Geoism, Not Globalization
The countries that were the showcase for globalization are now an economic shambles. In the past two years South Korea's economy has shrunk by 45 percent and Thailand's by 50 percent. Indonesia's has shrunk by nearly 80 percent, and gross domestic product per capita has fallen from $3,500 to under $750. The economic crisis that began in Asia is now ricocheting around the world. Russia is in default, Japan in recession and Africa and Latin America in financial turmoil. The US "bubble economy" is showing puncture wounds, with a decline in manufacturing, a sharp contraction in agriculture, a fall in corporate profits and wild gyrations on Wall Street.
While many Americans are deeply concerned about the speed and direction of the global economy, the Clinton Administration and the Republican leadership in Congress--both deeply beholden to global corporations and financial institutions--seek to accelerate the globalization juggernaut. This fall Congress faces two linked struggles on the future of the global economy.
The Return of Fast Track. Last fall, as a result of strong opposition from organized labor and Democrats in the House, Congress blocked Clinton's fast-track plan, which would have prevented Congress from amending trade deals negotiated by the President. Fast track was designed to clear the way for a NAFTA-style deal for the entire Western Hemisphere, and the Multilateral Agreement on Investment, to prevent countries--including the United States--from putting the brakes on the flow of global capital.
The Administration, realizing that political support for its globalization policy was waning, made a deal with the House Democratic leadership early in 1998 not to bring fast track back this year if its opponents would support an $18 billion expansion in funding for the International Monetary Fund. Now, to embarrass the Administration and divide it from its labor and progressive allies, Republican leaders in the Senate are promoting an omnibus trade bill that tacks fast track onto the African trade bill.
Expanding Funding for the IMF. The International Monetary Fund, originally established to stabilize exchange rates, has become the prime architect and enforcer of corporate globalism. In exchange for rescue loans, it has imposed ruinous structural adjustment plans that have virtually bled debtor countries to death. Although the IMF's actual operations have been little known to most Americans and even to many members of Congress, the spectacular failures of its recent bailouts in Russia, Asia and Mexico have finally brought its disastrous policies of imposed austerity, corporate welfare and deregulation into question.
As the manic boom phase of globalization began to falter with the outbreak of the Asian crisis a year ago, the Clinton Administration decided that expanded funding for IMF bailouts was the best hope for forestalling deflationary contagion--and for protecting the speculative loans and investments made by its friends in the international financial community. It therefore promoted the $18 billion "replenishment"--actually a huge expansion of IMF funding. With strong lobbying from the Clinton Administration and the House Democratic leadership, most Democrats signed on, partly in exchange for the withdrawal of fast track, partly from fear of global meltdown, partly as a sign of support for an internationalist approach to solving economic problems and partly because they were offered "reforms" that seemed to fix some of the IMF's flaws but that turned out to be toothless. Republicans were split: Corporate types like Newt Gingrich supported IMF replenishment, while right-wingers like Dick Armey and "Main Street Republicans" opposed it.
Meanwhile, right-wing populists like Pat Buchanan are lining up to ride to power on public fear and anger about globalization. If corporate globalism continues to result in deteriorating conditions of life for ordinary Americans, we're likely to see a rise of scapegoating demagogy and virulent right-wing economic nationalism.
Fortunately, from the debates over NAFTA, fast track, the World Trade Organization and the IMF--and from the growing links among popular movements and progressive parliamentarians around the world--a progressive alternative to corporate globalism and isolationist xenophobia is emerging. Such a progressive alternative to corporate globalism--based on global labor rights, environmental protections, sustainable development, democratization and international institutions to counter uncontrolled deflations and the race to the bottom--is the key to blocking the rise of right-wing nationalism.
Elements of this agenda are already being implemented in civil society--for example, by the antisweatshop campaigns that are forcing companies like Gap and Nike to reconsider some of their most reprehensible labor practices. Other elements--such as the recently passed Sanders-Harkin amendment banning the import of products made with child labor--have been written into law. Still others have been introduced in legislation that would end US financial support for IMF programs that degrade the environment and undermine workers' rights, restrict the power of governments to regulate "hot money" capital flows or give more bailouts to international bankers and investors.
Progressives have rarely presented these elements as a coherent alternative--a "new architecture" for the global economy. I and other progressives in Congress will be introducing legislation next session to begin laying out such an alternative. The upcoming debates on fast track and the IMF provide an opportunity to consider whether the global economy is going in the right direction and to look at alternatives. If instead we rubber-stamp fast track and IMF expansion, we will only increase the likelihood that meltdown will go global.
Bernie Sanders is the Independent US Representative from Vermont.
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