NetNews Usenet Archive 1992 #30/NN_1992_30.iso/spool/misc/activism/progress/9350

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Subject: The Bank That Could Destroy The Earth
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/** gen.newsletter: 130.0 **/
** Topic: NL12 Bank that could destroy the Ea **
** Written  5:38 pm  Dec 14, 1992 by [e-mail] in cdp:gen.newsletter **
The Bank that Could Destroy the Earth

By Peter Anderson (from Green Left, Australia)

On current trends, say some experts, humans could theoretically be
the only species left on the planet within 50 to 100 years - an
absurdity that highlights the imminence of environmental collapse
under the weight of unplanned human economic activity.
But while the domination of economy over ecology is reaching
critical proportions, the world's top economic regulators, who
continue to pursue development and restructuring agendas with
untold social and environmental consequences, seem purposely
oblivious to the fact. This is true especially of the World Bank
and the International Monetary Fund.
Even the economic results are appalling. Despite all the hype in
the 1960s about "development economics", with only a few notable
exceptions most of the countries of the economic south are not
much better off, and many are positively worse off, than they were
30 years ago.
It is not difficult to trace the immediate causes of this
deteriorating situation to the debt crisis of the 1970s, when,
bloated by petrodollars from souring world oil prices, the
international banks of the First World sent emissaries to the
Third World to unload their cash - at a price.
The pay-back came in the 1980s, when economic conditions in the
Third World got seriously worse. Subjected to the economic
policies of the World Bank, by the end of the decade sub-Saharan
Africa actually produced less per head of population than it had
at the beginning - an impoverished continent became even poorer.
However, while the poor countries were locked into a never-ending
cycle of ballooning debt and impossible repayments, the banks
shored up their finances by writing off failed loans, rescheduling
debts and repairing their balance sheets. By the end of the
decade, for the international banks, the debt crisis was over.
Today, from Amazonia to the Siberian forests, the seemingly
unstoppable encroachment of the world market continues to wreak
environmental havoc. Beyond debt and economic destruction and the
sharpening division between rich and poor, this market logic now
threatens the possible elimination of the fundamental biological
diversity on which life itself depends.
During her recent visit to Australia, the well-known author and
environmentalist Dr Susan George focused attention on the thinking
and the institutions that have helped to make this situation
worse. George is a researcher for the Transnational Institute, a
green think-tank in Amsterdam, and is a member of the
international board of Greenpeace. She is author of A Fate Worse
the Debt and The Debt Boomerang.
In two talks, "The Flight from Diversity" and "Economy and
Ecology", George highlighted her fears about the ubiquitous
application of market principles in the post-Cold War period.
"Although I was never a fan of the ex-Soviet Union and the other
countries that used to be called socialist", she said, "the fall
of the Berlin Wall nonetheless had a negative side. The end of the
Cold War has put an end to what political scientists used to call
the systems debate. Now there is only one superpower and one
system, with no variant alternative or opposition from any
quarter."
Greenpeace forest campaign coordinator Patrick Anderson recently
described how emerging Russian entrepreneurs, desperate for
dollars, were selling off logging concessions in the Siberian
forests and elsewhere to Korean, Japanese and US timber companies
at fire sale prices and as fast as they could. The habitat of the
last 300 Siberian tigers, thought by some to be the most beautiful
animal in the world, will go down with these forests.
Logic of the "free market"  Meanwhile, Lawrence Summers, World
Bank vice-president and chief economist, has bluntly stated his
view of the world economy and environment. George related comments
made by Summers at the World Bank's annual meeting last September
in Bangkok which show just how far "free market" thinking has
gone.
"What can the West do to drive this process of reform forward?",
he asked in reference to eastern Europe and the former USSR.
"Number one, it can spread the truth. The laws of [capitalist]
economics, it is often forgotten, are like the laws of engineering
- there is only one set of laws, and they work everywhere[!]."
Summers became notorious earlier this year for his judgment in a
leaked memo that the economic logic of dumping toxic waste in the
Third World was impeccable - because in the low wage country
people are going to die earlier, and so they won't have time to
die of prostate cancer.
He said a person in a low-wage country might earn $500 a year and
have 10 years left to live, whereas in a high wage country a
similar person might earn $50,000 a year and have 20 years to
live, and so would be contributing much more to the gross world
product and to economic growth. Therefore, you should put the
pollution where the lower value is.
At the World Bank annual meeting, Summers said there are no limits
to the carrying capacity of the earth that are likely to apply any
time in the foreseeable future. There isn't a risk of an
apocalypse due to global warming or anything else. The idea that
we should put limits on growth because of some natural limit is a
profound error and one that, were it ever to prove influential,
would have staggering social costs.
Summers' staggering judgment ignores the abundance of evidence
which shows that if the capitalist world economy continues to
exploit the earth's resources in the rapacious, virtually
unfettered manner it now does, the future of the planet is
threatened.
According to Susan George, human activity even 50 or 100 years ago
was so small compared to the biosphere it did not matter that we
had a completely open economy that was taking its factors of
production in nature without counting their cost, processing them
and throwing away the residues.
"Now, with the expansion of human activity, the economy is
reaching the limit of the biosphere. Yet it is still taking
without counting the true cost on one side, with regard to
resources, and it is still throwing away on the other side without
having any understanding of what this is doing to the biosphere,
which is by definition a closed system."  In 1986 an important
scientific article signed by Paul Erlich and others calculated
that human economic activity was then absorbing 40% of the "net
photosynthetic product", that is, the net capacity of the earth to
regenerate itself, leaving 60% for all other species.
They found that this kind of economic activity was doubling every
25-30 years, which means that in a quarter of a century we would
be consuming 80% of net photosynthetic product. This is clearly
unsustainable. Soon we would be at 100% per cent, which means no
other species would have access to anything.
"Unfortunately, this is not the way that the people who organise
the world economy see it." They rely on a "free-market" scenario
in which there are some very basic contradictions, according to
George.
* The contradiction between the open economy and the closed
biosphere means there are no price signals to tell us that we may
be in grave danger. The price of logs from a tropical forest, for
example, in no way represents the value of that forest in terms of
stabilising the climate or as a habitat for flora and fauna and
the home of biodiversity.
Although a price can sometimes tell us something about scarcity,
that does not always work until it is too late. Market signals do
not tell us anything about what we throw away. The market is not
going to send us signals if there is too much CO2 in the
atmosphere, or if there are too many CFCs.
The World Bank's finance wing, called the International Finance
Corporation, is making a large loan to Egypt to build a factory to
produce air conditioners and refrigerators with CFCs. The market
is not going to tell us that the ozone layer is already only
one-third of what it ought to be.
* The logical outcome of leaving the market to itself is
dramatically growing inequality within countries and between
countries.
A book by a former aide to president Richard Nixon, The Politics
of Rich and Poor, shows that the top 1% of US families during the
Reagan-Bush decade increased their share of family incomes by
nearly 50%. Meanwhile 80% of the people all lost. The poorest 10%
lost the most, their incomes falling by 15% to a level of less
than US$3200 a year.
The share of family income of the richest 1% is now on average 115
times more than the lowest 10%, and this is repeated at the
international level, where the gap between the wealthy, OECD
countries and the poor countries has never been greater. In the
19th century, it was probably about two to one. After the second
world war, the gap was about 40 to one. Now it is probably about
60 or 70 to one.
* Relying on the market to do everything makes it is impossible to
define social or developmental objectives. "The only other way to
organise society is through democratic discussion, various kinds
of solidarity and community, and this takes a lot of work", said
George.
Debt and impoverishment  Despite all this, the World Bank and the
IMF are imposing the market system universally, most emphatically
in the Third World. In fact, the world market is the most brutal
of all markets because there are not many rules, while in most
national economies there are at least certain social rules and
safety nets.
George believes the World Bank and the IMF found in Third World
debt the perfect instrument to force the integration of the
indebted countries more and more tightly into the world capitalist
economy. They say poor countries must export more, supposedly to
grow their way out of debt, but the effect is entirely different.
A recent study of African raw materials by the Transnational
Institute showed there is absolutely no hope for Africa to grow
out of its debts through the export of commodities because terms
of trade are declining, more synthetic substitutes are being used,
improved technology means lower raw material inputs are required,
and there is increasing competition from Asia.
But overwhelmingly the main problem is the net transfer of wealth
out of the poor countries and into the rich. In 1982 the indebted
countries of the south owed the north $800 billion. Ten years
later, having paid over $1300 billion in debt service, they owed
$1450 billion.
The countries of the south are overall 60% more in debt than they
were at the beginning of the 1980s. Africa's debt has doubled. The
debt of the poorest nations has more than doubled. In that time
the poor nations have paid the equivalent of more than six
Marshall Plans to the rich. In the past decade, the international
banks have received A$250,000 every minute from Third World
debtors.
Everything that stands in their path is destroyed, George said of
these dominant institutions. "Nature stands in the way of profits,
so nature must be disregarded. Culture stands in the away of
market extension because culture usually involves community ties,
solidarity, reciprocity. The state is often in the way because it
tends to regulate and sometimes even tends to protect the poor and
more vulnerable groups, so the state must be reduced to the lowest
common denominator.
"The World Bank and the IMF step in to determine for many
countries whether the currency is devalued or to define macro-
economic policy or set foreign policy (along with the US
government). Such was the case when Egypt joined US forces in the
Gulf War and was immediately awarded a one-quarter reduction in
debt, unachieved by any other nation.

Think locally, act globally

The flight from diversity in biology, economy and ideology is the
consequence of this "market mythology". While she did not attempt
to look deeper to the objective causes of the problem, Susan
George made full use of the concept of diversity to counter the
fatally flawed concept of the market and at the same time drew
attention to a fundamental ecological concern.
However useful it might once have been, according to George, the
phrase "Think globally, act locally" has become an international
cliche that has outlived its usefulness and now threatens to
substitute for the diversity of ideas a homogeneous view of the
world.
"I know of a billionaire", said George, "who was so convinced that
ecological disaster was impending he purchased the equivalent of a
private ecosystem in Mexico, but even he can not fully escape the
fact that we all live in an increasingly crowded and polluted
single family house, the only one we are ever likely to have."  A
few facts indicate the nature of the problem:
* We are within a few years of losing 15-25% of the total of
earth's biodiversity, but no-one really knows what that means in
terms of the number of species lost because no-one has the
faintest idea of how many species there are.
* In the last five years more than 300 new fish species have been
identified in the Amazon region alone.
* Harvard biologists estimate that 50 species are being driven to
extinction every day. Other experts put the figures much higher.
Even on a conservative estimate, 20,000 species are wiped out
annually.
* Probably as many one-fifth of terrestrial plants are threatened,
and in the US about 3000 native plants are considered in
short-term danger of disappearing forever. The situation is worse
of course in the tropical countries, which are the biological
superpowers.
* The scenario for the next couple of decades in the Latin
American rainforests ranges from a best case loss of "only" 15% to
a worst case estimate of a terrifying two-thirds.
Species have always been lost in the natural process of evolution.
But scientists now believe that today's extinction rate is as much
as 40,000 times its natural rate.
For example, "green revolution" type agriculture has forced
peasant cultivators to abandon farming with self- reproduced seeds
which were the result of thousands of years of natural selection
and replace them by genetically identical and vulnerable standard
varieties. As one observer has said, when peasants consume the
seeds they have been convinced are now obsolete, the heritage of
several millennia can disappear in a single bowl of porridge.
Homogenised global thinking and destruction of diversity are
nowhere more evident than in the area of so-called development
economics, in which it is considered that all economies must pass
through identical stages on a single predetermined path of
economic growth. In this process there is simply no account of
history, of culture or of nature, which at best is there to be
tamed or exploited.
Thus development professionals in places like the World Bank are
highly skilled at thinking globally and experts at acting locally,
forcing people to conform to their own view. In doing so, they do
not just homogenise space, they telescope time as well.
The negative implications of homogenised global thinking are also
revealed in cultural, intellectual and linguistic practice through
the use of collective nouns like humans, species and particularly
the pronoun "we", as in "we are destroying our forests", a
familiar phrase of many bureaucrats, United Nations commissions
and moralists.
We are almost never responsible for these crimes, and using the
terminology only makes it harder to see exactly which people and
which institutions are the real perpetrators, said George. "We"
are not, for instance, destroying "our" forests; identifiable
concession holders, particular logging companies and specific
national or international policies and institutions like the World
Bank are destroying the forests.
"Acting globally has become a practical necessity in a world where
we are acted upon globally, where decisions affecting our lives
are taken at levels so far removed from ordinary democratic
practices that no citizen has a hope of influencing them."
Clearly, as long as the ideology and practice of the so-called
free market system prevail without being contested, the fate of
the world hangs in the balance.
The market does not give us the signals we as a society need to
know, that we may be approaching ecological disaster.
The World Bank and the IMF found in Third World debt the perfect
instrument to force the integration of the indebted countries more
and more tightly into the world economy.
There is absolutely no hope for Africa to grow out of its debts
through the export of commodities.
In 1982 the indebted countries owed $800 billion. Ten years later,
having paid over $1300 billion in debt service, they owed $1450
billion.


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