"We have about 50% of the world's wealth but only 6.3% of its population.... Our real task in the coming period is to devise a pattern of relationships which will permit us to maintain this position of disparity without positive detriment to our national security. To do so, we will have to dispense with all sentimentality and daydreaming, and our attention will have to be concentrated everywhere on our immediate national objectives. We need not deceive ourselves that we can afford today the luxury of altruism and world benefaction.... We should cease to talk about vague and unreal objectives such as human rights, the raising of the living standards, and democratization. The day is not far off when we are going to have to deal in straight power concepts. The less we are then hampered by idealistic slogans, the better." -George Kennan, U.S. State Department memo, 1948
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The Virtues of De-globalization
End of an Era
"De-globalization," a term that the Economist attributes to me, is a development that the magazine, the world's prime avatar of free market ideology, views as negative. I believe, however, that de-globalization is an opportunity. Indeed, my colleagues and I at Focus on the Global South first forwarded de-globalization as a comprehensive paradigm to replace neo-liberal globalization almost a decade ago, when the stresses, strains, and contradictions brought about by the latter had become painfully evident. Elaborated as an alternative mainly for developing countries, the de-globalization paradigm is not without relevance to the central capitalist economies.
11 Pillars of the AlternativeThere are 11 key prongs of the de-globalization paradigm:
- Production for the domestic market must again become the center of gravity of the economy rather than production for export markets.
- The principle of subsidiarity should be enshrined in economic life by encouraging production of goods at the level of the community and at the national level if this can be done at reasonable cost in order to preserve community.
- Trade policy — that is, quotas and tariffs — should be used to protect the local economy from destruction by corporate-subsidized commodities with artificially low prices.
- Industrial policy — including subsidies, tariffs, and trade — should be used to revitalize and strengthen the manufacturing sector.
- Long-postponed measures of equitable income redistribution and land redistribution (including urban land reform) can create a vibrant internal market that would serve as the anchor of the economy and produce local financial resources for investment.
- De emphasizing growth, emphasizing upgrading the quality of life, and maximizing equity will reduce environmental disequilibrium.
- The development and diffusion of environmentally congenial technology in both agriculture and industry should be encouraged.
- Strategic economic decisions cannot be left to the market or to technocrats. Instead, the scope of democratic decision-making in the economy should be expanded so that all vital questions — such as which industries to develop or phase out, what proportion of the government budget to devote to agriculture, etc. — become subject to democratic discussion and choice.
- Civil society must constantly monitor and supervise the private sector and the state, a process that should be institutionalized.
- The property complex should be transformed into a "mixed economy" that includes community cooperatives, private enterprises, and state enterprises, and excludes transnational corporations.
- Centralized global institutions like the IMF and the World Bank should be replaced with regional institutions built not on free trade and capital mobility but on principles of cooperation that, to use the words of Hugo Chavez in describing the Bolivarian Alternative for the Americas (ALBA), "transcend the logic of capitalism."
From the Cult of Efficiency to Effective EconomicsThe aim of the de-globalization paradigm is to move beyond the economics of narrow efficiency, in which the key criterion is the reduction of unit cost, never mind the social and ecological destabilization this process brings about. It is to move beyond a system of economic calculation that, in the words of John Maynard Keynes, made "the whole conduct of life…into a paradox of an accountant's nightmare." An effective economics, rather, strengthens social solidarity by subordinating the operations of the market to the values of equity, justice, and community by enlarging the sphere of democratic decision making. To use the language of the great Hungarian thinker Karl Polanyi in his book The Great Transformation, de-globalization is about "re-embedding" the economy in society, instead of having society driven by the economy.
The de-globalization paradigm also asserts that a "one size fits all" model like neoliberalism or centralized bureaucratic socialism is dysfunctional and destabilizing. Instead, diversity should be expected and encouraged, as it is in nature. Shared principles of alternative economics do exist, and they have already substantially emerged in the struggle against and critical reflection over the failure of centralized socialism and capitalism. However, how these principles — the most important of which have been sketched out above — are concretely articulated will depend on the values, rhythms, and strategic choices of each society.
De-globalization's PedigreeThough it may sound radical, de-globalization isn't really new. Its pedigree includes the writings of the towering British economist Keynes who, at the height of the Depression, bluntly stated: "We do not wish…to be at the mercy of world forces working out, or trying to work out, some uniform equilibrium, according to the principles of laissez faire capitalism."
Indeed, he continued, over "an increasingly wide range of industrial products, and perhaps agricultural products also, I become doubtful whether the economic cost of self-sufficiency is great enough to outweigh the other advantages of gradually bringing the producer and the consumer within the ambit of the same national, economic and financial organization. Experience accumulates to prove that most modern mass-production processes can be performed in most countries and climates with almost equal efficiency."
And with words that have a very contemporary ring, Keynes concluded, "I sympathize…with those who would minimize rather than with those who would maximize economic entanglement between nations. Ideas, knowledge, art, hospitality, travel — these are the things which should of their nature be international. But let goods be homespun whenever it is reasonably and conveniently possible; and, above all, let finance be primarily national."
Foreign Policy in Focus columnist Walden Bello is a member of the House of Representatives of the Philippines and senior analyst at the Bangkok-based research and advocacy institute Focus on the Global South.