Globalization

$ CHAPTER 4 $
SELL THE LEXUS, BURN THE OLIVE TREE: Globalization and Its Discontents

I was getting myself measured for a straitjacket when I received an urgent message from Bolivia.
The jacket was Thomas Friedman's idea. He's the New York Times columnist and amateur economist who wrote The Lexus and the Olive Tree, which is kind of a long, deep kiss to globalization. I was in Cleveland to debate Friedman at the Council on World Affairs meeting in May 2001. Globalization, he told the council, is all about the communications revolution. It's about the Internet. It's about how you can sit in your bedroom, buy shares in amazon.com and send e-mails to Eskimos all at the same time, wearing your pajamas.
According to Friedman, we are "connected" and "empowered" and "enabled." And if that isn't cool enough by itself, globalization makes economies grow. Any nation on the planet that takes the pledge and follows the map can open the hidden gold mine. Poverty will end, as will the tyrannies of government. And every Bolivian will get their own e-mail address.
The end of world poverty! Eskimos! E-mail! I wanted this brave new future and I wanted it now! All I had to do, said Friedman, is change into something a little more form-fitting. "The Golden Straitjacket is the defining political economic garment of globalization," Friedman says. And, he explains, the tighter you wear it, "the more gold it produces."
Friedman is talking—figuratively, of course—about the latest economic fashion, "tailored by Margaret Thatcher." Ronald Reagan, he adds, "sewed on the buttons." There are about a dozen specific steps, but the key ones are: cut government, cut the budgets and bureaucracies and the rules they make; privatize just about everything; deregulate currency and capital markets, free the banks to speculate in currency and shift capital across borders. But don't stop there. Open every nation's industry to foreign trade, eliminate those stodgy old tariffs and welcome foreign ownership without limit; wipe away national border barriers to commerce; let the market set prices on everything from electricity to water; and let the arbitrageurs direct our investments. Then haul those old government bureaucracies to the guillotine: cut public pensions, cut welfare, cut subsidies; let politics shrink and let the marketplace guide us.
Selling these rules is easy work, he said and grinned, as there is no dissent. Yes, there were tree-hugging troublemakers demonstrating in Seattle. But as Britain's prime minister Tony Blair said, "People who indulge in the protests are completely misguided. World trade is good for people's jobs and people's living standards. These protests are a complete outrage."
But let's forgive youth its lack of sophistication. What the kids in the street didn't know is that history's over with, done, kaput! Friedman tells us: "The historical debate is over. The answer is free-market capitalism." And whether Republicans or Democrats, Tories or New Labour, Socialists or Christian Democrats, we're all signed on, we're all laced up in our straitjackets, merely quibbling about the sleeve length.
I was about to say, "Strap me in." But then I received this note—an e-mail—from Cochabamba, Bolivia. It was about Oscar Olivera, a community leader I knew through my work with Latin American labor unions. It said: Close to 1,000 heavily armed members of the Bolivian security forces dispersed peaceful marchers with tear gas, beating them and confiscating their personal possessions.
What was the problem? Maybe the Internet was down and the Bolivians were protesting that they couldn't unload their Amazon.com shares.
The message ended: "Oscar is missing. His whereabouts are unknown?” Didn't Oscar know that he was "connected and enabled"?
This reminded me that a large cache of documents had recently fallen into my hands. They came from the deepest files of the World Bank and International Monetary Fund, from the desk drawers of officials at the European Commission and the World Trade Organization: Country Assistance Strategies, an Article 133 diplomatic letter, memos from the secretariats—the real stuff of globalization—from inside the organizations that dream up, then dictate, the terms of the new international economics.
There was nothing here about Eskimos on cell phones, but I did find an awful lot about cutting Argentine pensions by 13 percent, breaking up unions in Brazil . . . and raising water prices in Bolivia, all laid out in chilling techno-speak and stamped "for official use only."
The spiky-haired protesters in the streets of Seattle believe there's some kind of grand conspiracy between the corporate powers, the IMF, the World Bank and an alphabet soup of agencies that work to suck the blood of Bolivians and steal gold from Tanzania. But the tree huggers are wrong; the details are far more stomach-churning than they even imagine. In March 2001, when Ecuador's government raised the price of cooking gas and hungry Indians burned the capital, I was reading the World Bank's confidential plan issued months before. The bank, with the IMF, had directed this 80 percent increase in the price of domestic fuel, knowing this could set the nation ablaze. It's as if the riots were scheduled right into the plan.
And they were. That's according to one of the only inside sources I can name—Joseph Stiglitz, former chief economist of the World Bank. "We called them the IMF riots." The riots as well as the response were programmed, the latter referred to euphemistically as "resolve"—the police, the tanks, the crackdown.
I threw off my straitjacket and began to write. And that's what you'll find in this chapter: my reports explicating lists of "conditionalities" (167 for Ecuador) required by the World Bank and IMF for their loans; unpublished proposed terms for implementing article VI.4 of the GATS treaty under the World Trade Organization; intellectual property rules under something called the "TRIPS" agreement, which determines everything from breast cancer treatment to Dr. Dre's control of rap music: all the dirty little facts of globalization as it is actually practiced. And you can read it in your pajamas.
You'll also find out why Oscar was missing; he was seized, in fact, by Bolivia's own globalization enforcement army.
Friedman ended his talk—it turns out he won't debate face-to-face, so we had to speak on separate days—by quoting with joyous approval the wisdom of Andy Grove, the chairman of Intel Corporation: "The purpose of the new capitalism is to shoot the wounded."
That day, for Oscar's sake, I was hoping Friedman was wrong.

Chapter 4 from The Best Democracy Money Can Buy, by Greg Palast (PLUME press, 2004)