% FROM THE NOAM CHOMSKY ARCHIVE
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% ftp://ftp.cs.cmu.edu/user/cap/chomsky/
% Filename:    articles/chomsky.z.year-501-part2
% Title:       Year 501: World Orders Old and New, Part II
% Author:      Noam Chomsky
% Appeared-in: Z Magazine, July-August 1992
% Source:      jaske@bat.bates.edu (Jon Aske)
% Keywords:    
% Synopsis:    
% See-also:    articles/chomsky.z.year-501-part1

           YEAR 501: WORLD ORDERS OLD AND NEW, PART II
                          Noam Chomsky
                  Z Magazine, July-August 1992


The first part of this series reviewed some basic themes of the
Colombian era. These considerations suggest that Year 501 and
what follows will be a classic case of Old Wines, New Bottles:
traditional policies, adapted to new contingencies.


The End of the Affluent Alliance

There are new contingencies, and they merit close attention. A
change of lasting importance was recognized officially in August
1971, when Richard Nixon announced his ``New Economic Policy,''
dismantling the international economic order established after
World War II (the Bretton Woods system), in which the US served,
in effect, as international banker. By that time, ``the affluent
alliance had come to the end of the road'' and ``the disorder was
getting too serious for aspirins,'' international economist Susan
Strange observed. German-led Europe and Japan had recovered from
wartime destruction, thanks in no small part to US international
military Keynesian measures from the early 1950s; and the US
economy was facing the unanticipated economic costs of the
Vietnam war. The world economy was entering an era of
``tripolarity''---and also, crucially, of stagnation and
declining profitability of capital. <<>>

The predictable reaction was a rapid intensification of the
bitter class war that is waged with unremitting dedication by the
corporate sector, its political agents, and ideological servants.
The years that followed saw an attack on real wages, social
services, and unions---indeed any kind of functioning democratic
structure---so as to overcome the troublesome ``crisis of
democracy'' brought about by the illegitimate efforts of the
public to bring their interests to the arena of democratic
politics. These moves were accompanied by an intensified
ideological offensive to strengthen authority and habits of
obedience, to diminish social consciousness and such human
frailties as concern for others, and to instruct young people
that they partake in a ``culture of narcissism.'' Another
objective is to establish a de facto world government insulated
from popular awareness or interference, devoted to the task of
ensuring that the world's human and material resources are freely
available to the Transnational Corporations (TNCs) and
international banks that are to control the global system.

The US remains the largest single economy, though declining
relative to its major rivals, which are not without their own
problems. Those faced by the US are also too serious for
aspirins, though little more is available thanks to doctrinal and
policy triumphs that have diminished the capacity for
constructive social action directed to the needs of the
irrelevant majority.

Nixon's response to the decline of US economic hegemony was to
suspend the convertibility of the dollar to gold, to impose
temporary wage-price controls and a general import surcharge, and
to initiate fiscal measures that direct state power, beyond the
previous norm, to welfare for the rich: reduction of federal
taxes and domestic expenditures, apart from the required
subsidies to the corporate sector. These have been the guiding
policies since. They were accelerated during the Reagan years,
largely following Carter Administration prescriptions that were
reshaped to bring about a huge growth in debt at every level
(federal, state, local, household, corporate), with little to
show in the way of productive investment. One crucial element is
the incalculable debt of unmet social needs, a mounting burden
imposed upon the large majority of the population and future
generations.

Nixon's initiatives constituted ``a sort of mercantilist
revolution in domestic and foreign policy,'' political economist
David Calleo observed a few years later. The international system
grew more disorderly, less regulated, ``with rules eroded and
power more significant.'' There was less ``rational control over
national economic life,'' hence great advantages to
internationalist business and banking, freed from capital
controls and official restraint and secure in the knowledge that
there will be a state-organized public bail-out if something goes
wrong. International capital markets rapidly expanded as a
consequence of the decline of regulation and control, the huge
flow of petrodollars after the 1973--4 oil price rise, and the
information-telecommunications revolution, which greatly
facilitated capital transfers. Vigorous bank initiatives to
stimulate new borrowing contributed to the Third World debt
crisis and the current instability of the banks themselves. The
outcome has been described as ``a system of world economic
governance with parameters defined by the unregulated market and
rules administered by supranational banks and corporations''
(Howard Wachtel), a system of ``corporate mercantilism'' (Peter
Phillips), with managed commercial interactions within and among
huge corporate groupings, and regular state intervention in the
three major Northern blocs to subsidize and protect
domestically-based international corporations and financial
institutions. <<>>

The rise in oil prices (preceded by comparable increase in price
of coal, uranium, and US agricultural exports) yielded temporary
advantages for the US and British economies, providing windfall
profits for the energy corporations, primarily US and British,
and inducing them to bring into production high-cost oil (Alaska,
North Sea) that had been withheld from the market. For the US,
rising energy costs were substantially compensated by military
and other exports to the Middle East oil producers and huge
construction projects for them. Their profits also flowed to
Treasury securities and investment; support for the economies of
the US and its British lieutenant has long been the primary
responsibility of the family dictatorships that serve as local
managers in the Middle East. <<>>

The same years saw the stagnation and collapse of the Soviet
empire, which had interfered with the planned global order in
several crucial ways. It excluded a vast region of the
traditional Third World from Western exploitation and control,
and its very existence as a counterforce provided a space for
nonalignment and limited forms of independent initiative in the
regions still bound to the traditional service function of the
South: providing resources, markets, cheap labor, opportunities
for investment and more recently, export of pollution. With the
Soviet collapse, both problems are overcome. The power of the
state capitalist industrial societies was enhanced further by the
economic catastrophe that swept through most of their domains in
the 1980s. The sense of foreboding throughout the Third World is
readily understandable.

In earlier years, the nonaligned countries had sought to gain
some control over their fate. Initiatives were developed through
UNCTAD (the UN Conference on Trade and Development) to create a
``new international economic order'' with support and
stabilization programs for primary commodities, in the hope of
stemming the deterioration in terms of trade and controlling the
sharp price fluctuations that have a devastating impact on
economies that rely on few primary exports. UNESCO undertook
parallel efforts to provide Third World countries with access to
international communications, a virtual monopoly of the advanced
industrial societies.

Both initiatives naturally elicited enormous hostility on the
part of the world rulers; both were turned back decisively in the
1980s. The US led a fierce attack on the United Nations that
effectively eliminated it as an independent force in world
affairs. UNESCO inspired particular hatred, because of its Third
World orientation and the threat to ideological domination. The
demolition operation and the return of the UN to US control have
been lauded here as a restoration of the ideals of the founders,
not without justice. The extraordinary levels of deceit that
accompanied the government-media campaign to extirpate the UNESCO
heresies are documented in an important book, which, needless to
say, had no effect whatsoever on the flow of necessary lies
(William Preston, Edward Herman, Herbert Schiller, _Hope &
Folly_, U. of Minnesota Press, 1989). The current hysteria about
``political correctness'' is a domestic analogue; to the
totalitarian mentality, even the slightest loss of control is an
unimaginable catastrophe, and evokes the most impressive frenzy.

Some of the realities are described in a study of the South
Commission, which brings together economists, government
planners, religious leaders, and other Third World elites (_The
Challenge to the South_). <<>> The study
observes that gestures to Third World concerns in the 1970s were
``undoubtedly spurred'' by concern over ``the newly found
assertiveness of the South after the rise in oil prices in
1973.''  As the threat abated, the rich men lost interest and
turned to ``a new form of neo-colonialism,'' monopolizing their
control over the world economy, undermining the more democratic
elements of the United Nations, and in general proceeding to
institutionalize ``the South's second class status.''

The pattern is consistent; it would be remarkable if it were
otherwise.


The ``Vile Maxim of the Masters''

The world economy has not returned to the growth rates of the
Bretton Woods era. The decline of the South was particularly
severe in Africa and Latin America, where it was accompanied by
rampant state terror. The catastrophe was accelerated by the
neoliberal economic doctrines dictated by the world rulers. The
UN Economic Commission for Africa found that countries pursuing
the recommended IMF programs had lower growth rates than those
that relied on the public sector for basic human needs. The
disastrous impact of neoliberal policies in Latin America was
particularly striking, heightened by the openness of their
economies to international capital markets. This led to huge
capital flight, unlike the East Asian state-run economies which
allow no such frivolity. <<>>

There is a technical term for the predictable effects of the
dictates of the powerful; they are called ``economic
miracles''--- meaning, improvement of the investment climate and
the prospects for domestic elites associated with the foreign
beneficiaries, along with rapid increase in poverty, starvation,
and general misery for the undeserving public. Another
concomitant is great satisfaction and self-adulation in the
commissar culture.

Meanwhile, the same state authorities and their minions preach
ruinous economic doctrines and block the way to independent
development in the South, and in numerous other ways ensure that
wealth and power centralize among the truly deserving in the
corporate board rooms. It is not their business that the
doctrines they preach have regularly been evaded when necessary
by the victors in the game while punishing those subjected to
these dogmas, once again through the 1980s. Approved doctrine
holds that the ``trickle down'' and ``export promotion'' policies
that have always led to disaster in the past will succeed today.
And they will, for the usual beneficiaries, who run the process
and understand it well enough. The basic truth is captured in the
headline of a lead article in the _Wall Street Journal_ on the
``initial [sic] social costs'' of the ``shock therapy''
administered by their benefactors: ``People Say the New Wealth Is
Slow to Trickle Down; Leaders: Stay the Course.'' <<>>

On occasion, developed societies too take the rhetoric seriously
and fail to protect themselves from the destructive impact of
unregulated markets. The consequences are the same, though not so
lethal as in the traditional colonial domains. Australia in the
1980s is a case in point. Deregulation and other free market
experiments (carried out by a labor government that adopted the
prescriptions of the right) created what one leading economic
commentator calls a ``capital disaster'' (Tom Fitzgerald). The
approved policies succeeded in reducing national income by over
5% a year by the end of the decade. Real wages declined,
Australian enterprises fell under foreign control, and the
country advanced towards the status of a resource base for the
Japan-centered state capitalist region, which maintained its
dynamic growth thanks to radical departures from neoliberal
dogma. <<>>

Fitzgerald observes that nothing different should be expected
from selective obeisance to Adam Smith, ignoring his warnings
about ``the vile maxim of the masters'': ``All for themselves,
and nothing for other people.''

The rich industrial societies themselves are taking on something
of a Third World cast, with islands of extreme wealth and
privilege amidst a rising sea of poverty and despair. This is
particularly true of the US and Britain, subjected to
Reagan-Thatcher discipline. Continental Europe is not too far
behind, despite the residual power of labor and the social
contract it has defended, and Europe's ability to export its
slums through the device of ``guest workers.'' The distribution
of privilege and despair in a society with the enormous
advantages of ours is not, of course, what one finds in Brazil or
Mexico.  But the tendencies are not hard to see.

The collapse of the Soviet empire offers new means to establish
the North-South divide more firmly within the rich societies.
During the May 1992 strike of public workers in Germany, the
chairman of Daimler-Benz warned that the corporation might
respond to strikes of production workers by transferring
manufacturing facilities for its Mercedes cars elsewhere, perhaps
to Russia, with its ample supply of trained, educated, healthy
and (it is hoped) docile workers. <<>> The
chairman of General Motors can wield similar threats with regard
to Mexico and other sectors of the Third World that remained
economic colonies of the West, and thus do not offer as favorable
a work force. Capital can readily move; people cannot, or are not
permitted to.

It is not that Daimler-Benz is greatly suffering from the labor
costs that management deplores. Two weeks after issuing the
threat to move Mercedes production to Russia, the same chief
executive, Edzard Reuter, announced the ``excellent result'' of
an exceptionally strong first quarter performance for 1992, with
a profit rise of 14% and a 16% increase in sales, largely abroad:
German workers are not quite the intended market for the Mercedes
division, the chief profit earner for this huge conglomerate.
Such facts, however, do not impress the US press, where the news
columns bitterly assailed the strikers for their ``soft life,''
long vacations, and general lack of understanding of their proper
place as tools of production for the rich and powerful.  They
should learn the lessons taught to American workers by the
Caterpillar corporation at the same time: profits and
productivity up, wages down, the right to strike effectively
eliminated by the free resort to ``permanent replacement
workers.'' <<>>

These are the fruits of the fierce corporate campaign undertaken
as soon as American workers finally won the right to organize in
the mid-1930s, after long years of bitter struggle and violent
repression unmatched in the industrial world. Perhaps we may even
return to the days when the admired philanthropist Andrew
Carnegie could preach the virtues of ``honest, industrious,
self-denying poverty'' to the victims of the great depression of
1896, shortly after he had brutally crushed the Homestead steel
strike, to great media applause, while announcing that the
defeated workers had sent him a wire saying ``Kind master, tell
us what you wish us to do and we will do it for you.'' It was
because he knew ``how sweet and happy and pure the home of honest
poverty is'' that Carnegie sympathized with the rich, he
explained, meanwhile sharing their grim fate in his
lavishly-appointed mansions. <<>>

So a well-ordered society should run, according to the ``vile
maxim of the masters.''

It is, therefore, only natural that when the battered unions
finally recognize the reality of the ceaseless class war waged
against them by the highly class-conscious corporate sector, the
business press should react with wonder at the fact that some
_unions_ still cling to outdated ``class-warfare ideology'' and
the ``battered Marxist view'' that ``workers form a class of
citizens with shared interests separate from those who own and
control business''---not to speak of such ``quirks'' as low pay
for executives, who are treated like other members (_New York
Times_). The masters, in contrast, keep firmly to this ``battered
Marxist view,'' often expressing it in vulgar Marxist rhetoric---
with values reversed, of course. <<>>

Under existing conditions of social organization and
concentration of power, selective free trade is hardly likely to
increase the general welfare, as it might under other social
arrangements. The two-year experience of the US-Canada free trade
agreement illustrates the process. Canada has lost hundreds of
thousands of jobs, many to industrialized regions of the US where
government regulations virtually bar labor organizing (the
Orwellian term is ``right to work,'' meaning ``effectively
illegal to organize''). These state policies, natural in a
business-run society with the public largely marginalized, leave
workers unprotected and much easier to exploit than in Canada,
with its more vigorous union movement and its cultural climate of
solidarity. The agreement has also been used to require Canada to
sell water to the US even in times of local water scarcity; to
abandon measures to protect the threatened Pacific salmon; to
bring pesticide regulations in line with laxer US standards; to
ban sale of irradiated food and steps to reduce emissions from
lead, zinc and copper smelters; and to end subsidies for
replanting of forests after logging. All such practices have been
judged illegal barriers to free trade. By similar reasoning, the
US objects to a GATT provision that allows countries to restrict
food exports in times of need, demanding that US agribusiness
must control raw materials no matter what the human cost.

At the same time, Canada, an asbestos exporter, is bringing
charges against the US for imposing EPA standards on asbestos use
in violation of trade commitments and the ``international
scientific evidence'' about health risks of asbestos: the EPA has
improperly gone beyond the ``least burdensome requirements'' for
the corporations, Canada claims. At the GATT negotiations, the US
is backing corporate proposals to restrict environmental and
consumer protection to cases supported by ``scientific
evidence,'' to be judged by an agency made up of government
officials and executives from chemical and food corporations.
<<>>

Perhaps the most dramatic current examples of the cynical pursuit
of the ``vile maxim'' in international trade are the US
government and GATT actions to force Third World countries to
accept US exports and advertising for lethal narcotics---the
world champion being tobacco, by a huge margin. The Bush
Administration launched its hypocritical ``drug war'' (timed
nicely to produce the proper mood for the invasion of Panama)
simultaneously with steps to force Third World countries to
import this leading killer, with advertising aimed at new
markets, women and children particularly. GATT backed these
murderous efforts. The media, while climbing aboard the ``drug
war'' bandwagon with appropriate enthusiasm and fanfare, obliged
the Administration further by completely suppressing the major
drug story of the day. There were no headlines reading ``US
Demands to be World's Leading Narcotrafficker,'' or even a line
in the back pages. The discipline was impressive.

With Eastern Europe returning to its approved Third World status,
drug pushers are leading the way in investment. ``Cigarette
makers flock to E. Europe,'' an upbeat front-page story is
headlined in the _Boston Globe_: ``While many American companies
have been criticized for not being aggressive in investing in
Eastern Europe, American cigarette companies have been
trail-blazers.''  Doubtless revelling in the new-found applause
for aggressively responding to US government efforts to encourage
investment in Eastern Europe, a tobacco executive explains:
``There is little awareness of health and environmental problems
in Hungary. We have about 10 years of an open playing field.'' We
have about ten years of profits, before the PC left fascists
impose conditions on lucrative mass murder. ``Of 30 developed
countries,'' the news report reads, ``life expectancy is shortest
in Eastern Europe.''  Guided by the ``vile maxim,'' US
corporations will try to improve the statistics further,
``trail-blazers for capitalism,'' free from criticism.

Note that Romania, Bulgaria, Russia, the former Yugoslavia, etc.,
are ``developed countries,'' to be compared with Western Europe
so as to demonstrate the evils of Communism---but not with
Brazil, Guatemala, the Philippines, and other quasi-colonial
domains that they resembled before they separated from the
traditional Third World. That practice is an ineradicable feature
of contemporary ideological fanaticism. Honesty on this crucial
issue is strictly _verboten_. <<>>

In the same issue of the _Boston Globe_, another story
illustrates how supple an instrument economic doctrine can be.
It celebrates the achievements of New Hampshire in dealing with
its fiscal problems. The method was to encourage a successful
enterprise that has become ``the largest retail volume outlet for
wine and liquor in the world, according to state officials,''
with $62 million in profits from sales of over $200 million in
1991, a $5 million increase in profit in a year. The increase is
attributed in part to doubling of the advertising budget for
alcohol, which ranks just below tobacco as a killer. The
enterprise is a state monopoly. Hence its profits allow the most
conservative state in the union to keep to the free market
doctrines its leaders revere and to avoid taxes that would rob
the wealthy to enrich welfare mothers. Another free market
triumph, unnoticed. <<>>

In theory, free trade arrangements should lower wages in
high-wage countries and raise them in the poorer areas to which
capital shifts, increasing global equity. But in prevailing
conditions, a different outcome is likely. The senior economist
at the Environment Department of the World Bank, Herman Daly,
points out that the vast and growing supply of underemployed
people in the Third World will ``keep the supply of labor very
large, and will make it impossible for wages worldwide to be bid
up very much.'' The effect will be huge profits and elimination
of high wages and social gains, including laws against child
labor, limits on working hours, and protection of the
environment.  ``Anything that raises costs [is] going to tend to
be competed down to the lowest common denominator in free
international trade''---precisely the intended outcome. <<>>

Under prevailing conditions of power and control, free trade will
tend to drive the level of existence to the lowest grade for
people who are spectators, not participants in the decisions that
affect their lives.

Overall, the 1980s accelerated a global rift between a small
sector enjoying great privilege, and a growing mass of people
suffering deprivation and misery. Though superfluous for wealth
production or consumption, the only human functions recognized in
the dominant institutions and their ideology, they must be dealt
with somehow. Current social policy in the US is to coop them up
in urban centers where they can prey upon one another; or to lock
them in jail, often for such crimes as possession of hard drugs,
another useful concomitant of the drug war. The latter policies
have the further merit of providing a Keynesian stimulation to
the economy through booming prison construction and employment
for security guards, the fastest-growing white collar profession.

There have always been two classes of people: the rulers with
their agents, and the beasts of burden who serve them or are
superfluous for their needs. The divide, familiar to the point of
triviality, only becomes more stark and clear in an era of global
corporate mercantilism, free movement of capital, and dissolution
of unions and other democratic structures that might interfere
with state capitalist autocracy, guided by its ``vile maxim.''

The maxim ``All for themselves, and nothing for other people''
requires a slight amendment: ``all for themselves _now_.'' The
longer term is as irrelevant as other people. Thus in a lead news
story, the _Wall Street Journal_ hails Bush's ``extraordinary
coup'' in compelling the entire world to abandon plans for a
meaningful agreement on greenhouse gases at the June Rio
conference (the official reason for the US demand for empty
verbiage is that a treaty would impede ``growth''---like
``jobs,'' a code word meaning ``profits''). Someone more clever
than I could pen a fine story or cartoon on the final edition of
the _Journal_, going to press with a passionate editorial
demonstrating that global warning is a left-wing fraud just as
the rising sea level engulfs the corporate headquarters. <<>>

The internationalization of capital that has accelerated since
1971 gives a somewhat new character to competition among national
states. To cite one indication, while the US share in world
manufactured exports declined 3.5% from 1966 to 1984, the share
of U.S.-based TNCs slightly increased. And international trade
patterns yield a very different picture if imports from overseas
subsidiaries are counted as domestic production. Commercial
products reflect these tendencies; to take one example, almost a
third of the market price of a GM Pontiac Le Mans goes to
producers in South Korea, over a sixth to Japan, about the same
to a combination of Germany, Singapore, Britain, Barbados and
others. As a geographical entity, the country and most of its
population may decline; the corporate empires are playing a
different game. With somewhere between 1/4 and 1/2 of world trade
already conducted within North-based TNCs, these are factors of
growing importance as we look towards Year 501. <<>>


The New Imperial Age

The realities are often presented with admirable frankness by the
rulers and their ideologists. The world's leading business daily,
the London _Financial Times_, features a lead article by the
economic correspondent of the BBC World Service, James Morgan,
under the heading: ``The fall of the Soviet bloc has left the IMF
and G7 [the 7 richest industrial societies] to rule the world and
create a new imperial age.'' We can now approach the fulfillment
of the vision proclaimed by Winston Churchill on the eve of the
Cold War: ``the government of the world must be entrusted to the
satisfied nations,'' the ``rich men dwelling at peace within
their habitations'' whose power places them ``above the rest,''
not the ``hungry nations'' who ``seek more'' and thus endanger
tranquility.

In the current version extolled by the _Financial Times_, ``The
construction of a new global system is orchestrated by the Group
of Seven, the IMF, the World Bank and the General Agreement on
Tariffs and Trade (GATT),'' in ``a system of indirect rule that
has involved the integration of leaders of developing countries
into the network of the new ruling class''---who, not
surprisingly, turn out to be the old ruling class. The local
managers constitute what British imperialists 70 years ago called
the ``facade,'' the ``constitutional fiction'' used to disguise
``absorption of the colonies'' <<>>; they can share the wealth,
as long as they properly serve their masters.

A fair man, Morgan takes note of ``the hypocrisy of the rich
nations in demanding open markets in the Third World while
closing their own''---standard operating procedure. He might have
added the World Bank estimate that the protectionist measures of
the industrial countries reduce national income in the South by
about twice the amount provided by official aid--- most of which
goes to the richer sectors of the ``developing world,'' largely
export-promotion in any event. Or the UNCTAD estimate that over
$26 billion of Third World exports are affected by _non-tariff_
barriers (NTBs) of the industrial countries, with an estimated
loss of some $4.6 billion in exports, almost 20% of current
exports of the affected products.  Or the World Bank estimate
that 31% of the South's manufacturing exports are subject to NTBs
as compared with the North's 18%. Or the 1992 report of the UN
Human Development Program, reviewing the increasing gap between
the rich and the poor (by now, 83% of the world's wealth in the
hands of the richest billion, with 1.4% for the billion at the
bottom of the heap); the doubling of the gap since 1960 is
attributed to policies of the IMF and World Bank, and the fact
that 20 of 24 industrial countries are more protectionist today
than they were a decade ago, including the US, which celebrated
the Reagan revolution by doubling the proportion of imports
subject to restrictive measures.

Or he might have cited some individual cases: for example, the
quotas imposed by the US, UK and France on their commercial rival
Bangladesh, on grounds that its textiles threatened local
industry. Or the dumping of highly subsidized US and EC wheat and
beef surpluses in such countries as Mali, Burkina Faso, and Togo,
undermining native producers in such powerful competitors as the
Sahel. Or US concerns over the threat to the US steel industry
posed by imports from Trinidad-Tobago. <<>>

Morgan notes further that the institutions of ``the new ruling
class,'' which now ``run large parts of the developing world and
eastern Europe'' (the traditional colonial domains),
``encourage'' their clients to follow ``the right kind of reform
policy.'' They must scrupulously avoid the policies that have led
to successful development from 17th-century England to East
Asia's ``little dragons'' today, keeping to policies that have
been highly beneficial to the international ruling class, if to
few others.  And when economic controls do not suffice to
``encourage'' proper behavior, we can always resort to the
security forces, as our little brown brothers can attest from
their recent experience.

The simmering economic crisis does not, of course, leave the
rulers unburdened. But they can call upon state power to come to
the rescue. When Continental Illinois Bank and Trust faced
collapse in 1984, the government was expected to respond, and
did, with ``the largest nationalization in American history''
(Howard Wachtel). The director who presided over the financial
disaster, Roger Anderson, was punished by appointment to the
Federal Advisory Council, where he became an official advisor to
director Paul Volker of the Federal Reserve, which had refused to
use its disciplinary and control authority as it observed the
growing crisis. If the collapse of the Olympia and York real
estate empire indeed causes the $3 billion of losses that the
banks currently fear, taxpayers will again be called upon to
render the proper services. <<>> Austerity is the right remedy for Latin American
peasants, Polish workers, the forgotten people of South-Central
Los Angeles, and huge and growing numbers like them; but not for
the people who count.

The government also has the duty of raising high protectionist
barriers when needed: for example, to allow the US steel industry
to recapitalize by effectively restricting steel imports to 20%
of the market since 1982. At the same time, it has the parallel
responsibility of undermining unions, so that new ``low-cost,
non-union producers'' can pay their labor force between 1/2 and
1/3 of what steel workers had gained after a century of bloody
struggle, and thus become ``exemplars of the lean and mean'' in
the admiring words of the London _Economist_, echoed by the _New
York Times_, which also lauds the success of the ``decade of
protection from imported steel'' and the resort to ``nonunion
work forces'' for lowering costs. <<>>

One great advantage of the new imperial age is that it further
marginalizes the general population. It sharply reduces the
threat of functioning democracy, and therefore leaves the way
clear to uplifting rhetoric about our commitment to democratic
ideals. The global rulers can now operate with fewer constraints,
more coordination and central management, and less interference
from domestic populations. These unruly and dangerous elements
not only have no influence over the decisions of the rulers (the
basic principle of capitalist autocracy), but also lack any
awareness of them. Who follows the crucial decisions of the GATT
negotiators or the IMF, with their enormous impact on global
society, including our own? Or of the TNCs and international
banks and investment firms that dominate production, commerce,
and the conditions of life, world-wide?

For the past several hundred years, elite democratic theory has
tended to range within a narrow spectrum. At one extreme, we have
the libertarian thinker John Locke, who held that citizens have
no right to discuss public affairs, though they may know about
them. In a modern variant, Walter Lippmann describes the public
as ``spectators,'' not ``participants,'' whose ``function'' is to
observe the passing scene, lend their weight periodically to one
or another member of the leadership class (elections), and then
return to their private concerns. At the other extreme we have
statist reactionaries of the Reaganite variety
(``conservatives''), who reject the right of the public even to
know what their leaders are doing and therefore establish illegal
state propaganda agencies, favor large-scale clandestine
operations (terror), block release of information about the
government even from the distant past, and in other ways protect
power from scrutiny. Reagan era censorship reached unprecedented
levels, including suppression and falsification of past history
so extreme that the chairman of the academic advisory board for
the State Department resigned with a public protest. <<>> The new imperial age marks a further
move towards the authoritarian extreme of formal democratic
practice.

The public is not unaware of what is happening, though with the
success of the policies of isolation and breakdown of
organizational structure, the response is erratic and dangerous:
faith in ridiculous billionaire saviors who are little more than
``blank slates'' on which one can write one's favorite dreams,
myths of past innocence and noble leaders, conspiracy cults
(accompanied by occasional incapacity to distinguish conspiracy
from institutional functioning), unfocused skepticism and
disillusionment---a mixture that has not had happy consequences
in the past.


Assuming Responsibility

The Old World Order is often described with no less frankness
than the new imperial age. A recent scholarly study by the senior
historian of the CIA, Gerald Haines, opens like this: ``Following
World War II the United States assumed, out of self-interest,
responsibility for the welfare of the world capitalist system.''
He could have gone on to quote a CIA secret memorandum of 1948
which explains the need to strike a balance between ``supporting
local nationalist aspirations and maintaining the colonial
economic interests'' of our Western European allies, or George
Kennan's call for restoring Japan's ``empire toward the south,''
both plans executed with the predictable balance, reflecting real
interests. <<>>

``American leaders tried to reshape the world to fit U.S. needs
and standards,'' Haines continues. It was to be an ``open world''
---open to exploitation by the rich, but not completely open even
to them. The US desired a ``closed hemispheric system in an open
world,'' Haines explains, a world that is closed to others in
regions held to be of critical importance to the US (as in Latin
America and the Middle East), and open where US dominance has not
been established. The goal was ``to eliminate all foreign
competition.'' The US therefore took pains to drive its French,
British, and Canadian rivals out of the Western hemisphere, so as
``to maintain the area as an important market for U.S. surplus
industrial production and private investments, to exploit its
vast reserves of raw materials, and to keep international
communism out''---rather like Europe and Canada themselves. Here
the term ``communist'' is to be understood in its usual technical
sense: those who appeal to ``the poor people [who] have always
wanted to plunder the rich,'' in Secretary of State John Foster
Dulles's phrase. Much the same was true of the Middle East, to
which the US extended the Monroe Doctrine after World War II,
with enormous consequences for southern Europe, North Africa, and
the region itself.

Haines happens to be concentrating on Brazil, the richest and
most important country of the hemisphere, but the conclusions
generalize. In Brazil, it was necessary to prevent economic
nationalism and what the Truman and Eisenhower administrations
called ``excessive industrial development''---that is,
development that might compete with US corporations, though
competition with foreign capital was not ``excessive,'' therefore
allowed. Quite generally, US leaders ``opposed major
industrialization plans of the Third World nations and rejected
foreign aid programs based on public loans to promote economic
growth,'' preferring a ``mercantilist approach,'' with Third
World economies integrated ``into their U.S.-dominated free trade
system''; the concept of ``mercantilist free trade'' captures
nicely the operative doctrines. The US ``tried to guide and
control Brazilian industrial development for the benefit of
private U.S.  corporations and to fit Brazil into its regional
economic plans.''  The humanitarian Point Four program, which was
to be ``a model for all Latin America,'' was designed ``to
develop larger and more efficient sources of supply for the
American economy, as well as create expanded markets for U.S.
exports and expanded opportunities for the investment of American
capital.''

What US planners ``envisioned, but seldom stated, was a
neocolonial relationship with Brazil furnishing the raw materials
for American industry and the United States supplying Brazil with
manufactured goods.'' They pursued a ``neocolonial,
neomercantilist policy''---which is, somehow, ``a classic liberal
approach to development,'' showing again how flexible an
instrument economic theory can be. Industrial development was
tolerable only if it was ``complementary to U.S. industry.'' The
basic concept was ``that Brazilian development was all right as
long as it did not interfere with American profits and
dominance,'' and ample profit remittance was guaranteed.
Agricultural development was also promoted, as long it avoided
``destabilizing'' programs like land reform, relied on US farm
equipment, fostered ``commodities that complemented US
production, such as coffee, cacao, rubber, and jute,'' and
created ``new markets for U.S. agricultural commodities'' such as
dairy products and wheat.

``Brazilian desires were secondary,'' Haines observes, though it
was useful ``to pat them a little bit and make them think that
you are fond of them,'' in Dulles's words. The US favored
democracy, therefore ``cultivating the Brazilian military,''
which US officials ``promoted . . . as the protector of
democracy.'' This farsighted policy came to fruition as the
generals took command in the 1960s, instituting a neo-Nazi
National Security State with ample torture and repression, and
creating a much-admired ``economic miracle'' by following all of
the most orthodox prescriptions of approved economic theory---a
matter that merits a separate look.

Throughout, Haines's account is interlarded with such phrases as
``the best of intentions,'' ``sincerely believed,'' etc. By lucky
accident, what was ``sincerely believed'' conformed nicely to the
interests of US investors, however ruinous it might be to our
wards. Again, Haines strikes traditional chords.

Soviet machinations in Brazil were of great concern to Ambassador
A.A. Berle, a leading liberal statesman from the New Deal through
Kennedy's New Frontier. The Russians are like the Nazis, he
warned in 1946: ``Horribly, cynically, and terribly, they exploit
any center of thought or action which may make trouble for the
United States''; they are so unlike us, in this regard.
Intelligence, however, could detect no Soviet trouble-making in
Brazil apart from economic missions and other common practices.
But Berle's position was endorsed. As Haines summarizes an
intelligence report a few months later, ``the Soviet Union might
conceivably find it to its advantage in the future to fish in
troubled inter-American waters.'' So no chances could be taken.
The potential Communists must be eliminated before they have a
chance to act.

This is the common stance of the early postwar period, throughout
the world, much as it was at home after World War I, when ``there
could be no nice distinctions drawn between the theoretical
ideals of the radicals and their actual violations of our
national laws'' and ``no time to waste on hairsplitting over
infringement of liberty'' (Attorney-General Palmer and the
_Washington Post_, during Wilson's Red Scare). <<>>

US leaders used Brazil as a ``testing area for modern scientific
methods of industrial development,'' Haines observes. US experts
provided instructions on all sorts of topics. For example, they
encouraged Brazilians to open the Amazon to development and to
follow the US model of railroad operation---the latter a touch of
black humor, perhaps. But crucially, they provided Brazil with
sincere advice on how to benefit US corporations.

The result is ``a real American success story.'' ``America's
Brazilian policies were enormously successful,'' bringing about
``impressive economic growth based solidly on capitalism.''

Political success was also inspiring. Already by September 1945,
when the ``testing area'' had barely been opened for experiment,
Ambassador Berle wrote that ``every Brazilian now has available
to himself all of the resources available to any American during
a political campaign: he can make a speech, hire a hall,
circulate a petition, run a newspaper, post handbills, organize a
parade, solicit support, get radio time, form committees,
organize a political party, and otherwise make any peaceable bid
for the suffrage and support of his countrymen''---just like
``any American.'' We're all equal, one happy family in harmony,
which is why government is so responsive to the needs of the
people.  And so ``democratic''---in the doctrinally approved
sense of the term, referring to unquestioned business rule.

This triumph of capitalist democracy stands in dramatic contrast
to the failures of Communism, though admittedly the comparison is
unfair to the Communists, who had nothing remotely like the
favorable conditions of this ``testing area'' for capitalism,
with its huge resources, no foreign enemies, free access to
international capital and aid, and benevolent US guidance for
half a century. And indeed it is a success. US investments and
profits boomed as ``Washington intensified Brazil's financial
dependence on the United States, influenced its government's
decisions affecting the allocation of resources, and nudged
Brazil into the U.S.-dominated trading system,'' Haines writes.

Within Brazil, the ``modern scientific methods of development
based solidly on capitalism'' have brought great benefits to some
5--10% of the population, while perhaps 75% live in indescribable
misery, comparable to Central Africa, with one of the most
lopsided distributions of income in the world. Starvation and
disease are rampant, the country is the world center of such
triumphs as child slavery and torture and murder of street
children by the security forces---``a process of extermination of
young people'' according to the head of the Justice Department in
Rio de Janeiro (Hlio Saboya), targeting the 7--8 million street
children who ``beg, steal, or sniff glue'' and ``for a few
glorious moments forget who or where they are'' (London
_Guardian_ Brazil correspondent Jan Rocha). In Rio alone, a
congressional commission identified 15 death squads, most of them
made up of police officers and financed by merchants. Brazilian
medical researchers describe the population of the Northeast as a
new subspecies: ``Pygmies,'' with 40% the brain capacity of
humans--- the result of severe malnutrition in a region with much
fertile land, owned by large plantations that produce cash crops
for export. Truly a glorious victory, a tribute to capitalism,
and our magnificence. <<>>

We should appreciate the scale of the achievement. It took real
talent to create a nightmare in a country as favored and
richly-endowed as Brazil. In the light of such triumphs of
``modern scientific methods of development based solidly on
capitalism,'' it is understandable that the ruling class of the
new imperial age should be dedicated with such passion to helping
others share the wonders, and that the ideological managers
should be so enthusiastic in celebrating the grand accomplishment
and its agents.

There are many other such success stories in the Caribbean and
Central America, the Philippines, Africa, in fact wherever
Western power and capitalist ideology have reached. These basic
truths and their meaning, which would be taught in elementary
schools in free societies, must be kept far removed from
consciousness as we advance towards Year 501 of the Old World
Order.

One striking feature of the record of ``scientific methods of
development'' is the ``irrational disdain for the agricultural
experience of local peasants'' (Hans Schmidt), which has had
significant effects throughout the world. In his standard history
of Haiti under the 20-year Marine occupation after Wilson's 1915
invasion, Schmidt attributes ``a series of disastrous failures''
in Haitian agriculture to that ``irrational disdain,'' as US
experts attempted to apply ``the latest developments in
scientific agriculture'' to their Haitian testing area---as
always, sincerely believing that they were doing good, as always
benefiting US agribusiness and the related corporate structure
for high tech agriculture. A 1929 study found that ``Haitian
peasants were growing cotton more successfully than American
plantations which employed the latest scientific methods,''
Schmidt observes. The chief US agricultural expert reported to
the State Department that agricultural ventures ``had failed
because promoters had been unwilling to study the techniques
employed by local people who had, through generations of
practical experience, developed locally viable methods,'' which
enabled the natives to raise cotton more successfully than the
plantations that were ``scientifically cultivated.'' <<>>

At least, as long as the natives could hold on to their lands.
Another achievement of Wilson's liberation of Haiti was a new
Constitution, imposed on the hapless country after the National
Assembly was dissolved by the Marines for failure to ratify it.
The US-designed Constitution overturned earlier laws preventing
foreigners from owning land, thus enabling US corporations to
take what they wanted. Assistant Secretary of the Navy Franklin
Delano Roosevelt later took credit for having written the
Constitution, probably falsely, though he did hope to be one of
its beneficiaries, intending to use Haiti ``for his own personal
enrichment,'' Schmidt notes. Ten years later, in 1927, the State
Department conceded that the US had used ``rather high handed
methods to get the Constitution adopted by the people of Haiti''
(with 99.9% approval in a Marine-run plebiscite with under 5% of
the population participating). But these methods were necessary:
``It was obvious that if our occupation was to be beneficial to
Haiti and further her progress it was necessary that foreign
capital should come to Haiti . . ., [and] Americans could hardly
be expected to put their money into plantations and big
agricultural enterprises in Haiti if they could not themselves
own the land on which their money was to be spent.'' It was out
of a sincere desire to help the poor Haitians that the US forced
them to allow US investors to take the country over, the State
Department explained. <<>>

Other experiments have commonly turned out the same way. In his
study of another long-time ``testing area,'' Liberia,
anthropologist Gordon Thomasson found the same ``irrational
disdain'' for native intellectual achievement, and the same
severe costs---for the local population. Over the centuries, the
Kpelle peoples had developed hundreds of varieties of rice that
were matched precisely to microenvironments in particular
ecosystems; dozens of different seeds might be planted in a small
field, with very high yields. US agronomists advised
capital-intensive ``green revolution'' techniques using
petrochemical inputs which, apart from being far too costly for a
poor country, bring lower yields and loss of the traditional
knowledge and the wide variety of seeds that have been bred,
selected, diversified and maintained over centuries. Thomasson
estimates that agricultural productivity will be cut by as much
as 50% if the rich genetic pool of rice varieties, ``the product
of centuries of self-conscious breeding and selection,'' is lost
and replaced by foreign inputs: ``many areas of rural Liberia
will for all intents and purposes cease to exist, and so will
many of Liberia's indigenous cultures.'' The disdain of the
experts, in this case, was heightened by the fact that this was
``women's knowledge,'' transmitted by older women to young girls
who spent much time acquiring the skills and lore.

Following standard doctrine, US experts also advised Liberia to
convert farmland to plantation cash crops (which, incidentally,
happen to benefit US corporations). The resulting shortfalls led
USAID to push the development of paddy rice in swamps, ignoring a
World Health Organization effort to keep people out of these
regions because of extreme health hazards.

The Kpelle had also developed sophisticated metallurgical
technology, providing highly efficient tools. In this case, their
achievements were ``killed by colonialism and monopoly
capitalism, not because the product it produced was in any way
inferior or overpriced in the marketplace,'' but by means of
subsidies to coastal merchants and other market destortions
designed by the economic experts and imposed by the US-controlled
governments, ``eventually destroying the economy, currency, and
indigenous industry.'' Again, there were beneficiaries as well:
multinational mining concessions, foreign producers who supplied
the importers, and banks outside Liberia to which they ship their
profits.

Chalk up another notable success of neoclassical and monetarist
``free market'' theories. <<>>

Students of US diplomatic history might recognize that it is
unfair to take Liberia and Haiti as illustrations. As Wilson's
Secretary of State Robert Lansing explained, <<>> ``The experience of Liberia and Haiti show that
the African race are devoid of any capacity for political
organization and lack genius for government. Unquestionably there
is an inherent tendency to revert to savagery and to cast aside
the shackles of civilization which are irksome to their physical
nature, . . . as we know from experience in this country.  It is
that which makes the negro problem practically unsolvable,'' and
perhaps accounts for the results of the experiments in Liberia
and Haiti---which, however, are duplicated throughout the Third
World.

These regular features of the 500-year conquest will have growing
significance in the years ahead as the ecological consequences of
unsustainable capital-intensive agriculture reach a scale that
cannot be neglected even by the rich. At that point, they will
enter the agenda, like the ozone layer, which became
``important'' when it seemed likely to endanger rich white folk.
Meanwhile, the experiments will continue in the ``testing
areas.''


Laboratory Animals

The notion of a ``testing area'' for US ``modern scientific
methods'' merits particular notice. Similarly, ``American
strategists have ideal testing ground' for implementing
low-intensity conflict doctrine'' (a.k.a.  international
terrorism), a recent DOD-sponsored RAND Corporation report on the
experiment concludes. <<>> In
earlier days, Vietnam was described by high US officials as a
laboratory for ``experiments with population and resource control
methods'' and ``nation building.'' The Marine occupation of Haiti
was described by a thoughtful observer in 1926 as ``an experiment
in pragmatism'' conducted by caring souls who comprehend ``that
intelligent guidance from without may sometimes accelerate the
process of national growth and save much waste.'' <<>> The technical posturing appears to
help sustain the self-image, at least.

One finds no intimation that the experimental subjects might have
the right to sign consent forms, or even to know what is
happening to them. On the contrary, they scarcely have the rights
of laboratory animals. _We_ will determine what is best for them,
as we always have; another hallmark of the 500 years.

The wise among us just _know_, for example, that maximizing
consumption is a core human value: ``If we weren't influencing
the world'' in this direction, ``it would be someone else because
what we are seeing everywhere is an expression of the basic human
desire to consume,'' Boston University professor of management
Lawrence Wortzel explains. <<>> US investors are lucky to be so in tune with basic human
nature. True, slow learners sometimes have to be helped to
understand their true nature. The advertising industry devotes
billions of dollars to assisting this self-awareness, and in the
early days of the industrial revolution, it was no small problem
to bring independent farmers to realize that they wished to be
machines on an assembly line so as to be able to gratify their
basic human desire to consume.

Our primitive wards also commonly lack self-awareness, and need
some help. The US proconsul in Haiti in the 1920s, Financial
Adviser Arthur Millspaugh, observed that ``the peasants, living
lives which to us seem indolent and shiftless, are enviably
carefree and contented; but, if they are to be citizens of an
independent self-governing nation, they must acquire, or at least
a larger number of them must acquire, a new set of wants''---
which the advertising industry will be happy to stimulate, and US
exporters will generously fulfill. <<>>

The same problem arose half a century earlier, as the US prepared
to rescind the solemn treaties recognizing ownership of Eastern
Oklahoma by the Five Civilized Tribes. The Indian Territory had
been granted to these nations in perpetuity after they had been
brutally expelled from their traditional homes under President
Andrew Jackson's Indian Removal Act of 1830. But once again, they
stood in the way of civilization.

What followed is described by Angie Debo in his classic 1940
study _And Still the Waters Run_. <<>> Land was held
collectively and life was contented and prosperous. The Federal
Indian Office opposed communal land tenure by ideological dogma,
as well as for its practical effect: preventing takeover by white
intruders. A group of Eastern philanthropists and humanitarians
began to meet in 1883 to consider problems of the Indians. Its
third meeting was addressed by Senator Henry Dawes of
Massachusetts, considered a ``distinguished Indian theorist,''
who had just concluded a visit of inspection to the Indian
Territory.  He described what he found in glowing terms: ``The
head chief told us that there was not a family in that whole
nation that had not a home of its own. There was not a pauper in
that nation, and the nation did not owe a dollar. It built its
own capitol, in which we had this examination, and it built its
schools and its hospitals.''

Dawes then recommended that the society be dissolved, because of
a fatal flaw, of which the people were unaware: ``Yet the defect
of the system was apparent. They have got as far as they can go,
because they own their land in common. It is Henry George's
system, and under that there is no enterprise to make your home
any better than that of your neighbors. There is no selfishness,
which is the bottom of civilization. Till this people will
consent to give up their lands, and divide them among their
citizens so that each can own the land he cultivates, they will
not make much more progress.'' In brief, though apparently
civilized and advanced, the people remained culturally deprived,
unable to recognize their ``basic human drive to consume'' and to
best their neighbors, ignorant of the ``vile maxim.''

Dawes's proposal to bring enlightment to the savages was accepted
by the humanitarians, and soon implemented. He introduced
legislation that barred communal landholding and headed the
Commission that oversaw the dispossession of the Indians that
inevitably ensued. Their lands and property were looted, and they
were scattered to remote urban areas where they suffered
appalling poverty and destitution.

Such is the way with experiments: they don't always succeed. In
fact, these regular experiments typically do succeed, as this one
did, for those who design and execute them---honorable men,
always guided by the most benevolent intentions, which,
fortuitously, happen to coincide with their own interests.

Even today, the general population often fails to understand its
inner wants. The current debate over health care provides some
useful illustrations. A case in point is a major article in the
_Boston Globe_ (Feb. 9) by Thomas Palmer, an outstanding
journalist, well to the liberal side of the spectrum. Palmer
opens by reporting that almost 70% of Americans prefer a
Canadian-style health-care system, according to polls. But they
are wrong, for two reasons.

The first reason is technical: it was clarified by President
Bush, who ``emphasized the importance of avoiding the problems of
bureaucratized, universal-care systems like Canada's.'' It is a
matter of logic that government-run systems are inefficient, and
the fact that the highly bureaucratized private sector system in
the US is vastly more inefficient is therefore irrelevant. It is,
for example, of no relevance that Blue Cross of Massachusetts
employs 6680 people, more than are employed in all of Canada's
health programs, which insure 10 times as many people; or that
the share of the health dollar for administrative costs is over
twice as high in the US as in Canada. <<>> Logic cannot be confuted by
mere fact.

More interesting is the second reason, which is ``spiritual.''
There is a ``difference in outlook'' north and south of the
border; there are ``theoretical differences that students of the
two nations see in the psyches of the average American and
Canadian.''  These students explain that the Canadian system
would cause ``the kind of rationing of health care that Americans
would never accept. . . . The US system rations by price; if you
can afford it, it's there. Canadians ration their health care by
providing the same care for everyone and simply making those
seeking elective or less urgent procedures wait.''

Plainly, that would not accord with ``American-style
impatience,'' one ``student of the two nations'' explains.
Imagine, he says, that ``no matter how poor you are, you will sit
in a hospital bed and receive care as the richest in your
community. No matter what contacts you have and no matter how
rich you are, you can get no better than that.'' Americans would
never accept that, we learn from this expert (incidentally, the
president of a health-care consulting firm). Further insights
into the American psyche are given by the deputy director of a
trade group of commercial health insurers. The 70% of Americans
who don't understand their own psyches are not sampled;
obviously, they too need instruction in self-awareness.


Reshaping Industrial Policy

The economic managers of the 1980s not only left the US with a
legacy of unprecedented debt, but also with the lowest rate of
net private investment of any major industrial economy. In
1989--90, the US fell behind Japan in the absolute level of
industrial investment, with a population twice as large. The US
position in traditional high-tech industry also declined
severely. <<>>

For forty years, US industrial policy has been based on the
Pentagon system, which provided a regular stimulus to high
technology production and a state-guaranteed market to cushion
management decisions. With Soviet power a reality, it was always
possible to concoct ``missile gaps,'' ``windows of
vulnerability,'' and other threats to our existence when needed.
These forms of massive state intervention in the economy provided
the US with a comfortable lead in the advanced sectors of
technology. But the pretexts are now gone, and new devices are
needed.

At the same time, the cutting edge is shifting towards other
areas, notably biotechnology. Like other competitive sectors of
the economy, the pharmaceutical and health industries and
agribusiness have always benefited from a crucial state-organized
subsidy for research, development, and marketing. These areas are
now gaining a greater role in planning for the years ahead.  In
the early postwar years, research would ``spin off'' electronics
and computer firms, creating new opportunities for enrichment for
engineers, scientists and entrepeneurs. Today, biotech firms are
springing up around the same research institutions, by rather
similar mechanisms.

The US National Institutes of Health are engaged in what the
_Wall Street Journal_ calls ``the biggest race for property since
the great land rush of 1889,'' in this case, ``staking U.S.
patent claims to thousands of pieces of genetic material---DNA
---that NIH scientists are certain are fragments of unknown
genes.'' The purpose, the NIH explains, is to ensure that US
corporations dominate the biotechnology business, which the
government expects ``to be generating annual revenue of $50
billion by the year 2000,'' and vastly more beyond. A recent
patent for a basic human blood cell could allow a California
company to ``corner the market for a broad array of life-saving
technologies,'' to cite merely one example. The biotech business
took off after a 1980 Supreme Court decision granting a patent
for an oil-dissolving microorganism developed through genetic
engineering, the _Journal_ observes.

The prospects are considered to be expansive. To convey a sense
of the prospects, one researcher remarks that some way down the
road, parents might even have to pay royalties for having
children. Medical procedures such as bone-marrow transplants and
gene-based therapies will also be protected by patent. The same
could be true of engineered animals, seeds, and other organisms.
We are now speaking of control of the essentials of life. By
comparison, electronics deals with mere conveniences. <<>>

These developments give new urgency to the US demand for
increased protection for ``intellectual property''---crucially
including patents---at the ongoing GATT negotiations. These
protectionist measures are needed to ensure that US corporations
dominate the health and agricultural industries, thus controlling
the essentials for human life; and to guarantee to US
pharmaceutical corporations huge profits on drugs that are priced
far beyond the reach of taxpayers who fund the research, let
alone the bulk of the world's population. ``Basic biomedical
research has long been heavily subsidized by United States
taxpayers,'' the _New York Times_ business pages observe, and
``high-tech pharmaceuticals owe their origin largely to these
investments and to Government scientists,'' funded by billions of
taxpayer dollars for the National Institutes of Health and for
University research. But drugs created through genetic
engineering and other state subsidy are priced beyond the reach
of those who pay for their development. Protection of
``intellectual property'' is designed to guarantee monopoly
profits to the publicly-subsidized corporations, not to benefit
those who pay; and the South must be denied the right to produce
drugs, seeds, and other necessities at a fraction of the cost.

On similar grounds, the US has refused to sign a treaty on
preserving the world's biological species. The Assistant
Secretary of State for the Environment, Curtis Bohlen, said that
the treaty ``fails to give adequate patent protection to American
companies that transfer biotechnology to developing companies,''
and ``tries to regulate genetically engineered materials, a
competitive area in which the United States leads,'' the _New
York Times_ reports. <<>>

The US International Trade Commission estimates that US companies
stand to gain $61 billion a year from the Third World if
``intellectual property'' rights are protected in accord with US
demands, a cost to the South of somewhere between $100--300
billion when extrapolated to the other industrial countries,
dwarfing the debt service flow of capital from South to North.
The same US demands will require poor farmers to pay royalties to
TNCs for seeds, denying them the traditional right to re-use
seeds from their harvests. Cloned varieties of commercial crops
exported by the South (palm oil, cotton, rubber, etc.) will also
be commercial property, subject to increased royalties. ``The
main beneficiaries will be the core group of less than a dozen
seeds and pharmaceuticals companies which control over 70 per
cent of world seeds trade,'' and agribusiness generally, Kevin
Watkins observes in a recent study for the Catholic Institute of
International Relations in London. <<>>

While the US seeks to ensure monopoly control for the future, the
same drug companies it protects are cheerfully exploiting the
accumulated knowledge of indigenous cultures for products that
bring in some $100 billion profits annually, offering virtually
nothing in return to the native people who lead researchers to
the medicines, seeds, and other products they have developed and
refined over thousands of years. ``The annual world market value
for medicines derived from medicinal plants discovered from
indigenous peoples is US $43 billion,'' ethnobotanist Darrell
Posey estimates. ``Less than 0.001% of the profits from drugs
that originated from traditional medicine have ever gone to the
indigenous people who led researchers to them.'' Profits of at
least the same scale derive from natural insecticides, insect
repellents, and plant genetic materials, he believes. The
international seed industry alone accounts for some $15 billion a
year, based in large measure on genetic materials from crop
varieties ``selected, nurtured, improved and developed by
innovative Third World farmers for hundreds, even thousands of
years,'' Maria Elena Hurtado adds. <<>>

Only the knowledge of the rich and powerful merits protection.

Before gaining its current dominance, the US did not abide by the
rules it now seeks to impose. In the 19th century, the US
rejected foreign claims to intellectual property rights on
grounds that they would hamper its economic development. Japan
followed the same course. <<>> And
today, the concept of ``intellectual property rights'' is finely
crafted to suit the needs of the powerful. Exactly as in the case
of ``free trade,'' the subjects in the new imperial age are to be
denied any recourse to the methods that were used by the ``rich
men dwelling at peace within their habitations.''

This combination of plans by the rulers of the new imperial age
is viewed from the South as ``an act of unbridled piracy,''
Watkins observes, given the fact that the genetic materials used
by the Western corporations to create their patented and
protected products are derived from Third World crops and wild
plants, cultivated, refined, and identified over countless
generations.  The seed and pharmaceutical companies thus ``reap
monopoly profits, while the genius of the Third World farmers,
past and present, in selecting and developing individual seed
strains goes unrewarded.'' The New World Order as a whole is
described by Egypt's leading newspaper, _al-Ahram_, as ``codified
international piracy,'' referring in this case to the efforts of
the Bush Administration to set up a confrontation with Qaddafi
for domestic political purposes in the manner that has become
routine since Libya's utility as a cheap punching bag was
recognized by Reaganite PR specialists in 1981. The terminology
is apt enough. <<>>

The unbridled piracy takes on increased urgency as indigenous
agriculture and knowledge are undermined in favor of ecologically
unsustainable agroexport in the interests of the TNCs, and the
biological resources of the South---the world's richest by far
---are sharply reduced, raising the danger of disease and blight
to potentially catastrophic levels. To whatever extent
biotechnology may provide a remedy, the effect again will be to
transfer power and wealth to the rulers of the new imperial age,
if the demands of the corporations for increased protection are
implemented. That they will be is almost a foregone conclusion,
given the distribution of power and the insulation of
decision-making from public interference in the new imperial age.

The tendencies towards the new imperial age heralded by the
international financial press are obvious and understandable,
along with the extension of the North-South divide to the
habitations of the rich. There are also countertendencies.
Throughout the North, notably in the US, much has changed in the
past 30 years, at least in the cultural and moral spheres, if not
at the institutional level. Had the quincentennial of the Old
World Order been in 1962, it would have been celebrated once
again as the liberation of the hemisphere. Today, that is
impossible, just as few can blandly talk of our task of ``felling
trees and Indians.'' The European invasion is now officially an
``encounter,'' though large sectors of the population rightly
reject that euphemism as only somewhat less offensive. The
domestic constraints on state violence that are fully recognized
by the US political leadership are another case in point. Many
were depressed by the inability of the peace movement to prevent
the Gulf war, failing to recall that perhaps for the first time
ever, large-scale protests actually preceded the bombing, a
radical change from the US assault against South Vietnam 30 years
ago. The ferment of the 60's reached much wider circles in the
years that followed, eliciting new sensitivity to racist and
sexist oppression, concern for the environment, respect for other
cultures and for human rights. One of the most striking examples
is the Third World solidarity movements of the 1980s, with their
unprecedented engagement in the lives and fate of the victims.
This process of democratization and concern for social justice
could have large significance.

Such developments are perceived to be dangerous and subversive by
the powerful, and bitterly denounced, often in tones of real
hysteria. That too is understandable: these countertendencies do
threaten the vile maxim of the masters, and all that follows from
it. They also offer the only real hope for the great mass of
people in the world, even for the survival of the human species
in an era of environmental and other global problems that cannot
be faced by primitive social and cultural structures that are
driven by short term material gain, and that regard human beings
as mere instruments, not ends.