The tragedy of Allende-era Chile: A strong start countered by imperialist assault

The 50th anniversary of the first 9/11 — the military coup that overthrew the democratically elected government headed by Socialist Party leader Salvador Allende — is this month. Chilean working people made enormous advances during the first year of the Allende government, formally a multiparty coalition known as Popular Unity, before Chilean capitalists, U.S. corporate interests firmly backed by the Nixon administration and right-wing elements in both countries were able to regroup and begin a heavy-handed sabotage campaign waged with increasing vehemence. In this excerpt from What Do We Need Bosses For?: Toward Economic Democracy, some of those first-year successes are recounted but the bourgeois forces are already beginning their efforts to obstruct and ultimately reverse all advancement.

For a little while more [after Salvador Allende’s government nationalized Chile’s copper industry in July 1971], Popular Unity continued to have the wind at its back. Its economic policies paid fast dividends: National unemployment dropped from six percent to four by the end of 1971, while for greater Santiago, unemployment declined from 8.3 percent to 3.8 percent, the lowest ever recorded. Importantly, most of the new jobs were in productive areas (agriculture, industry, construction) in contrast to previous years when job growth tended to be in services. Gross domestic product rose 8.5 percent for 1971, nearly double the 1960s average. Industrial growth was 12 percent, and here too this was not growth for growth’s sake — most of it was in production of basic goods such as food and clothing in contrast to past years when growth was based on durable goods such as appliances and automobiles. Wages increased 30 percent, and the labor share of income [of the Chilean economy] increased from 55 percent to 66 percent. These accomplishments were done with a significant cut in inflation. Perhaps the most basic measure of the improvement was that the poor could now afford to eat meat and buy clothes.

Storm clouds, however, began to appear on the horizon. The dramatic burst in production and living standards for 1971 had been assisted by the large amount of unused industrial capacity, the large numbers of unemployed who could be put to work, by freezing prices so that private employers couldn’t pass on the costs of wage increases to customers as had customarily been done, large inventories of goods and raw materials due to the recession that Popular Unity had inherited, and large currency reserves on which the government could draw. Further improvement would be harder to come by, in part due to the relative lag in food production.

The price of copper dropped sharply in 1971. Copper had sold as high as 84 cents per pound during the [preceding Christian Democrat] Frei administration and was still at 70 cents the first half of 1970, but would average only 49 cents for 1971. Given Chile’s heavy dependence on copper, that was a serious blow — each reduction of one cent cost the country $15 million over a year. At the same time, many products that Chile needed to import, including foodstuffs, rose in price. As 1972 began, a black market began to develop in response to these price imbalances. In addition to the rising costs of imported food (a problem difficult to tackle in the short term because Chile had long ceased to be food self-sufficient), wholesale distribution was still controlled by private capital. Instead of investing in production, that capital began to be used to buy up scarce items and re-sell them at extortionate prices.

Although much reduced for the year as a whole, inflation had begun to creep upward during the last two months of 1971; fear of renewed inflation caused the government and the national trade union federation, CUT, to agree to cap 1972 wages at the final 1971 inflation rate. The government had been printing money during 1971, a danger that would best not be continued. Individual unions resisted the wage cap despite arguments that too much of an increase would risk a resumption of inflation. And as 1972 opened, a U.S.-imposed credit blockade began, as promised by the Nixon administration. Not only was credit previously provided routinely by international lending agencies halted, routine short-term credits used to finance everyday trade were cut and even the sale of spare parts was stopped.

This was an “invisible” blockade; no official sanctions were announced. The credit blockade additionally impeded those firms that wanted to sell their products in Chile. Others that wished to do business found themselves unable to counter pressures brought to bear on them. Kennecott, one of the two major copper companies to be expropriated, filed lawsuits in Western European courts in a successful effort to halt copper sales. Chile’s chronic trade deficits, combined with the concentration of finance in New York, left the country highly vulnerable to a credit embargo, both by international lending organizations and corporate banks. This would have devastating effects, economist Richard E. Feinberg explained:

“The invisible credit blockade was the U.S.’s response to Allende’s moderate national and progressive domestic policies. The blockade reduced Chile’s capacity to import traditional consumer items, as well as the food needed by the better-off workers; Chilean industry and transport began to suffer from a lack of spare parts, and many factories had to reduce output due to a shortage of needed imported inputs, while Chile’s inability to import capital equipment undermined [Popular Unity’s] investment plans. The inevitable shortages of supply angered consumers and helped fuel inflation. The shortage of foreign exchange exacerbated social tensions.”

It was the success of Popular Unity that U.S. multinational capital feared

Although multi-national corporations compete, sometimes fiercely, with one another, they will close ranks and unite not only when the system they dominate is threatened, but when there is a sustained effort simply to contain their profits and redistribute income somewhat more fairly. Chile, a mid-sized country, hardly could constitute a threat to multi-national capital. But the example that Popular Unity had set raised alarm bells in corporate suites; if Chile succeeded in its peaceful road to socialism, other countries would surely wish to copy the example. Massive exploitation of underdeveloped countries swelled corporate coffers, and all the power they could bring to bear would be put into action, backed by the powerful governments of the global North all too willing to do their bidding.

Smaller businesses took their cues from their larger brethren.

Ariel Dorfman, who worked as a cultural and media adviser to the Popular Unity government, in his memoir Heading South, Looking North, tells of the story of “Juan,” a factory worker who was being driven out of the country into exile with him in the aftermath of the 1973 coup:

“[Allende’s] policies had created an economic boom: increased salaries and benefits led to skyrocketing consumption and that led, in turn, to a major increment in production. So, more goods sold and a better life for Juan and his co-workers, right? Not at all. The owner of the factory, opposed to the revolution, even if it did not threaten his property, had decided to sabotage production: he had stopped reordering machine parts, he had blocked distribution deals that were already in place, he refused to hire new workers and threatened to fire those who complained. He should have been making money in buckets and instead was secretly preparing bankruptcy proceedings, pulling his capital out of the industry, getting ready to flee the country. The workers had watched this class warfare patiently for months and, finally, when the owner had announced he was shutting down the whole operation, they had taken over the premises. It was the only way to save their jobs and keep producing the food that Chile needed. Allende’s government intervened in the conflict, negotiated compensation for the owner, and put the workers in control. Juan had been elected to head the council that, for a couple of years, ran that factory, and in spite of inevitable mistakes, it had been a successful venture.”

De-capitalization, removing equipment or outright closures were common reasons for the government to step in and take over enterprises; 1972 would see a steady stream of these. The example of the Yarur workers [who had taken over their textile mill in the first takeover directly accomplished by employees] had indeed quickened the tempo of the revolution. Regardless, from a macro-economic standpoint the gathering problems had to be confronted, a task made much harder by the obstinate refusal of the parliamentary opposition to approve any Popular Unity legislation.

^{The past is not forgotten. Chileans demonstrate in Plaza Baquedano, Santiago in 2019 (photo by Carlos Figueroa)}

The budget deficit had grown larger than planned due to the loss in income from softening copper prices, the increase in prices of imports, deficits in nationalized enterprises caught between rising costs and consumer-price freezes that had to be covered by the government, and the uncontrolled increase in land seizures. Revenue had to be increased. One way would be to crack down on tax evasion — the loss in 1971 just from evaded sales tax was three times the size of the deficit! The rise of the black market in 1972 would only aggravate this problem because illegal operations don’t pay taxes.

One solution to these problems would be a rationalization of the tax code, not only to reduce tax evasion, but to make the code more progressive. Popular Unity proposals to do this, however, were uniformly blocked by the Christian Democrat and National opposition. In part that was due to class interests, but also to prevent inflation from being tamed — fomenting economic chaos had become policy for the opposition parties. …

Working people weren’t experienced at management but quickly improved production

The workers who began to co-manage Chile’s growing social-property area made mistakes — having been shut out of all participation previously, how could it be otherwise? — but overall did well, both in terms of maintaining production, creating links with other enterprises and with surrounding communities, and with orienting production toward the everyday needs of Chileans.

The most comprehensive study of the social-property area was carried out by economists Juan Espinosa and Andrew Zimbalist, who performed an intensified study of 35 manufacturing enterprises that came to be part of the social-property area. The two found that in 29 of the 35 enterprises studied, productivity increased, and that the productivity improvements were sustained, even increasing over time. Those results imply that morale improved after the staff freed itself of private management, and such a conclusion is backed up in the findings that absenteeism declined, strikes were called at one-seventh the rate they had been previously, and theft and defects were reduced while more innovation was found.

Alienation from the process of production was gradually being eliminated, Espinosa and Zimbalist wrote. In their book Economic Democracy: Workers’ Participation in Chilean Industry 1970-1973 they quote a foundry production worker in an enterprise that they ranked near the median of participation levels of the 35 studied, and thus not an exceptional example. The worker said:

“We tried to break down the barriers which had been erected to divide us. We dissolved the three trade unions and formed a single one. Any executive or foreman could be submitted to the Discipline Committee. A collective bonus system was set up. In general, there was a qualitative change in human relationships. The executives and technicians attended the worker assemblies with everyone else — and their vote wasn’t worth more than that of a worker. We were all ‘workers’ with different functions — but the difference in functions didn’t define social privilege. It was the birth of a new sort of society — the reflections of our hopes and aspirations. Great perspectives opened — and for this we were ready to sacrifice ourselves — and so we did, simply because we were convinced that this would mean a better world for ourselves and our children.”

Few technicians left; in the majority of enterprises studied less than 10 percent. For all personnel, social services were greatly improved and working conditions improved. Improvements commonly done included ventilation and heating systems; construction or expansion of cafeterias; construction of day care centers; establishing first-aid clinics and purchases of ambulances, used by the surrounding community as well those working in the enterprise; initiation of cultural activities; and administrative and technical classes. Capitalists who had lost control complained that money was being wasted on these, but the money spent was less than one percent of enterprise net worth. And along with better conditions on the job was job rotation and drastic reductions in inequality; the biggest raises went to those with the lowest pay.

^{Popular Unity supporters rally in Chile in 1972 (photo via Revista Argentina Siete Días Ilustrados)}

In the first enterprise to be seized by its workers, the Yarur textile mill (subsequently known as “Ex-Yarur”), there was a “dramatic increase” in participation, “whether measured by voting, meeting attendance, or committee membership.” At general-assembly meetings, government managers could be criticized for giving reports that were insufficiently clear and concise. At this enterprise, “the politics of deference had given way to a participatory democracy.”

Interesting as well were the product changes made — production was increasingly geared to meeting needs instead of producing for the highest possible profit, in strong contrast to how production is organized under capitalism. At Ex-Yarur, for example, the repair shop began to manufacture three-quarters of the parts previously imported and no longer available due to the U.S. blockade. The enterprise instituted the “democratization of production” to ensure popular needs, in particular serving the most deprived, in contrast to the previous régime when production for the wealthy was emphasized.

Production for people, not for the highest profit

In line with these goals, a government organization, the State Technology Institute, developed 20 affordable products to meet needs. Among these were agricultural machinery; spoons for measuring rations of powdered milk given through a government plan; inexpensive but durable furniture for housing and playgrounds; and a simple record player. “Instead of giving priority to the production of capital-intensive goods and the maximization of profit, as private companies had done in the past, the government emphasized accessibility, use value, and the geographic origin of component parts,” noted Eden Medina, a historian of science and computing, in her study of technology during the Popular Unity era.

None of this is to suggest that paradise had been reached. Problems remained, including uneven levels of participation, occasional sectarian tensions, paternalism on the part of some Communist Party leaders, lack of commitment from Christian Democratic workers and insufficient responsiveness from the state bureaucracy. The study conducted by Espinosa and Zimbalist found that the more Christian Democrats who worked in an enterprise, the more thefts and defects that were reported. Parallel to that, the more participation by the full workforce in an enterprise, the less absenteeism and thefts and the more innovation there was. Another strong pattern in the social-property area was that no layoffs occurred when economic problems arose; instead efforts were made to bolster social services.

Changes were afoot in the countryside as well. Occupations of farmland increased dramatically in frequency after Allende took office, and although the government expressed public disapproval of these wildcat actions, there were no attempts at repression, consistent with the policy that force would never be used against its base. Agricultural production increased for 1971 and 1972 (although not enough to meet demand), but production was expected to decline 15 percent for 1973 due to the bosses’ strike in October 1972, which prevented seed and fertilizer to be delivered as the Southern Hemisphere growing season began. One serious problem that had not been tackled was that food distribution remained almost entirely in private hands. State agencies bought only 14 percent of agriculture products in 1971, enabling food in capitalist hands to be diverted to the black market, causing shortages and inflation as black-market food sold at prices that were multiples of official prices.

What had not yet been set up was a system of workers’ participation in planning. Workers persistently asked to be represented on the State Development Corporation’s sectoral development committees. Industrywide meetings of workers in the textile, metallurgy, forestry and mining industries passed resolutions calling for worker participation at all levels, and the trade union federation, the CUT, began planning for a national conference that would tackle this issue. Tragically, time was running out for these initiatives.

This is an excerpt from What Do We Need Bosses For?: Toward Economic Democracy, a study of nations that have attempted to construct post-capitalist societies published by Autonomedia. Citations omitted. Sources cited in this excerpt, in the book, are Francisco Zapata, “The Chilean Labor Movement under Salvador Allende 1970-1973,” Latin American Perspectives, winter 1976; Edward Boorstein, Allende’s Chile: An Inside View; James D. Cockcroft and Jane Carolina Canning (eds.), Salvador Allende Reader: Chile’s Voice of Democracy; Richard E. Feinberg, “Dependency and the Defeat of Allende,” Latin American Perspectives, summer 1974; Ariel Dorfman, Heading South, Looking North: A Bilingual Journey; Juan G. Espinosa and Andrew S. Zimbalist, Economic Democracy: Workers’ Participation in Chilean Industry 1970-1973; Peter Winn, Weavers of Revolution: The Yarur Workers and Chile’s Road to Socialism; Eden Medina, Cybernetics Revolutionaries: Technology and Politics in Allende’s Chile; Kyle Steenland, “Rural Strategy Under Allende,” Latin American Perspectives, summer 1974

The world’s food system brings us inflation, hunger and waste

Market fundamentalists would have us believe that if only we left the provisioning of all human needs to the tender mercies of unregulated markets, a cornucopia of fabulous wealth would trickle down to all. A powerful fire hose of propaganda ceaselessly proclaims this, amply funded by those whose interest lie in accumulating unlimited wealth without regard to social or environmental harm.

Friedrich Hayek, in propagating the Austrian School of economics, precursor to the Chicago School of Milton Friedman, went so far as to claim that solidarity, benevolence and a desire to work for the betterment of one’s community are “primitive instincts” and that human civilization consists of a long struggle against those ideals, and “the discipline of the market” is the provider of civilization and progress. Friedman, venerated by those made ever more wealthy and powerful through deepening corporate control of society, promoted the idea that the one and only consideration for any corporation is to maximize profits for shareholders; doing anything else would be “immoral.” So pervasive is this extremist ideology that corporations are routinely sued by “activist shareholders” for failing to extract every possible scrap of money by any means necessary, most certainly including instituting layoffs even if the company already is highly profitable.

The appalling inequality, wars, imperialism, billions without regular work, slums and a host of other ills, not least of which is global warming, are the products of allowing “markets” to determine ever more social outcomes and of making ever more human needs a commodity, even such basics as water and housing. But what of food? Along with water and shelter, nothing is more a necessity than food. Perhaps here we can find a silver lining in the corporate conquest of the world? Agriculture has made enormous strides over the past century; farms have never been so productive and a variety of foods never more available.

^{(Photo by Anubhav Sarangi)}

Nonetheless, food is a commodity in a capitalist economy. Inflation, you’ve undoubtedly noticed, has not exempted food. Food has become much more expensive over the past two years, reflected in significantly higher grocery costs and restaurant bills. In general, the corporate right-wing ideology that thoroughly dominates the mass media seldom misses a chance to blame wage increases for any incidence of inflation. Yep, it’s greedy working people who believe they should be paid a wage sufficient to actually live on in exchange for work. Seldom, if ever, is evidence presented to back these claims. Rather, it is presented as an incontestable fact of life. So it has been over the past two years of inflation that has spread around the world, as has been routine for decades.

It is as if the disruptions of the Covid-19 pandemic could not have anything to do with supply chain disruptions and production, or that the greed of financiers and those in the executive suites of corporations in raising prices could not be a factor. Food prices are not exempted from this pattern. So although there are several reasons behind the surge of inflation, the above factors can’t be discounted. Beyond that, there is the much broader, and more long lasting, question of food supply for the world.

What sort of “efficiency” sees billions going hungry?

Let’s try to tackle food supply first. As the United Nations Food and Agricultural Organization (FAO) report The State of Food Security and Nutrition in the World 2023 states, “Global hunger in 2022, measured by the prevalence of undernourishment, remained far above pre-pandemic levels.” The FAO report estimates that about 10 percent of the world’s population “faces chronic hunger” — about 122 million more people were in this category in 2022 than in 2019, before the pandemic. Using a more broad measure, more than one-quarter of the world’s population are “food insecure,” with a distinct gender bias. The report states, “Food insecurity is more prevalent among adult women than men in every region of the world, although the gap narrowed considerably at the global level from 2021 to 2022. In 2022, 27.8 percent of adult women were moderately or severely food insecure, compared with 25.4 percent of men, and the proportion of women facing severe food insecurity was 10.6 percent compared with 9.5 percent of men.”

And although the prevalence of stunting among children under five years of age due to malnutrition has declined, nonetheless the total of these unfortunate children is estimated to have been 148.1 million in 2022, or 22.3 percent of the global age cohort.

A system that leads to such inhumane, inexcusable results can’t be said to be efficient. It would be on target to say such a system is an abysmal failure. But the above numbers, appalling as they are, likely understate the actual scale of hunger. A separate FAO report, The State of Food Security and Nutrition in the World 2021: The world is at a critical juncture, while noting that between 720 million and 811 million people faced hunger, said far more were in a precarious position vis-à-vis food. “Nearly one in three people in the world (2.37 billion) did not have access to adequate food in 2020 — that’s an increase of almost 320 million people in just one year,” this report said. One-third of the world’s people! Moreover, an even larger number of people are unable to afford a healthy diet, to which we will return.

Eric Holt-Giménez, former Food First executive director in Oakland, California, and who has taught at several universities, including the University of California, argues that the extent of world hunger is understated. In an article, “Capitalism, Food, and Social Movements: The Political Economy of Food System Transformation,” published in the peer-reviewed Journal of Agriculture, Food Systems, and Community Development, said that one-seventh of the world’s population goes hungry at the same time that one and a half times more than enough food for everybody is produced. But he then explains that the estimate of one billion hungry people “is likely a gross underestimation.”

Dr. Holt-Giménez wrote that the total number of hungry people is underestimated because of how hunger is defined. He wrote, “This is due to the way that hunger is measured. People are only identified as hungry if they experience hunger 12 months out of the year. If they experience hunger for only 11 months out of the year, they’re not counted as hungry. Second, this measurement is based on caloric intake, and you can imagine that the required number of calories an individual must consume varies substantially according to height, gender, occupation, age, etc. The caloric intake threshold for determining hunger (around 2000 kilocalories) is fine if you sit quietly behind a computer for 8 hours a day. But most hungry people in the world are women farmers in the developing world who work under a hot sun all day long and are nursing one or more children. They need as much as 5000 kilocalories a day. Official estimates miss all of this.”

When the “magic of the market” yields waste, not cornucopia

Regardless of how we count, it should be indisputable that capitalist agriculture is a failure. Surely, even if “only” hundreds of millions of people, rather than billions, lack sufficient access to food, that is a monumental failure by any humanistic measure. Those seeking to absolve the “market” of any responsibility are quick to point elsewhere, with Malthusian-inspired whisperings that the problem is over-population a favorite. But such excuses are just that — excuses. The world’s farmers actually produce enough food for everybody on Earth. The problem is affordability and efficiency. And that brings us to food waste.

Here again we confront capitalist mantra. The “magic of the market” will ensure everybody has sufficient food, market fundamentalists tell us incessantly, as is promised for most everything else. But what if billions of people can’t afford food? What if food can’t reach those who wish to eat it? It is precisely “markets” that are behind the huge numbers of people with insufficient food. The United Nations Environment Programme’s Food Waste Index Report 2021 estimates that “food waste from households, retail establishments and the food service industry totals 931 million tonnes each year,” or 17 percent of total global food production. A 2011 FAO report, however, estimated that around one-third of food produced globally was lost or wasted.

Those United Nations studies, however, may be underestimating the true extent of food waste while placing blame unduly on personal behavior. A study by six scientists led by Peter Alexander of the University of Edinburgh, “Losses, inefficiencies and waste in the global food system,” calculates that nearly half of the world’s food is wasted. The authors, publishing in Agricultural Systems, argue that “over-consumption of food” should be included as waste. They write, “If human over-consumption, defined as food consumption in excess of nutritional requirements, is included as an additional inefficiency, 48.4% of harvested crops were found to be lost (53.2% of energy and 42.3% of protein). Over-eating was found to be at least as large a contributor to food system losses as consumer food waste.” Human over-consumption here is defined as food consumption in excess of nutritional requirements. But, crucially, food losses before it could be eaten comprise by far most of that total: “Losses of harvested crops were also found to be substantial, with 44.0% of crop dry matter (36.9% of energy and 50.1% of protein) lost prior to human consumption,” they wrote.

That extensive crop loss is a crucial point because standard commentaries on food waste tend to place the lion’s share of the waste on consumer behavior. By blaming personal behavior, systemic causes can be conveniently ignored. And although food certainly is wasted at the consumer level, and at the retail level as well, the Agricultural Systems study, one of the few to systematically analyze food waste, indicates that agricultural production inefficiencies are where solutions need to be found. Simply increasing agricultural areas or seeking higher yields through the use of greater inputs (such as fertilizers, pesticides or water) could cause more global warming, deteriorating soil quality, water scarcity and losses of biodiversity. The authors wrote:

“The results demonstrate that agricultural production inefficiencies (in both crop and livestock) are the dominant contributions to the overall losses within the food system, when considering either harvested crops or all biomass. … Both the total rate of primary production and also the percentage that is harvested have been increasing over time, in large part due to increasing crop yields. Livestock production efficiencies have also been increasing over time, but still are responsible [for] a substantial loss. … Both consumer behaviour and production practices play crucial roles in the efficiency of the food system. … The greatest rates of loss were associated with livestock production, and consequently changes in the levels of meat, dairy and egg consumption can substantially affect the overall efficiency of the food system, and associated environmental impacts (e.g. greenhouse gas emissions). It is therefore regrettable from environmental and food security perspectives that rates of meat and dairy consumption are expected to continue to increase as average incomes rise, potentially lowering efficiency of the overall food system, as well as increasing associated negative health implications (e.g. diabetes and heart disease).” [internal citations omitted]

The paper says livestock production is often not included in studies of food loss and waste, which is why its authors find higher results. Where consumer behavior comes in here is in what is consumed: “Changes to influence consumer behaviour, e.g. eating less animal products, reducing food waste, and lowering per capita consumption to be closer to nutrient requirements will all help to provide the rising global population with food security in a sustainable manner.”

“Free” for multi-national corporations but not for farmers

Food waste is not inevitable, nor is it necessarily a consequence of basic human failure, even allowing for consumer- and retail-level waste. Dr. Holt-Giménez, the former Food First executive director who was quoted earlier in this article, states that food waste is a part of capitalism, resulting from the consequences of relentless competition. He wrote in his “Capitalism, food, and social movements” article: “It’s often said that reducing food waste can eliminate hunger. While this is conceptually true, it overlooks the influence of our capitalist food system. Food waste is part of that system. Industrial agriculture, capitalist agriculture, has to overproduce in order to stay in the market, and food waste is a consequence.” Capitalist agriculture particularly is susceptible to overproduction because farmers are induced to produce more when crop prices fall because they need to cover heavy fixed costs and are also induced to produce more in good years to make up for the inevitable bad harvest years, Dr. Holt-Giménez wrote. Farmers can’t plant less in bad years nor move their farms.

Compounding all these inequalities is national inequality. Global South countries, where impoverished farmers and hungry populations are found in large numbers, are on the wrong side of imperialist dynamics. The World Bank and International Monetary Fund are two primary vehicles for domination and plunder. As South governments fall into debt, they take loans that always come with the same requirements to privatize public assets (which can be sold far below market value to multi-national corporations waiting to pounce); cut social safety nets; drastically reduce the scope of government services; eliminate regulations; and open economies wide to multi-national capital, even if that means the destruction of local industry and agriculture. This results in more debt, which then gives multi-national corporations and the IMF still more leverage to impose more control, including heightened ability to weaken environmental and labor laws. Subsidized food from the North is exported to the South under World Bank and IMF diktats or under so-called “free trade” agreements, bankrupting South farmers who can’t compete with Northern capital.

As only one example, almost five million Mexican family farmers were displaced in the first two decades of the North American Free Trade Agreement (NAFTA) and the number of Mexicans living under the poverty line increased by 14 million. Subsidized corn from the United States flooded Mexico, sold below the costs of small Mexican farmers. Corn imports from the U.S. increased fivefold and pork imports from the U.S. increased by more than 20 times, according to a Truthout report by David Bacon. As a result, Mexican farmers forced off their land either became seasonal workers on growing agribusiness farms, sought work in the cities or migrated north. 

Under “free trade” agreements, agricultural overproduction in the North is subsidized with tax dollars to dump the surplus in the South, Dr. Holt-Giménez wrote. “Essentially the public is coerced into destroying the food systems of Global South so that Big Grain can make its money. … In the 1970s, the Global South generated about a billion dollar surplus annually from food production. Toward the end of the century, this changed to an annual deficit of approximately 11 billion dollars.”

Yes, Africans starve but North agribusiness profits

Plenty of other examples other than Mexico could be cited, but in the interest of saving space further examples will be limited to two African countries. The dictated terms of World Bank and IMF loans, known by those lenders as “structural adjustment programs,” forces small farmers to be more integrated into global food markets to their detriment. The programs “meant indebted countries across the Global South had to convert from prioritising indigenous crops that the local population depended on, to producing cash crops for export,” Adele Walton of Progressive International wrote. “As a result, local populations and farmers became more vulnerable to food scarcity — due to the negative ecological effects and decline in food accessibility.”

Ms. Watson’s article, “Capitalism is causing the food crisis, not war,” explicates this with the examples of Zambia and Kenya. The structural-adjustment agenda included the privatization and liberalization of the seed system, leading to a decline in support for farmer cooperatives. Zambian farmers were forced to prioritize maize as a cash crop, lessening local crop variety and thus resulting in fewer food sources. “[C]orporate control of agriculture is weakening food security,” Ms. Watson wrote. “Seed systems have gone from being cooperative-led (which gives farmers more agency and fair prices) to being corporate-led (which prioritises profits).” Most Zambia smallholder farmers don’t have the resources to buy seeds at the commercial price. With more farmers forced to grow cash crops, which can be more susceptible to weather changes, about half of Zambians are reported to be unable to meet minimum calorie requirements.

Kenyan farmers have fared no better under this onslaught of imposed capitalist agriculture. Overuse of chemical fertilizers is causing land degradation that hurts food production. “As in Zambia, the disastrous legacy of [structural adjustment programs] is to blame,” Ms. Watson wrote. “In 1980, Kenya was one of the first countries to receive a structural adjustment loan from the World Bank. It was conditional on reducing essential subsidies for farmer inputs, such as fertilisers. This process instigated a shift towards farming cash crops for export, such as tea, coffee and tobacco, instead of farming key staples for the local population, such as maize, wheat and rice.”

^{Losses of harvested crops (excluding grassland and forage crop inputs to livestock production) by stage in the food system. (“Losses, inefficiencies and waste in the global food system,” Agricultural Systems, May 2017)}

As a result of farmers having to struggle, if they can afford it, to obtain agricultural inputs that were free before the IMF dictation, 3.5 million people in Kenya are already suffering crisis levels of hunger, with projections that the number will rise to 5 million, according to a report by Save the Children and Oxfam. Ms. Watson concludes, “Structural adjustment has made Kenya into a food exporter [while] malnutrition remains high.”

It is not simply a lack of food that is a problem; the unaffordability of healthy food adds to health problems. In an examination of 11 African countries, the FAO 2023 Food Security report noted that “The cost of a healthy diet exceeds average food expenditure for low- and middle-income households in both high- and low-food-budget countries in the 11 countries analysed. Low-income households living in peri-urban and rural areas are especially disadvantaged, as they would need to more than double their current expenditure on food to secure a healthy diet.” Around the world, there are a staggering 3 billion people who cannot afford a healthy diet, according to the UN’s Food Waste Index Report 2021.

Low incomes also make it extremely difficult for farmers in Africa, and elsewhere in the Global South, to keep their farms and livelihoods. Smallholder farmers, who are mostly women, produce over half of the world’s food, according to Dr. Holt-Giménez. But they are at the mercy of predatory capitalist practices, he writes:

“Although poor peasant farmers produce most of the world’s food, most of them are going hungry. Their parcels of land are too small. What they get paid for the products is too low. They sell it off right away as soon as they harvest because they’re poor and need money. Six months later, they’re buying back food at higher prices, but they don’t have enough money, and so they go hungry. The women and girls who feed most of the world make up 70 percent of the world’s hungry. And these small farms are getting smaller. … [W]e are condemning most of these women farmers to poverty because their farms are too small.”

As many of those struggling small farmers are Africans, they are seen as financial opportunities by the corporations of the advanced capitalist countries. Africa draws most of the attention when global hunger is discussed, although most of the world’s hungry are in Asia-Pacific, according to the UN’s Food and Agriculture Organization. That attention is not for altruistic reasons, Dr. Holt-Giménez says:

“There is a reason for the high profile given to the issue of hunger in Africa relative to that in Asia. The approach to end hunger routinely proffered is the Green Revolution: produce more food with more chemicals and high-yielding seed varieties. Asia already had a Green Revolution and is consequently saturated with chemical fertilizers, GMOs, and modern farming machinery. While this transition has not eliminated hunger in the region, it has saturated the market for machinery, chemicals, and industrial seed. However, Africa is a wide-open market for a Green Revolution, and there is substantial money to be made selling these technologies. And while I think it’s important to talk about the issue of hunger in Africa, I think this is why hunger in this region receives much more attention relative to Asia.”

You pay more so the vampire squid can profit more

Let’s return to price inflation, something everybody who eats has experienced in the past two years. This round of food inflation is not the first in recent times; there was a noticeable rise in food prices in the wake of the 2008 financial crash. Food prices were said to have increased 80 percent in 18 months, with the number of hungry estimated at more than one billion. After a fall in prices, 2011 saw another round of price rises. Financial speculation was behind much of this, Murray Worthy of the World Development Movement reports. By 2011, he wrote:

“Financial speculators now dominate the market, holding over 60 per cent of some markets compared to just 12 per cent 15 years ago. In the last 5 years alone, the total assets of financial speculators in these markets have nearly doubled from $65 billion in 2006 to $126 billion in 2011. This money is purely speculative, with none of it being invested in agriculture, yet it is now 20 times more than the total amount of aid money given globally for agriculture. Led to prices no longer being driven by supply and demand for food, but by the sentiments of financial speculators and the performance of their other investments. Created huge inflationary pressure in the market, forcing food prices up. The consequences have been devastating. In the last six months of 2010 alone, 44 million people were pushed into extreme poverty by rising food prices.”

“Future contracts,” the devices frequently used by investment banks and other financial speculators to profiteer on food, were created as a hedge in the 19th century for farmers as some protection against the volatility of commodity food pricing by enabling them to lock in a specific price for their crops. The Roosevelt administration enacted regulations to limit positions in a series of acts in the 1930s to curb speculation that had begun, but the regulations were weakened in the 1990s and early 2000s, in part in response to lobbying by Goldman Sachs.

^{U.S. Treasury Department under new management (photo by takomabibelot)}

As a result, speculation increased dramatically, with disastrous effects on food supply and pricing. “The number of derivative contracts in commodities increased by more than 500 per cent between 2002 and mid-2008,” wrote Tim Jones of the World Development Movement in an article titled “The great hunger lottery: How banking speculation causes food crises.” Speculators came to dominate long positions in food commodities. “For instance, speculators held 65 per cent of long maize contracts, 68 per cent of soybeans and 80 per cent of wheat, Mr. Jones wrote. “As early as April 2006, Merrill Lynch estimated that speculation was causing commodity prices to trade at 50 per cent higher than if they were based on fundamental supply and demand alone.” This is highly profitable for the speculators. Goldman Sachs, the vampire squid with tentacles jamming into wherever a dollar can be extracted, made about $5 billion from commodities trading in 2009 and Royal Bank of Scotland is estimated to have more than $1 billion. Mr. Jones continued:

“[T]he situation was probably best summarised by the famous businessman George Soros, himself no stranger to financial speculation. In an interview with Stern Magazine published in the summer of 2008, Soros reflected on the nature of the crisis: ‘every speculation is also rooted in reality. … Speculators create the bubble that lies above everything. Their expectations, their gambling on futures help drive up prices, and their business distorts prices, which is especially true for commodities. It is like hoarding food in the midst of a famine, only to make profits on rising prices. That should not be possible.’ ”

In a rational world, it would not be possible. Speculation, nonetheless, has only accelerated since then. The FAO Food Price Index rose 58 percent during 2021 and the first half of 2022, remaining well above pre-pandemic prices even with some subsequent easing. Although the war in Ukraine and pandemic-era supply chain bottlenecks contribute to food price inflation, speculation plays a large role in driving up prices. “While soaring food prices threaten food security globally, large food trading firms are profiting,” wrote Sophie van Huellen of the University of Manchester. “These companies bet on the direction of food prices by storing or trading substantial amounts of goods — making big financial gains as a result.”

A former U.S. Commodity Futures Trading Commission officer, Michael Greenberger, estimates that as much as 25 percent, possibly more, of the price of wheat “is dictated by deregulated speculative activity” involving futures markets and related derivatives. He said, “We’re in a market where speculators are driving prices up.”

If it’s a commodity, it’s for profit not your stomach

What to do? In the long run, ceasing to make food a commodity, possible only with the abolishment of the capitalist system, is necessary. That won’t be happening in the near future, so we do need practical solutions that can conceivably begin to be implemented today. The FAO, in its 2023 Food Security report, offers only tepid liberal band-aids, such as building rural infrastructure and using “behavioural science” as “an essential innovation … to develop evidence-based approaches.” Nothing wrong with those goals, but they do not touch root causes.

A much more comprehensive set of ideas has been put forth in a report commissioned by WWF Netherlands written by six authors led by Eva Gladek. “[S]imply ensuring a sufficient level of food production will not address the more entrenched impacts and humanitarian imbalances within the food system,” the report states. “All of these systemic failures present opportunities for transitioning the food system in a direction where it provides fully for the needs of people without infringing on key limits. … We can produce sufficient food, even for a much larger population, if structural changes are made to how we approach both production and consumption.”

Although not putting forth concrete proposals to accomplish the following goals, the report does detail four main challenges to a transition to a sustainable and resilient food system. These are: 1. Adaptive capacity and resilience must be built into both biophysical aspects of the system (through the preservation of biodiversity, maintenance of healthy soil systems, maintenance of buffering capacity in water bodies, etc.) and socioeconomic aspects of the system (knowledge transfer, development or organizational capacity, elimination of poverty cycles, etc.). 2. Adequate nutrition for the world’s population, including reducing food waste; shifting to lower-impact, less-resource-intensive food sources; prioritizing food production over non-food uses; improving economic access to food; and improving farmer productivity in the developing world. 3. Remaining within planetary boundaries in all of the key biophysical impact areas across the entire life cycle of food production, consumption and disposal, including investing in the development of new sustainable agricultural techniques. 4. Structurally supporting the livelihoods and well-being of people working within it; it should be possible to fully nourish and support oneself and earn a reasonable living wage in exchange for average work hours within the food system.

Can those worthy goals be accomplished under capitalism, under which food, water and other necessities of life are commodities to be bought and sold by the highest bidders, regardless of social or environmental impact? Certainly we should try, but it is more than reasonable to question whether it is possible under the current global economic régime. 

I have written this numerous times but it can’t be stressed too much that capitalist markets are nothing more than the aggregate interests of the biggest and most powerful financiers and industrialists. Capitalist markets are not impassive entities sitting loftily in the clouds, dispassionately sorting out winners and losers. And as those powerful financiers and industrialists can call on the immense power of the most powerful national governments, and the host of multilateral institutions, including but not only the World Bank and IMF, that enforce those interests with force and are also able to rely on the structures of global capitalism that enforce and intensify inequality, we should not expect results different from what we have. How many lives should be lost for someone’s profit?

When does a formal democracy degenerate into fascism?

It can happen here. “Here” being any country in which capitalism rules. When does a bourgeois formal democracy tip over into fascism? That is a question that needs an answer in many places, certainly not excepting the United States, which has already experienced a self-coup attempt with unmistakable fascist overtones.

We’re referencing Donald Trump’s attempt at a self-coup, to use the Latin American phrase, in January 2021. Many people, even on the Left, laugh at that day’s events, pointing out that the would-be putsch had no chance of success. It did have no chance of success. That does not mean it should be cavalierly dismissed; on the contrary, it should be taken with utmost seriousness. Hitler’s beer hall putsch of 1923 had no chance of success, either, and his violent movement remained on the lunatic fringe for several more years. But we know how German history would turn out.

There will be no facile comparison of the contemporary United States with Weimar Germany here. We are not living in Weimar times. There are no organized brown shirts running amuck, a military deeply hostile to democracy and ready to act on that hostility nor a significant number of industrialists bankrolling storm troops. History does not repeat itself, as tragedy or farce, neatly and certainly not precisely. We nonetheless might take a lesson from history before we take stock of contemporary political conditions.

^{Anarchist feminist and Spanish Republican anti-fascist protest at #25NFeminista event in Madrid (photo by Jack From Hell)}

One myth to be dispelled is that Hitler was elected. He wasn’t. He was handed power by the German president, Paul von Hindenburg, who appointed Hitler chancellor. Unfortunately, that was completely legal under the Weimar constitution, and enough for the biggest opposition party, the Social Democrats, to hold their powder — they refused to unleash their militia and confined themselves to a legal order that was imminently going to be destroyed. The other major opposition party, the Communists, declared “After Hitler, our turn,” a public sentiment quite a contrast with their membership forced to go into hiding or exile as the newly empowered Nazis began rounding up party members and destroying their offices.

Union leaders meekly rolled over for Hitler after he was handed power, agreeing to participate in what would now be a Nazi-led May Day celebration. Within two days of that May Day, the Nazis began arresting union leaders and banning existing unions; social democrats would soon meet the same fate. It took Hitler only three months to sweep away all opposition and assume dictatorial power. With all political opposition swept away, persecutions of Jews, Roma and LGBT communities began with results the world should never forget or minimize.

Why did von Hindenburg appoint Hitler chancellor? In the last election before the January 1933 appointment, the Nazi vote had actually declined from the previous ballot; the combined Communist and Social Democrat vote was 1.5 million votes higher than the Nazi vote, which totaled 33 percent, although the combined Left vote was a million shy of the combined vote of the Nazis and the National Party, the remaining vehicle of the traditional Right. Most of the 1920s support for Germany’s traditional right-wing parties had been transferred to the Nazis, who made a gigantic leap from 2.6 percent in May 1928 to 18 percent (second among 10 parties) in September 1930. The leaders of those traditional right-wing parties had thought they could control Hitler by having him appointed chancellor (the equivalent of prime minister) but giving the Nazis only two of 10 cabinet positions. Unfortunately, one of those positions was the Interior Ministry that controlled the police, allowing the Nazis to flood the police with their brown shirt thugs. That Interior minister, Wilhelm Frick, was a participant in the beer hall putsch but was given no more punishment than a suspended sentence.

Violence in the service of corporate profits

The stories in Italy and other countries that fell to fascism aren’t much different. Mussolini, too, was handed power. Mussolini was a socialist until he began receiving money from arms manufacturers and other business interests. Although now far to the right, he carefully allowed a variety of propaganda to be put forth and even denied having a program, allowing fascism to appear to be whatever one wished it to be. But his benefactors knew what he and they wanted. Fascists were receiving regular subsidies from shopkeepers’ associations and the Confederation of Industry. Socialists came in first in November 1919 elections but conservatives began buying the support of fascist squads and police allowed them to attack unimpeded and even provided support. Mussolini’s March on Rome could not have happened without Italian business leaders financing the fascist squads. Soon King Vittorio Emmanuel appointed him prime minister. Bans on unions and strikes swiftly followed. In Spain, a fascist-minded military overthrew the Republican government; military coups brought fascist generals to power in Chile and Argentina in the 1970s with the support of fascist squads using violent tactics. Violent suppression of working people and their organizations, and reduced wages and working conditions, followed in each case.

In none of the historical cases was a fascist takeover a sudden burst from nowhere. There was much violence by the Right amply funded by corporate leaders and backed by the military and police. The tipping point came before the takeovers — there was, and is, no easily definable point where the rubicon is crossed. Thus vigilance and pushback is always necessary. If it looks like fascism and acts like fascism, then it should be taken seriously as a fascist movement. The 2024 presidential election season has already begun in the U.S., which does not yet have industrialists and bankers bankrolling street thugs and maneuvering to overthrow formal democracy. Those corporate titans certainly appreciated all that the Trump administration, staffed by some of the most virulent ideologues from among the bourgeoisie and comprador, did for them and would do for them again if they get the chance, but that is different from backing an outright fascist movement. Given how much control industrialists and bankers have over the U.S. political process, it is hardly necessary for them to overthrow a system that works so well for them. 

^{July 2018 Stand Up To Racism rally in London (photo by Alisdare Hickson from Canterbury, U.K.)}

Nonetheless, times and conditions can change, and the very fact that a fascist movement exists — one that Trump currently heads but Florida Governor Ron DeSantis wishes to assume the leadership of — should be taken with utmost seriousness, especially as it is a movement that shows no sign of dispersing.

There is not a parliamentary system in the United States but rather a two-party system that is seemingly impregnable, and possesses a military that to all appearances, for all its use as a battering ram overseas for corporate plunder, is nonetheless a strictly constitutional body with no hint of domestic unrest. True, but we should disabuse ourselves of elevating form over function. The classical image of fascism is of storm troopers marauding in the streets, violently suppressing any opposition. But 1970s South America was different than 1920s and 1930s Europe. There were fascist gangs running loose in Chile and Argentina, but fascism was imposed through undisguised military coups.

Fascism in the United States, were it to happen, would come in forms different from all of those, with Christian fundamentalists forming a key portion of any base. But what is crucial is that a significant percentage of a country’s industrialists and financiers — its capitalist ruling class — backs the imposition of a dictatorship with money and other support. This is the crucial commonality overriding the different forms of fascist takeovers.

Empty rhetoric versus class interests

Why is this so crucial? Because fascism is a dictatorship imposed for the benefit of large industrialists and financiers. At its most basic level, fascism is a dictatorship established through and maintained with terror on behalf of big business. It has a social base, which provides the support and the terror squads, but which is badly misled since the fascist dictatorship operates decisively against the interest of its social base. Militarism, extreme nationalism, the creation of enemies and scapegoats, and, perhaps the most critical component, a rabid propaganda that intentionally raises panic and hate while disguising its true nature and intentions under the cover of a phony populism, are among the necessary elements.

Despite national differences that result in major differences in the appearances of fascism, the class nature is consistent. Big business is invariably the supporter of fascism, no matter what a fascist movement’s rhetoric contains, and is invariably the beneficiary. Instituting a fascist dictatorship is no easy decision even for the biggest industrialists and bankers who might salivate over the potential profits. For even if it is intended to benefit them, these big businessmen are giving up some of their own freedom since they will not directly control the dictatorship; it is a dictatorship for them, not by them.

It is only under certain conditions that business elites resort to fascism — some form of democratic government, under which citizens “consent” to the ruling structure, is the preferred form and much easier to maintain. Working people beginning to withdraw their consent — beginning to seriously challenge the economic status quo — is one “crisis” that can bring on fascism. An inability to maintain or expand profits, as can occur during a steep decline in the “business cycle,” or a structural crisis, is another such “crisis.”

^{Fascism is a global phenomenon, not limited to any one country. (Photo by The All-Nite Images from New York)}

No fascist movement can succeed without a sizable base convinced that those on the Left must be stopped at any cost, that the only way the mystical far Right return to the past that is dangled in front of them can be brought about is for it to be forcibly imposed and those in opposition must be suppressed with violence. This portion of the equation, unfortunately, very much exists in the United States as the unshakable following of Trump sadly demonstrates. Trump’s desire to be a fascist dictator is obvious — this should be unmistakable for anyone on the Left, but sadly isn’t as all too many either still don’t take Trump and his base seriously or, worse, are seduced by Trump’s siren songs.

I was once a guest on a respected environmental radio program discussing the Trump administration’s plans for revising the North American Free Trade Agreement when I was quite rudely interrupted and addressed in a most condescending manner by another guest, the prominent head of a Washington non-governmental organization (NGO) who purported to “correct” me by claiming that Trump’s trade advisers say they want to do away with the secret tribunals that corporations use to overturn government laws and regulations. Trump had been in power more than a year at this point, and his administration’s all-out war on working people and its strenuous efforts to allow corporations to plunder and pollute unencumbered by regulations was in full swing. Moreover, the administration’s trade policy paper had been released — this was the topic I was addressing — and there was nothing ambiguous about its intention of dismantling labor, safety, health or environmental standards upheld by other countries.

Trump’s vaguely left-sounding rhetoric was merely for show, a transparently obvious ploy to attract voters who had very good reasons for deploring so-called “free trade” agreements and the many other policies that have screwed over working people while allowing jobs to be moved overseas. Germans in the Weimar Republic had plenty of reasons to be fed up, too, but those obvious Nazi lies became unmistakably lies when Hitler wiped out those storm troops who believed the left-sounding rhetoric in the “Night of the Long Knives.” Mussolini used such tactics as well.

The records of Trump and DeSantis should be unmistakable

Four years of Trump in the White House — four years of all-out assaults on working people and the environment, incompetent bumbling and lying about the Covid-19 pandemic and giving permission to every misanthrope to act out their most obnoxious anti-social fantasies — could not be clearer. Trump remains an embodiment of the threat of fascism. And what of his main rival for the Republican Party presidential nomination? DeSantis — or DeSatan as he has been dubbed — clearly also has aspirations of becoming a fascist dictator. The governor does not have a rabid popular backing like Trump does but he seems more likely to acquire strong backing from industrialists and financiers than Trump, giving his success in reducing the Florida Legislature to his rubber-stamp. DeSantis might as well be ruling by decree considering how legislators hand him whatever he wants.

The record here needs no introduction for those paying attention. But let us “highlight” some of his doings. He’s waging a scorched-earth war against LGBT communities, denying their humanity and banning to the extent possible even discussing those communities’ interests, imposing draconian abortion bans (women always stripped of rights and reduced to baby machines under fascism), unilaterally removing from office elected officials who dare to disagree with him, banning books, whitewashing history, using immigrants as disposable props in the service of nationalism and nativism, and offering bonuses to police officers to relocate to Florida, many of whom have been accused of criminal acts including domestic battery, kidnapping and murder. So vicious is the police state DeSantis is moving to create and so hostile is the attempt to erase slavery and racism from history that the NAACP has issued a travel advisory for African-Americans to avoid the state.

Although it is inarguably true that an independent fascist party is not going to take power in the United States in the foreseeable future, it is not necessary for one to arise. The two leading candidates for one of the two parties that alternate in power, the Republicans, both have aspirations of being fascist dictators and there is a sizable base of Republicans ready for just that. Little help from the other party, the Democrats, is forthcoming as the “center-left” opposition (in actuality the “center-right” opposition to the far right) is steam-rolled time after time, their inability to stand up to the right or mount any effective opposition is not only the product of being beholden to corporate money and “American exceptionalism” ideology but the intellectual dead end of liberalism. (I’m using North American terminology here; readers in the rest of the world can substitute “social democratic” for “liberal.”)

North American liberalism and European social democracy are trapped by a fervent desire to stabilize an unstable capitalist system. They are hamstrung by their belief in the capitalist system, which means, today, a belief in austerity for working people and subsidies for corporate and financial plunder, no matter what nice speeches they may make. When Bill Clinton, Barack Obama, Jean Chrétien, Justin Trudeau, Tony Blair, Gordon Brown, François Hollande, Gerhard Schröder, José Luis Rodríguez Zapatero and Romano Prodi all fall to their knees in front of industrialists and financiers, when each speedily implements neoliberal austerity policies despite leading the supposed “center-left” opposition to the conservative parties that openly stand for corporate domination, there is something other than personal weakness at work. And this sorry record — Bill Clinton was the most effective Republican president the U.S. ever had — provides an opening for far right demagogues to offer left-sounding siren songs that fool too many.

Nonetheless, I can readily understand why so many United Statesians, not only liberals but even those who are on the Left, vote for Democrats as a tactical move, arguing that a Democrat in power, particularly in the White House, provides more space to maneuver. Although I personally don’t have the stomach to vote for Democrats, I certainly understand this tactical voting as a matter of survival, especially as each Republican administration is worse than the last. But it would be helpful if Democratic voters would put some pressure on their office holders to actually try to implement some of what they want rather than giving them a free pass. And a different strategy from the usual Democratic Party cringing and cowering shouldn’t mean cowering first and then cringing.

Voting aside — and voting should be the least of the things we do — fascism can only be stopped by a mass movement, by confronting it directly. And that means taking seriously the danger, rather than laughing at the ignorance of Trump and his blinkered followers. Fascism is never a laughing matter as its body count ought to make clear.

Grasping dependency and under-development as structural, not simply a product of force

That some regions have to remain undeveloped so that others can develop has long been one of the obvious realities of capitalism. This is another way of pointing out that massive poverty across the Global South is not the result of some local insufficiency but rather due to the functioning of imperialism, the ongoing effects of colonialism and financial might.

This dynamic has been discussed in detail many times, most notably, in the case of Africa, in Walter Rodney’s classic How Europe Underdeveloped Africa. Latin American authors have tackled this structural inequality in works such as Eduardo Galeano’s Open Veins of Latin America. Other authors, such as Samir Amin in his many works, have looked at this from a broader global perspective. There is no shortage of books that detail, in grisly detail, how capitalism has immiserated much of the world. But what are the structural reasons for this state of affairs?

We are accustomed to thinking in terms of military conquest, invasions and coups. There is a long history here; the United States alone has invaded Latin American countries 96 times, and that total doesn’t include the coups it has sponsored and the governments it has decisively undermined. In more recent times, financial power through the control of the world economic system and the unrelenting leverage of the dominant position of the U.S. dollar, supplemented through multilateral institutions like the World Bank and International Monetary Fund that pitilessly impose austerity through their one-size-fits-all “structural adjustment programs” on behalf of multinational capital, are deployed more frequently and systematically than raw military power.

Both financial muscle and military muscle are copiously used to elevate Global North capitalist core countries at the expense of the Global South, with the U.S. doing everything it can to maintain its place — more specifically, its multinational corporations’ place — at the apex of the pyramid. Yet it is not only these levers. Capitalism is also kept in place by structural forces. We can’t fully comprehend how the world capitalist system functions without studying its structure, which operates even when financial or military muscle is not at a given moment being directly applied. This is where the Brazilian Marxist Ruy Mauro Marini has stepped in, persuasively arguing that the roles of local bourgeoisies, and not only Northern imperialism (as important as that is), as well as unequal exchange resulting from a subordinate position within a global division of labor, are indispensable to understanding the fate of Global South workers and in particular Latin American underdevelopment.

His essay The Dialectics of Dependency is not a new work, but has been newly translated into English for an audience to whom he is largely unknown. I confess I was unfamiliar with Professor Marini prior to reading a description of the book containing the eponymous essay, published by Monthly Review Press, but was immediately intrigued. I can now say I am pleased to have been introduced to his work and add him to the list of understudied Latin American theorists who should be better known. The Dialectics of Dependency* contains not only his important essay, but an introduction to the concept, a lengthy essay discussing Professor Marini’s life and extensive work as an activist, writer and professor, and a concluding essay further discussing the concept and situating it as a tool to help guide movements. The two framing essays were written by Jaime Osorio, a close comrade of Professor Marini, and the essay documenting the author’s life and work was written by the translator, Amanda Latimer. (Although Professor Marini is Brazilian, the essay was developed and written in Spanish during his two decades of exile in Mexico, Chile and Europe.)

Development and underdevelopment go together

That The Dialectics of Dependency was first published in 1973 does not lessen its impact. Dependency is understood as “a relation of subordination between formally independent nations, in the framework of which the relations of production of the subordinate nations are modified or re-created to ensure the expanded reproduction of dependency,” the outcome of which “cannot be anything other than than more dependency.” This can not be liquidated other than through “eliminating the relations of production it involves.” To be less tautological, dependency can be defined as the subordination of economies and countries to other economies and countries.

Latin America was plundered throughout the colonial period, with Christopher Columbus inaugurating slavery, forcible precious-metal extraction and the genocide of native peoples. Formal independence for Latin American countries coincided with the Industrial Revolution, during which they “came to gravitate toward England” rather than each other. “Ignoring one another, the new countries would link themselves directly to the English metropole,” Professor Marini wrote, becoming suppliers of foodstuffs and raw materials while importing manufactured products. “Latin America developed in close consonance with the dynamics of international capital.” Colonial metals and “exotic goods” contributed to increased commodity flows and “paved the way” for large-scale industry in core capitalist countries.

^{Iguazú Falls on the Brazil-Argentina border (photo by Giovita70)}

English technological advances enabled significant increases in production and the ability to flood markets with commodities. With the displacement of farmers into cities and the creation of a modern proletariat, the incorporation of this new working class into consumption was “an essential step.” In turn, the supply of food from Latin America made it increasingly possible for English capitalism to reduce the value of labor power and thus “achieve a balance between increasing surplus value and, at the same time, increasing wages.” In contrast, “super-exploitation” — a drastic lowering of wages — was the means for Latin American capital to be competitive. Because Latin American production was largely for export, local capitalists did not have to create a local market and could keep wages at extraordinarily low levels because they did not need their workers to be able to buy the products they produce.

Unequal exchange gathered momentum and super-exploitation became the route for Latin American capitalists to maintain their profitability and their places in the global capitalist system. Rather than increase productivity or invest in new machinery, Latin American capitalists have relied on intensifying exploitation, that is through suppressed wages, work speed-ups and increased working hours. While not discounting the very real role of imperialist capital, a key political conclusion of the Marxist theory of dependency is recognizing the “dominant classes’ [of Latin America] responsibility in reproducing dependency.” Local bourgeoisies earn substantial profits from this arrangement and have no incentive to change it.

Corporations from the Global North have a ferocious need to grab the resources of dependent countries, and local capitalists are happy to help them. This is not to discount other forms of plunder, such as unequal exchange, the extraction of profits through investment, interest on foreign debt and the draining of capital and knowledge by monopolies based in the capitalist core.

Global division of labor fuels unequal exchange

As industry continues to develop in the capitalist core, it becomes more productive and requires greater raw materials, further enforcing a global division of labor. Professor Marini argues that the large quantities of food exported by Latin America to industrialized countries reduced the real value of labor power in the latter, causing higher rates of surplus value and enabling Global North bourgeoisies to capture productivity increases. This aspect is somewhat counter-intuitive, so let us allow the author to explicate it.

“[W]hat determines the rate of surplus value is not the productivity of labor in and of itself, but the degree of exploitation of labor; in other words, the relation between surplus labor time (in which the worker produces surplus labor) and necessary labor time (in which the worker reproduces the equivalent of his wage). Only by altering this proposition, in a manner favorable to the capitalist (that is, by increasing surplus labor at the expense of necessary labor) can one modify the rate of surplus value.”

To make clear what the author is discussing here, surplus value is the amount (or value) produced by an employee beyond the amount that equals the amount that he or she is paid. In other words, if an employee is paid $100 for a day’s work but produces products or services worth $200, then the $100 differential represents the surplus value produced by the employee and which is taken by the capitalist. From that surplus value, once the capitalist takes care of other expenses (such as rent, mortgage, equipment, interest on loans, etc.), comes the capitalist’s profit. A capitalist can introduce a new production technique or new machinery that makes workers more productive and thus temporarily boost profits, but because the capitalist’s competitors will quickly move to introduce the same techniques or machinery, the amount of products will have increased but the surplus value extracted won’t because the price of the product or service will become uniform across the industry with the common adoption of what was originally a breakthrough for the organization that first adopted it. Because more is being produced in the same period of time, the capitalist can reduce the prices of the products or services for competitive reasons, thereby lowering the value of what is produced. To counteract that reduction in value, capitalists squeeze more out of their workforces to increase the surplus value extracted.

^{Entre Rios province, Argentina (photo by Felipe Gonzalez)}

Professor Marini, in his discussion of how Latin American food exports led to Global North bourgeoisies reaping the benefits of productivity increases, continues:

“[O]ne task assigned to Latin America, within the framework of the international division of labor, was providing the industrial countries with the food required for the growth of the working class, in particular, and of the urban population, more generally, that was taking place there. … The effect of this supply … would be to reduce the real value of labor power in the industrial countries, which allowed increases in productivity there to be translated into increasingly higher rates of surplus value. In other words, through its incorporation into the world market for wage-goods, Latin America played a significant role in increasing relative surplus value in industrial countries.”

The food exported to industrial centers by Latin America enabled more people to leave farms and migrate to the cities, and the increasing industrialization required more workers to move to where the factories are located. This migration results in more competition for jobs, putting downward pressure on wages.

Visible force, yes, but economics underlies that

Behind the use of military and diplomatic pressure, Professor Marini argues, “is an economic base that makes it possible” and failure to understand that is to obscure “the real nature of international capitalist exploitation.” He writes that rather than believe that equitable trade relations are possible in global capitalism, what is needed is the abolishment of international economic relations based on exchange value.

“Indeed, as the world market attains a more developed form, the use of political and military violence to exploit weak nations becomes superfluous, and international exploitation can rely increasingly on the reproduction of economic relations that perpetuate and amplify the backwardness and weakness of those nations. We see the same phenomenon here that is observed internally in the industrial economies: the use of force to subject the working masses to the rule of capital diminishes as economic mechanisms that enshrine that subordination come into play.”

Countries that are disadvantaged by this unequal exchange seek to compensate by greater exploitation of workforces rather than increasing productivity. In other words, doubling down on being a “low cost” producer — the Global South capitalist can only remain competitive by increasing exploitation to make their products cheap through increasing the intensity of work, lengthening working hours and/or reducing wages. Resource extraction and agricultural products, Latin America’s major contributions to the world economy, require less investment than manufacture. Thus, labor in extraction and agriculture can be intensified with little or no capital. That exploitation can be maximized because the Latin American capitalist is producing for export, and does not need a sizable domestic buying power to reap profits or maintain a market, and all the more can this be done because of ongoing high unemployment and underemployment.

This dynamic does not mean there is no industrialization in dependent countries. Industry does slowly develop, but there is insufficient funds to buy the equipment and machinery needed to produce manufactured products. Importing capital — taking out loans from the North or North-controlled supranational lending organizations — becomes a necessity. In turn, as capitalism stabilized after recovering from World War II, capital flowed preferentially to industry in the Global South, which offered attractive profits due to the low cost and super-exploitation of labor there. And as the pace of technological advancement quickens, machinery becomes outdated quicker and manufacturers in the core capitalist countries can recoup some of their costs by selling outdated equipment to manufacturers in the South.

“Latin American industrialization thus corresponds to a new international division of labor,” Professor Marini wrote. “In this framework, the lower stages of industrial production are transferred to the dependent countries … while the most advanced stages are reserved for the imperialist centers … along with a monopoly over the corresponding technology.” With wages remaining low and unequal exchange maintained through the foregoing processes, new industrialization in dependent countries remains dependent on upper class consumption and exports. Workers’ incomes are too low to buy the products they produce at the same time their productivity rises due to the machinery that is imported, even if that machinery is outdated by the standards of the capitalist core countries. Further investment will be in luxury goods while basic consumer items stagnate. Wages also stagnate, increasing inequality. And dependency on core countries is recreated.

“[T]he structure of production adapts to the structure of circulation inherent in dependent capitalism,” Professor Marini concluded. The trap of dependency can only be ended by putting an end to the global system of capitalism.

Knowledge needed, not fairy tales

The Dialectics of Dependency explicates the above arguments with much technical detail. Although putting forth a persuasive discussion, the book is not necessarily accessible to a reader not already conversant in economics and Marxist terminology. The titular essay is written in a quite abstract manner, which will likely lessen the potential audience. That would be a loss as the book is a valuable, and needed, addition to theory to help our collective understanding of unequal exchange and the roots of deep inequality among the countries of the world capitalist system. Anyone wishing to grasp this enduring international phenomenon would benefit from reading The Dialectics of Dependency. It is not always easy reading but working your way through sometimes difficult and abstract passages will be enriching for any activist seeking to understand how capitalism works.

It also explains why such stratification exists without falling back on under-developed explanations that see only military force without the very structures of capitalism and the system’s perpetual and relentless need for expansion and intensified exploitation. The concluding essay by Jamie Osorio helps explain the implications of Professor Marini’s theory. 

His analysis, Professor Osorio wrote, “has shown the naïveté and fallacies of international bodies and academic groups that make extensive descriptive studies and then conclude — like children writing letters to Santa Claus — that it would be good to have a bourgeoisie that is dynamic, autonomous, committed to technological knowledge … willing to create internal markets by paying better wages to most of the working population.”

Rather than believe in Santa Claus or fairy tales, far better that the dynamics of capitalism be grasped in their full dimensions. Only by understanding how and why, and drawing appropriate conclusions, rather than simply observing, can the world’s exploited — the vast majority of humanity — hope to see a better world come into being, a world that will have put capitalism into the history books.

* Ruy Mauro Marini, The Dialectics of Dependency [Monthly Review Press, New York, 2022]

The latest offensive from U.S. imperialism: The Indo-Pacific Economic Framework

As production is moved to ever more distant locales, with ever lower labor and environmental standards, the corporations behind these moves want all barriers to the movement of raw materials and finished products removed. Thus the era of so-called “free trade” agreements. These agreements, which are written to elevate corporations to the level of national governments (and in practice, actually above governments), have become so unpopular thanks to the efforts of grassroots activists to expose them to public scrutiny that governments have become cautious about embracing new ones.

How to get around this impasse? The U.S. government has evidently believed it has found a solution: Claim a “free trade” agreement is not a “free trade” agreement. Not only as an attempt to avoid public scrutiny but to totally bypass Congress.

This latest offensive on behalf of multi-national corporations is the Indo-Pacific Economic Framework. Haven’t heard of it? That’s because the Biden administration, which has cooked up this scheme, would much prefer you didn’t. So far, the 13 other governments that have entered negotiations, including Australia, India, Japan and New Zealand, aren’t eager for their own citizens to know about it, either, and have agreed, whether explicitly or tacitly, to keeping quiet.

^{The countries negotiating the Indo-Pacific Economic Framework (graphic by JohnEditor132)}

Make no mistake, however. The Indo-Pacific Economic Framework (IPEF) is a straightforward initiative to deepen U.S. domination in the Asia-Pacific and Indian Ocean regions. Activists across those regions have taken notice and have already spoken out against the IPEF. Interestingly, some of the governments of those countries, in particular Australia and New Zealand, are quite open in acknowledging the IPEF is a U.S. initiative designed to keep them firmly under the U.S. umbrella and away from China — and are supporting this in their limited public statements. So those social-movement groups sounding alarms are on firm ground, to which we will return below.

So what is this “free trade” deal that is allegedly not a “free trade” deal? A White House “fact sheet” issued by the Biden administration in May 2022, upon the announcement of the IPEF at the Quadrilateral Security Dialogue meeting in Tokyo, declared that the “IPEF will enable the United States and our allies to decide on rules of the road that ensure American workers, small businesses, and ranchers can compete in the Indo-Pacific.” And how might this stated goal be achieved? Negotiations are to focus on “four key pillars to establish high-standard commitments that will deepen our economic engagement in the region.”

Those four pillars announced by the Biden administration are a “connected economy” that will harmonize standards on cross-border data flows and data localization; a “resilient economy” that seeks to “better anticipate and prevent disruptions in supply chains … [and] guard against price spikes that increase costs for American families”; a “clean economy” that “will seek first-of-their-kind commitments on clean energy, decarbonization, and infrastructure that promote good-paying jobs”; and a “fair economy” under which “tax, anti-money laundering, and anti-bribery” standards are used “to promote a fair economy. “

The same lies packaged for new consumption

Does this list sound familiar? Perhaps it does, as these are the sort of goals repeatedly promised in “free trade” agreements of the past, goals that never materialize because the draconian rules designed to unilaterally overturn health, safety, labor and environmental regulations always have words like “must” and “shall” attached to them in trade agreement texts, but any language purporting to safeguard such standards use words like “may” and “can.” And as disputes are settled in secret tribunals in which the lawyers who represent corporations against governments in these tribunals on one day switch hats and sit as judges on another day, the interpretation of what appears to be dry, technical, neutral-sounding language almost invariably is adjudicated in favor of the complaining corporation, without any appeal being possible.

Attempting to sidestep this history, the U.S. government is trying to claim the IPEF is not a trade deal at all, and thus can be approved by the White House unilaterally with no input by Congress. The Biden administration asserts that IPEF talks do not cover tariff liberalization or provisions that would require changes to key U.S. laws that Congress would have to approve and therefore has no intention of submitting the agreement for approval. Senators disagree, with 21 members of the Senate’s Finance Committee, including its Democratic (Ron Wyden of Oregon) and Republican (Mike Crapo of Idaho) leaders, sending the White House a letter telling the administration it must submit IPEF to Congress for approval.

^{Discussions during Indo-Pacific Economic Framework negotiations (photo via Prime Minister’s Office of Japan)}

Washington is far from the only seat of government slapping happy faces on this subterfuge. Let’s start our survey with Australia and New Zealand, where the governments seem quite pleased at this opportunity to be sidekicks to U.S. imperial designs. And perhaps believe a sub-imperialist slice of the action could come their way given there are several developing countries taking part in negotiations. The full list of countries taking part in IPEF talks are Australia, Brunei, India, Indonesia, Japan, Republic of Korea, Malaysia, New Zealand, the Philippines, Singapore, Thailand, the United States and Vietnam, although India is taking part in only some of the “pillars.”

The Australia Department of Foreign Affairs and Trade claims that the IPEF “Supports the promotion of clean energy technologies and renewables to help address climate change impacts and the region’s energy transition” and will “accelerate growth in the digital economy, unlock green trade and investment opportunities, and improve labour and environment standards across the region.” The department also said the IPEF “Improves regional trade and investment conditions.” Unfortunately, Canberra does not specify how the IPEF will miraculously bring about those results, and any text circulating or positions taken in negotiations are unknown because the entire process is being kept secret from the public and legislators.

That the IPEF is a back-door attempt to resurrect the Trans-Pacific Partnership was broadly hinted in December 2022, when Foreign Minister Penny Wong “praised Washington’s commitment to Indo-Pacific security but said its departure from a regional trade pact was still being felt and that enhanced U.S. economic engagement with the region should be a priority,” according to a Reuters report.

Corporate interests already lining up in support

A clue to who will benefit comes courtesy of the Australian Strategic Policy Institute, which claims to be an “independent, non-partisan think tank” despite being established by the government, receiving some of its funding from the Australian military and says it reflects the opinions of Australian government officials and industry leaders. A report the Institute published is, like corporate interests in general, favorable toward the proposed pact. “The IPEF is viewed as a potentially innovative way to boost regional investment rather than as a mechanism to strengthen the usual substance of trade agreements, such as market access into the US,” the report said. This corporate vision appears to be to position Australia as a regional assistant to U.S. corporations. The report’s first recommendation: “The US, as the convener of the IPEF, should lean into Australia’s capacity-building expertise in the region” because “Australia has a long history of organising capacity building and training exercises in Southeast Asia and the South Pacific.” In other words, Australia should position itself firmer as a junior imperialist country. 

Canberra has been a good pupil, if you want to look at it that way, as symbolized in its decision earlier this year to spend up to $368 billion to buy nuclear submarines from the United States after the U.S. strong-armed the Australian government to cancel a previous cheaper deal to buy conventional submarines from France. The deal also will have U.S. and British submarines stationed on Australia’s Indian Ocean coast.

Much the same comes from Wellington. The New Zealand Foreign Affairs & Trade Ministry has declared, “The Indo-Pacific Economic Framework for Prosperity is an opportunity to strengthen economic cooperation with the United States and across our wider home region. The IPEF will provide an open and inclusive platform for the US to engage more deeply in the economic architecture of the Indo-Pacific, which we think is valuable for both New Zealand and the wider region.” Considering that when the Trans-Pacific Partnership was being negotiated, a key initiative for the United States was to weaken New Zealand’s health care system, it is reasonable to wonder why again negotiating a surrender to U.S. corporate interests would be a good idea. 

^{The architecture of Melbourne (photo by Diliff)}

U.S. government negotiators, on behalf of the pharmaceutical industry and its obscene profits, took direct aim at New Zealand’s Pharmaceutical Management Agency program that makes thousands of medicines, medical devices and related products available at subsidized costs in Trans-Pacific talks. The agency’s cutting down the industry’s exorbitant profit-gouging was openly called by the U.S. corporate lobby group Pharmaceutical Research and Manufacturers of America an “egregious example” to be eliminated because of its “focus on driving down costs.” Can New Zealand expect anything better this time?

Other participating governments have issued similar statements, with South Korea Trade Minister Ahn Duk-geun stating that “creating practical outcomes in areas like supply chain and clean energy is imperative.” Malaysian Trade Minister Mohamed Azmin Ali, discussing the supply chain talks, said “Malaysia believes that it is crucial to outline the tangible benefits of this trade and multilateral economic framework.”

With eyes open, grassroots opposition has already begun

Activist groups across the region and around the Pacific Ocean have already begun organizing opposition. This is a drill, after all, that groups organizing in opposition to always one-sided “free trade” agreements have had to repeatedly conduct.

A strong voice of opposition is that of Jane Kelsey, the University of Auckland law professor who long sounded the alarm on the Trans-Pacific Partnership from New Zealand. 

Once again taking up the challenge, Professor Kelsey, in a May 2022 article in The Conversation, wrote, “[D]espite the high-profile launch, the IPEF remains an enigma, a high-level idea in search of substance.” She questions why the Australia and New Zealand governments are in these talks at all. “Realistically, the IPEF is a ‘pig in a poke’. Aotearoa New Zealand and Australia need to take a deep breath and realistically assess the opportunities and threats from such an arrangement. … Then they must weigh up the options: stand aside from the negotiations, pursue alternative arrangements, or establish a clear, public negotiating mandate that would truly maximise the nations’ interests for the century ahead.”

That commentary was written at the time of the IPEF’s creation. More recently, in December 2022, Professor Kelsey wrote more forcefully on the imperial nature of this trade deal, intended to reinforce U.S. dominance. Note that, in the U.S. government’s “fact sheet” quoted above that the purpose is to “ensure American workers, small businesses, and ranchers can compete in the Indo-Pacific.” Not even a pretense that working people in the other 13 negotiating countries might benefit. Writing in Bilaterals.org, Professor Kelsey said:

^{Lupin field, New Zealand (photo by Michael Button)}

“It is extraordinary how quickly states across ‘the region’ (whatever we name it) have fallen into line. Old imperial powers have embraced the US’s re-assertion of its regional presence: Australia, with its increasingly strident anti-China stance; Canada, welcoming a new hybridised North-South version of the old Western hegemony; France, wary of its remaining colonies being seduced by China. … Predictably, New Zealand has also fallen into line.”

What we have here is a replay of the Trans-Pacific Partnership, and the TPP agenda of dismantling national protections against the depredations of U.S. multi-national capital. Professor Kelsey wrote:

“Barack Obama famously and unsuccessfully tried to sell the TPPA to the American people, and the US Congress, as the vehicle for America to write the rules and call the shots in the 21st century, not China. Those power politics remain the same. As with the TPPA, the US initiated the negotiation and will set the agenda, dictate the script and approve the outcome, with other states attempting to influence at margins. Even when Trump withdrew the US from the TPPA, many of the US-driven texts were retained by the remaining eleven countries. We also expect parts of the TPPA to form the starting point for US demands. … 

‘The prosperity’ promised by IPEF is principally for the US on terms it can manage politically. The Biden administration is determined to bypass the messy problem of securing approval in the Congress. An ‘executive agreement’ that does not contain market access commitments and does not require the US to change any of its laws avoids that problem. So, unlike the TPPA, IPEF will not include negotiations for other parties to access the US market, removing the most obvious means for other countries to point to any commercial gains. The pro-corporate regulatory settings will reflect the status quo in the US. Add to that the penchant for the US to invoke ‘national security’ exceptions to justify breaching its trade obligations, which makes a mockery of an ‘open rules-based system’ and any pretence that IPEF will be a reciprocal exchange of benefits by all the participating countries.”

Opposing a policy of total subservience

Such goals have not gone unnoticed in Australia. Writing in Green Left Weekly, William Briggs noted how fast the new Labor government of Anthony Albanese fell in line. “The first action of a new government is always steeped in symbolism,” he wrote. “The Anthony Albanese Labor government’s reaffirmation of Australia’s unswerving loyalty to the United States at the Quadrilateral Security Dialogue (Quad) meeting was just so. … The new Labor government is facing almost impossible tasks. No capitalist economy can hope to overcome global crises. Any reform, any tinkering at the edges, is to be supported and welcomed, but a policy of total subservience to the interests of the US is hardly the way forward.”

The Indo-Pacific Economic Framework will be detrimental to the developing countries as well. The president of the Malaysian civil society organization Consumers’ Association of Penang, Mohideen Abdul Kader, said:

“US multinational companies are openly pushing for provisions that would prevent the Malaysian government from preferentially purchasing from our local companies. This undermines domestic manufacturing especially in current times. It also adversely affects the need for small and medium sized firms to recover from the effects of Covid-19. The US industry is also demanding stronger intellectual property protection that would, among others, make medicines, textbooks, agricultural and manufacturing inputs and climate change technology more expensive. The digital economy provisions sought by US big tech companies would undermine Malaysia’s privacy, consumer protection, health, environmental, financial, tax and other crucial regulations, while the privately held global food company Cargill wants provisions that allow foreign investors to sue the government in international tribunals.”

^{Tokyo at night (photo by Basile Morin)}

And from the Philippines, Joms Salvador of Gabriela Philippines, in a statement issued through the Asia Pacific Forum on Women, Law and Development, a network of feminist organizations, sees through the attempt to promote the IPEF as benefiting women:

“The IPEF is not, and never will be, just about economic trade, but a link in the chain of US hegemonic dominance in Asia-Pacific, where it has maintained strategic military presence and client relations with its neocolonies in the region, often to the detriment of national sovereignty and the human rights of Asian women and peoples. Women must resist the IPEF and stand our ground in the face of intensifying US-China rivalry and its encroachment on our lives as sovereign peoples.”

Helping women? No, women have seen this movie before

Filipino women are far from alone in rejecting an attempt at whitewashing the corporate-oriented nature of the IPEF. In a statement titled “Statement Rejecting Pinkwashing in the Indo-Pacific Economic Framework,” more than 60 women’s rights organizations, labor unions and civil society organizations firmly rejected an “upskilling” program that is promoted as a way for young women to gain employment in technical fields but it seen as another initiative actually designed to deepen the dominance of U.S.-based Big Tech companies. The coalition of groups, in their statement, said:

“The Upskilling Initiative for Women and Girls promises training by fourteen US Big Tech companies to women in IPEF countries. However, it appears that much of the promise is simply re-packaged training that is already available, and primarily designed as a tool to increase market presence and profits. The initiative is designed to encourage developing countries to agree to ‘high-standard commitments’ on the ‘promotion of cross-border data flows’ which translates to the adoption of rules that have been included in other trade agreements at the behest of Big Tech. Rules that a) restrict governments being able to effectively regulate Big Tech, b) inhibit governments from implementing rights-enhancing data policies for political sovereignty and economic self-determination, c) enable algorithms to be kept secret, d) constrain governments from requiring tech companies to have a local presence, and e) stop governments from pro-actively developing digital industrial policies, including autonomous digital public infrastructure. All of these can be extremely harmful to women’s human rights.

The initiative involves companies that have undermined labour rights, refused to recognise workers as employees, have used tax havens to avoid making tax contributions to public services essential for gender equality. Previous trade agreements have included commitments to gender equality, but those agreements have instead harmed women’s human rights by liberalising services, promoting the privatisation of public services essential in addressing discrimination and exclusion, deregulating the labour market, and promoting a race to the bottom in wages and conditions, and denying governments the policy space required for people to progressively realise their economic rights.”

Opposition also arises in the imperial center

Opposition has begun to be organized across the Pacific, in the United States itself. A letter initiated by Citizens Trade Campaign, a national coalition including unions, community groups and other organizations, released on March 2023 a petition signed by more than 400 labor, environmental, community and religious groups calling for the Biden administration to include strong labor rights based on International Labour Organization standards, binding commitments to combat global warming and digital standards to protect consumer rights and privacy while reining in Big Tech abuses. The letter also asks for transparency during IPEF negotiations: “A more transparent and participatory negotiating process for IPEF would allow for a wider set of interests to provide informed input and ensure equitable treatment of communities which are not part of the official U.S. trade advisor system most representing corporations who now have access to U.S. proposals and other confidential IPEF texts.”

A separate U.S. effort, by a group of consumer advocates, calls on the Biden administration to eliminate IPEF language that they say could undermine efforts to hold Big Tech accountable for their privacy practices. The consumer advocates have not seen any IPEF text because it remains secret from the public, but in their letter they said they “understand from policymakers and others who have reviewed the draft” that its digital trade section could help let U.S. tech companies off the hook when it comes to privacy safeguards, The Washington Post reports. The letter adds that the IPEF contains “problematic terms” giving “Big Tech firms control of our personal data” while limiting other countries from applying regulations.

A third negotiating round is scheduled for May in Singapore. The first round of talks, in Brisbane in December 2022, ended without a status report by participants but reportedly negotiators set aside more challenging issues. The second round, in Bali, Indonesia, ended with a commitment “to an aggressive negotiating schedule throughout 2023,” with nothing of substance revealed.

Activists on both sides of the Pacific had to organize a years-long campaign to defeat the Trans-Pacific Partnership, an effort that can only be said, at best, to be partially successful because most of the countries involved did eventually sign it, albeit with somewhat less draconian rules because the most hard-line government, that of the United States, dropped out due to intense domestic pressure. As with the TPP, and the many other “free trade” agreements that have been implemented, the purported benefits for working people are illusions. Fanaticism and fantasy have long driven government propaganda in promoting these deals. Once the TPP text was released, it could readily be seen why it had been secret throughout the negotiations.

“Free trade” agreements — even when falsely advertised as something else — have very little to do with trade and much to do with imposing corporate wish lists, including sweeping away health, safety, labor and environmental standards that can’t be eliminated through democratic means. As with all “free trade” agreements, the fault lines are along class, not national, interests. Industrialists and financiers around the world understand their class interests and are united to promote their interests. Working people uniting across borders, in a broad movement, is the only path toward reversing corporate agendas that accelerate races to the bottom.

How does an economic system so hostile to life endure for centuries?

When we conceptualize the power that maintains capitalism, violence and ideology readily come to mind. Despite the vast inequality, grotesque exploitation, contempt for life and the environment, chronic instability and the rebellions that repeatedly arise and sometimes take power, capitalism seems firmer in the saddle than ever, spreading its suffocating tentacles to virtually every place on Earth.

“How is it even possible that a social order so volatile and hostile to life can persist for centuries?” asks Søren Mau in the introduction to his book Mute Compulsion: A Marxist Theory of the Economic Power of Capital. Violence has been with capitalism since its beginning — indeed, capitalism could not have taken root without massive coercion through violence, draconian laws, slavery and colonialism. The ideological constructs that keep so many in thrall become ever more sophisticated, with a vast apparatus of mass media, “think tanks” and other institutions perpetually reinforcing bourgeois mantras, supplemented by schools, militaries, workplaces and other applicators of social conditioning.

Yet violence is not necessarily ever faced by a typical working person in the advanced capitalist countries, the core of the global system. Violence was used copiously in earlier days of capitalism, both to establish its foundation, enable its growth and to put down strikes, but today is generally reserved for those in the Global South. Ideology is ever present, but keeps bumping up against the material realities of life; that the propaganda telling us no other system is possible seems to get ever more frantic is a clue that capitalist ideologists are perhaps less certain of their mantras than they would let on in public.

Saying this is not to suggest that violence and ideology haven’t been, and still aren’t, crucial props for capitalism. Of course they are and will be. But is that all there is? Dr. Mau, a philosopher and researcher based in Copenhagen, argues persuasively there is more. That there is more beyond violence and ideology really isn’t controversial, at least for those willing to open their eyes to the realities of capitalism. But how to conceptualize this? This is the task that Dr. Mau assigned himself, and Mute Compulsion is the result. In a methodically constructed presentation, he details the concept of “mute compulsion,” the impersonal power embedded in capitalist economic processes. Because violence and ideology are not always in operation, something else must keep the system in place — specifically, keeping working people in their deeply subordinate place — and that is the indirect social forces that maintain the system.

The power of capital is “operative even when ideological and coercive domination are absent,” he writes.

The book seeks to build on Karl Marx’s description of how other forms of power take over once violence has done its job. Quoting from Capital Volume 1, Dr. Mau translates from Marx’s German-language original as follows:

“[T]he mute compulsion of economic relations seals the domination of the capitalist over the worker. Extra-economic, immediate violence is still of course used, but only in exceptional cases. In the ordinary run of things, the worker can be left to the ‘natural laws of production,’ i.e., it is possible to rely on his dependence on capital, which springs from the conditions of production themselves, and is guaranteed in perpetuity by them.”

The power to impose will in multiple dimensions

To grasp this concept, the definition of power must be expanded beyond defining it as simply referencing relations among individuals. The concept should be extended to “relations among social actors as well as the emergent properties of those relations,” Dr. Mau writes. “The power of capital can thus be defined as capital’s capacity to impose its logic on social life; a capacity which includes and ultimately relies upon, yet is not reducible to, relations among social actors in a traditional sense, such as the relationship between capitalists and proletarians or the relationship between an employer and an employee.”

Thus, he argues, power is not a simple dyad nor is it something possessed or exercised exclusively by people, groups, classes or subjects. Marx’s first breakthrough, Dr. Mau argues, is a turning from his original critique of bourgeois society based on human nature, permeated by a “Feurerbachian humanism,” following an 1845 break, “an important step forward,” after which Marx no longer criticized capitalism “in the name of the essence of the human being.” Leading thinkers among those following Marx, such as Friedrich Engels, Georgi Plekhanov and Karl Kautsky, tended to base their theories on “productive force determinism” and thus tended to see the state as the “ultimate locus of capitalist power.” Dr. Mau argues that tendency flows from the idea that capitalism had entered a monopoly state, as exemplified by Vladimir Lenin and Rudolf Hilferding, and remained influential deep into the 20th century, as exemplified by Paul Baran and Paul Sweezy.

Forms of domination beyond the violence/ideology couplet slowly were developed late in the 20th century, with Robert Brenner and Ellen Meiksins Wood, frequently cited throughout the book, discussed here. This development is seen as a break with the idea of the economy as a separate sphere. Having completed a discussion of philosophical development, Mute Compulsion then begins building its case. This construction begins with a discussion of tools. Humans use tools not for convenience but because of necessity. Because they are a necessity, tools are an organ, part of the human body, yet separated from it. Human tools are “absolutely crucial for understanding how such a thing as economic power is possible.” At the level of corporeal organization, “human individuals are caught up in a web of social relations mediating access to the conditions of their reproduction.”

^{The conquest of the Incas (mural by FUEJXJDK)}

The corporeal organization of humans “opens up an immense space of possibility” that makes “a succession of modes of production possible.” The author acknowledges the foregoing is not a full anthropology, but rather is intended to create a better understanding of what economic power is. A stress on the relations of production arises because through them people gain access to the necessities that keep them alive. This is not an “economist” view but reflects the necessity to counter the false bourgeois idea that the economy is completely separate from the rest of society.

Whatever the means used to subject workers — violence, ideology, mute compulsion — the production and extraction of surplus value is the object of capitalist production. Without the capacity of humans to produce more than what is necessary for their own survival, class society would be impossible. As Dr. Mau quotes Marx, again from Capital Volume 1:

“If the worker needs to use all of his time to produce the necessary means of subsistence for himself and his family, he has no time left in which to perform unpaid labour for other people. Unless labour has attained a certain level of productivity, the worker will have no such free time at his disposal, and without superfluous time there can be no surplus labour, hence no capitalists as also no slave-owners, no feudal barons, in a word no class of large-scale landed proprietors.”

After violence does its job, less direct means can substitute 

The possibility of surplus labor explains the possibility of class domination, but not its actuality. Tools and machines outside the body forces a need to gain access to what are means of survival. That necessity results in a concentration of economic power in the hands of those possessing those means and employing those who don’t have them. Thus the worker must sell their labor power to a capitalist to survive. No violence at all is needed here; the need to survive is sufficient to impose the relationship. But this is not a personal relationship, because nobody is bonded to any single capitalist. Capital induces a “debt relation” that binds workers to “capital as such,” not any specific capitalist. The need of capitalists for a steady supply of labor meant that, in the early period of capitalism, peasants had to be violently forced, including through the use of law, to become wage workers and dispossessed of reproducing themselves outside of the market. Once the social pattern solidifies, less direct means of power can be deployed. Dr. Mau writes:

“In opposition to violence or ideology, the ‘silent, unremitting pressure’ of property relations does not directly address the worker; it rather addresses the material environment of the worker, or, more specifically, the material conditions to reproduction. … The power of capital does not just prevent the worker from following their will (although it often does that); it also facilitates a certain way in which they can actually follow that will. Mute compulsion only works because the worker wants to live. Only because of this can capital succeed in demanding surplus labor in exchange for the means of life.”

The subjugation of everybody — especially workers but also capitalists — to the market, unique to capitalism, is inescapable. Market competition is not only a result and cause of the power of capital, “it is itself one of its mechanisms.” There are vertical market relations, skewed by the unequal power of capitalists and working people, and there is horizontal competition among proletarians and among capitalists. That production is for the sale of products in the form of commodities for exchange value in markets adds to the dependence on markets. Competition confronts workers and employers — for workers, it is an alienating form because they are “confronted with the essence of capital,” and for capitalists, it is an inescapable force that requires them to cut costs, drive their workforce to work at a pace maximizing profit and incorporate ever larger portions of social life.

^{Statue of Alice Nutter, English woman accused of witchcraft. (Photo by Graham Demaline.)}

Competition strengthens class power because, although capitalists compete with one another, it also unites them as “hostile brothers” dividing “the loot of other people’s labor.” (A phenomenon that demonstrates this clearly is the stream of lawsuits in which industrialists and financiers fight over which gets the bigger share of the pie; the two representatives of capital are in full agreement that the workers, whose work created the profits they fight over, don’t deserve any of it.) Class domination is necessary “to secure workers’ appearance on the market as sellers of labour power in the first place.” Violence is no longer necessary to secure the supply of workers, Dr. Mau writes:

“Marx points out that ‘state coercion’ was necessary in the early days of capitalism in order to ‘transform the propertyless into workers at conditions advantageous for capital,’ since at this early stage of capitalist development, those conditions ‘are not yet forced upon the workers by competition among one another.’ In other words, competition has the same function as violence had in the original creation of capitalism, and competition is an absolutely crucial part of the mute compulsion of economic relations.”

The continuation of capitalism relies on impersonal domination as well as personal relationships of domination. The authority of the capitalist within the workplace is merely the form of appearance of the impersonal power of capital, Dr. Mau argues, adding that this realization enabled Marx to move beyond his early moral critiques of capitalism. Thus it is not personal lack of morality that compels a capitalist to introduce new technologies and surveillance techniques, or to “deskill” the workforce. Rather, relentless competition forces capitalists “to live up to standards in order to stay in business.” 

As it grows, it can take over more aspects of life

As capitalism gains in power, it is able to subsume more and more of life and geography. Agriculture is now dominated by multi-national corporations, rendering most farmers subcontractors with little decision-making ability; the containerization of shipping has overhauled logistics and taken power from dock workers at a crucial choke point of distribution; and the ability of commodities to move freely while labor is constrained is detrimental to employees. Spatial expansion means increased competition, intensifying the power of capital over everything. Even the very instability of capitalism can rebound to the benefit of capitalists, as economic downturns increase unemployment and thus further disciplines workers. “The forces of capital know very well that a crisis is a splendid opportunity to strengthen capital’s grip on social life,” Dr. Mau writes. Capitalism is indeed “tremendously tenacious.”

Mute Compulsion is not easy reading but it is important reading, providing a welcome assistance toward understanding the ongoing power of capital and longevity of capitalism in all its dimensions. No book is perfect, and so it is proper to note a couple of weak points. One is that the author’s attempt to integrate racial and sex discrimination into his theory fell short, most notable in the muddled discussion of sex relations. The book gropes toward a declaration that the “hierarchical system of gender” precedes capitalism “yet nevertheless reproduces and is reproduced by it,” a certainly reasonable conclusion but one in which the preceding discussion does not lead. It is also jarring for the flippant and unwarranted one-line dismissal of “the radical feminist concept of patriarchy” (is the concept of structural male oppression of women really controversial?) and that the author believes himself to be a far better authority than feminists like Silvia Federici and Maria Mies who have written foundational books that have shaped the field. Sometimes we need to remind ourselves we are not experts on all topics. Hostility to feminism has sadly become fashionable on the Left, and it is difficult not to speculate if this phenomenon, conscious or not, has influenced this refusal to engage, uncharacteristic from the rest of the book.

The other weakness is in the brief discussion of deskilling, which is not understood in the phenomenon’s full dimension. Minimizing the tendency of deskilling, Dr. Mau writes that “capital is not interested in deskilling as such, but only in deskilling as a tool of domination.” That is true to a degree but is not quite right. Deskilling can mean changing work conditions such that skills are made irrelevant; a de facto taking away of a skill.

As I have decades of experience in the workplace, I have experienced this first hand. I once worked as an editor for a large publishing company that owned dozens of newspapers and magazines covering the legal industry. A new management decided to dismantle the staff of each publication, which were specialized in various subjects or geographical areas, and throw everybody together as one giant staff, with editors and reporters assigned to a general pool assigned to no particular publication. Thus our specialized knowledge was rendered useless by making everybody interchangeable. Unfortunately my attempts to raise this issue with my co-workers was met by blank stares and in less than a year mass layoffs began. That’s deskilling, at least in a white-collar environment.

The preceding critiques are not fatal flaws. It would be pointless to judge a book by whether we agreed with the entirety of the contents. What matters is the overall argument, content and presentation. Mute Compulsion succeeds marvelously at constructing a picture of the impersonal aspects of capitalist domination, a crucial aspect that requires full comprehension if we are to grasp the totalizing nature of capitalism. And without a full comprehension, how are we to rid ourselves of it? If you want to understand the workings of capitalism, you’ll want to read this book.

Søren Mau, Mute Compulsion: A Marxist Theory of the Economic Power of Capital [Verso, London and Brooklyn, 2023]

Call it whitewashing or greenwashing, World Bank subterfuge doesn’t fool us

Every so often, the World Bank puts out a paper that calls for better social protection or at least a somewhat better deal for working people. The public relations people there evidently believe we have very short memories.

No, dear reader, the World Bank has not changed its function, nor have elephants begun to fly. Without any hint of irony, the World Bank’s latest attempt at selective amnesia is what it calls its “Social Protection and Jobs” strategy, in which it purports to advocate that the world’s national governments “greatly expand effective coverage of social protection programs” and “significantly increase the scale and quality of economic inclusion and labor market programs.” Hilariously, the World Bank titles its 136-page report fleshing out this strategy “Charting a Course Towards Universal Social Protection: Resilience, Equity, and Opportunity for All.”

In that report, the World Bank, with a straight face, writes that it “recognizes that the progressive realization of universal social protection (USP), which ensures access to social protection for all whenever and however they need it, is critical for effectively reducing poverty and boosting shared prosperity.” Furthermore, the report builds on a previous document that allegedly offers “an overarching framework for understanding the value of investing in social protection programs and outlined how the World Bank would work with client countries to further develop their social protection programs and systems.” The report asserts goals of achieving equity, resilience and opportunity for all people, especially the developing world’s most vulnerable, and “to create opportunity by building human capital and helping men and women to access productive income-earning opportunities.”

^{A demonstration in Oslo during the World Bank conference in June 2002 (photo by Vindheim)}

We arrive at that favorite set of code words, “human capital.” We’ll return to that shortly. But before we highlight the actual record of the World Bank and its role in imposing devastating austerity on countries around the world, at enormous human cost, let’s take a brief look at the International Trade Union Confederation response. The ITUC, which represents 200 million workers in 163 countries and has 338 national affiliates, says its “primary mission is the promotion and defence of workers’ rights and interests.” Readers may recall that the ITUC issues a yearly report on the state of labor, consistently finding that not a single country fully upholds workers’ rights.

In its four-page summary of the World Bank declaration, the ITUC said it agrees with the World Bank’s stated goals, and “agrees with the Bank that the lack of social protection for the majority of the world’s workers in the informal economy is a challenge that needs to be urgently addressed.” Nonetheless, the ITUC “has a number of considerable reservations to some of the policy messages” and disputes “the rigor of the analysis underpinning some of the policies proposed.”

The ITUC writes: “The Bank’s vision of universal social protection appears to prioritise the extension of targeted non-contributory social assistance at the expense of social security, when both forms of support serve distinct and complementary functions.” Further, it “disagrees with the Bank’s critique of social security schemes, especially pensions, as an undue burden on public finances and ‘regressive’ in nature.” The World Bank’s “solution” to make pension and social security systems sustainable “mainly involve reducing public subsidies to social security, strengthening the link from contributions to entitlements through defined-contribution schemes [retirement plans in which you pay into but have no guarantees as to payout], as well as strengthening the role of voluntary and private pensions.”

In other words, it’s work until you drop! That is already a long-term goal of right-wing ideologues and corporate interests not only in the United States but around the world.

Underneath the rhetoric, the usual right-wing prescriptions

And, true to right-wing form, the World Bank places the onus for unemployment squarely on individuals. The ITUC critique says: “the onus of addressing unemployment appears to focus on the individual, rather than on the broader structural forces at play. The [bank report] disregards in particular the measures that governments can take to create new, quality jobs, such as proactive industry planning, public sector job creation, and public investment – including in labour intensive sectors with strong social and environmental dividends, such as infrastructure, care and the green economy.” Finally, the World Bank claims that labor regulations are “excessive” and threaten employment, and advocates lowering already meager worker protections.

Once again, the World Bank has not forgotten its raison d’être; it has not suddenly changed its stripes. Elephants will continue to not fly.

Did we really expect otherwise? A look at the World Bank’s record provides all the evidence anyone could want of it being one of the world’s most destructive agencies, an organization dedicated to enhancing corporate plunder and imposing punishing austerity. A one-two punch with the International Monetary Fund. Both organizations do the bidding of the Global North’s multi-national corporations through playing complementary roles.

^{Three Gorges Dam, a project funded by the World Bank that displaced 1.3 million people (photo by Christoph Filnkössl)}

When I last checked in at the World Bank, in 2018, the bank was in the process of completing its “World Development Report 2019: The Changing Nature of Work,” which opened with quotes from Karl Marx and John Maynard Keynes. That was merely a feint. What we soon read in examining the report is that the problem is “domestic bias towards state-owned or politically connected firms, the slow pace of technology adoption, or stifling regulation.” Sure, jobs are disappearing, but that’s no problem because “the rise in the manufacturing sector in China has more than compensated for this loss.” Essentially, the World Bank was advocating that we become sweatshop workers in China. What else to do? “Early investment in human capital” — in other words, pay lots of money for advanced degrees you won’t be able to use — and “more dynamic labor markets,” which is code for gutting labor protections and making it easier to fire workers.

Elephants didn’t, after all, fly five years ago, either. 

The World Bank has even declared itself above the law. Unfortunately, at least one U.S. court agrees. A lawsuit filed in federal court in Washington on behalf of Indian farmers and fisherpeople ended with a ruling that the World Bank is immune from legal challenge. The bank provided $450 million for a power plant that the plaintiffs said degraded the environment and destroyed livelihoods. The court agreed with the World Bank’s contention that it has immunity under the International Organizations Immunities Act. The World Bank thus was declared the equivalent of a sovereign state, and in this context is placed above any law as if it possesses diplomatic immunity. Another suit, however, also filed by EarthRights International against the World Bank for its role in turning a blind eye to alleged systematic human rights violations by a palm oil company in Honduras for a project it financed, was allowed to proceed by the U.S. Supreme Court in 2019. That case, however, appears to yet be decided by the trial court. So the World Bank can sometimes be sued in the United States legal system but it remains to be seen if it will have to shoulder any responsibility.

The World Bank has a long history of ignoring the human cost of the projects it funds. The World Development Movement, a coalition of local campaign groups in Britain, reports that the World Bank has provided more than US$6.7 billion in grants to projects that are destructive to the environment and undermine human rights, a total likely conservative. To cite merely three of the many examples, the World Bank:

• Loaned an energy company in India more than $550 million to finance the construction of two coal-fired power plants. Local people, excluded from discussions, were beaten, their homes bulldozed and reported reduced food security and deteriorating health as a result of the power stations.
• An Indonesian dam, made possible by the World Bank’s $156 million loan, resulted in the forcible evictions of some 24,000 villagers, who were subject to a campaign of violence and intimidation.
• In Laos, a hydropower project made possible by World Bank guarantees displaced at least 6,000 Indigenous people and disrupted the livelihoods of around 120,000 people living downstream of the dam who can no longer depend on the rivers for fish, drinking water and agriculture.

A study of World Bank policies, “Foreclosing the Future” by environmental lawyer Bruce Rich, found that:

“Drawing on Bank studies, project evaluations and sectoral reviews, it is shown that the World Bank still suffers from a pervasive ‘loan approval culture’ driven by a perverse incentive system that pressures staff and managers to make large loans to governments and corporations without adequate attention to environmental, governance and social issues. In 2013, Bank Staff who highlight social risks and seek to slow down project processing still risk ‘career suicide.’ … [The bank] has continued to binge on enormous loans to oil and gas extraction, coal-fired power stations and large-scale mining generating environmental damage, forest loss and massive carbon emissions.”

Destroying the environment in the service of short-term profits

Want more? The World Bank has provided nearly $15 billion in financing for fossil fuel projects since the 2015 signing of the Paris Climate Accords. An October 2022 report by Big Shift Global, a coalition of 50 environmental organizations across the Global North and South, notes that despite World Bank claims that it would end financing for upstream oil and gas production, it has other avenues to promote fossil fuels. One of these methods is to send funds to a financial institution, which in turns sends the money to the fossil fuel project. Another is to provide non-earmarked funds but make the money conditional on instituting reforms encouraging fossil fuels.

The biggest fossil fuel funding, according to the Big Shift Global report, is $1.1 billion for the Trans-Anatolian Pipeline, a gas distribution project in Azerbaijan. Another $600 million went toward a gas storage project in Turkey and another eight projects were given at least $100 million by the World Bank. Projects that the World Bank has financed include expansion of coal. Other work by the World Bank includes $2.8 billion so that Ghana could move its energy mix from mostly hydropower to majority fossil fuels, and pressured Ghana to enter into gas contracts that causes it to pay $1.2 billion annually for gas it doesn’t use, which also has put a greater debt burden on the country. 

The World Bank also encouraged Guyana to use a Texas law firm that has Exxon as a major client to rewrite its petroleum laws, while providing money for oil and gas development in Guyana. That development will benefit Exxon as the fossil fuel multinational snagged a contract under which Guyana doesn’t receive any of the profits until the costs of the field are paid off. In other words, the Big Shift Global report says, “Exxon can continue to charge Guyana for every newly developed oil field. It could take decades before the money trickles down to the people.” 

^{Protest at the World Bank (photo by “Jenene from Chinatown,” New York City)}

The World Bank attempted the same whitewashing stunt with its fossil fuel funding, once issuing a report lamenting global warming while completely ignoring its role in worsening global warming. At the time of that whitewashing report, the bank was providing billions of dollars to finance new coal plants around the world. By any reasonable standard, the World Bank is a key organization in the concatenation of processes that has brought the world to the brink of catastrophic climate change. The policies of the World Bank and its sibling, the International Monetary Fund, have constituted non-stop efforts to impose multi-national corporate control, dismantle local democratic institutions and place decision-making power into the hands of corporate executives and financiers, the very people and institutions that profit from the destruction of the environment.

A trail of evictions, displacements, gross human rights violations (including rape, murder and torture), widespread destruction of forests, financing of greenhouse-gas-belching fossil-fuel projects, and destruction of water and food sources has followed the World Bank. It works in conjunction with the International Monetary Fund, whose loans, earmarked for loans to governments to pay debts or stabilize currencies, always come with the same requirements to privatize public assets (which can be sold far below market value to multi-national corporations waiting to pounce); cut social safety nets; drastically reduce the scope of government services; eliminate regulations; and open economies wide to multi-national capital, even if that means the destruction of local industry and agriculture. This results in more debt, which then gives multi-national corporations and the IMF, which enforces those corporate interests, still more leverage to impose more control, including heightened ability to weaken environmental and labor laws.

The World Bank compliments this by funding massive infrastructure projects that tend to enormously profit deep-pocketed international investors but ignore the effects on local people and the environment. The two institutions are working as intended, to facilitate the upward distribution of wealth, regardless of human and environmental cost.