GLOBAL ECONOMY : A DEAL WITH THE DEVIL (by Shiva Kant Jha)

Was this the face that launched a thousand ships

And burnt the topless towers of Ilium?

Sweet Helen, make me immortal with a kiss!

Her lips suck forth my soul: see, where it flies!

Come, Helen, come give me my soul again.

Here will I dwell, for heaven be in these lips,

And all is dross that is not Helena.

Christopher Marlowe, Doctor Faustus

 

 

I think it worthwhile to draw attention to the 3 stages which are conspicuously present in the modern economic history: these  are —

           Stage I: The think-tanks of the imperialists learnt certain lessons from the realities which were obvious in  mid-19th century. The Encyclopaedia Britannica notes: “In the middle years of the century (the 19th century) it had been widely held that colonies were burdens and those materials and markets were most effectively acquired through trade.” [Asa Briggs in the Encyclopaedia Britannica Vol. 29 p. 85 (15th Ed.]

          Stage II: Till the World War II, the era was of old imperialism, under which the wielders of imperial powers were directly present in the colonies and the subservient territories.  In the post-World War II phase the USA became most dominant, later hegemonial. ‘The Big Business’, represented by the corporations, mainly MNCs (Multinational corporations) and TNCs (Transnational Corporation), called the shots. It may not be far from truth if we say that the political sovereignty began yielding to ‘corporate imperium’ under the U.S. leadership. This subservience of the political realm of the nation states to the economic realm was facilitated by the deliberately contrived   changes in the international states system, as these tiny-tots, called the ‘states’, can provide secret jurisdictions to help predatory capitalism to grow, and the inscrutable High Finance to make money grow on trees, and then to intrude as investments in the global jurisdictions to capture trade and economic resources.

 

Stage III. Whilst the formation of the UN was on the global political assumptions, the corporate interests, dominant in the Conference at Bretton Woods in 1944, gave birth to the IMF, and the World Bank, and later, in 1995, to the formation of the WTO bidden by Art. III (5) of its Charter to ‘cooperate, as appropriate, with the International Monetary Fund and with the International Bank for Reconstruction and Development and its affiliated agencies’ [  “With a view to achieving greater coherence in global economic policy-making, the WTO shall cooperate, as appropriate, with the International Monetary Fund and with the International Bank for Reconstruction and Development and its affiliated agencies.”].

“Two of the Bretton Woods institutions-the IMF and the World Bank-were actually created at the Bretton Woods meeting. The GATT was created at a subsequent international meeting.” In pursuing their strategies the imperial powers had their broad objectives  no different from those of the East India Company. These objectives were —

(a) how best and most to get access to the resources of the foreign markets, both to get access to trade and domestic resources on favourable terms.

(b) how to devise ways to plough back the profits (and now the virtual money), as INVESTMENT,  in the foreign lands on high return, and under sovereign guarantees through treaties, and a well-crafted regime to provide  international protection ( viz. under the umbrella of the WTO Treaty, the BITs, the Regional Trade Pacts, and many other international consensual instruments.

In 1990s,  the IMF   stressed  “the importance of trade agreements that would assure capital the same freedom of movement as goods. It proposed three principles:

  • Foreign companies should have complete freedom of choice as to whether they participate in a local market by importing goods or by establishing a local production facility.
  • Foreign firms should be governed by the same laws and be accorded the same rights in a country as domestic

Foreign firms should be allowed to undertake any activity in a country that is legally permissible for domestic  firms to undertake. ” [   David Korten, When Corporations Rule the World  p. 123]

Oct. 25, 2015

 

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