excerpts from the book

The Silent Takeover

Global Capitalism and the Death of Democracy

Part 4

Reclaim The State

by Noreena Hertz

Arrow Books, 2001, paper


Reclaim The State

The rise of protest

... while the power and independence of governments withers and corporations take over ever more control, a new political movement is beginning to emerge. Rooted in protest, its advocates are not bounded by national geography, a shared culture or history, and its members comprise a veritable ragtag of by now millions, made up by NGOs, grassroots movements, campaigning corporations, and individuals. Their concerns, while disparate, share a common assumption: that the people's interests have been taken over by other interests viewed as more fundamental than their own-that the public interest has lost out to a corporate one.

The protesters include ordinary people with ordinary lives: housewives, schoolteachers, students, business people, suburbanites and city folk, blue- and white-collar workers alike. Although their goals may be divergent and may even at times be at odds with one another, they share a scepticism about the promises and assurances given by those in authority and - thanks to the neo-liberal orthodoxy which has taught them that the state cannot solve their problems - considerable uncertainty about the role of government.

The apparent inability or unwillingness of our elected representatives to defend our interests against those of business has created a cycle of cynicism. People do not look to government to solve their problems, and politicians therefore have little to lose if they focus their attention on business rather than on voters. Low voter turnout, falling levels of trust and increasingly visible corruption have contributed to a widespread feeling that politics simply does not matter. It is almost as though both sides of the electoral equation have given up on democracy, through a suspicion that elections don't really change anything substantial. In a world where governments are proving less effectual than corporations, trust in representative government is at an all-time low. Traditional deference to politicians, along with many other experts, has evaporated, leaving a citizenry that increasingly demands an effective and decisive say in important issues, a say that seems ill-served by the electoral ballot box.

These protesters believe that taking the chance that what is good for business is good for us and our communities is just too high a risk, hazarding the food we eat, the environment, and the democratic process. While some may welcome the recent attempts of various corporations to address some of the failings of the system and contribute to the social sphere, they tend to see these attempts as window-dressing or corporate PR, and remain sceptical about companies' motives. At the same time they reject representative government as an ineffective, coopted and flawed mechanism for dealing with the failings of the market or representing their interests on the global stage, and reject the politics of today as the 'politics of Narcissus', concerned only with presentation and 'spin'. They choose to voice their concerns on the street, on the Internet, and in the shopping malls, because they feel that these are the only places that they can be heard. They will not trust either government or business except in terms of responsiveness and results.

The Pulitzer Prize-winning author Thomas Friedman's 'McArches World', in which countries with McDonald's in them do not go to war, is being replaced by a McConflict world, in which wrecked McDonald's shop fronts have become a symbol of the discord within and Jose Bove, the French farmer who destroyed a McDonalds construction site, has become a folk hero. International order provided courtesy of multinational corporations may have been purchased at the price of domestic anarchy.

But it is not just brands that the protesters attack - governments and multilaterals are targeted with equal ferocity, often with positive effect. There was the forcing through of a pact on global climate at the Earth Summit in Rio de Janeiro in 1992, where NGOs 'set the original goal of negotiating an agreement to control greenhouse gases long before the governments were ready to do so, proposed most of its structure and content, and lobbied and mobilized public pressure to force through a pact that virtually no one else thought possible when the talks began'. And the collapse of the Multilateral Agreement on Investment (MAI) thanks to the efforts of numerous consumer groups and environmentalists who feared the draft treaty to harmonise rules on foreign investment would have disabled national governments' ability to protect their own citizens in the face of corporate demands. Then there was the balaclava-wearing leader of the Zapatistas, pipe-smoking subcommander Marcos, who in 1994 waged cyber war against the pro-NAFTA 'Structural Adjustment Policies' of Mexico's PRI government. And the 'Pink Fairies' of Seattle, Prague, Gothenburg and Genoa who in their bo-peep outfits, pink bras, Lycra, sequins and wings helped to disrupt recent IMF, WTO, EU and G8 meetings. Jubilee 2000 successfully pushed for a dramatic reduction in the debts of the poorest countries. And the presidential building in Quito, Ecuador was taken over in protest in January 2000 against President Jamil Mahaud's austerity programs. A culture of protest is emerging that threatens to overturn the status quo.

Through demonstrations, publicity campaigns and direct action schemes, the protest movement attempts to raise the costs to businesses and governments of continuing with whatever practices protesters consider damaging, and to shape the terms on which the new elites can operate. As journalists, academics, activists and ordinary citizens speak out against the omnipotence of big business and the unreliability of government, nowadays protesters log on rather than turn on and protest rather than drop out.

What makes this movement particularly remarkable is the breadth of its appeal, and the extent to which it has managed to coalesce divergent interests. Traditional and non-traditional groups have worked together in unprecedented ways to achieve solutions rather than, as in the past, seeing each other as a part of the problem. The scandal of BSE ('mad cow' disease) in Britain, for example, was significant in the extent to which it gave former enemies a common cause:

Civic association - the classic expression of civil society - and uncivil politics - the presumed expression of anemic democracy - joined hands against government untrustworthiness. Farmers and producers, environmentalists and consumer groups, opposition politicians and newspapers mixed conventional forms of participation with social activism in response to untrustworthy government.

The debate over genetically modified foods elicited a similar response, except that agrochemical corporations joined politicians as the focus for protesters. In Britain, guerrilla gardeners-environmental activists whose tactics included night attacks on GM crops-found themselves sharing a platform with the Women's Institute, a traditional bastion of British conservatism, in condemning GM foods.

At the World Trade Organization talks in Seattle in November 1999, a similar range of divergent interests gathered outside the convention hall to express their concerns over international free trade. Trade unionists, environmentalists and anarchist groups differed in their goals but shared a common hostility to the way that global markets were being sliced up and controlled by the most powerful governments and corporations. The image of these erstwhile enemies holding hands symbolises the extent to which civil society is now speaking with a common voice, at least so far as it shares common concerns. Protest is becoming institutionalised as an acceptable form of expression.

The movement has no fixed membership, so it can mobilise support around shared concerns, national or global, as and where appropriate. This lack of permanent mass membership and of a physical base does not weaken it, rather it makes the movement more flexible and able to tackle diverse issues, many of which may cross national boundaries. Its power is widely distributed: 'One does not need an army, control over governmental bureaucracies, massive wealth or even large numbers of activists to be effective.' In the age of the Internet mass action can be orchestrated with unprecedented ease. Sharing information and strategies and building links is easier and cheaper than ever before. We saw the pressure corporations are now under from e-boycotts. Similarly 'A draft of the MAI text, posted on the Internet . . . allowed hundreds of hostile watchdog groups to mobilise against it. [And] the Seattle trade summit was disrupted by dozens of websites which alerted everyone (except, it seems, the Seattle police), to the protests that were planned.'

As the power and credibility of politicians wanes and the power of corporations and international organizations grows, the protest movement has been gaining momentum. A hundred NGOs turned up at the WTO Ministerial Meeting in 1996; three years later, in Seattle, there were over a thousand. Over 100,000 Bolivians took to the streets in February 2000 in protest against their government's decision to privatise the national water supply. The Washington World Bank/IMF protests that April were attended by over 10,000 demonstrators. At the end of June 2000, 40,000 people gathered in France outside the court at which Jose Bove was being tried. In July a consumer boycott by thousands of Japanese housewives brought down Sogo, the Osaka retailer that had come to epitomise business-government cronyism in Japan. 20,000 protestors converged on Prague in September; and at the EU summit in Nice in December that year 100,000 turned out.

In 2001, tens of thousands rose up against IMF plans in Ecuador in February; 80,000 took to the streets in April in Quebec against the Free Trade Area of the Americas agreement; 30,000 protested in Gothenburg against the IMF summit; over 150,000 in Genoa in July; and then in December 2001 over one million Argentineans poured onto the streets of Buenos Aires in protest against the economic austerity measures that were pushing two thousand Argentineans below the poverty line each day.

These are early days, but if people continue to feel alienated from traditional politics and distrustful of the politicians' agendas, if they continue to feel abandoned by the state, and increasingly of the opinion that politics has been co-opted by business, if people continue to feel that the only real power is in the hands of unelected institutions - huge corporations and unaccountable supranational structures - the voice of protest will only grow louder and we will continue to see a shift from the politics of acceptance towards that of dissent. In the nineteenth century workers, and in the early twentieth century women, protested to get the vote; today protest centres on the assumption that their votes have become insignificant.

Protest as the catalyst for change

As we have seen, in today's world economics has become the new politics, and the pursuit of economic goals now outweighs political and social concerns. Governments pursue market share rather than territorial gain, and politicians depend on big business to fund their campaigns and provide the jobs they need to win elections, threatening what impartiality they once had. At the same time people have become increasingly distanced from politicians, and politicians have shown themselves equally out of touch with their electorates. Even James Wolfensohn, head of the World Bank, now concedes that 'globalisation is not working at the level of the people', and it is clear that wealth is not trickling down as has been predicted. Meanwhile, the IMF's 2,700 employees dictate economic terms to 1.46 billion people, and corporations are now openly in the business of politics. The democratic deficit is fast becoming a democratic chasm, and protest is emerging as the only way for other voices to be heard.

The protest movement gives a voice to people who have been denied the right to elect their governments, as well as to people who no longer feel that their representatives are acting on their behalf. It empowers people who otherwise would have no recourse, in particular the young, the group throughout the world's democracies least likely to express themselves through the traditional ballot box. By rejecting traditional notions of representative democracy it makes democracy more direct, and puts it in people's own hands. By questioning, criticising and publicising, it 'can change the terms of disclosure, and the balance of different components in the international constellation of discourses.'

The movement's success has given participants a sense of empowemment, and demonstrated that there are alternatives to the frustration and alienation that many experience. They have proven that the demos has a clear role to play in this commerce-centred world, in applying pressure to society's decision makers, in making democracy more robust, if more uncertain.

In a world in which ideology competes with ice cream and the policies of the dominant parties are almost indistinguishable, so that there is no apparent gain from changing the government, protest places on the agenda policies that the dominant parties would not otherwise offer the electorate. In a post-cold war era in which the US has become the only 'imperial power' we see a rise in popular dissent, because people see no alternative but to take issues into their own hands.

Of course, such protest does not provide a long-term solution to the Silent Takeover. Its limitations mirror those of consumer activism - unsurprisingly so, given their shared genesis in the discontent of the early l990s, and their similar methods of expressing discontent. The commonality of interests often centres on a shared general disillusionment, rather than specific concerns or proffered solutions. In some cases protesters are motivated by a sense of common good; but in others they are concerned only with safeguarding their own interests, or those of a limited group - the 'raise less corn and more hell' variety of protest, like the British fuel protests of autumn 2000. As we have seen, pressure groups need to play to the media, which encourages polarised posturing, the demonisation of 'enemies', the oversimplification of issues and the choosing of fashionable rather than difficult causes to champion. Issues such as soil erosion, nitrate leaching, and forest biodiversity in Africa, hardly ever get a look in. And the need for media attention can inspire violence. As Brian, the American student I met en route to Genoa, put it, 'There has to be trouble, otherwise the papers won't report it, we won't get our concerns on the front page.'

Various pressure groups that play a large role in civil society have taken up the mantle of people's champion, yet they lack any sort of democratic mandate, are often narrowly focused on the priorities of their members, or of their leadership, and may work to impose their values irrespective of those of others. Some aim to speak for the poor and the marginalised, but not all. Because they concentrate on single issues, they may feel no need to concern themselves with the concerns of others, as would occur in a genuine democracy. Sometimes the coalitions of interests are global in their concern, but often they have highly nationalistic undertones. And sometimes the wishes of the demos can be downright nasty, like the British hysteria about paedophiles, largely stirred up by a corporation, News International, through the pages of its News of the World newspaper and resulting in such fiascos as that of the Bristol paediatrician who had to go into hiding because the mob couldn't tell the difference.

Protest is far removed from any familiar notion of participatory democracy. For those who are not prepared to stand in the clouds of tear gas outside another intergovemmental conference, or to live in tunnels beneath proposed road development sites, the scope for involvement is limited. We can post off a cheque once a year to Greenpeace - or, like the majority, sit back and watch the dramas unfolding on our television screens, unsure whether we really identify with or support the tactics of the protesters. Can these masked masqueraders really be representing majority views?

Protest acts as a countervailing force to the Silent Takeover, yet because it is not fully inclusive it shares, to a degree, the illegitimacy of its opponent. The institutionalisation of protest risks leaving us with a political system where those with the most intensely held opinions, those who shout the loudest or are the best organised, are the people to whom politicians and CEOs respond. Anti-abortion campaigners in the United States and defenders of foxhunting in the UK have distributed pre-printed postcards to group members for them to sign and send to local representatives. E-mail allows pressure groups to mobilise thousands of members instantaneously, who can shoot off standard forms of protest to express concern about a single issue. The silent majority risks becoming disempowered by the vocal minority. Corporations risk being tried by kangaroo courts, while politics risks being permanently assigned to an arena in which the battle for political sway is fought on the one hand by corporations and on the other by pressure groups, with ordinary people's interests lost in the struggle.

But despite the limitations of protest, despite its failure to balance effective means with democratic ends, despite the fact that it can never by itself be a long-term solution, the question remains as to whether, as its powers increases, it will be able to act as a catalyst for reform. Can protest change politics in the same way as it is beginning to change the corporate agenda? Can protest pressurise governments into once again putting the people's interests first? Can it force politicians to return to true democracy and provide the stimulus for them to come up with genuine inter-party debate and politics that will mobilise voters? Can protest act to re-establish government as a democratic forum within which different social needs are weighed, and all is not reducible to either the corporation or the individual? Can protest serve to reinvent the state? History suggests that it can.

The new agenda

But can politics be refrained so as to avert this nihilistic senario? Is there a new agenda that could be embraced that could rebuild democracy for the people? Can social injustice, inequality and power asymmetries be addressed so as to make politics a product once again worth buying, and can globalisation be made to work for all and not just the few?

I believe that they can, that a new agenda is possible, based on principles of inclusiveness, a reconnection of the social and the economic, and a determination to ensure that everyone has access to justice wherever they are. And that what has been preventing its birth has not only been the safeguarding of special interests or a lack of resources: it has been a lack of moral imperative, responsibility or political will.

First, at the national level, this new agenda necessitates a disenfranchisement of corporations. Corporate funding political parties and election campaigns makes a mockery of democratic principles, and continues to ensure that politics remains skewed towards the interests of the few - exclusive rather than inclusive. In practical terms this means breaking the financial stranglehold corporations have on politics, and a commitment by those governments that have not already done so to introduce reform of political financing and state funding of election campaigns. Any private funding of election campaigns will always come with strings attached. If trust is to be restored, politicians will have to prove to the electorate that they are working for the public and not a private good.

Second, the steadfast belief in trickle-down economics, the legacy of Reagonomics and Thatcherism, an axiom which has been used to justify everything from corporate welfare in the United States to corporate tax rate cuts in Europe, must once and for all be laid to rest. Growing inequalities, and corporations' tendencies to capture the gains from subsidies or tax cuts for themselves, provide glaring disproof of the trickle-down theory. In practical terms the rejection of this axiom will necessitate the scrapping of the policy of corporate welfare, but also a rethink of redistributive tax policies and public expenditure more generally. A world of gated communities next to ghettos is not only unconscionable, it is also dangerous. The 'free lunch' school of politics, in which politicians make inflated claims and generate inflated expectations without admitting that tradeoffs will undoubtedly be needed, must be laid to rest.

And third, the power of corporations at a national level must be checked. Reregulation rather than deregulation is the urgent priority. Stronger anti-monopoly bodies, with the increases in funding that will be needed to support them. Cross-ownership restrictions on media enforced. Mandatory reporting requirements on issues relating to the environment and society. And the integrity of information and academic research ensured: obligatory disclosure of potential conflicts of interest, and corporate sponsorship of the public realm made subject to stringent controls. Without a strong regulatory framework in place, the market becomes a free-for-all, too often at our own and our neighbours' expense.

But reframing politics at the national level though necessary is not sufficient. In a world of global capital, politics must be reframed at the global level too. This will entail addressing the dominance of trade and corporate interests in the global sphere, as well as the question of how to best meet the needs of those who have not benefited from globalisation.

To this end we will need first to put in place mechanisms to help people fight against injustice as part of a wider political - rebuilding of institutions. All people, wherever they are, must be extended the rights we in the North take for granted. Workers and communities everywhere must be guaranteed basic rights to minimum health, safety, and welfare standards at work, and not be dismissed or dispossessed without adequate compensation. Multinational corporations must not be allowed to infringe these rights, wherever it is that they operate.

A world in which people have no access to justice is one in which discontent will continue to fester. So it is imperative that we ensure that the perpetrators of corporate injustices be held to account, wherever they are, and that their victims have redress whoever they are. In the long term this is a matter of strengthening both local and international regulation of companies and making enforcement effective. In the short term, there are two clear initiatives that can be taken.

First, governments of the North must commit themselves to legislative reforms that will ensure that the corporate veil can be pierced and parent companies be held responsible for the actions of their subsidiaries in whatever country they operate. And second, workers and communities everywhere must be given access to a global legal aid fund.

Next, we need to set up a World Social Organization (WSO): an organisation which will counter the dominance of the World Trade Organization and will establish rules and regulations that will reframe global market mechanisms to ensure the long-term protection of human rights, labor standards and the environment. Such an organisation must have teeth as sharp as those of the WTO and equally effective powers of enforcement. Together with the WTO, it will be subject to a new adjudication mechanism that will seek to reconcile trade and other interests when the WTO and WSO clash, as they undoubtedly will, so as to best serve the public good.

But we in the North must be careful not to use this new organisation as a form of protectionism. The developed world must help developing countries meet the costs of better global standards, and the different starting points of different nations must be taken into account when designing new protocols.

And finally we must address the problem of alleviating the positions of those who are most excluded and marginalised, the losers from globalisation. At least, we must cancel debt and reverse the outflows of capital from the south to the north. We must significantly increase overseas aid, which for the least developed countries has fallen 45 per cent in real terms since 1990, and we must rethink the ways in which it is delivered. And we must pull down all trade barriers on agricultural and textile products from the developing world - developing countries are losing almost $2 billion a day because of inequitable trade rules. The commitment at the Doha round of the WTO to enter negotiations on the issue of agricultural subsidies is frankly not good enough.

But more than this, we will also need new money to realize our new goals. The world needs a new global tax authority, linked perhaps to the UN system. The authority should have the power to levy indirect taxes, for example on pollution and on energy consumption, which can then be spent on protecting the environment. The authority will also need to be able to levy direct taxes on multinational corporations, in order to fund the development of global environmental, labour and human rights norms. And specific health taxes on tobacco and alcohol companies should be levied to fund a global health fund.

These six steps are only the beginning of an agenda for action to recast globalisation. They are not the only steps we could take - of course not. But they are a way to begin to reunite the global economy with social justice, a way to begin to address the fundamental concerns highlighted by the Silent Takeover.

A better world is possible: a world of greater equity, justice, and true democracy. But here is a warning: unless those in power do address these issues, those disenfranchised by the Silent Takeover or those who chose to speak for the disenfranchised will keep on trying to batter down the doors of power, in whatever ways they see most fit. If we continue as a world to perpetuate such power asymmetries, and if inequalities continue to grow at the rate we have seen them grow over the past twenty years, what we will see is a replacement of politics by protest, an institutionalisation of protest and rage, and with it the demise of democracy itself, even in those nations that pride themselves on being democratic. Until the state reclaims the people, the people will not reclaim the state. Until the benefits of globalisation are shared more widely, people will continue to rise up against globalisation.

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