excerpts from the book

Globalization Unmasked

imperialism in the 21st Century

by James Petras and Henry Veltmeyer

Fernwood Publishing - Zed Books, 2001. paperback


"Globalization" refers to the widening and deepening of the international flows of trade, capital, technology and information within a single integrated global market.

"Globalization" involves the liberalization of national and global markets in the belief that free flows of trade, capital and information will produce the best outcome for growth and human welfare (UNDP 1992).

The network of institutions that define the structure of the new global economic system is viewed not in structural terms, but as intentional and contingent, subject to the control of individuals who represent and seek to advance the interests of a new international capitalist class.
This class, it is argued, is formed on the basis of institutions that include a complex of some 37,000 transnational corporations (TNCs), the operating units of global capitalism, the bearers of capital and technology and the major agents of the new imperial order. These TNCs are not the only organizational bases of this order, which also include the World Bank, the International Monetary Fund (IMF) and other international financial institutions (IFIs) that constitute the self-styled "international financial community," or what Barnet and Cavenagh (1994) prefer to call "the global financial network." In addition, the New World Order is made up of a host of global strategic planning and policy forums such as the Group of Seven (G-7), the Trilateral Commission (TC) and the World Economic Forum (WEF); and the state apparatuses in countries at the centre of the system that have been restructured so as to serve and respond to the interests of global capital. All of these institutions form an integral part of the new imperialism - the new system of "global governance."

Throughout history, ruling classes representing small minorities have depended on a coercive state apparatus and social institutions to defend their power, profits and privileges. In the past, particularly in the Third World, imperial ruling classes financed and supported overseas and domestic religious institutions to control exploited people and deflect their discontent into religious and communal rivalries and conflicts.

U.S. foreign policy is largely directed towards serving the TNCs [transnational corporations].

In Colombia, Mexico and Peru, peasant-guerrilla movements were active; in Bolivia, Paraguay, Ecuador and Brazil, significant peasant movements emerged. In Venezuela and Argentina, urban uprisings and trade union strikes gained popular support. The threat from below to the U.S.-backed neoliberal elite consensus led Washington to seek a new ideology to support its intervention through the military and police. The "fight against narco-trafficking" has served Washington's empire-building purposes. First, it has disguised Washington's repressive and exploitative policies behind a high moral purpose, and thus domestic public opinion has been neutralized. Second, the fight against narco-traffickers has allowed Washington to penetrate the internal security forces of Latin America and establish its own political agenda. Third, the "narco-traffic war" has allowed Washington to have direct access to the society in order to push its economic and counter-insurgency agenda. By focusing the fight against narco-traffic towards Latin America and towards the countryside, Washington has been able to aim blows against real or potential social revolutionary movements. If Washington's leaders were truly serious about drug-trafficking issues, it would instead focus internally, on the large international banks that launder most of the drug money; they would arrest corrupt police who take drug bribes; they would invest more in anti-drug education; and they would provide decent jobs for the low-paid, marginal groups of workers who become drug dealers. The decision to look overseas and downward, instead of inward and upward, is a political choice, an imperial requirement.

Any objective analysis of drug trafficking would have to conclude that the issue is essentially a "market," or "demand," problem. Fundamentally it is an internal problem of the U.S. and its government, society, economy and cultural system...

The "externalization" of the drug problem has a double value for Washington: it deflects a deep critique of U.S. society and economy, and it provides a pretext for the continuous manipulation of Latin politics, politicians and [military officials.

Washington's "war on drugs" is directed towards increasing U.S. power in Latin America. The use of drug money laundered through U.S. banks finances Washington's trade imbalances, while the drug war increases Washington's general influence over economic policy, allowing U.S.-based TNCs to buy Latin American public enterprises at scandalously low prices and to penetrate markets.

The reason the U.S. has concentrated its anti-drug campaign in Colombia is because Washington is fearful that this Latin American nation could become he second Vietnam... Washington's anti-drug war is deeply intertwined with its counterrevolutionary politics: its military aid is mainly directed towards destroying peasant links to the FARC. By eradicating coca, promoting cheap imports and repressing peasant organizations, the U.S. and the Colombian military hope to drive the peasantry out of the countryside and isolate the guerrillas.

Between 1960 and 1964 the Right divided between a populist sector that attempted to "co-opt" the reform agenda of the revolutionary Left and a "hard Right" that aligned with the military and the conservative hierarchy of the Church,

In Brazil, Chile, Peru and Venezuela the populist Right, in alliance with the U.S., pushed for agrarian reforms to divide the peasants from the radicalized working classes and urban poor. Under tutelage from the U.S., reform was combined with physical repression in the form of "counter-insurgency," The bourgeoisie combined electoral and armed struggle. Under pressure from the Left and the popular movements, the "populist sectors" of the Right began to lose control of the "reform process." Increasingly the "hard Right" began to organize paramilitary groups, mass protests and economic boycotts (disinvestment, lockouts). The "electoralist Right" increasingly abandoned its "populist alliance" and began to prepare covert armed action in alliance with the military and U.S. intelligence agencies.

The "reformist phase" of the Right ended in 1964 with the military coup in Brazil. Preceded by mass demonstrations in which it utilized its ties with the traditional Church, conservative mass media and civic associations, the Right fomented economic paralysis and socio-political polarization. In this context the "hard Right" allied with the military to launch the military coup.

The point is that the Right possesses an instrumental view of democracy. For the Right, the class character and orientation of the state determines its practice towards armed or electoral struggle.

The Brazilian Right's decision to take the road of armed struggle via a military coup set an example for the rest of Latin America. Military coups subsequently took place in Argentina (1966 and 1976), Bolivia (1971) and Chile (1973). The phase of right-wing electoral competition with the Left ended. The Right's inability to control the "reformist" process and its loss of electoral support strengthened the sectors oriented towards armed struggle. The Alliance for Progress announced by Kennedy was dead. The U.S. once again aligned itself with the "hard Right." In the ideological terms, the Right shifted from a democratic discourse to national security, from agrarian reform to export-oriented "modernization."

The decade from 1973 to 1983 was a decade of unrestrained right-wing violence from the government and through paramilitary groups. Rightist violence reached unprecedented heights. In Central America, 350,000 people were killed and over 2.5 million went into exile. In South America (Argentina, Chile, Uruguay, Brazil, Bolivia and Peru), close to 70,000 people were killed. The Right resorted to state terror on a massive scale.

Repressive policies were oriented towards disarticulating civil society, particularly the popular sociopolitical movements; destroying the political intellectual framework of the nationalist, populist and socialist political and intellectual leaders; and, more importantly, restructuring the economy and state.

The second phase of the rightist strategy was to reshape the economic, state and class structure to concentrate wealth in the export elites, banks and multinationals and to centralize power in the executive (military) branch of government. Accompanying these political-economic changes, the Right created a new neoliberal political-intellectual framework from which to shape economic and social policy. The combination of violent rule and "liberal reform" was first embodied in Chile under Pinochet and was followed later by military rulers in Argentina, Uruguay and Bolivia. The Right deepened its ties internationally while disarticulating civil society internally. The United States and the international financial agencies provided large flows of financial resources and economic advisory groups to consolidate right-wing regimes Many of the key right-wing economic advisors were graduates of universities in the U.S. specializing in free market dogma (University of Chicago, Stanford, Harvard, etc.).

Once the liberal institutional-economic framework was set up and the process of accumulation and concentration was taking place, the Right debated the question of "governability." The discussion focused on forms of legitimization, rules for resolving the conflicts of interest within the ruling class and methods to contain popular unrest. The issue of governability became acute, with the return of mass struggles in Brazil (1979-85), Chile (1983-86), Argentina (1982-83) and Bolivia (1981-84), as well as the revolutionary struggles in Central America (Guatemala and El Salvador).

The military regimes were no longer the most viable political instruments to deepen and extend the neoliberal model promoted by the Washington consensus. re Right turned towards a negotiated transition, in which an electoral system would preserve the state but leave the socio-economic class structure intact. What was crucial for the Right was the selection of appropriate interlocutors who would accept the parameters of politics established during the dictatorship and respect the impunity of the military.

... From the pinnacle of rigid class structures the Right controlled the mass media and financial resources to project an image of legitimacy, while practicing a new style of authoritarian politics [Latin America 1980s -1990s.] Under the electoral facade of the 1990s the Right rules through the executive and legislates by executive decree. It guarantees the continuity of its rule by forcing through laws allowing for the reelection of the president, and it pressures and corrupts representatives and judges to approve anti-labour legislation that weakens trade unions and undermines class solidarity.

The Right engages in class warfare, strengthening the bourgeois class by privatizing key public enterprises and thus concentrating more power and economic resources in the hands of its key class supporters. The Right facilitates mergers of mass media empires, thus centralizing ideological control in the hands of right-wing capitalists. Neoliberal policies are less an "economic" strategy than a political-class strategy. Economic policies and political decrees are directed towards disarticulating the social base of the Left, and legal measures are enforced by physical repression.

Any discussion of the Right in Latin America must take into account the U.S. imperial state and multinational banks and corporations. They play a central role in shaping the strategies and providing organized support and financing of the Latin American Right. In fact, conceptually they are an integral part of the Right.

U.S. strategy [in Latin America] is right-wing because its intervention and articulation is in defense of policies that favour the maximization of profits and their free remittance by a small elite of banks and corporations at the expense of the income of wage earners and national growth. Washington's policies are articulated with business and financial groups of the Right against popular movements. Its free market ideology resonates with the liberal doctrines of the Latin American Right and is hostile to the redistributive policies of the Left.

Washington, through the National Endowment for Democracy [NED], financed seminars, meetings and publications on the theme of "redemocratization." [Latin America, 1980s] The "new democracy" embodied in the Washington consensus excluded popular consultation, agrarian reform, redistribution of income and comprehensive public social services. Instead it centralized power in the presidency as an instrument of neoliberal policy.

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