Abstract
Life cannot be captured in mathematical equations. Because of this, in democracies, determining the optimal economic order is not a matter of arithmetic but of political debate. So is decision-making about movement along the continuum. It is also a matter of finding an acceptable balance between the government and the market.
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References
Chapter 11
As said in the first chapter, moving to the left or to the right side of the continuum is a matter of normative economics, because it involves ethical and value judgments. My personal viewpoint is that people who, due to policies of moving to the right side of the continuum, are hampered from fulfilling a position in society, are threatened in their dignity. Likewise, unemployment for people who want to work can be considered as a lack of recognition of their usefulness to society. To me, we have a double problem of core values here. Firstly, increasing inequalities between people, leaving many behind, is not in accordance with the appropriate development of a civilized society. Secondly, increasing dissatisfaction with present-day liberal democratic capitalism may encourage those who are left behind to “restart history.” History has seen several examples of opportunistic politicians who succeeded in mobilizing dissatisfied masses. Concluding international treaties could be of help in this respect. As an indication that world politics, particularly the G8, takes this challenge seriously, the suggestion of the Commission on Global Governance to the United Nations to establish an Economic Security Council, which I suggest could be adapted into a Social-Economic Security Council, is certainly worth considering, not only as a sign of civilization but also from the perspective of the “self-interest of the privileged.” There is reason, however, not to be too optimistic in this respect. Even now, the United Nations has a central system to which the General Assembly, the Security Council, and the Economic and Social Council (ECOSOC) belong. The latter is supposed to deal with specific economic and social problems without “the necessary powers to manage effectively” (Taylor, P.: The United Nations and International Order, in: Baylis, J. & Smith, S., (eds.): ibid., pp. 332–335). All the more so since international organizations like the IMF, the World Bank, the WTO, and the OECD (OECD: Towards a New Global Age: Challenges and Opportunities. Policy Report, OECD, Paris, 1997) appear to pursue neo-liberal policies worldwide.
Stiglitz, J.: The Roaring Nineties: ibid., p. xii.
Stiglitz, J.: The Roaring Nineties: ibid., p. 318.
Turner argues that privatization is not absolutely necessary for market liberalization, although in practice it is difficult for governments to own companies and resist subsidization at the same time (Turner, A.: ibid., p. 167).
Stiglitz, J.: The Roaring Nineties: ibid., p. 284.
Stiglitz, J.: The Roaring Nineties: ibid., p. 283.
Hertz, N.: ibid.: p. 57.
Hertz, N.: ibid.: p. 57.
Snel, E., Hoek, T. van der, and Chessa, T.: Kinderen in Armoede: Opgroeien in de Marge van Nederland, Van Gorcum, 2001, p. 72.
Commission on Social Justice: What is Social Justice? in: Pierson, Chr. and Castles, F., (eds.): ibid., p. 61.
Happily, there is a ray of hope, since, particularly at the American state level, there is a growing number of grassroots organizations which are exposing the outrageous behavior of the corporate/political combination to the detriment of the American people. Through their actions, these organizations try to send a message to the market about the importance of corporate responsibility and conduct. An increasing number of companies are moving away from conventional corporate accounting, trying to include social and environmental considerations (Huffington, A.: ibid., pp. 250–257).
Pilger, J.: Hidden Agendas, Vintage Books, 1999, p. 57.
Gates, J.: ibid.: p. 32. The figure of 80 million is based on the worldwide trend.
Pilger, J.: Hidden Agendas, ibid.: p. 104.
Legrain, Ph.: ibid.: p. 16.
Mestrum, F.: ibid.: p. 24.
Hutton, W.: The State To Come, Vintage Books, 1997, p. x.
Galbraith, J. K.: The Culture of Contentment, London, 1992, p. 170. Galbraith argues here that “Yet the possibility of an underclass revolt, deeply disturbing the contentment, exists and grows stronger. There have been outbreaks in the past, notably the major inner-city riots of the latter 1960s, and there are several factors that might lead to a repetition.”
Peterson, W.C.: ibid. Peterson says, “If slow economic growth and stagnant real wages continue for the rest of the century, it will take some extraordinary creative and political leadership to avoid an explosion” (p. 92).
Reich, R.: The Work of Nations: A Blueprint for the Future, London, 1993.
Lasch, C.: ibid., p. 85.
Soros observes that globalization did not cause this misery. To him, armed conflicts and oppressive and corrupt regimes are to blame for that. Therefore, while recognizing that globalization, as well as resulting in more interdependence between the countries of the world, has also increased the possibilities of internal problems in those (underdeveloped) countries, he suggests that next to the necessity of thinking out better regulations regarding the provision of collective goods (education, health care, environment, etc.), we should also find ways to improve political and social circumstances within separate countries (Soros, G.: Soros on Globalization (Dutch Translation), ibid.: pp. 31–32). In this respect, Scholte rightfully observes that globalization has not been the only force behind persistent and growing poverty, but that local social structures, national policies, natural calamities, and other forces have also been influential (Scholte, J. A.: Globalization: A Critical Introduction: ibid.: p. 217). Furthermore, Kupchan argues that the ongoing struggle between the United States and Islamic radicals is no proof of a clash of civilizations. To him, the root causes of disaffection within Islamic society and the resulting terrorism are the illegitimacy of governing regimes, clan and factional rivalries, income inequalities, poverty, and a sense of being left behind (Kupchan, C. A.: ibid., p. 70). Similarly, Lagendijk and Wiersma argue that in the longer term reducing poverty and underdevelopment, guaranteeing civil rights, combating cultural and religious contrasts, as well as the reconstruction of failed states and dispelling feelings of humiliation will be necessities for the prevention of terrorism (Lagendijk, J. and Wiersma, J. M.: Na Mars komt Venus: Een Europees Antwoord op Bush, uitgeverij Balans, 2004, p. 115).
Dawson, A. D.: ibid., p. 52.
Hertsgaard, M.: ibid., p. 21.
As an example, representatives of the urban poor of Southern Africa and Asia have organized themselves into Slack/Slum Dwellers International in 1996, whereas the Participation Resource Action Network has linked poor people across continents (Scholte, J. A.: Globalization: A Critical Introduction, ibid.: pp. 73–74).
Pilger, J.: Hidden Agendas, ibid.: p. 328.
Huntington, S. P.: Who are We? America’s Great Debate, ibid., p. 315.
The state of Michigan alone already had many militia groups in the 1990s (Moore, M.: Downsize This: ibid.: pp. 13–14). It should be mentioned that the number of active militia movements had dwindled to 197 in 2000 (Huntington, S. P.: Who are we?, ibid., p. 315).
Pilger, J.: Hidden Agendas: ibid.: p. 330.
As an example, the city of Ahmedabad in India has the Self-Employed Women’s Association, campaigning to improve the life of its impoverished members and representing more than 200,000 poor women. Moreover, in countries such as Peru, Mexico, Brazil, South Africa, and Nicaragua, women are campaigning for fair prices, rents, basic social needs, schools, health centers, and sanitation (Pilger, J.: Hidden Agendas: ibid., p. 536).
OECD: The Reform of Health Care: A Comparative Analysis of Seven OECD Countries, ibid., p. 16.
Pen, J.: Slechte Mensen, in: Openbare Uitgaven, 17 April 1985, pp. 38–40.
Polanyi, K.: ibid.: p. 250.
List, F.: The National System of Political Economy, Reprints of Economic Classics, August M. Kelley Publishers, New York, 1966, p. 166.
Kuttner, R.: Everything for Sale, ibid., p. 45.
Kuttner, R.: ibid., chapter 2.
Ormerod, P.: ibid., pp. 137 and 3.
Ormerod, P.: ibid., p. 76. Besides, in the long run we all die, according to Keynes.
Ormerod, P.: ibid., p. 109.
Ormerod, P.: pp. 109–110.
Ormerod, P.: ibid., p. 111.
As an example: Friedman is a strong supporter of completely free world trade. Nevertheless, he too has to take it for a fact that political decision-making regarding tariffs and subsidies is a serious impediment to completely free trade (Friedman, M. and Friedman, R.: ibid., chapter 2).
Ormerod, P.: ibid., p. 205.
Ormerod, P.: ibid., p. 75.
Layard, R.: What Labour Can Do, Warner Books, London, 1997, p. 83. China, for example, is among the countries with a very high economic growth rate, despite the fact that it had one government official for every 34 citizens in 1996. In Wilson’s China: The Big Tiger; A Nation Awakes, we read: “The medieval Han emperors maintained only one official for every 8,000 people. The Tang doubled that, and the Qing emperors doubled it again. When Mao Zedong stormed into power in 1949, the ratio was one official to every 290 persons. Today, for all the Communists’ efforts it stands about 1 to 34, an extraordinarily heavy concentration of talent in the work of bureaucracy. Beijing alone hosts two million of them—a quarter of the city’s total Population” (Wilson, D.: China: The Big Tiger; A Nation Awakes, London, 1996, p. 75).
Stiglitz, J.: Whither Socialism?, MIT Press, 1995, pp. 275–276.
Commission on Social Justice: ibid., p. 62.
Lewin, L.: Self-Interest and Public Interest in Western Politics, Oxford University Press, 1991, p. 112. According to the author, American voters are “sociotropic.”
Orren, G. R.: Beyond Self-Interest, in: Reich, R. B., (ed.): The Power of Public Ideas, Harvard University Press, Cambridge, Massachusetts, 1990, p. 13.
Edgerton, R. B.: Traditional Beliefs and Practices. Are Some Better than Others? in: Harrison, L. E. and Huntington, S. P.: Culture Matters: How Values Shape Human Progress, Basic Books, 2000, p. 137.
With this paradigm, the author is attempting to bring about a synthesis between “factors that form society and personality, as well as factors that form markets and rational decision-making.” With this in mind, he adjusts the main points of the neo-classical paradigm. In the first place, the underlying principle is that people strive after “morality” as well as “pleasure.” Also, the supposition of rational decision-making is replaced by decision-making which is based primarily on values and feelings. Finally, the supposition of individual decision-making is replaced by decision-making which takes place in the context of “social collectivities” (Etzioni, A.: The Moral Dimension: Towards a New Economics, London/New York, 1988, pp. 3–5).
Etzioni, A.: The Moral Dimension, ibid., p. 9.
Regarding this, see: Handy, C.: The Empty Raincoat, ibid., p. 46.
Etzioni elaborates the concept of a responsive community in The Spirit of Community, culminating in a communitarian agenda: Etzioni, A.: The Spirit of Community: Rights, Responsibilities and the Communitarian Agenda, London, 1995.
Sen, A.: Development as Freedom, ibid., pp. 65–66.
Buchanan, P. J.: ibid., p. 176.
Wight, Jonathan, B.: ibid.
Smith, A.: The Theory of Moral Sentiments, Reprint, Oxford University Press, 1976, p. 9.
Etzioni, A.: The Moral Dimension, ibid., p. 22.
Hirsch, F.: ibid., p. 137.
Huffington, A.: ibid., p. 119.
The philosopher Van der Wal distinguishes between three levels of meaning regarding the solidarity principle. First, there is the descriptive level. This is “the actual realisation of solidarity [...] which exists between people and the resulting preparedness to share existence with others, in particular where the dark sides are involved” (author’s translation). The second level, the analytical level of the solidarity principle, involves “the central notion of a theory of society” (author’s translation). At the third level, solidarity is “a yardstick to promote the quality of interpersonal relationships” (author’s translation): Wal, G. A. van der: Solidair, Hoe en Waarom? Over de Betekenis van Solidariteit bij de Bekostiging van de Gezondheidszorg, in: Jacobs, F. C. L.M. and Wal, G. A. van der, (eds.): Medische Schaarste en het Menselijk Tekort, Ambo, Baarn, 1988, pp. 85–87).
Sen, A.: Welzijn, Vrijheid en Maatschappelijke Keuze. Opstellen over de Politieke Economie van het Pluralisme, Amsterdam, 1995, p. 263.
Wetenschappelijke Raad voor het Regeringsbeleid: Tweedeling in Perspectief, Den Haag, 1996, pp. 140–141.
Kuttner, R.: The End of Laissez-Faire: National Purpose and the Global Economy after the Cold War, University of Pennsylvania Press, Philadelphia, 1992, p. 4.
Groen, J. F.: Een Stem in het Publieke Domein: Een Onderzoek naar Documenten van Protestantse Kerken in Duitsland, Engeland en Nederland 1979–1994, Amsterdam, 1979, pp. 48 and 50.
Etzioni, A.: The Moral Dimension, ibid., p. 63.
Ploug, N. and Kvist, J.: Social Security in Europe: Development or Dismantlement, The Hague, 1996, pp. 2–3.
Groen, J. F.: ibid., p. 70.
Etzioni, A.: The Moral Dimension, ibid., p. 77.
Hofstede, G.: ibid., pp. 102–103.
Scholte, J. A.: Globalization: A Critical Introduction, ibid., p. 39.
Barrez, D.: ibid., pp. 45–49.
Barrez, D.: ibid., pp. 56–57.
Lindert, P. H.: Growing Public: Social Spending and Economic Growth since the Eighteenth Century, Cambridge University Press, 2004.
Lindert, P. H.: ibid., pp. 17–18.
Turner, A.: ibid., p. 165.
Lindert, P. H.: ibid., p. 18.
Lindert, P. H.: ibid., pp. 306–307.
Lindert, P. H.: ibid., p. 29.
Castles, F. G.: The Future of the Welfare State: Crisis Myths and Crisis Realities, Oxford University Press, 2004, p. 15. Similarly, American research shows little or no effect of employer-provided insurance benefits on employment, whereas German research found that employment is not sensitive to the employer’s contribution to the health insurance portion of the wage bill (Mossialos, E. and Dixon, A.: Funding Health Care in Europe: Weighing up the Options, in: Mossialos, E., Dixon, A., Figueras, J., Kutzin, J., (eds.): ibid., p. 287).
Pierson, P.: The New Politics of the Welfare State, in: Pierson, Chr. and Castles, F., (eds.): ibid., pp. 309–319.
Gough, I.: Social Welfare and Competitiveness, in: Pierson, Chr. and Castles, F., (eds.): ibid., p. 239.
Castles, F. G.: ibid., table 2.1, p. 25.
Aggregates of total public social expenditure as a percentage of GDP divided by the percentage of the dependent population, that is, the population aged 65 and over, plus the percentage of the civilian population registered as unemployed (Castles, F. G.: ibid., p. 36).
Castles, F. G.: ibid., table 2.4, p. 37.
Clayton, R. and Pontusson, J.: Welfare State Retrenchment Revisited, in: Pierson, Chr. and Castles, F., (eds.): ibid., pp. 320–334.
Castles, F. G.: ibid., p. 45.
Castles, F. G.: ibid., p. 39.
Rifkin, J.: The European Dream, ibid., p. 45. In 1970, labor productivity in the Netherlands was 75% of the American level. However, in 2000, Dutch laborers were 5% more productive than their American colleagues (Vries, B. de: ibid., p. 152).
Lindert, P. H.: ibid., p. 18.
In this respect, Rifkin points out that three-quarters of the difference in productivity levels between the USA and Europe is attributable to the fewer hours worked in Europe (Rifkin, J.: The European Dream, ibid., p. 48).
Castles, F. G.: ibid., p. 91.
Castles, F. G.: Social Expenditure in the 1990s: Data and Determinants, forthcoming in Policy and Politics, 33(3), July 2005.
Forrester, V.: L’horreur économique, ibid., p. 109. This is the International Monetary Fund, which, like the World Bank, is part of the United Nations, but which nevertheless operates like the “self-righteous surgeons, skilfully removing the remnants of political control over market forces” (Castells, M.: The Power of Identity, ibid., p. 269). Meanwhile, these tax-free salaried surgeons saw their remuneration increase by 38% during the period 1992–1993, with a further budgeted increase of 22% for 1994 (Ormerod, P.: ibid., pp. 3 and 124).
Rifkin, J.: The European Dream, ibid., pp. 53–54.
De Volkskrant, 22 March 2005.
Swaan, A. de: Dutch Welfare in Europe XL, in: Gier, E. de, Swaan, A. de, & Ooijens, M., (eds.): ibid., pp. 7–8.
Calleo, D. P.: ibid., p. 295.
Calleo, D. P.: ibid., p. 296.
Thurow, L.: ibid., p. 111.
In this respect, see: Castles, F. G.: ibid., p. 92.
Calleo, D. P.: ibid., p. 208.
Kapteyn, P.: Zonder Openbaring verwildert het Volk—over de Grenzeloosheid van het Europese Integratieproces, in: Kaars Sijpesteijn, E. J., (ed.): ibid., p. 4.
Hutton, W.: The World We’re In, ibid., p. 183.
Scholte, J. A.: ibid., pp. 9 and 7.
Legrain, Ph.: ibid., p. 7.
Myrdal, G.: ibid., pp. 61–68.
As for the malfunctioning of democracy, four types of criticism can be distinguished. Firstly, it is argued that democracy has become a matter of cooperation between political, corporate, and professional elites. In this respect, Huffington speaks of “a toxic marriage of money and political influence” (Huffington, A.: ibid., p. 136), whereas Myrdal labels the close connection between business leaders, politicians, universities, and other social spheres as the power oligarchy (Myrdal, G.: ibid., p. 116). Consequently, democracy is no longer connected to ordinary people. This would explain why citizens of the developed world have hardly any appreciation left for their political system (Zakaria, F.: ibid., p. 20). They feel unheard and they no longer believe that governments work in their interests. Therefore, they turn away from politics. In this respect, an “alienation index” has even been developed. Since 1960, it shows a continuously decreasing spiral from 34% in the 1960s to 63% in the 1990s (Zakaria, F.: ibid., p. 151). The American political scholar Putnam calculated that, since the 1960s, active participation in public and social activities in the United States decreased by 40% (Zakaria, F.: ibid., p. 152). People have been turning away from politics for decades already, despite increasing average wealth and political stability. The latter makes the developments even more mysterious (Zakaria, F.: ibid., p. 153). Democracy, in theory an open and accessible system, is in reality controlled “by organised or rich and fanatic minorities who protect their short-term interests, while sacrificing the future” (author’s translation) (Zakaria, F.: ibid., p. 240). and they are supported by an amazingly increasing number of lobbyists. In the United States, lobbyists, together with professional consultants, opinion leaders, and activists, all there in the name of democracy, have become a powerful elite which appears to be capable of undermining the work of the institutions of representative democracy (Zakaria, F.: ibid., p. 186), including the government itself, as all American presidents over the past decades have experienced (Zakaria, F.: ibid., p. 164). In the United States lobbying has become a $1.55 billion annual business, with 38 lobbyists for every member of congress. Many of these lobbyists have family ties with members of congress (Huffington, A.: ibid., pp. 78 and 91–96). The second type of criticism suggests what might be called an erosion of the Trias Politica, i.e., a clear distinction in society between legal, executive, and judicial powers. Contrary to the situation in the 1960s and 1970s, nowadays “ordinary” citizens (a hairdresser, a businessman, a self-employed medical specialist, or what have you) are far less represented in parliament or in the other layers of democracies. In this respect, a recent publication regarding politics in the Netherlands is rather revealing. It shows that roughly two-thirds of Dutch politicians, whether at the national, the county, or the local level, are civil servants (Westerloo, G. van: ibid.). Civil servants, depending on the government for their income, are believed to have taken over. Together with politicians they are assumed to have created a closed political circuit with policy formulation, determination, execution, and control in their hands. This circuit is thought to represent a kind of aristocracy, a caste of professional administrators. In this small and closed world of its own, maintaining political coalitions has become sacrosanct. In these same coalitions evident political blunders of the ruling elite remain without consequences in a political “sorry culture.” As a further consequence of this erosion of the Trias Politica, one can observe disappearing Weber-like hierarchical relations between those who determine policy (politicians) and those who have to execute the decisions in this respect (the bureaucracy). Politicians who try to re-establish these relations, pursuing the primacy of politics, experience worsening relations with leading bureaucrats (Nieuwenkamp, R.: ibid.) Contributing to this development is the fact that over the past few years, members of the cabinet, expecting a fresh wind, favor the appointment of outsiders to deal with their organizational and budgetary problems. The present Dutch Minister of Health appointed a top manager from the Dutch postal organization to consult on the running of Dutch hospitals. That country’s Secretary of Health asked the manager of the Dutch Golden Tulip hotel chain to consult on the financing of nursing homes (De Volkskrant, 22 June 2005). Tony Blair hired a former British president of Coca Cola to consult on the running of British schools, and a former head of the British Confederation of Industries to review the functioning of hospitals (Daily Telegraph, 9 January 2002), whereas the Chancellor of the Exchequer hired a banker to report on the economic foundations of the NHS. Also, the Irish minister of health put his confidence in a banker by appointing him as the CEO for Irish health. In general, these days leading politicians show a reverence for so-called management gurus, and, consequently, running the state or government departments has become a growing market for management consultants. The Blair government’s spending on consultants’ fees, for example, rose by 25% during the fiscal years 1998–1999 and 1999–2000, and by 50% in the following year to £550 million (Wheen, F.: ibid., p. 57). One can wonder, therefore, who really rules: politicians or technocrats. Thirdly, politics is thought to be no longer based on the wish to pursue ideals regarding the design of society. Instead, it has more to do with a person’s personal career path. It is good for your curriculum vitae to be able to mention that you are politically active. In the old days, a political appointment was a crown to one’s career. These days it seems to be a springboard to become someone important. As the Dutch political scientist Rosenthal has formulated it: members of the Dutch parliament live on politics not for politics (Westerloo, G. van: ibid., p. 204). These characteristics together have led some to label Dutch politics as a perversion of democracy (Westerloo, G. van: ibid., p. 144). The fourth type of criticism has to do with the openness of democracy. This openness makes it very easy for interest groups to contact the political level. However, the more open a democracy is, the more it is accessible for money, lobbyists, and fanatics, which, in turn may result in a loss of status (Zakaria, F.: ibid., p. 155). To restore this situation, several authors suggest protecting the political institutions from easy access by citizens and interest groups. Political institutions should for certain periods be mandated to do the job which they are there for without having constantly to react to incidental interventions. This might be called a restoration of political authority (for example: Zakaria, F.: ibid.; Cliteur, P.: ibid.). It seems to me that the four types of criticism all apply to the present-day international political economy, with the corporate elite in a position of determining cultural hegemony (Antonio Gramsci in: Ellwood, W.: ibid., p. 70). In this respect, Ellwood remarks that corporate business, through a subtle public relations policy, through manipulation of the media, and through having friends in high places [i.e., politics], has succeeded in transforming neo-liberal ideas on the world economy into a generally accepted way of life (Ellwood, W.: ibid., p. 70). Formulating it this way refers to a powerful combination of the corporate and the political elite, which is the determining factor in today’s international political economy. They hold on to each other, exchanging skills to their mutual benefit. Cabinet members hiring corporate managers to solve their organizational and budgetary problems, and corporate business hiring former political leaders in order to better be able to play the political game. As an example, shortly after having left office as Prime Minister, Margaret Thatcher was hired by (hedge fund) Tiger Management as an expert to attend five board meetings a year because of her “political insight and experience to help inform investment decisions” for a payment of £1 million a year (Wheen, F.: ibid., p. 264). Similarly, former Prime Minister Kok of the Netherlands was hired by one of the biggest banking/insurance companies shortly after his second term. Examples like these may lead ordinary citizens to conclude that politics is a closed-shop affair to which outsiders have no access. This assumption may be reinforced by politicians who, after having come to power, do not live up to the promises they made during election campaigns. This may explain why ordinary citizens, believing that they cannot change the course of things, turn away from politics.
Phillips, K.: ibid., pp. 149–150.
Lamy, S. L.: Neo-Realism and Neo-Liberalism, in: Baylis, J. and Smith, S., (eds.): ibid., p. 194.
Frankel, J.: ibid., p. 67.
Rodrik, D.: ibid., p. 2.
Gates, J.: ibid., p. xxxi.
Servan-Schreiber, J. J.: Le Défi Américain (Dutch Translation), Utrecht/Antwerpen, 1967.
Servan-Schreiber, J. J.: ibid., p. 48.
Servan-Schreiber, J. J.: ibid., p. 56.
Servan-Schreiber, J. J.: ibid., p. 122.
Servan-Schreiber, J. J.: ibid., pp. 18–19.
Servan-Schreiber’s ideas have been contested heavily by Marxist economists like Ernest Mandel. To the latter, the innovation gap between the United States and Europe in those days was not a consequence of lagging mental and technological possibilities, but of the unavailability of capital to finance quick innovation (Mandel, E.: Die EWG und die Konkurrenz Europa-Amerika (Dutch translation), Van Gennep, Amsterdam, 1969, p. 31).
Fukuyama, F.: The End of History and the Last Man, ibid., p. 126. It is eye-catching that the economic success of these countries was not realized at the expense of social justice. In Taiwan and South Korea, income inequality has decreased steadily during the past 25 years. In Taiwan, the highest paid 20% of the population earned 15 times as much as the lowest 20% in 1952, but this difference decreased to four and a half in 1980.
Nevertheless, also in 1967 it was predicted that China would become a powerful industrialized socialist state by the year 2001 (Suyin, H.: China in the Year 2001 (Dutch Translation), Lemniscaat, Rotterdam, 1967, p. 223).
World Bank: China 2020: Development Challenges in the New Century (Washington D.C.: World Bank, 1997, p. 103, quoted in: Kupchan, C. A.: ibid., p. 63).
Meanwhile, Russia has been designated an official “partner” of NATO, complete with a NATO ambassador who takes part in NATO meetings (Reid, T. R.: ibid., p. 185).
Eyden, T. van der: ibid., p. 71.
Croft, S. et al.: ibid., p. 4.
Lagendijk, J. and Wiersma, J. M.: ibid., p. 118.
Calleo describes two other Pan-European models for an enlarged European Union, including Russia. Firstly, in bipolar Pan-Europe, the EU benefits from the collapse of communism. Countries which have been liberated from communism join the EU, except for Russia itself. The latter country is kept at arm’s length, but receives compensatory aid and enjoys diplomatic respect. In the second model, i.e., a unified Pan-Europe, the East and the West of Europe create an integrated Eurasian system, which eventually includes Russia (Calleo, D. P.: ibid., pp. 343–353).
In the year 2000, the EU accounted for 24% of world trade in services, with the United States reaching 22%, and Japan no more than 8% (Rifkin, J.: The European Dream, ibid., p. 61).
The facts mentioned can be found in: Rifkin, J.: The European Dream, ibid.
Reid, T. R.: ibid., p. 115.
Reid, T. R.: ibid., pp. 113–114.
Reid, T. R.: ibid., p. 120.
Reid, T. R.: ibid., p. 124.
Rifkin, J.: The European Dream, ibid., p. 68.
Lagendijk, J. and Wiersma, J. M.: ibid., p. 67.
Lamy, P.: ibid. In 2003, after the start of the American action in Iraq 70% of Europeans wanted the EU to become a superpower, with more than 70% expecting this to happen (Reid, T. R.: ibid., p. 11).
Lagendijk, J. and Wiersma, J. M.: ibid., pp. 71 and 98. Judging from the (sub)titles of their books, apparently American authors also believe that the United States is the losing party. Rifkin’s The European Dream has as the subtitle How Europe’s Vision of the Future is Quietly Eclipsing the American Dream; Reid’s The United States of Europe has The New Superpower and the End of American Supremacy as its subtitle, while Kupchan writes unrestrictedly on The End of the American Era.
In: Rifkin, J.: The European Dream, ibid., p. 201.
Rifkin: J.: The European Dream, ibid., p. 201.
Rifkin, J.: The European Dream, ibid., p. 208. It should be realized, however, that a positive attitude of citizens toward Europe does not necessarily mean an appreciation of EU politicians.
As for the latter, it is rather cheap to argue, like Ernest Mandel does, that the United States had its own (business) interests in helping the countries of Europe by creating markets, and preventing the European continent from being taken over completely by communism (Mandel, E.: ibid., p. 11). Of course American self-interest played a role here, but that leaves unaddressed the fact that the United States contributed tremendously to Europe’s liberation and reconstruction, as well as to the preservation of its democracy (also see: Myrdal, G.: ibid., pp. 192–193).
These Europeans are supported, for that matter, by a range of American authors like Moore, Klein, Hertz, Pilger, Gates, Hertsgaard, et cetera (see the bibliography). A TimeEurope.com poll of 2003 showed that no less than 87% of Europeans believe that the United States “poses the greatest danger to world peace.” Furthermore, a 2002 Gallup International poll reports that the population in 23 out of 33 countries believe American foreign policy to negatively influence their country (Rifkin, J.: The European Dream, ibid., p. 302).
Rifkin, J.: The European Dream, ibid., p. 3.
Calleo, D. P.: ibid., p. 128. To some, globalization is Americanization, because the American-led global economy “is the only game in town” (Kupchan, C. A.: ibid., p. 60). This game refers to a particular interpretation of the globalization process, promoted by Americans but at the same time disliked by non-Americans. Much of this dislike has to do with differences in cultural values and with the way Americans are trying to impose their neo-liberal views on the rest of the world. Their way of doing business may be perceived as insulting to indigenous practices. Authors like Huntington, Fukuyama, and Barber have warned about the resentment this may breed. There are even those who link the dreadful events of September 11, 2001, to the worldwide discontent with the way present-day American neo-liberal capitalism leaves many people behind, destroys their culture, ruins their environment, and rapes their dignity. To these people, the twin towers in New York were not mere buildings. They were destroyed “symbols of American capitalism” (Klein, N.: Fences and Windows, ibid., p. 235). Furthermore, Chomsky argues that the September 11 attacks were the reply of oppressed people from the Third World to centuries of American depredations (Berman, P.: Terror and Liberalism, W.W. Norton & Company, New York, 2003, p. 151). With several examples, he illustrates that, according to him, with good reason, in much of the world, the United States is regarded as “a leading terrorist state” (Chomsky, N.: 9–11, Seven Stories Press, New York, 2002, p. 23). In line with this, a poll by Time magazine in the beginning of 2003 revealed that 80% of the respondents thought the United States to be the greatest threat to peace, compared to 7% to 8% for Iraq and North Korea (Barber, B. R.: Fear’s Empire: ibid., p. 59). In this respect, it should be noted that the “war on terrorism” declared after September 11, except for its dreadfulness, is nothing new. Already in the 1950s, President Eisenhower and his staff had discussed the “campaign of hatred against us” in the Arab world. In the 1960s, President Kennedy ordered that “the terrors of the earth” must be visited upon Cuba, whereas in the 1980s President Reagan launched “a terrorist war” against Nicaragua. If we add to this the American support for the Suharto regime in Indonesia, as well as American behavior regarding East Timor, Bush’s plaintive words “why do they hate us” seem rather naïve. This is the same naïveté he demonstrated during his visit to Europe in 2001 when he spoke of “My NATO” (author’s italics) (Barrez, D.: ibid., p. 182). The reason for hatred against the United States is simply the fact that the country “has generated so much violence to protect its economic interests” (Chomsky, N.: ibid., p. 116).
An illustration for this attitude is a declaration as recently as 1999 of the then American Secretary of Defense, that the Unites States “is committed to ‘unilateral use of military power’ to defend vital interests, which include ‘ensuring uninhibited access to key markets, energy supplies, and strategic resources’ and indeed anything that Washington might determine to be within its own jurisdiction” (Chomsky, N.: ibid., p. 111). The attacks of September 11, therefore, can also be interpreted as a sign that people are no longer prepared to accept American self-interested action. In line with this, Ritzer argues that the attacks on the World Trade Center “serve as a backdrop for a wide range of expressions of outrage against the United States (Ritzer, G.: McDonaldization: The Reader, Sage Publications Inc., 2002, pp. 186–187). However, statements like the one of the American Secretary of Defense are nothing new, in fact. Already in 1948, George Kennan, a US strategic planner, is known to have said: “We have 50% of the world’s wealth but only 6.3% of its population. In this situation, our real job in the coming period [...] is to maintain this position of disparity. To do so, we have to dispense with all sentimentality [...], we should cease thinking about human rights, the raising of living standards and democratization” (Pilger, J.: The New Rulers of the World, Verso, New York, 2002, p. 98). The history of American interventions in the world delivers many examples which support this policy. In this respect, Grossman produced a list of 134 American interventions, covering 111 years between 1890 and 2001, with an average of 1.15 interventions per year. This average increased to 2.0 per year after the fall of the Berlin Wall. Furthermore, Galtung shows that the spatial patterns of the interventions changed drastically in the post-war period. Starting with East Asia (Korea, Vietnam, Indonesia, Iran), via Eastern Europe (less violent because of the presence of the Soviet Union), to Latin America (starting in Cuba and reaching most of the continent), and, finally, focused on West Asia (Palestine, Iran, Libya, Libanon, Syria, Iraq and Afghanistan). Although the argument for these interventions was always the defense of democracy, human rights, and freedom, they somehow always ended up in securing free trade markets (Sardar, Z. and Davies, M.W.: Why do People Hate America? Icon Books, 2002, pp. 67 and 71. Also Lagendijk and Wiersma point out that in the United States “values” and “interests” appear to coincide (Lagendijk, J. and Wiersma, J. M.: ibid., p. 30)). After all, if democracy, freedom, and human rights had been the motives for intervention, why, then, did the Americans support the Greek colonels, the Argentine generals, the shah of Persia, Pinochet of Chile, and Marcos of the Philippines? (Barber, B. R.: Fear’s Empire, ibid., p. 130) Why did they assist in the removal of Mossadegh in Iran, Arbentz in Guatamala, and Allende in Chili? And why did they invade the Dominican Republic and Grenada?).
Barber, B. R.: Fear’s Empire, ibid., p. 60.
Rifkin, J.: The European Dream, ibid., pp. 290–291. See for American neoconservatism: Halper, S. and Clarke, J.: America Alone: The Neo-Conservatives and the Global Order, Cambridge University Press, 2004).
As for the latter, around 260,000 military staff are stationed in no less than 26 countries worldwide (Todd, E.: Après l’ empire: Essai sur la decomposition du système américain (Dutch Translation), Prometheus, 2003, p. 114).
Legrain, Ph.: ibid., p. 11.
Firstly, despite the fact that in November 1999 the General Assembly of the United Nations passed a resolution with 163 countries in favor, saying that outer space should be reserved for peaceful purposes, the United States, together with Israel, abstained. Bush wanted to have a new defense missile operational in 2002, thus tearing up the 1972 arms control treaty with the Russians. Since Russia was no longer a threat, the new motive became the presence of so-called “rogue states.” Publicly expressed concerns (Russia, China, Sri Lanka, and Canada) about the prospect of an arms race in space did not help. Secondly, the United States walked out on a landmine prohibition conference in Canada in 2000, saying that they still needed to lay mines in Korea. Consequently, a proposed treaty could not be realized. Thirdly, the United States wanted American soldiers, exclusively, to be exempted from trial by a proposed international criminal court. Here, Russia and China took the same position (Halper, S. and Clarke, ibid., p. 123). Finally, the United States withdrew from the Kyoto agreement directed at a reduction of carbon dioxide emissions. Each withdrawal is, according to Neale, an illustration of US determination to dominate the world (Neale, J.: ibid., chapter 7; also, Moore, M.: Stupid White Men, ibid., p. 183).
Chomsky, N.: ibid., p. 13.
A U.S. State Department poll of 1999 showed that 78% of Germans were positive about the United States. Shortly after the war on Iraq had started, this figure dropped to 38%. In France, only 37% of respondents were positive about the United States in 2004, down from 62% in 1999 (Reid, T. R.: ibid., p. 24).
Sardar, Z. and Davies, M.W.: ibid., p. 194. Furthermore, the American Hertsgaard observes that the Americans, only 14% of whom have a passport, hardly know anything about the rest of the world because they are neither interested nor taught to know. As an example: a 1995 test among high school students about to graduate revealed that more than half of them had never heard of the Cold War (Herstgaard, M.: ibid., p. 56). This also applies to over one-third of the members of Congress (Gates, J.: ibid., p. 193). In this respect, a poll in 2002 among Americans aged 18–24 revealed that 83% could not find Afghanistan on a map, whereas 85% and 69% could not identify Israel or the United Kingdom, respectively (Petras, K. and Petras, R.: Unusually Stupid Americans:A Compendium of All-American Stupidity, Villard, New York, 2003, p. 7).
Hertsgaard, M.: ibid., p. 196. This same self-esteem also explains the ease with which Bush managed to pass the Patriot Act of October 2001, turning 20 million non-American inhabitants into outlaws with a simple signature. The law, which intrudes on half of the American Constitutional rights, was accepted by 98 votes to 1 in the Senate and opposed by only 66 out of 435 votes in the House of Representatives. Furthermore, opinion polls revealed that over 70% of the American population agreed (Hertsgaard, M.: ibid., pp. 52–54). Regarding American arrogance, it should be taken into account, however, that there is a difference between America and the Americans. They are not automatically the same. The American government, the military, and the official economic institutions are the ones who determine American policy. This makes the United States a country that is ruled by an elite, preaching democracy worldwide, but not living up to that for its own citizens. Consequently, most Americans do not vote. In a world ranking of developed capitalistic democracies regarding participation in elections, the country is positioned at number 114 (Hertsgaard, M.: ibid., p. 162). Americans feel alienated from the political system, which they rightfully believe to be in the hands of the rich and powerful. And if we add to this the American belief that open markets are an antidote to the terrorists’ violent rejectionism and that we have to “fight terror with trade” (Klein, N.: Fences and Windows, ibid., p. 239), or, even stronger, that “you’re either for free trade—or for Al-Quaeda” (a conclusion drawn by Palast from a speech delivered by Bush’s “globalization czar” to a meeting of CEOs shortly after the events of September 11, in: Palast, G.: ibid., p. 165), it may well be that Fukuyama is completely wrong with his conclusion that we have reached the end of history. Instead, history may well be restarted. For Americans at large this will come as a surprise, not because they are morally corrupt, but because they simply are not informed. And it is unlikely that they will be informed objectively, since the highly monopolized press is part of the American establishment, which is courting the ruling American elite (Hertsgaard, M.: ibid., pp. 90–111). Since around the turn of the millennium, the global media market, through mergers, acquisitions, and joint ventures, has become dominated by ten trans-national corporations—Time Warner, Disney, Bertelsmann, Viacom, Tele-Communications Inc., News Corporation, Sony, Seagram’s (formerly Universal), General Electric (formerly NBC), and Dutch Philips (formerly Polygram). This is in line with Hutton’s observation that, for example, 57% of the New York Times and 52% of the Washington Post are “owned by institutional investors whose priority is shareholder value” (Hutton, W.: The World We’re In, ibid., p. 176). Contributing to a one-sidedly informed American public is the fact that, in 2000, only six corporations accounted for 50% of media outlets, down from 50 in the mid-1970s (Gates, J.: ibid., p. xxi). In turn, this is in line with Neale’s observation that the US media have to lie, because there is “a moral gulf between the ruling class and working America.” If the truth were told, most Americans would be outraged, he assumes (Neale, J.: ibid., p. 173). According to Todd, this current American behavior cannot last much longer. The essence of his explanatory paradoxical model is that, if the rest of the world discovers the advantages of democracy and learns that it can do without the United States, the latter country will not only be inclined to lose its democratic principles, but will also discover that it cannot do without the rest of the world economically. The spread of liberal democracy and peace would be a threat to the United States. The country, because of its very high consumption level, is already very dependent on the rest of the world and has, therefore, an interest in a certain disorder in order to justify its political and military power (Todd, E.: ibid.).
Halper, S. and Clarke, J.: ibid., p. 10.
Hutton, W.: The World We’re In, ibid., pp. 192–193.
In this regard, it is argued that the WTO lets the interests of the developed world prevail, that the developing world would not benefit from the WTO, that environmental damage caused by free trade would hardly be of concern to the WTO, and that labor terms would not be the WTO’s business. As for the last point, one even argues that the WTO is worse than its predecessor, the ITO, since the Havana Charter of 1948 required members to “take fully into account the rights of workers under inter-governmental declarations, conventions and agreements” (Wilkinson, R.: Multilateralism and the World Trade Organisation: The Architecture and Extension of International Trade Regulation, Routledge, 2000, p. 158). Now, however, the only thing the WTO asks from its members is to conduct their commercial relations “with a view to raising standards of living, ensuring full employment and a large and steadily growing volume of real income and effective demand” (Wilkinson, R.: ibid., p. 58). This seems to be more rhetorical than substantial, given the fact that, contrary to the Havana Charter, the WTO has no formal relations with the International Labor Organization (ILO), nor does it want to have such relations. Moreover, the WTO managed to resist pressures from a number of members in this respect. France, for example, did not succeed in establishing a permanent working party between the ILO and the WTO (Jospin, L.: ibid., p. 38).
Phillips, K.: ibid., p. 232.
Palast, G.: ibid., p. 155.
Phillips, K.: ibid., p. 230. Dornbusch from MIT simply states that the IMF is “a tool of the United States to pursue its policy off-shore” (Phillips, K.: ibid., p. 230), making developing countries their “desperate satellites” (Ellwood, W.: ibid., p. 55). Furthermore, the former secretary-general of the United Nations, Mr. Boutros-Boutros Ghali, observes that this global governance agency to which the IMF, the World Bank and the WTO belong “is now the sole property of a single power—the US—which, through intimidation, threats and the use of its veto manipulates the world body for the benefits of its own interests” (Sardar, Z. and Davies, M.W.: ibid., p. 69).
Regarding this, a 1994 study by Hufbauer and Elliot found that efforts to preserve jobs trough trade barriers cost, on average, $170,000 per job saved. In some industries, this was even $500,000 or more (Gilpin, R.: ibid., p. 91). However, the other side of the coin is that free trade has also its price. If workers in the developed world lose their jobs to workers in the developing world, they no longer pay income taxes, receive unemployment benefits and, eventually, welfare and food stamps if, out of desperation, they quit looking for a job (Buchanan, P. J.: ibid., p. 285). To this other side of the coin one should also add the medical and psychological costs of deteriorating working conditions like ulcers, colitis, hives and hand tremors (Kelly, C. M.: ibid., p. 108).
Gilpin, R.: ibid., p. 89. Chomsky holds the view that “free trade is imposed on the poor countries by the leaders of the world whose industries and commerce have long been amply protected” (Fox, J.: ibid., p. 7). Consequently, WTO regulation of international trade is not based on equality of rights, but on the dominance of the economically strong. All of this occurs, despite the fact that trade protection appears to be very costly, as discussed in note 165.
Bové, J. and Dufour, F.: ibid.
Legrain, Ph.: ibid., p. 180.
Huffington, A.: ibid., p. 143.
Reid, T. R.: ibid., p. 238.
Reid, T. R.: ibid., p. 237. The legislation at issue is the Foreign Sales Corporations and Extra-Territorial Income Exclusion Act, which provided a tax break to American firms that sell overseas.
Kupchan, C. A.: ibid., 156.
De Telegraaf, 1 June 2005.
Hertsgaard, M.: ibid., p. 80. Boeing received billions of dollars in research grants, and the Americans introduced the Buy American Act (Reid,T. R.: ibid., 135).
Wheen gives examples of American politicians (Wheen, F.: ibid., p. 169).
Hettne, B. and Söderbaum, F., in: Breslin, S., Hughes, Ch.W., Phillips, N., and Rosamond, B., (eds.): ibid., p. 41.
Legrain, Ph.: ibid., p. 99.
Rugman, A.: The End of Globalisation, Washington, 2000, p. 56.
Legrain, Ph.: ibid., p. 190.
Castells, M.: The Rise of the Network Society, ibid., p. 102.
Rugman, A.: ibid., p. 116.
Legrain, Ph.: ibid., p. 8.
Legrain, Ph.: ibid., p. 191.
Legrain, Ph.: ibid., p. 191.
Legrain, Ph.: ibid., p. 195. After September 11, 2001, ambitions were scaled back to a more modest deal with Central America.
Frankel and Rose in Legrain, Ph.: ibid., p. 191.
Wheen, F.: ibid., chapter 10.
The Commission on Global Governance: ibid., p. 288.
Bφås, M.: The Trade-Environment Nexus and the Potential of Regional Trade Institutions, in: Breslin, S., Hughes, Ch. W., Phillips, N., Rosamond, B., (eds.): ibid., p. 59.
Reid, T. R.: ibid., p. 99. The author gives several examples of American products which were forced to adjust to EU rules regarding labeling, manufacturing, design, and safety (Reid, T. R.: ibid., p. 232).
Rifkin, J.: The European Dream, ibid., p. 55. Also see: Rodrik: ibid., pp. 69–85.
Reid, T. R.: ibid., p. 158.
Reid, T. R.: ibid., pp. 5–6.
Reid, T. R.: ibid., pp. 148–149.
Calleo, D. P.: ibid., p. 245.
Calleo, D. P.: ibid., p. 239.
Calleo, D. P.: ibid., p. 245.
Kupchan, C. A.: ibid., pp. 28–29.
Turner, A.: ibid., pp. 8 and 82.
Turner, A.: ibid., pp. 164–165.
Levine, A.: ibid., p. 4.
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(2007). The Social Context Reconsidered. In: Trends in EU Health Care Systems. Springer, New York, NY. https://doi.org/10.1007/978-0-387-32748-8_11
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