AS UNIONIZATION rates decline, as the percentage of uninsured Americans rises and as we colonize Iraq, it is appropriate to seek the origins of these seemingly disparate phenomena.I suggest that they are the direct and predictable result of an economic system created and maintained for the benefit of the plutocrats.
Classical economics fails us as a society because it promotes a fraudulent ideology at the expense of human welfare. Worldwide, 1.2 billion individuals live on less than one dollar per day, and approximately 1,500 children die every hour from malnutrition. Citizens of developing nations are not the only ones who suffer; one in eight Americans lives in poverty, and that percentage has increased every year under the Bush administration.
Additionally, military expenditures necessary to create safe investment climates in Iran, Guatemala, Nicaragua or Iraq mean that we cannot spend money preventing the spread of AIDS in Africa or investing in public education at home.The real tragedy, however, is that we protect corporate interests at the expense of democratic institutions, with CIA-planned coups in Iran (1953), Guatemala (1954) and Nicaragua in the mid- 1980s.More recently, Hugo Chavez, the democratically elected president of Colombia, accused the Bush administration of assisting in a failed coup to reinstate an autocratic government and concentrate oil revenues in the hands of the Venezuelan elite and the multinational oil corporations.
The Western industrial states and corporate elite do not merely pursue their narrow economic objectives through direct force; often these goals can be accomplished through International Monetary Fund and World Bank "structural adjustment" policies, which remove protection for local economies, privatize public goods, such as water systems, and cut funding for social services like public schools and health clinics. Former World Bank Chief Economist Joseph Stiglitz blames his former institution and the IMF for exacerbating worldwide poverty and inequality, despite what he claims are good intentions.
Through our support of the IMF/World Bank and within our own country, we are pursuing economic policies antithetical to our country's founding ideals. At this university, economics classes uncritically preach the gospel of amoral self interest and perpetual growth, doctrines that underlie the disastrous real world effects of laissez faire economic policy.Fortunately, some University faculty are challenging classical economics' deadly prescriptions.
Ira Bashkow, assistant professor of anthropology, suggests that while some "economic development" projects are designed to benefit corporations at the expense of citizens of developing countries, even well-intentioned projects almost invariably fail because they attempt to apply the narrow models of classical economics to widely varied social situations. If we are to resolve problems associated with worldwide poverty, Bashkow suggests, "economics needs to be aware of its own limitations" and needs to understand the diversity of cultural and economic situations in which people actually live.
Before discussing poverty reduction in the developing world, we need to stop supporting policies designed to perpetuate and exacerbate poverty. According to Bashkow, the World Bank and the IMF have "relied on developing countries' need to make up budget shortfalls in times of special stress in order to extract policy concessions, like the removal of trade protections, that allow foreign competitors (often subsidized by their governments) to dominate local markets and destroy local competitors, leading to the evisceration of local farming and industry and ultimately to increased poverty and neocolonial economic dependence on the West."
"Moreover," Bashkow asserts, "ordinary people's lives are often made worse, not better, by internationally funded projects that apply cookie-cutter templates for development, such as free trade zones, where workers' interests nearly always suffer."
Thus, in order to fix the world's problems, we first have to stop making them worse.Once we stop designing economic development policies to benefit multinational corporations at the expense of laborers abroad, then we can focus on doing penance for centuries of economic exploitation.
Developed countries' international organizations should start by working to build local economies, Bashkow recommends, rather than trying to integrate local laborers into the world market. In developing local economic systems, the IMF/World Bank must first learn to listen to local citizens, understand their situations and cultures and then fund projects that will work in the context of unique regional characteristics. Finally, international development organizations need to be held accountable. After a half century, the result of IMF/World Bank interventions have been to increase world poverty. After reexamining the faulty neo-liberal assumptions that underlie these failures, development efforts need to be monitored by independent bodies and should not receive any more funding if they continue to fail in their stated purpose of poverty reduction.
By questioning the assumptions upon which classical economics is based, by prioritizing human welfare over corporate profits and by working to understand cultural differences, we can begin to undo the damage wrought by 500 years of colonialism, from its mercantilist origins to its current neo-liberal manifestations.
Zack Fields's column appears Fridays in The Cavalier Daily. He can be reached at zfield@cavalierdaily.com.
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