What is the link between globalisation and the war on Iraq? It’s central, and helps explain Tony Blair’s enigmatic position in a war that will reshape not only the world’s security framework but its economic order, writes former head of international equities at Bankers Trust, Christopher Selth.
Christopher Selth first contributed to Webdiary after September 11, when he argued that the catastrophe marked the end of “naive global capitalism” His essay today develops that theme in the light of the war on Iraq, and is compelling and deeply thought-provoking reading. It attempts to answer, in part, the intriguing question of where Tony Blair is in the crisis enveloping the world, and why. After reading Christopher, it’s worthwhile re-reading Blair’s first major speech after September 11, at Blair vision. I’ve republished two previous Webdiary pieces by Christopher after his essay.
If, as Christopher argues, globalisation forces are at odds with US unilateralism, where does that leave the anti-globalisation/peace movement? It leaves it with some hard thinking to do. As Blair said in his vision speech post September 11: “This is a moment to seize. The Kaleidoscope has been shaken. The pieces are in flux. Soon they will settle again. Before they do, let us re-order this world around us. Today, humankind has the science and technology to destroy itself or to provide prosperity to all. Yet science can’t make that choice for us. Only the moral power of a world acting as a community, can.”
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America’s war on globalisation
by Christopher Selth
I appreciate the quality of so much that has appeared here in the Webdiary with regard to the Iraq disaster. In trying to understand the causes and the possible consequences of the current disaster, as Kim Beazley rightly describes it, I would like to consider an additional element which does not seem to have been much touched upon, the economics of globalisation. I find it amazing that this issue which so dominated debate prior to 9/11, and is still in many ways central to understanding the politics of the current situation, seems now so invisible. I think that it is with reference to these forces that the position of the most enigmatic figure in this crisis, Tony Blair, can be understood.
The objections of so many of us around the world to the war in Iraq have centred on two primary arguments.
Firstly, there is the question as to whether the disarmament of Saddam Hussein could be achieved without recourse to war. Increasing pressure through the auspices of the United Nations and the weapons inspection process might have achieved this outcome without risking the horrific loss of life implicit to war.
Secondly, there is the deep anger and suspicion inspired by the US and the coalition of the willing acting unilaterally, ignoring the protocols that form the basis of what we consider to be international law. These actions could fundamentally weaken structures that have been developed since the Second World War. Rising from this are a number of profound concerns:
1. It represents the effective declaration of an American Empire. We have lost sovereignty. This suggestion is not just some paranoid fantasy by critics from the left, inside and outside of the US. It is equally argued with a positive spin by neo-conservatives within the US.
2. There is a fundamental inconsistency between the breaking of international law to initiate a war and the western values that George W. argues he is claiming to defend. This suggests these values are in fact under attack within the West, not just be the terrorist threat, but by the neo conservative elements within the US administration and its allies. That attack can be seen not just within the war itself, but in the overturning of civil liberties and the manipulation of the media. Doubts grow as to whether the attack on those values is an unintended consequence, a necessary evil, or an explicit objective to control opposition.
3. These actions, rather than promoting global security, are likely to stimulate a global arms race, and promote terrorist activity. In a world where the US administration is suggesting the only real basis of security is might, other governments are going to have to get some muscle. The marginalised people of the earth are going to have to resort to terrorism to be heard, as they lose faith in institutions not backed by force.
Forgive me for repeating these arguments, but there is one question I find intriguing in them, intriguing by way of its absence. Whatever happened to globalisation?
I believe that alongside the moral outrage, part of the energy that has driven the peace movement derives from the same source as the anti-globalisation protest movement. There is a strong sense around the world, by the man on the street, that the structure of our daily lives has been shaped by forces outside of the control of our communities. And then we got September 11.
To a cynic it would seem hardly surprising that “the terrorist threat”, a “law and order” issue, has been used by politicians of any persuasion to sidetrack the globalisation debate and the electoral damage of a weakening economy. I in no way want to downplay the significance of the tragic loss of life in New York, Washington, Bali, or in Palestine and Israel for that matter, but there is little doubt that times like these are ripe for political exploitation.
With the war on Iraq, US unilateralism, and the much publicised manifesto of the “Project for a New American Century”, however, the fears that were latent in the anti-globalisation protests appear to have crystallised.
Yet they have crystallised in an extraordinary and perverse way. What has transpired in the diplomatic lead up to the Iraqi War has run significantly counter to what was the suggested by proponents of the globalisation juggernaut.
I quote from last weeks edition of US business magazine Business Week:
Chief executives are beginning to worry that globalization may not be compatible with a foreign policy of unilateral pre-emption. Can capital trade, and labour flow when the world’s only superpower maintains such a confusing and threatening stance.
What is exposed are divisions in what previously had been categorised as a singular elite, widely perceived as dominated by the business community driving global development.
What we have is not just a growing rift between France, and potentially much of Europe with the US, but also Russia, and even more concerning from a US perspective, China. One of the core elements of globalisation was consensus amongst governments weakening the significance of the nation state as anything other than a geographic expression of a potential market. Furthermore, the business community is profoundly sensitive to any breakdown in the rule of law. It sits at the heart of contractual relations.
Will the current situation threaten the multilateral basis of international law? The risk of this is not as fanciful as might first be thought. The US, through its non-ratification of several international agreements, has powerfully intimated that it is only interested in agreements that meet its specific national interests. This position is also made explicit in many of the neo-conservative manifestos that have without any doubt been read with horror in the capitals of Americas trading partners.
What is now made clear is that there is no single global elite co-ordinating world affairs.
Now it becomes obvious that in order to understand how we got here, and where we might end up, we need to understand the positions of heterogeneous collection of powerful interests across the planet. Nor should we fall into the trap of thinking that we can simplify revert to an old fashioned model built around nationalism to explain the situation. This cannot be understood simply as France versus the US, or the UK and Spain versus France and Germany within Europe. I believe this analysis suggests the clearest explanation of Tony Blair’s position, which has mystified so many.
Whilst recognising the risks in using any broad generalisations, in considering the drivers of change through history I find it very enlightening to consider the tension between old money and new money.
Old money tends to reside in mature industries. It uses its clout to get government to either give it monopolistic rights, or to protect it from potential external threats. It argues a politics of nationalism, traditional values, and fear of change to win public support. The Packers are a classic example of this in Australia.
New money will seek to win support by promising opportunity in growth and innovation. It tends to be identified with a rising middle class, with liberal social and cultural values.
Old money has been suspicious if not scared of globalisation. New money has tended to embrace it.
It is interesting that many of the positions held by neo-conservative elements dominating the White House were formulated prior to the ascendancy of neo-liberal politics over the 80s and 90s, and the move to an increasingly trans-national economic order.
But it is also telling that if one were to politically deconstruct the Bush White House, its key agenda had always been domestically focused. Its key backers were “old money”; the oil industry, the defence industry, the auto industry. Its positions have consistently played to those constituencies. Furthermore, the “new money” identified with globalisation and the economic boom of the 90s has been in retreat; primarily the technology and telecom sector, but also the financial community.
As the Business Week quote suggests, it is hard to believe that these groups are comfortable with the current US government position. Do transnational US companies appreciate the risks to the multilateral trading environment? Alan Greenspan, head of the US federal reserve, and some time guru to the “new world order” has been widely criticised by the neo conservative establishment for not being supportive of the Bush economic stimulus package. There was already significant concern about the blowout in the US budget deficit. This is no script that the “globalisation” camp ever called for.
I have built a scorecard looking across countries and industries to try to explain the national position with reference to the stances of these various nations to the current situation. It is extraordinarily accurate.
I only want to refer to the two obvious swing players – Britain and France. This analysis can be fruitfully applied however to everyone.
In France there is a fascinating synergy. There are significant “old money” groups who have tight relationships with the government, and have a nationalist view of the world. They are commonly labelled by critics of the French as “Gaullist”. The French farmers that generate so much ire in Australia are the tip of the iceberg. Yet, French companies targeting pan European or global markets could also be seen as having a stance powerfully opposed to that of the Bush administration. They want a world governed by global agreements, not US ones, and/or want to be seen as neutral and independent of US unilateralism.
In the UK, on the other hand, economic interests face the inverse dilemma. British companies are heavily exposed to the US. Many have been trying to explicitly position themselves as domestic players in both the UK and the US market. That means the UK must tread very carefully as to not burn bridges in America. Furthermore, the greatest wealth generated in the UK over the past 20 years has been in the booming financial hub that is the City of London. The City is increasingly dominated by US investment banks, that have used it as a platform to penetrate both the British and the continental markets. In fact it would not be much of an exaggeration to describe London as the capital of the “globalised world”. The interests of the financiers are not strictly aligned to the Bush camp, but they are desperate to protect the fabric of the global order. It is the bedrock of their business.
Oh what an excruciating bind for Tony Blair! He was so clearly trying to manoeuvre what he must have seen as the perilously unilateralist Bush administration into adopting a position that might protect the global institutions that British commerce has been built on in the 90s, whilst protecting English economic interests in the US, in the face of a hostile Labour Party! And maybe have an impact on fighting the threat of terrorism. If Blair had pulled it off, he might have been the saviour of the globalisation new order.
The business interests that drove globalisation in the 90s find themselves equally in a bind. Clearly their preferred outcome is the reconstitution of a consensus which permits a return to the old status quo. Sadly, I think issues of morality will be secondary in these negotiations. But the question remains, can it be done? Is it consistent with the way the neo conservative agenda is playing out now in the United States? Are there old money nationalist business constituencies on either side of the Atlantic that will resist such compromises?
“Global” business might think that it is better to protect the increasingly integrated global economic structure, even if it is at the expense of surrendering political sovereignty to the neo conservative Bush administration. Conversely, it might see that the Bush position as ultimately inconsistent with that economic order, and business would either be better served by an attempt to rebuild it led by the Europeans, with China as their key ally. Or they may see the reemergence of distinct regional trading blocks as the new reality that they will have to learn to live with. Publicly they will say nothing. They do not want to be identified with the losing side.
John Howard’s behaviour demonstrates the centrality of these calculations in even Australia’s strategic thinking. He hasn’t signed up just as part of the coalition of the willing. He is aggressively negotiation a bilateral free trade agreement with the United States. This is pretty clear evidence of a fundamental shift away from the 90s multilateral globalisation paradigm. The end result, however, is unlikely to be one that anti-globalisation protesters were seeking.
I apologise if this reads as callous. The “financial markets” tend to be as callous as the bureaucrats who have initiated this ugly war. Of course, one must also remember that Saddam Hussein is nothing if not callous.
So what about we, the people? Well the good news is that its not all over for us, yet.
Elections are far enough away not to be caught up excessively in wartime jingoism, but close enough to make a difference. Is that what the French were actually playing for? Chirac has popular support across Europe. France looks like it has miscalculated, and divided Europe. But what happens if Blair or Aznar succumb at the polls? Or more significantly if Bush fails? He would not be the first one term Bush.
Maybe that is the most bizarre irony. For the sake of our moral convictions the global peace movement must fight on. But what are we fighting for? Is it the multilateral world that was the foundation of the globalisation the public was so afraid of? Or are we, hopefully, fighting for a new form of globalisation? One that has a popular mandate, for the people, by the people, of the people.
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Christopher Selth, 20 September 2001, published in What happens next?
I have been travelling in Europe during this time of crisis. It has been illuminating and disturbing to witness the varied responses to the horror of the attacks on New York and Washington. It is with this experience I read with interest the piece you included by John Wojdylo in Terror unlike movies. I agree with much he has reported and many of his views, particularly with respect the CNN coverage. On other fronts, however, there are deep issues which I feel are avoided in his analysis.
I do not think it is adequate to analyse the dynamics of Islamic fundamentalist extremism in isolation, no matter how sophisticated that analysis is. I agree that these acts cannot be tolerated, but to characterise them solely as the product of sophisticated extremists misses the key point. Why is the audience these extremists play to so fertile?
There is a deep centered anger about the inconsistencies and injustices of global capitalism that are more than just the ravings of extremists. I was in Covent Garden during the 3 minute silence. Behind me, a man of Indian or Pakistani extraction held a series of conversations on his cell phone. It was hard not to feel that this was not an act of terrorism, at the most personal, small level, flouting our moral expectations. I was angered. But I also understood that the problem was deep, and broad.
Some of your readers made reference to Marx. Marx is very relevant here, and I do not come from a background that would seen as traditionally marxist. I was a senior fund manager, a primary witness to global capitalism. Speaking with some of my associates here in London there is a perception, which I strongly share, that this terrorism reflects the end of imperialism, of naive global capitalism. That is what financial markets are trying to digest, Tony Blair refers to the end of an era. Paul Keating is now talking about this.
The West’s involvement in the region is reasonably well documented, even though its moral implications do not seem to be widely understood by the man on the street. The West supported the Shah of Iran and other totalitarian regimes in order to fight the ogre of communism and guarantee the supply of oil, even when these regimes flouted the democratic rights the West so grandly espouses as the basis of its moral superiority.
The support of the creation of the Israeli state was in part to assuage Western guilt at complicity in the holocaust, and the strength of the Jewish electorate in the United States. The fate of Palestine was a side issue which the West saw for a long time as not of its concern.
The endless, morally ambiguous partnerings driven by the Kissinger-driven philosophy of my enemy’s enemy is my friend as evidenced by the support of Sadam Hussein by the US, to fight Iran, and US support of the Taliban to fight Russia, has seen the West create its current foes.
The rule of law has been applied selectively. UN Security Council motions have justified the bombing of Iraq, but have not produced an effective censure of Israel. The basis of these inconsistencies is the tendency, throughout history, of the establishment to reinterpret history, and morality, to justify its own actions.
On a personal level, I firmly agree that the action in New York cannot be tolerated but it is not enough to dismiss the actions of the terrorists as nihilistic or insane or immoral. These people are the disenfranchised. Why should they confront the West on the West’s terms?
The rules of contract and law, which are the basis of western capitalism, look like locking 75% of the world population in poverty for the foreseeable future. Why are the acts in New York any more morally reprehensible than what happened in Rwanda? In Kampuchea? In Sri Lanka? The only reason why the west is involved in the Muslim world at all is the presence of the oil that drives our economies.
What we are witnessing must be interpreted on one level as the end of acceptance of the rules of the game by the 75%. That is why there was dancing in the streets in many parts of the world inhabited by the have nots. A friend of mine was in Cairo last week. It was clear that the anti western sentiment was not just held by extremists.
Yes, we must track down the perpetrators of these acts, but if we do not face up to the new reality, that the desperate of the globe will play by their rules, not ours, to change the global playing field, this struggle will go on indefinitely. The planet could resemble a giant Beirut or Northern Ireland.
We must finally face up to the legitimate concerns of the underprivileged, and not dismiss them as just the way things are, whilst we continue to enjoy our consumerist society and our superficial support of liberal humanist ideals when they suit us. It is time to be positive, and fight to make the world a better place.
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Christopher Selth, September 27, 2001, Left, right … how politics will march forwards
In response to Greg Weilo’s view of left and right (Retrospective Hansonism), I am not sure whether or not Greg is confused about the appropriate labels to apply to his position. He is either naive or disingenuous with respect to the label appropriate to his positioning on the political spectrum. More significantly, the underlying politics of his position reflects the deep fissures in our society that the tragedy in New York is opening up.
I would like to respond to the underlying philosophical points Greg raises before coming back to labels. The two issues are, however, very linked.
Firstly, one must distinguish between underlying belief systems, and the strategies adopted by political parties. This distinction can be seen either as reflecting the notorious disconnect between politicians and voters, due to the cynical pursuit of power, or alternatively as the disconnect between high principle, or abstract theory, and its application to the practicalities of government.
A further problem appears from the difficulties, if not bankruptcy, of left and right wing economic theories in generating convincing practical outcomes. Marxism and Socialism, and Economic Rationalism no longer offer the political machines of left and right easily saleable policy stances. Note, so-called Economic Rationalism is in f act the pure application of a brand of capitalist, neo-classical economic theory. It has become clouded with the realiti es of practical, rational, economic policy.
Political parties need to be understood in terms of the electoral base to which they appeal, and the strategies they need to adopt in order to get over the line, to win elections. So-called left wing parties have two traditional constituencies; the working class, which tends to be economically left wing, but culturally conservative; and the liberal humanist intelligentsia, which is more economically rational in orientation, but culturally very liberal.
The right wing parties have a parallel fault line. One constituency is old money and small business. There are a number of sub groups here, including owners of businesses that are often local monopolists, but tend to be averse or incapable of taking on global challenges, farmers, and small businesses. These groups tend to favour state intervention to protect their positions from globalisation and the stresses of change. Their politics can ironically parallel the socialism of the working class, but for powerfully different reasons. Their cultural politics tend to conservatism.
The other group comprises global capitalists and technocrats. This group is not defending its position, it is seeking to expand its wealth. It is confident and pro-globalisation and economic rationalism. It is culturally liberal humanist.
You can see in this matrix the divides that have been evident within the Australian political landscape for some time. It is why the Labor Party has resisted homosexual law reform, and why the Coalition has locked in the positions of Kerry Packer, Qantas, and parts of the agricultural lobby, rather than promoting free trade. Left and right wing parties pursue policies in stark divergence from some simplistic understanding of their supposed underlying support base.
This is why right wing parties tend to push socially conservative and populist policies that appeal to the working classes. It will transfer votes from the traditional left to the populist right. It is key to winning a parliamentary majority. In America these were the so called Reagan democrats.
Pauline Hanson undermined the Australian right wing’s ability to claim this ground. That’s why she was so dangerous. This was why the Tampa was such a crucial turning point for John Howard. Behind this rhetoric, however, the right has little interest in the broad agenda of the working class, other than protecting jobs when it simultaneously protects the economic interests of its support base.
The globalist faction in the right, witness Peter Costello, is invariably outraged by this positioning.
The old left was interested in pushing its liberal humanist agenda to win middle class champagne socialist support, whilst being careful of not alienating its working class base. This was the Gough Whitlam strategy. You can see how long Labour stayed out of power in Australia and the UK as a result.
The new left added to its arsenal by embracing elements of economic rationalism. This was particularly the case as Marxism and Socialism were seen as failing to deliver under the pressure of global capital and change. It owed few favours to old money. The more sophisticated members of the new left, such as Paul Keating, saw that the only way to improve job prospects in the nation longer term was by making the economy more efficient. This would also win middle class votes.
The problem was that the short term pain would always leave it at risk with its traditional voting base. That is what ultimately brought Labor down. It is why Kim Beazley is so scared of declaring his hand. He is castrated by these internal tensions.
Both sides are constantly doing deals that alienate part of their traditional support base. This is reality. It is a clear outcome of the structure of our electoral process and parliamentary system.
An interesting insight on these issues can be found in the work of the now dead US sociologist, Christopher Lasch. His last book before he died, The Revolt of the Elites: And the Betrayal of Democracy is particularly thought provoking. The core thesis in this book is that the global technocracy, visible in all our major cities, working for globally focused organisations, have more in common with each other than the culture of their particular national hinterland.
I think there is a great deal of truth in this proposition. People like me, educated affluent technocratic elitist bastards, have more in common with our class compatriots in London, Paris or New York, than we do with the average man of our particular economic hinterland. In Sydney this can be metaphorically conceptualised as the difference of culture and beliefs between inner city and coastal dwellers, and the suburbs.
Lasch comments that this global class tends to be socially liberal humanist. He notes the irony that the elite might support gay rights, but at the same time feel it is for the best that inefficient industries be shut down, even at the expense of jobs and communities This is what Greg would refer to as left wing, social ideology. At the same time it is economically rationalist, which Greg identifies as right wing economic philosophy.
The important question that arises is what is the motivation behind the elite’s espousal of these values? Is it legitimate compassion, or a self-serving identification with the fashionable causes of the day, a champagne socialism that can go hand in hand with the process of personal enrichment? It is the new religion of the upper class, which John Howard often, to his chagrin, runs up against. The have nots of our society often feel these values are hypocritical. Despite all of this, many of these values are of great merit. The irony is that it is this great Western tradition that George W. Bush keeps saying we are fighting for.
Lasch’s work is filled with dark irony. It transcends the distinction of left and right. It hits the fault line on which Greg sits. Whilst Lasch unquestionably has captured a key thread, he does not reach any conclusions. It is a provocative piece.
The attack on liberal humanism, and economic rationalism and globalisation, reflect a common factor, fear of change, fear of the unknown. Human history has seen at these moments objective analysis give way to extremism and hysteria. Legitimate criticisms from both sides are lost. We are at risk of being swept away by this tide. Extremist politics are on the rise.
The question confronting us is: Can we integrate liberal humanism with a new paradigm in economic management? Economic policy needs to balance the dynamic drive of capitalism, with appropriate measures to reduce the shock waves and to humanise the process. Regrettably most such strategies in recent times have been hijacked by traditional interest groups: old money, old unions, and old farmers. The power of governments to act in the face of global forces is itself suspect.
A new economic philosophy and social philosophy is required. We must move forward, not backward. The conservative chest beating post the World Trade Center attack risks the worst outcome.
Greg’s thinly veiled piece emphasises this point. It is not hard to decipher. Greg groups all elements of the community that are not part of his pure national core as dangerous; homosexuals [of which I am proudly one!!!], feminists, pro-abortion groups, multi-cultu ralists. On this front he calls himself a Nationalist. On the economic front, he calls himself a Socialist. A national socialist?
Is it by accident that Greg says that left wing extremists have been running things for the last 50 years, ie the post war period? Fifty years ago there was another National Socialist who was arguing the same thing. His name was Adolf Hitler.
I am afraid that the fight is just beginning against this conservative backlash. I agree with Margo that a new opposition movement is needed. It needs to do more than just say bigotry is wrong. It must address the philosophical and political roots of this problem. It must be a broad movement. It must be self critical to avoid the accusation of elitism. This must be more than just the liberal humanist intelligentsia saying how awful everyone else is.