Issue 86 of INTERNATIONAL SOCIALISM JOURNAL Published Spring 2000 Copyright © International Socialism
Join in any debate or discussion about hunger, world poverty and the effect of world capitalism on the poorest countries, and at some point the name of Susan George will be mentioned. George is an example of a rare breed. She is one of those independent scholar-activists who for 25 years has written and campaigned against the horrors of the global system, neither being deflected by often vicious attacks from the establishment nor by the flatteries of academia. From her earliest published works through to her latest writings, what shines through is a passionate anger at the inequities of a system that condemns hundreds of millions of human beings to lives of brute survival, and at the hypocrisies of those who benefit from that very state of affairs. It would be wrong to call her a 'development theorist' or an 'economist' in the normal sense. Rather, she is a champion in the cause of social and economic justice. As she says of herself:
An American settled in France, she is currently the associate director of the Transnational Institute based in Amsterdam--a loose coalition of radical academics working for social change. She has also served on the board of Greenpeace International (1990-1996), and is associated with the left wing French publication Le Monde diplomatique and with campaigns such as Jubilee 2000, which has led the movement for the abolition of Third World debt. This list of credentials could go on, but it will suffice.
George has rightly been a highly influential figure. With the growth of an increasingly radicalised consciousness in both the advanced industrial countries and in the less developed countries around issues of world trade, the misuse of science and ecological ruin, the audience for her writings has also grown. She urged us on to action against the World Trade Organisation at the end of 1999 and many of the protesters at Seattle must have been familiar with her work.
In her first book, How the Other Half Dies (1976), she uncompromisingly exposed the way in which capitalism destroys the lives of the poorest people on our planet. Her essential aim in the book is to explain world poverty not as a terrible but unavoidable phenomenon, but rather as something which flows from the logic of the system itself. More than this, George draws out the deliberate manner in which the inequalities of the system are maintained. She does this in a number of ways. She demolishes attempts by apologists for the system to explain away poverty as a thing unconnected with the normal workings of capitalism. She looks at the political and social mechanisms by which the wealthy elites of the poorer countries are brought into the fold of the West. George also argues that technological 'solutions' in and of themselves, imposed with no regard for local economies and cultures, bring misery to those who are pushed aside by such developments. Finally, she looks at the workings of the large 'agribusiness' corporations and the politics of food aid.
The first thing George does, however, is to hit the reader with the facts of the problem at that time. It should be borne in mind that by the time George was writing her book in the mid-1970s the road of national development for most of the hitherto 'developing' world had hit bumpy ground. The capitalist post-war boom was long since over, and the world economy was in deep crisis. It was around this time that Third World countries were first beginning to move towards the International Monetary Fund (IMF) and the World Bank for lending to finance their development programmes. The first IMF-inspired austerity measures were soon to be introduced in countries as far apart as Egypt and Jamaica. This was the historical moment when the seeds of the crippling debt burden of the southern hemisphere that we see today were being sown. What George is describing in her book--though it may not have been obvious to most at the time--is the experience of economic reversal for the populations of the Third World. The facts about, and the scale of, the problem were staggering (and are worse today):
At the time this meant that these human beings were struggling to live on about 30 cents a day. In some areas, George explains, half of all children could be expected to die before the age of five, and worldwide more than a fifth of all children were malnourished. One in every eight people were literally starving, and half of the world's population were suffering from malnutrition of one form or another.3 In the Third World a child was 15 times more likely to die before its first birthday than in the West. Indeed, infant mortality rates in such countries were similar to those in Europe around 1750. She examines also the diseases of the poor: goitre, affecting 300 million; pellagra, caused by a monotonous corn diet; beri-beri, caused by iron deficiency; blindness, caused by vitamin A deficiency; the parasitic diseases--malaria, yellow fever, bilharzia. All of them both avoidable and treatable given the right social conditions and medical support, but all of them blighting the lives of hundreds of millions of the poorest in the world. To complete the list today we would need to add tuberculosis, HIV/AIDS, cholera, dengue fever and many others which have either appeared since George wrote her pathbreaking book, or which have reappeared from having been pushed to the margins by medical advance and the social improvements of the 1960s.
After having given a picture of the scale of the human suffering involved, George now turned to the causes of the problem. This was nothing to do, she argued, with 'natural' disasters. As she points out, 'drought, which is a frequent occurrence in the south western United States, is not at all the same thing as drought in the Sahel'.4 Neither, as some had started to argue following the apocalyptic predictions of Paul Erhlich, was the problem caused by 'overpopulation'. When we consider just how influential this pernicious idea was to become, not just on the right but also on the left and within the Green movement in the 1980s, George's clarity on the question is impressive. As she points out, there is no correlation whatsoever between the population density of a country and the levels of hunger in that country:
As she insists, it is not large family size that leads to poverty, but rather poverty that creates the economic need for children:
Another issue on which George stood out against the crowd was that of the 'Green Revolution'. This phrase was bandied about in the mid- 1970s by the popular press to refer to the new strains of high yield crops (HYCs) that had been developed by American bio-scientists working for the Rockefeller Foundation in Mexico. These 'miracle' crops would, it was claimed, eliminate hunger and famine once and for all. The reality, however, was that these crops were often vulnerable to local plant diseases and lacked the necessary background genes for hardiness in coping with local climatic conditions. The deals that farmers had to enter into to obtain these HYCs stipulated that they also had to import expensive fertilisers produced by US agribusiness companies when much cheaper, locally manufactured fertilisers were available. But much more fundamental than all of these was the fact that the destination of these new crops was never going to be the poor who needed them most. Rather, the produce of this modern agricultural revolution was bound for world, and particularly Western, markets. It was the export orientation of Third World economies that was ultimately to take food from the mouths of the hungry. The result was that whilst rice production in India rose dramatically, rice consumption actually fell. It was the system then, George argued, that had to change:
George, however, reserved her greatest scorn for the major political and economic institutions of the West. She pointed out the way in which food and 'food aid' had become a weapon of political and economic power in the world. She cited the examples, amongst many, of the refusal of food aid to Chile during the period of the Popular Unity government under Allende, and the cutting off of food aid to the newly independent countries of Cambodia, Laos and Vietnam after the US's military defeat there in 1974.
In the 1980s Susan George focused her attention on the structural mechanisms which tied Third World economies into such an unfavourable relationship with the rest of the world economy. With characteristic perspicacity she homed in on an issue which has today become a focus for mobilisation around the globe--that of Third World debt. In her 1988 book, A Fate Worse Than Debt, George charted the effect of IMF and World Bank intervention in the poor countries and the ravages of the structural adjustment policies they imposed.
The huge borrowings granted by the major lenders in this period were not for social or welfare spending. The spin-offs of increased investment into housing, health and education which had come with the industrial development of the 1960s were already a faded memory. An unholy alliance had emerged between the IMF, the World Bank and local rulers in which economic coherence had been put to one side. George describes the way in which the highest bids for the building of sugar refineries, for example, would win because of the large margin for palm-greasing which had been included in them. Vast building projects with little strategic purpose were undertaken. She cites the example of the Morong (Batan) nuclear power station commissioned by president Ferdinand Marcos of the Philippines at a cost of $2.1 billion. The plant was inoperable because it had been built on an area of high volcanic activity--but it did contribute handsomely to the personal fortunes of the Marcos family! This was the era of the 'white elephants'.
Another area for which loans were forthcoming was that of military spending. By 1982 Third World spending on arms stood at over £12 billion:
In most of the rest of the book George surveys the damage and human cost of the effects of IMF-imposed conditions in large areas of the Third World and the early impact of the structural adjustment policies. In Africa the effects of IMF policies could be seen at their most extreme--and this is still the case today. In terms of world trade Africa was at best marginal, accounting for only 4 percent of the total. With the IMF financial regime coming on top of this the result would be crippling. As George commented:
She was right. Even when she was writing in the late 1980s, all of the classic indices of living standards were worsening and swinging towards the extremes. When the Kenyan government carried out its Rural Child Nutrition Survey in 1982 it found that 28 percent of children under five were stunted compared to 24 percent ten years previously. It also revealed chronic sickliness in nearly half of all children. In Zaire real wages had fallen to a tenth of what they had been at independence and 80 percent of people were living in absolute poverty.
It was George's unique contribution at this time to also link the issue of Third World debt to that of ecological destruction as concerns about the environment were entering mainstream debate. For George at this time the issue was primarily the way in which major building projects, undertaken with little regard for long term ecological consequences, affected the lives of people within particular countries. The impact of such things as the removal of topsoil, the diverting of rivers, the 'cashing in' of natural resources to service debts and the forced transmigration of millions of indigenous people are all examined. She also discusses the effects of rainforest clearance and highlights the loss of thousands of plant species of unknown and untapped potential. Today we are also aware of these issues as things that are affecting the planet as a whole.
The Debt Boomerang (1992) was a collaborative work undertaken with others from the Transnational Institute, but for which George assumed overall responsibility. The book explores the ways in which the burden of Third World debt affects the economies and societies of the West. In places it also provides a welcome antidote to the notion that workers in the West benefit in any sense from the exploitation of the populations of the poor countries.
Continuing her theme of the environmental consequences of the exploitation of the Third World, George illustrates the link between debt and deforestation:
To heavily indebted countries such as these the rainforests are either a source of revenue in themselves in terms of the hardwood exports, or they need to be cleared to make way for the grazing of cattle or the growing of modern cash crops. The fact that rainforest clearance is a major contributory factor to global warming is not a serious concern to the capitalist companies caught up in the rush for short term profit. If the ruthlessness of the companies involved in the destruction of the rainforests needed any further illustration we should remember the murder of Chico Mendes, who organised the rubber tappers of Brazil in an attempt to harmonise their need for a livelihood with the need to maintain the rainforest itself.
George also charts the impact of the debt crisis on jobs in the West. As consumption levels have fallen in Latin America, for example, so markets for goods from the US have also contracted. In 1983 the Quarterly Review of the Federal Reserve Bank had noted a drop in exports to Latin America which would lead to a loss of a quarter of a million jobs in the US. In fact, by the following year the US had 560,000 fewer jobs caused by the loss of exports since 1980. George extrapolates that a further 800,000 jobs would have been created if the growth of the 1970s had continued after 1980.
Another sense in which workers in the West have paid for the debt crisis is the way in which Western banks have transferred the costs and risks of lending onto taxpayers and ordinary depositors. The major creditor banks protect themselves against losses in a myriad of ways. One is by tax relief on 'non-performing' loans. George gives figures which show that the UK Inland Revenue was set bear about $7 billion of the $20 billion of outstanding loans at that time. Other losses were spread over long periods of time and incorporated into bank charges.
We can conclude from all of the above that workers in the West, far from having gained from the exploitation of the Third World, have directly lost out because of the instabilities and unevenness the debt has produced. Whilst the banks have achieved hitherto undreamt of rates of return on their lending in the Third World, workers in the West have paid. On the other hand, however, there is a hint here of one of George's more problematic themes. This is the notion that there is a conflict of interest between finance and productive capital within which an appeal to the 'rational' side of the system can be made. We will return to this after looking at her most recent work, The Lugano Report.
The Lugano Report (1999) is an ironic and polemical book. George writes as though she is the voice of a 'working party' commissioned by the governments of the advanced capitalist world to examine the question of what the main threats are to the capitalist system, and what measures must be taken to preserve capitalism in the next century. The picture which George paints does capture something of the gloom which hangs over any speculation about the future of capitalism today. Overall, however, the result is a mosaic of some important insights, a whiff of conspiracy theory and more than the occasional flight of fancy.
George begins by pointing up the great contradiction of capitalism identified by Marx 150 years ago--that on the one hand capitalism is the most productive system in history so far, and yet has created the most extreme wealth alongside the greatest extremes of human misery. As George says, the world now produces the equivalent of the entire physical output of the year 1900 in less than two weeks. Despite this, the prognosis of the 'working party' for the future of the system is grim. Ecological breakdown is likely, they argue, in the foreseeable future. Global warming and freak weather patterns will reach a critical, irreversible stage and will have a catastrophic impact on human life. Economic development will be distorted by increasingly negative and irrational features. 'Gangster' capitalism will run rife in large parts of the world. Drug barons and arms dealers operating outside of any regulation, or national or international law, will become increasingly powerful. The corruption of government officials will become the norm. Financial meltdown, they continue, despite their unshakeable faith in the free market, is an ever-present danger. These oracles of the system also achieve the insight that class struggle may just be a problem for them in the future.
The apocalyptic conclusions of the report, they argue, can only be avoided with some measure of regulation. Excesses of competitive behaviour between multinational companies must be curtailed, as well as the dangers of 'pernicious growth' leading to overproduction and collapse. The national state must play no role in this. That would be counter to the very principles of the free market. Rather, they suggest, some of the institutions of global capitalism may play such a regulatory role. The World Trade Organisation, they suggest, is a 'promising candidate for international success' in this area.
The 'working party' are especially concerned, not to say obsessed, with the 'problem' of population. The system, they argue, cannot support present levels of population growth. The world has polarised, they argue, into a one third/two thirds division in which the third that is better off has a stake in terms of wealth, security, careers, jobs etc and in which the other two thirds are in effect shut out of the world system. The conclusion reached is that the liberal democratic societies of the West are only sustainable for a third of humanity. The 'working party' now 'unflinchingly' reaches its most shocking conclusion--that the other two thirds of humanity must go. By 'go', the 'authors' mean literally just that--that they must be eliminated. They are not, they demur, proposing a Holocaust-type final solution. There will be no opprobrium here. Rather, population reduction will be achieved through both preventative and curative measures. Preventative measures will reduce the birth rate. The removal of reproductive freedom will play a part in a new 'biopolitics'. The mentalities of the 20th century must be changed and a transvaluation must occur.
As you try to catch your breath, the 'authors' press on. Curative measures, dealing with those people already born, will mean a positive fostering of the great scourges of humanity. Warfare and inter-ethnic conflict will be encouraged through the selling of ever cheaper arms and political destabilisation. Famine will play its role as a 'population curb', as will increasingly limited access to land and drinking water. Pestilence and the diseases of poverty will also do their work. Food aid will end and the market will cut off those unable to buy. The historical Enlightenment project to improve the lot of all mankind will end. The experts who make up this working party are vicious Malthusians.
Now, all of this does conjure up the sense of deep pessimism and despair felt by many who see no alternative to the present system. It also rams home the chilling reality of the horrors that capitalism is quite capable of delivering. However, George is not just being dramatic here. She does suggest that such thinking is indeed going on in powerful circles in the advanced countries, and that she would not be in the least surprised if such a document had indeed been produced by a similar working party.
It is often difficult in the The Lugano Report to pick out where George is saying what she actually thinks and where she is imagining how such a working party might think. This makes a critical appreciation of the argument she is putting forward problematic. What is clear, however, is that she does believe that capitalists--or at least powerful sections of the capitalist class--are able, actually or potentially, to exert a high degree of control over their system. Even the premise of this level of collaboration between the advanced capitalist powers glosses over the intense rivalries between them which make their alliances unstable. Most recently we can point the tensions within the World Trade Organisation (WTO) between the US government and European governments over the issue of banana imports into Europe. This was one well-publicised instance of the much larger issue of genetically modified produce and the desire of US biotech companies to break into lucrative European markets with this new generation of foodstuffs. Indeed, the fiasco of the Seattle WTO conference in November 1999 and the failure of the represented governments to reach agreement on trade can hardly have inspired confidence amongst the major capitalist powers in their ability to regulate their system, even in their own terms.
A constant theme running through all of George's work is the notion that the barbarities of the system she has so brilliantly charted are to do with the maldevelopment of capitalism. The problem then becomes one of how world capitalism is managed, or rather mismanaged. For George, the enormous increase in the activity of the financial sector is a key distorting factor in the world economy. The influence of finance capital, then, is seen as a cause of the warped priorities of the system rather than as being one of the effects of the long period of capitalist crisis which neatly covers the period over which George has been most active and influential. The qualitative growth of the banking sector and the activity of finance capital has it roots in the period of low profit rates and stagnation of the 1970s. Large firms which could not afford the cost of capital investment to update plant and machinery to compete on world markets chose instead to speculate with profits on the major money markets of the world. The financial and manufacturing sectors of world capitalism, then, are two interpenetrating sides of the of the same system. There is no 'more rational' side to the world system representing the potential for 'development'. George does not recognise this sufficiently.
The weakness of George's analysis of the economic roots of the crisis of world capitalism leads directly to an uncertainty as to who her audience actually is. Often her writings read as an appeal to opinion formers and practitioners within government or development circles. This is very much the case in A Fate Worse Than Debt. In the '3-D' (debt, development and democracy) solution she proposes that a combination of enlightened repayment policies linked to strategic investment and controlled import-export schemes with the West would begin to inch Third World countries back onto the path of development. Again there is the appeal to the interest of one section of capitalism (manufacturing) over another (banking). This is a kind of alternative economic strategy for the Third World. There is also some of this in The Lugano Report, where she puts forward the Tobin tax--a proposed tax of about half a percent on all foreign exchange earnings--as a way of controlling the excesses of the money markets whilst generating revenue for Third World investment. This is reformism at the level of international financial markets. In her most recent comments on the significance of the Seattle protests, her proposals border on an almost utopian belief in the humanitarian good sense of some elements within capitalist governments:
It is this belief in a section of capitalism to which progressives can appeal that leads George to a 'management' solution to the problem. But why, she wonders, has the ideology of the free market become so strong in the last decade? With no real notion of the organic crisis of the 1970s grounding her analysis, she concludes that it must have been the result of a purely ideological guerrilla campaign waged by the free market right over this period:
What is needed, she says, is a similar project from the side of those who seek change for the better. This project, she argues, must move beyond 'left and right'. What she means by this is that some sections of capitalism may be won to the humanitarian side:
This strategy would be a long term one of changing the intellectual consensus within the circles that matter. Funders of research in development circles and non-governmental organisations should back the work of researchers in these fields, George argues. The strategy here is one of laying intellectual siege to the system in order to pave the way for a new enlightenment in international relations. This is a direct appeal to progressive academics.
But George is vacillating. On the one hand she is concerned with looking for levers of influence within the development agencies. On the other she is aware of the self limiting nature of such an endeavour and looks instead to activism. This is where she is at her best. All of her books have the admirably non-academic distinction of ending with the question, 'What can we do?' Indeed, there are passages in her books which read as a call to arms:
There is a revolutionary sentiment here, but for George the 'we' is unclear. The agents of radical change for her include everybody from grassroots activists involved in community campaigns, consumer boycotts and consciousness raising, to those involved in civil society initiatives such as workers' self help organisations and co-operatives, development agencies and non-governmental organisations, trade unions, those involved in government, and even some transnationals. George is a writer concerned with the question of power, but she does not locate a social force which is adequate to the task of challenging the power of capitalism itself. There is no sense in George's writings of the revolutionary potential of the working classes of the Third World and of the West.In the end, this is the most serious shortcoming in George's perspective. Strong on exposing the problems but weak on the question of political strategy, George sees no essential role for the working class in any transformation of the world economic order. In fact, in every part of the world where the effects of IMF austerity measures have been felt, workers have resisted. From the anti-IMF riots against Sadat's government in Egypt in the 1970s onwards, the impositions of the World Bank and the IMF have produced urban riots, strike movements and insurgency. However, it is not just the role of the working classes of the Third World with which we should be concerned, but also that of the Western working class.
In her discussion of Seattle in the January issue of Le Monde diplomatique, George does talk about the involvement of the AFL-CIO and the organising role these unions played that day. For George, however, this is merely one element in a wide and complex coalition of forces. George misses the most exciting and important fact--that 40,000 US workers (Teamsters, steel workers, etc) joined forces with the Seattle protesters and in doing so reached out the authentic hand of working class internationalism to their brothers and sisters in the oppressed countries of the world. It is such actions and their reciprocation that the new world consciousness manifested at Seattle will fuse with the rise of different national working classes around the world to prepare the ground for international solidarity and revolution.
Despite the critical remarks made here it would be churlish to end on a negative. George has done important work, and many people have been radicalised by the way in which she has brought home the true scale of the barbarity of modern capitalism. After three decades of radical scholarship and campaigning she remains an optimist for the struggle ahead: