Issue 236 of SOCIALIST REVIEW Published December 1999 Copyright Socialist Review

News Review

WORLDTRADE ORGANISATION

Global warning

An anti-WTO convoy travelling through the US during November

Thousands were due to demonstrate in Seattle and around the world at the end of November as ministers gathered for talks on the World Trade Organisation (WTO). The WTO benefits the giant multinationals, enforcing their rights with disastrous consequences for people around the world. The aim of the Seattle talks is to expand the WTO's mandate further, giving unprecedented new powers to the corporate giants.

Pushing free trade policies into poor developing countries is meant to ensure that governments are stopped from interfering in the flow of trade, and that the economic growth that follows will benefit everyone. The WTO's agreements are deemed essential because international trade holds the key to prosperity. But the truth is that the WTO exacerbates the existing unevenness between countries and leaves all countries wide open to the ravages of the multinational corporations.

Over the last 20 years the share of global trade of the least developed countries has more than halved. At the time of the Global Agreement on Tariffs and Trade deals in 1994 even the OECD predicted that Africa would lose out to the tune of $2.6 billion a year over the following ten years.

China's admittance into the WTO last month will come at a cost. Many companies will be forced to push through a large number of redundancies in order to compete successfully. The Financial Times (16 November) predicts that the 'divisions between rich and poor will yawn wider'. And the effects won't just be felt amongst the working class in China. US textile manufacturers have warned that China's entry into the WTO would cost 150,000 US jobs.

It is clear that the WTO is there to ensure that the interests of the rich countries are forced onto the poor countries. But the structure of talks further demonstrates the lack of an even playing field. While the US sends over 250 negotiators to the talks, 30 out of the 134 countries cannot afford to base anyone in Geneva, one of the world's most expensive cities. During previous rounds of negotiations the 'quad' countries (US, Europe, Japan and Canada) took key decisions behind closed doors with Third World representatives left in the coffee bar dependent on journalists for information.

The imbalance goes further than rich against poor. 'Sponsorship' of the WTO Seattle talks allows corporations to buy access to officials and influence decisions. The WTO rules mean that governments are not allowed to interfere with trade. If domestic policy has an impact on overseas companies wishing to sell their goods then the WTO can step in and attempt to stop the policy. The policies of western governments are also forced to put profit before need in this way. The recent banana war between the EU and the US highlights how attempts to protect the poor are thwarted. The EU was blocked from giving preferential treatment to impoverished Caribbean farmers. US multinationals felt they were being unfairly treated and took the matter to the WTO's dispute panel. The panel adjudicates, but it is then up to individual countries to impose trade sanctions. Again the odds are stacked against the poor. The US has little to fear if a small Third World country threatens sanctions, but the reverse could destroy an economy.

Martin Wolf, writing in the Financial Times (15 November), seems to think that the undemocratic nature of the WTO is not a problem: 'As an agreement among states the WTO cannot itself be democratic. But decisions are reached by consensus and legislated by governments.' The argument amongst the supporters of free trade and the WTO is that the developing countries are open to trade because of the economically useful knowledge and skills that are chiefly to be found amongst the multinationals, and if countries cut themselves off from the 'benefits' of this the result will be disaster. The world trade structure is not there to benefit the multinationals but to help the small countries, so the argument goes. But in fact the multinationals use the WTO to bully their way in. Because local markets are forced to compete on a world market it is not a matter of choice. Backed up by severe requirements from the IMF and World Bank for loan repayments, the development of local economies to the level of the multinationals is a near impossibility.

But this argument goes to the heart of the problem. With the multinationals and the 'quad' countries running the show, the fundamental imbalance that the WTO exacerbates will remain. Pressure can be mounted on governments not to sign up to agreements that only benefit the multinationals and protect their profits, but to eradicate poverty and inequality requires the removal of the profit motive completely.
Beccy Reese


BETWEEN THE LINES

  • Siemens, the private company involved in the catastrophe over passport applications last summer, has escaped fines worth 275,000. The Home Office has waived the fines for the fiasco of 500,000 unprocessed applications and long queues at passport offices. At the time Jack Straw defused the controversy by saying that Siemens would be fined for computer failures.
    Millennium Dome
  • Sales of the 20 tickets for the Millennium Dome have been so slow that the company behind it has had to take out a 50 million loan to cover cash flow problems.
  • There may soon be an added cost to enjoying a chilled Coke. New vending machines being tested will automatically raise the price as the temperature increases.
  • The Health and Safety Executive--the main body dealing with the Paddington rail disaster--fails to investigate nearly 90 percent of major injuries and only 10 percent of those investigated result in prosecution. No director or manager has been prosecuted for any of the 47,000 major workplace injuries between 1996 and 1998.

  • How quickly does the cup of humanitarian concern run dry? A small nation, struggling to assert its right to independence, faces a military onslaught from a powerful neighbour. Thousands of civilians are dead and 200,000 refugees flee across the border. A third of the population is displaced and a humanitarian catastrophe looms as winter approaches. All this seems horrifically familiar. Except that the western response to Russia's savage onslaught on Chechnya, when compared to the call to arms over Kosovo, has been strangely muted. Strobe Talbott, the US deputy secretary of state, declared at the end of October that Russia had 'a right and a duty' to eradicate 'terrorism', echoing Russian prune minister Vladimir Putin, who has insisted that Chechnya is 'a bandit republic' that has to be 'eliminated'.

    The facts of human suffering in Chechnya are stark. In a carbon copy of Nato's strategy in the Balkans, the military has refrained from engaging ground troops, resorting instead to massive air and rocket bombardments. Villages across the northern plain, where support for the rebels is often low, have been obliterated. The capital, Grozny, still in ruins from the last war, and the second town, Gudermes, have been subjected to devastating assault.

    The immediate pretext for the invasion was the bombing of working class tower blocks in Moscow and a minor escapade by some rebel Chechen leaders in the neighbouring republic of Daghestan. Over 300 died in the explosions, which the authorities immediately blamed on Chechen rebels. Whilst there are good reasons to doubt this, the bombings cemented support for the military offensive in Chechnya. But the underlying motives for the invasion are bound up with the desire of Russia's ruling class to reassert its regional dominance and to re-establish itself as a major world player. The Caucasus--which spans the region between the Caspian, with its untapped oil reserves, and the Black Sea--is an area of vital interest to Russia. Russia is intervening in conflicts across the region, attempting to destabilise states such as Georgia and Azerbaijan that Nato is tying to pull into its orbit. At stake here are the vital routes for the Caspian oil and gas pipelines which both Russia and the western powers wish to command. At the end of this century we are witnessing a return of 'the Great Game', the inter-power rivalry that marked the end of the last. In addition, the generals and their supporters in the Russian government wish to restore the authority of the military and reverse the humiliation they have suffered in Afghanistan and Chechnya.

    This is a high risk strategy, however. Aerial and rocket bombardment is one thing--long term occupation of the territory another. While popular opinion supports the war, that support is fragile. If Russia finds itself bogged down in a long conflict with body bags returning, then the mass opposition that occurred during the last war could re-emerge this time.
    Rob Ferguson


    STRESS AT WORK

    White collar blues on the new production lines

    BT call centre workers struck against pressure at work

    Levels of stress and insecurity at work have risen enormously over the last three decades. In a recent Cambridge University study of 300 men and women from a wide range of industries, two thirds of interviewees claimed that work has intensified in the last five years. Some 64 percent said that they 'always' or 'regularly' worked longer than their basic working hours. Just over 30 percent of full time male workers regularly worked more than 48 hours a week. Working hours had risen over the past five years for 39 percent, and 64 percent claimed that the speed of work (and the effort they had to put in) had increased.

    Asked if they trusted management, 44 percent replied 'only a little or not at all', and three quarters believed that management and workers are not 'on the same side'. So much for Blair's classless society.

    In recent times, there has been a significant spread of job insecurity to white collar groups including some once thought of as relatively privileged--for example professional workers, who went from being the most secure group in 1986 to the most insecure in 1997. Workers in the financial and public sectors have seen the nature of their work transformed in recent years. For workers in the financial sector a major factor was the deregulation of the City in 1987. In the public sector lack of adequate funding has led to insecurity, overwork and a culture of management bullying.

    The opening up of new sectors to the market and the intensification of competition, both domestic and global, has led to massive job losses, intensified workloads and job insecurity. This is clear with the privatisation of the utilities and the railways, and the new competition between firms. A devastating illustration of this was provided by the Paddington rail crash. The researchers explicitly state that the underlying causes of this sharp increase in insecurity and workloads lie with the constant attempt by senior managers to cut costs, especially by reducing staffing levels in response to market pressures and the demands of leading shareholders. There also remains the hangover of the defeats suffered by the unions in the 1980s. More than half the interviewees believed that the need for trade unionism is greater now than five years ago. The report recommends tougher minimum wage legislation, greater employee protection and the regulation of capital, and looks forward to a revival of trade unionism.
    Sabby Sagall


    THE WALRUS

    California dreaming

    Much of the recent rhetoric from the Blair camp has been spiced with gung-ho references to the potential of the internet and a knowledge based economy. Two of the top spin bowlers on this aspect of New Labour policy are Geoff Mulgan and Charles Leadbeater, former leading lights of Marxism Today. Mulgan is a member of the Downing Street Policy Unit. Leadbeater, meanwhile, is rated by Tony Blair to be an 'extraordinarily interesting thinker'. He spends some of his time as an adviser to the DTI and his new book, Living on Thin Air, also received instant praise from Tory Chris Patten as 'intellectually fascinating'.

    Not all critics have been so generous. In a hilarious put down in a recent London Review of Books, Nick Cohen notes that 'to believe as Blair believes requires total immersion in the ideology of modern capitalism'. Leadbeater goes down well 'because he endorses that ideology'--Living on Thin Air 'is a business plan for the British political class'.

    Take a look at the website of Demos, the 'think-tank' set up by Mulgan, and this view is rapidly confirmed. Among the knowledge freely imparted here is that a hefty whack of the core funding of Demos comes from freethinkers like Cable and Wireless, British Gas, Shell International, NatWest, the RAC and Tesco. Cash for special projects has come from such wacky nonconformists as IBM, BT, the Prudential, Mercury, and Coopers & Lybrand.

    Corporate largesse and prime ministerial approval are not the only trouble at Demos. You have to wonder about some of the people they've got working in there. One of their senior research fellows, for example, goes by the name of Perri 6 and among the excellent work he has produced is the seminal Open Wide Futures for Dentistry in 2010 (1996).

    The space cadets at Demos have always shown an uncanny ability to play the role of political fashion junkies. An idea to die for one day can easily end up in the bin by the next. Then instant amnesia sets in. At different times, the gurus at Demos have talked up the virtues of Scandinavian social democracy, the German economic miracle, the triumphs of Japanese working practices and the thrillingly productive Asian Tigers.

    The minute any turn out to be not quite so brilliant after all, out they go. Only a silly old Marxist would wonder if there might be any pattern to this repeated cycle of boom and bust. In his latest 'visionary' and 'prophetic' work Leadbeater effortlessly shrugs off the notion that the 'classic economic models of the centre left' might ever have been of much value. Now we are told, brazen as you like, that the latest hot thing is California. If Britain was to embrace 'knowledge-sharing and innovation rather than competition and hostility', Leadbeater promises, we could end up as the California of Europe. Next thing we know, they'll be finding gold in them thar hills.

    A more convincing picture of just how unappealing a prospect this might actually be is revealed in a recent report for the Daily Telegraph: 'It can be a dog's life for the hard slogging high-tech workers of Silicon Valley, where the endless hours, intense pressure and warp-speed business environment are driving employees to the psychologists' couches with ever greater frequency.'

    It has presumably barely entered Leadbeater's consciousness that living on thin air is not only a hypothetical construct. It's the way that two-thirds of the world's population is forced to exist.

    There are no rich and poor in the network society, no capital or labour. Nor is there much mention of the fact that the real thinking behind the internet first sprang from the demands of the US military or that worldwide computer markets are not controlled by a load of hippies with beards but by three gigantic corporations.

    Oddly enough, the person who has been crowned as the first 'philosopher of cyberspace' is a sociologist at the University of California, by the name of Manuel Castells. Even odder is that Castells also has a Marxist background. He was a young professor at the University of Paris and it was in his very classroom that Daniel Cohn-Bendit and others started the 1968 rebellion. 'Nothing to do with me,' Castells now claims.

    Between them, these quick change artists have made a fine living out of standing Marxism on its head, and this is the talent the powers that be most eagerly extol. Castells reverses Marx's adage, The Walrus'The philosophers have interpreted the world, the point is to change it.' His job is not to change anything, only to figure it out. And, anyway, the weather is so nice. Mulgan, Castells, Leadbeater, Marx: which of these great thinkers will be best remembered in the next millennium?


    KURDS

    Radiation sickness

    Kurds released from jail in Turkey face a new danger. A British security company, Aims Ltd, has talked to Turkish military authorities about the use of radiation to track Kurdish prisoners after they have been released. Aims has proposed to irradiate the prisoners from a source hidden in a metal box on a table in an interrogation cell during imprisonment. Once the prisoners are irradiated then they can be tracked after their release using satellites or aircraft sensitive to the radiation. There is a chilling side effect which Aims admits: 'The downside is that the target will succumb to radiation poisoning in approximately 21 days.'

    Aims has also been involved in proposals to help Turkey 'neutralise' suspected Kurdish bases in southern Cyprus, and the provision of intelligence reports on Kurds in European Union countries.


    COMPUTERS

    Game of monopoly

    The shiny surface of the computer industry received a large dent last month with a court ruling that the world's biggest computer company, Microsoft, founded by Bill Gates, is a 'monopolist that has harmed consumers by using its market muscle to block competition'. In fact there has never been a 'free' market in the computer industry. The original monopolist, IBM, gained its position only due to massive investment by the US government, which wanted to ensure it kept ahead in the arms race. IBM lost out to new companies like Microsoft in the 1970s because it got too complacent.

    But the gains weren't due to Gates's brilliance at developing new technologies. One of the main sources of Microsoft's success, the Windows format, was an idea stolen from Apple, which had acquired it from Xerox, which developed the technology but failed to recognise its potential.

    Microsoft is in trouble now only because it became too blatant in its attempts to dominate the whole of the business. To counter the success of the rival Netscape internet browser Microsoft forced anyone buying its software to also receive its own browser. It even insisted that PCs should not be allowed to show the Netscape browser image at the top of their screens.

    The reaction of Microsoft's rivals to the court ruling has been curiously muted. While they are pleased to see the giant taken down a peg or two, the last thing competitors want is their own business dealings and monopoly building activities to come under scrutiny.


    Return to
    Contents page: Return to Socialist Review Index Home page