Global Tyranny (2000)

Book Review from the May 2000 issue of the Socialist Standard

Your Money or Your Life! the Tyranny of Global Finance by Eric Toussaint, translated by Raghu Krishnan, Pluto Press, 1999.

This is a potentially useful resource for socialists' campaign of educating the working class about how they are being exploited. It provides an analysis of the "globalisation of capital", and how this has enabled the largest industrial groups and financial investors to operate "with the least possible number of restrictions as far as labour laws and social conventions were concerned". Toussaint provides a useful introduction in which he outlines his 45 "theses" which are enlarged upon in the body of the text. These cover the workings and the consequences of the process from "1: massive impoverishment on a global scale" through to 42: "globalisation hastening environmental decline", and conclude with the need for alternatives, in particular 44: "satisfying human needs" and 45: "rethinking a project for emancipation".

Of course, much has already been written on such matters as Third World Debt, the role of financial institutions including the World Bank and the IMF, and the human suffering resulting from unfair trade and Structural Adjustment Programmes. But this book is a less irritating read for socialists because it uses the language of the class struggle, for example, in thesis 43 referring to "the global offensive of capital against labour", and in 26 stating that the repayment of foreign and domestic debt "has been a tremendous mechanism for transferring the [surplus] wealth created by the workers to capitalists". Toussaint evidently considers himself to be a socialist, dedicating the book to Ernest Mandel and sharing Marx's belief that "the emancipation of the oppressed can only be achieved by the oppressed themselves".

However, there are errors in the book in terms of the socialist analysis of capitalism. For example, Toussaint refers to debt repayments coming out of tax revenues, "which largely come from working people". This is odd given that in the Glossary he defines surplus value as "what remains of the social product once the reproduction of the workforce is assured and its maintenance costs covered". Logically these subsistence costs must be the money actually received by the workers, hence net of tax, and so tax revenues must, in effect, come from the capitalists' share of the spoils. A much more serious error lies in the kind of solution Toussaint proposes. He lists alternatives to the current situation headed by reforms to the handling of Third World Debt. He asserts that the "tyranny" of financial markets can be "disciplined", "if governments decide to do so". He puts his faith in "the wealth of social movements" succeeding in resisting globalisation. How can Toussaint reconcile this trust in reformist measures which only capitalists or their state servants can bring about with his recognition of the unavoidable responsibility of the oppressed for their own emancipation?

One welcome theme of the book is Toussaint's account of the effects of globalisation on the environment. In particular, he recognises that the so-called "Green Revolution" was "carried out to the detriment of communal lands, has led to severe impoverishment of biodiversity, an increase in plant diseases and soil exhaustion". He cites the well-known environmental and social activist Vandana Shiva as seeing that, far from saving India from famine, as is claimed by the World Bank, the Green Revolution was "part of the plunder and exploitation of the peasantry for the benefit of trade and industry". In a socialist society the traditional knowledge and expertise held by small communities will be respected, especially where this relates to local ecology and sustainable systems of land use, and hence priority given to local decision-making over whatever has to be delegated to wider regional or global democratic control.

How much more interesting it is looking forward to the future socialist society than indulging in wishful thinking about how the current economy might be reformed to mitigate its worst effects. However, to be fair to Toussaint, he devotes only ten per cent of the pages of his book to these alternatives, and damns capitalism so powerfully in the rest, that it may be that he intends the reader to draw their own conclusion: that the only solution is to scrap it altogether.

Chris Marsh

World Bankers (2008)

Book Review from the April 2008 issue of the Socialist Standard

The World Bank – A Critical Primer. By Eric Toussaint. Pluto Press.

Throughout this comparative study of official World Bank statements and internal memos, Eric Toussaint lays bare the absolute conflict between the public and private ideologies, time after time revealing the imperative of achieving US political aims above all other considerations. It is a very interesting book making the facts and figures of economics accessible to the layperson through ample explicit tables and clear explanations with minimum use of jargon.

Contrary to common belief, the mission of the World Bank under the umbrella of the UN was not and is not to reduce poverty but (1) to rebuild Europe post second world war and (2) to promote the economic growth of the South through development. As a part of the World Bank Group the World Bank is (supposedly) bound by the UN Charter and according to the International Court of Justice it is the duty of the World Bank to respect human rights and customary law in general. However, nowhere is this obligation seen to be incorporated in the implementation of their policies; in fact examples abound as to how readily and easily these obligations have been circumvented or simply disregarded. In strict violation of a UN right of people to self-determination the World Bank granted loans in the 1950s to Belgium, France and Britain to finance projects in their colonies, mostly for mining for the benefit of the colonial powers and then, following independence, the debt was transferred to the newly emerging nations. This “odious debt” is a violation of international law which Toussaint describes as having been imposed on “the Bank, with the connivance of its main colonial shareholders and the blessing of the US”.

The Bank’s mandate was to be purely economic, not to be involved in politics but even the first loan it granted in 1947, to France, was held up by the US government until Communist Party members were ousted from the coalition government. One chapter is specifically devoted to examples showing that the policy of granting loans is first and foremost determined by the US government often on the basis of purely political objectives. From the 1990s the US influenced against granting loans in areas that would compete with US products. Where oil was concerned drilling was encouraged, refining, not. In essence, more primitive accumulation, showing no regard for environmental concerns or human rights and contrary to the UN Charter. The over-riding message is the blatant, systematic disregard for the founding principles of the Charter.

As to the answers to criticisms of the Bank’s succession of errors or bad management Toussaint reveals them to be “a deliberate part of a coherent, carefully thought out, theoretical plan, taught with great application in most universities.” The strategy, in a nutshell, is that providing infrastructure should fall on the state sector and anything that might prove profitable should be given to the private sector (preferably favouring multinational corporations), i.e. privatisation of profits combined with the socialisation of the cost of anything not profitable. Within the indebted country failing private companies would have their debt transferred to the state (as the military junta in Argentina transferred $12 billion of private debt to the state). Thus the capitalists in developing countries escape their debt, having it paid instead by the Treasury at the expense of the workers (Toussaint’s analysis). In Argentina in the 80s (just one typical example) even subsidiaries of transnational corporations indebted to their parent companies had their debts transferred to the Argentina Treasury; Renault, Mercedes-Benz, City Bank, Chase Manhattan, Société Générale etc. etc., all transferred their debt and as the government had no access to their accounts, one might raise an eyebrow!

Describing the demise of Mexico in the 80s Toussaint is of the opinion that “Mexico has lost control of its destiny which, historically, has been the US’s objective since the nineteenth century.” By the end of the 90s all six major developing regions showed negative net transfer meaning simply that their debt to the World Bank was continuing to grow because they couldn’t keep up with the payments. Reports and internal memos reveal the Bank saw the crisis on the horizon but their “double discourse” informed the public and indebted countries that there was nothing to worry about. When the subject of Debt Reduction was eventually raised (in 1989) by the US government the Bank complied. This consisted of indebted nations buying US Treasury bonds in exchange for a reduction of their debt; in effect now the indebted countries were financing the policy of indebtedness of the US itself. As for the Bank’s own accounts, since its founding in 1946, they have consistently produced positive net results. Since 1985 each year has exceeded $1billion in profits whilst all developing countries’ net transfers since 1987 have been negative, resulting in increasing debt.

Eric Toussaint is President of the Committee for the Abolition of Third World Debt (CADTM) whose mission is “to contribute to the emergence of a world based on the sovereignty of its peoples, on international solidarity, equality and social justice” with which we can broadly agree. Throughout the book he promotes “a break with the capitalist system” and tells us that “a system of redistribution of wealth is needed.” Point 30 of 31 indictments of the World Bank says “a new international, democratic institution must urgently be found to promote a redistribution of wealth and to support people’s efforts towards development that is socially just and respectful of nature.” Then he goes on to talk of 21st century socialism without addressing what this means except to break away from the Washington Consensus, the World Bank and the IMF in favour of new financial and monetary institutions and to point to possible alternatives such as Venezuela, Bolivia and Ecuador.

An alternative system, hostile to capitalism but without a commitment to abolishing money? – Is it possible that Eric Toussaint hasn’t yet heard of the Socialist Party?

Janet Surman