robert wade, east asia's economic success

(274): neoliberals think 'intervention' is responsible for E. Asian take-off only insofar as it was intervention to remedy the effects of previous intervention (so, 'less intervention')

(274): they assume technology away

(276): list of qualifications for S. Korean success -- pollution, repression, male-female wage gap, economic importance exaggerated vs. japan

(276-279): but four key indicators of success

1. gain in relative command over world resources (Korea and Taiwan reduced income gap with core in 80s)
2. trade perfomance
3. industrial transformation -- not as % of GDP, which can be misleading, but as ability to produce at world-competitive prices
4. removal of poverty--took about 100 hours to produce 100kg of wheat between 1400 and 1880, in Europe; in Korea/Taiwan this was about 150-200 hrs in 1950s, down to 40-60hrs in early 80s; in Indian village, 230 hours; in US at minimum wage about 15 hrs

(283): vs. notion that Third World was better off in the 'laissez-faire' world of 1900-1950

1. evidence that living standards fell in India; in Africa, no good evidence one way or the other
2. colonial governments were hardly laissez-faire
3. most economies grew successfully in dirigiste 50s and 60s
4. other factors explain poor performance in 2nd half, beyond gov't intervention

(285): four features of Korea, pace Amsden

1. State as entrepreneur, banker, shaper
2. distortion of price structures through subsidies, protection, price controls--different industrial structure than would otherwise have been generated
3. large, diversified business groups mean much economic activity is not on the market, but intrafirm
4. State disciplines firms with subsidies, rewards firms that do well on the export market

(286): late industrialization: handicaps experienced by market-based economies when there are technologically advanced firms on the market

(287): Amsden's central point is that investment needs to be directed to areas where there is low profitability and lots of work to be done. private firms will avoid this, unless the State can step in.

(288): the way in which firms borrow ('management' and 'learning') is as important, if not more important, than the actual act of innovating.

(289): subsidies have to be 'reciprocal', rather than unidirectional (as in, they need to reward and sanction, rather than be free handouts). State has to discipline firms (market is not sufficient, nor is pressure of technological competition [how different?])

(291-302): weaknesses in Amsden

1. getting prices 'wrong' -- not proven well, possibility that the State was just intervening to make the FM work b/c of market failures [confusing, though, since this seems her main, clearest point]
2. nothing about how the State was organized
3. could the success of industry be a scale effect, rather than a productivity effect (Korea's endowments already suited manufacture--no n. resources, basically skilled workforce, etc.)
4. didn't Korea just follow its comparative advantage? Amsden not disproving this well, either [also confusing]
5. learning is not adequately operationalized -- actually it is three concepts, and maybe even a 'frame of mind'

(303-304): Haggard's argument about why LA turned to ISI phase 2 (production of capital goods) and EA turned to export of consumer goods (and then export of capital goods?). has to do with:

1. external pressures: declining US aid in SK; balance of payments deficits
2. domestic coalitions: balance of class forces--landed elites imp in Brazil + agro-exporters
3. political institutions: authoritarian regime in SK; politicians in Brazil
4. ideas: technocrats' ideas [stupid] in SK; influence of Prebisch

(306): Haggard's argument explains 'irrational' policies in LA as a product of these factors.

(306-310): two weaknesses

1. is it true that this difference is the critical factor that explains divergence? maybe there are antecedent factors, like different endowments, that better explain this
2. description of politics is very thin, and argument is functionalist -- inferring the existence of coalitions from the fact of shared interests

(311): key--Wade wants to stress w-systemic opportunities: US buyers were looking for low-cost suppliers, but didn't turn to LA (because natural resources provision of export receipts disincentivized a turn to manufacture--'Dutch Disease'), and there was no 'basically skilled' population (either low skilled or highly skilled). LA was unlikely candidate for cheap labor manufactured exports, as a result. in EA case, they had all this, and the benefit of Japan close by ['flying geese'?]

(315): importance of authoritarianism -- not vote-seekers...

(316): imp--the importance of these w-systemic factors means that the chances for contemporary Third World states are 'slimmer' than is otherwise thought

(317): neoliberalism popularizes the myth of the 'harmony of interests' at precisely the time when the world is showing increasingly fierce competition

---

[1] significance of WTO sanctions becomes obvious from this description of E. Asian success

david mcnally, from financial crisis to world slump (2009)

(37): feedback loops, of course: "So, if the first phase of the global crisis centred on the financial sector, with a stunning series of bank-collapses, the second phase is concentrated in manufacturing, with a wave of failures, bailouts and massive downsizing ofnon-financial corporations. But downsizing and restructuring will, in turn, trigger big drops in global demand (as laid-off workers cut back consumption and corporate demand retrenches), which, in turn, will hit firms in services (such as hotels and business assistance) and hammer the current-account balances and financial systems of scores of nation-states, sparking yet further banking crises."

(38): this fact will be important to the larger indictment, of course: "Meanwhile, East Asia, which was the heart of the neoliberal wave of expansion (1983–2007), to be discussed below, is now the centre of the overaccumulation storm."

(38-39): China: "The centre of the wave of accumulation of the past twenty-fi ve years,
as global production-chains ran through its manufacturing base, China is now at the nexus of the overaccumulation-crisis. While predictions that Chinese industry is running at only 50 per cent of capacity may be extreme, there can be little doubt that huge numbers of factories have closed, while many are operating at dramatically reduced levels... Trying to manage an economy that needs economic growth rates of eight per cent a year just to absorb the massive fl ows of rural migrants into industrial centres, Chinese offi cials now describe the still worsening employment situation as ‘grim’ and worry openly about social unrest."

(39): the spectre of deflation: "Overaccumulation, asset-defl ation and price-cutting now threaten a downward spiral in prices and profi ts that would spell a seriously prolonged global slump."

(40): the size of the bailout, globally (see FN 18): "And we are very far from the endpoint. Despite a stunning series of bailouts of the banking system in the Global North approaching $20 trillion, or 30 per cent of world GDP, the international fi nancial system continues to stagger."

(40): "More banks will fail, more countries will be forced to turn to the IMF in order to stay afl oat." [what to make of this? especially since it was widely agreed that the IMF's time had passed? is this empirically realistic?]

(41): KEY--"[unlike] the savings-and-loan meltdown of the early 1990s, the collapse of Long Term Capital Management (1998) or the bursting of the dot.com bubble (2000–1) – this one has moved from a fi nancial meltdown to a eneralised economic crisis. And, unlike crises that were regionally confi ned – East Asia (1997), Russia (1998), Argentina (2000–1) – this is a globalising crisis at the heart of the system. We confront, in other words, a generalised global crisis in the reproduction of capital and of the relations between capital and global labour that have characterised the neoliberal period. Th e neoliberal reorganisation of world-capitalism is now undergoing a systemic shock."

(41): this, clearly, he sees as his central contribution: "In what follows, I argue that we need a more dynamic, historical and nuanced account of what has happened to world-capitalism over the past quarter century than has been generally off ered. Too many radical analyses focus either on regulatory frameworks or the crisis of profi tability of the 1970s to explain what is happening today. In so doing, each approach ignores crucial features of the dramatic processes of restructuring and accumulation that ran across the neoliberal period – and that laid the basis for the current crisis. I further argue that this crisis should be analysed in terms of a breakdown in prevailing valueforms, including models of value-measurement, and that this breakdown opens up new spaces for value-struggles – struggles over the very forms for reproducing social relations – that could trace the outlines of a radical and systemic counter-project to that of capital."

(41-42): not, in other words, in these two camps: "On the Left, most analyses of the crisis have tended to fall into one of two camps. On the one hand, we fi nd a series of commentators who view the fi nancial meltdown as just the latest manifestation of a crisis of profi tability that began in the early 1970s, a crisis that has eff ectively persisted since that time. In another camp is a large number of commentators who see the crisis as essentially caused by an explosion of fi nancial transactions and speculation that followed from deregulation of fi nancial markets over the past quarter-century."

(42): absolutely right--"Th ey [the latter approach] confuse policy reactions to the globalisation of production and fi nance with causes of the current crisis. It is, of course, true that fi nancial deregulation is a contributing factor in the current crisis. But, rather than driving the process of fi nancial liberalisation, deregulation followed and responded to structural transformations... proponents of the deregulation-thesis lack an explanation as to why this crisis has not been restricted to fi nancial markets; they are unable to probe its interconnection with problems of global overaccumulation. Secondly, because these commentators are prone to describe the problem in terms of neoliberal policychanges, rather than capitalism, they advocate a return to some sort of Keynesian re-regulation of fi nancial markets."

(42-43): important--i accept this, but we still have to be able to explain generalized stagnation: "Those analyses that eff ectively read the current crisis in terms of a decline in the rate of profi tability from the mid-1960s to early 1970s have the merit of focusing on deeper problems at the level of capitalist accumulation, and, for this reason, I will engage them at considerably more length. For the most part, however, these approaches tend to be amazingly static, ignoring the specifi c dynamics of capitalist restructuring and accumulation in the neoliberal period. Th ere is a particularly unhelpful tendency in many of these analyses to treat the entire thirty-fi ve year period since 1973 as a ‘crisis’, a ‘long downturn’, or even a ‘depression’. Yet, such assessments downplay the dramatic social, technical and spatial restructuring of capitalist production that occurred across the neoliberal period, all of which signifi cantly raised rates of surplus-value and profi tability, and led to a volatile – indeed ‘turbulent’ – but nonetheless real process of sustained capitalist expansion, centred on East Asia."

(43-45): three methodological protocols:

1. "I insist, first, that we need to treat the world-economy as a totality that is more than the sum of its parts... Much discussion of the neoliberal period has focused on a number of capitalistically developed nations – most frequently the US, Germany and Japan – and treated the world-economy as largely an aggregate of these parts."
   
2. "Secondly, it is vital to recognise that an assessment of world-capitalism cannot make its focus the performance of national economies per se. Capital does not invest in order to boost Gross Domestic Product (GDP), national income, or aggregate national employment. It invests in order to expand itself via the capture of shares of global surplus-value (although what individual capitalists attend to are rates of return on total investment)."
3. "Th ird, the unique quarter-century long postwar-boom (1949–73) ought not to be the benchmark against which everything else is deemed a ‘crisis’. Th at great boom was the product of an exceptional set of social-historical circumstances that triggered an unprecedented wave of expansion. But, prolonged expansion with rising levels of output, wages and employment in the core-economies is not the capitalist norm; and the absence of all of these is not invariably a ‘crisis’. It is utterly misleading to imagine that capital is in crisis every time rates of increase in world or national GDP fall below fi ve or six per cent per annum. Indeed, where wage-compression characterises a phase of capitalist expansion, this may be favourable to profi tability while suboptimal in terms of the growth of consumer-demand and annual rates of national economic growth. Yes, capitalist expansion under such conditions throws up limits to itself. But this is what we should expect of all capitalist ‘régimes of accumulation’. Th e capitalist mode of production is inherently contradictory at multiple levels; every pattern of capital-accumulation involves self-generated limits."

(45): My analysis will build upon three main theses:

1. "Following the recessions of 1974–5 and 1980–2 and the ruling-class off ensive against unions and the Global South that took off in this period, severe capitalist restructuring did generate a new wave of capitalist growth, albeit a much more uneven and volatile one than occurred during the great boom of 1949–73... [E. Asia is important to this story, again--see actual text for details...]"
2. "Alongside and interacting with these changes, a wholesale reorganisation of capitalist fi nance occurred, stimulated by a metamorphosis in forms of world-money (analysed in Section 4 below)"
3. [so this crisis has its origins in 1997, rather than in a long, thirty-year downturn] "Th e upward trend in profi t-rates from the early 1980s sustained a wave of capitalist expansion that began to falter in 1997, with the crisis in East Asia. The East-Asian crisis signalled the onset of new problems of overaccumulation that shape the contours of the present crisis."

THESIS ONE

(47): CRITICAL: "Central to my argument is the claim that intense processes of capitalist restructuring throughout the neoliberal period created a new social-spatial reconfi guration of capital and a new, uneven and volatile wave of capitalist expansion (and drove key processes of the phenomenon known as ‘globalisation’). Th rough a dialectic of global restructuring that has reconfi gured labour and capital both within and outside the core, the world-capitalist economy has been decisively remade. I will take diff erent sides of this dialectical process in turn. While some commentary often seems to suggest that very little restructuring of capital has occurred at the core of the system since the crises of 1973–82, it is clear that major re-organisations of work-process and technology have in fact taken place."

(48): "Th e cumulative eff ects of these processes were profound. In the fi rst instance,
they involved a sustained and signifi cant rise in the rate of exploitation... [Secondly,] Th is increase in the rate of surplus-value in the US went hand in hand with major improvements in the productivity of new capital-investment. As both Mohun and Edward Wolff further show, the tendential rise in the organic composition of capital35 that characterised the period 1947–82 was abruptly reversed during the period of vigorous neoliberal expansion (1982–97) and the productivity of new investment rose."

(49): seems important--"In the absence of such powerful class-resistance, crises will serve as moments of reorganisation that create conditions for increases in labour-productivity and rates of profi t – which, in turn, make renewed expansion possible." [in other words, capitalism cannot self-destruct]

(49): tracking the profit-rate (see graph; not from article): "And it is decidedly clear in this regard that, after falling consistently from 1964–82, profi t-rates experienced a signifi cant recovery after 1982, as detailed studies for both the US and Europe have shown. True, profi tability did not return to the levels of the mid-1960s. But sustained recovery at lower levels is still that – sustained recovery that makes possible ongoing accumulation."

(49-50): "Th e mid-1980s are a decisive turning point in this regard, as capital based in Japan and Germany... turned outward in dramatic fashion... " [globalized production chains in E. Asia, etc.]

(51): CRITICAL--"Across the quarter century 1980–2005, the world’s ‘export-weighted’ global labour-force quadrupled. Most of this growth occurred after 1990 and about half of it took place in East Asia, where the working class increased nine-fold – from about 100 million to 900 million workers. South Asia, too, saw significant growth in both industry and the number of industrial workers.45 While the accuracy of these calculations can be debated, more conservative estimates still suggest that the world working class doubled in size over the past two decades."

(52): fair enough, this is one of his interventions (and it's fair, especially because it addresses the lacuna identified by Arrighi, without becoming Arrighi's narrative)--"Th e fact that, by 2002, there were twice as many manufacturing workers in China than in the G-7, where the number has been in a pretty steady decline for decades, is indicative of major structural transformations that have taken place in the global economy throughout the neoliberal period. Without accounting centrally for thesedevelopments – that is, by setting them at the heart of an account of the neoliberal period – we fail to grasp key dynamics of the system in recent decades."

(53): important--"It will not do to say that, for twenty-fi ve years, crisis was ‘postponed’ because credit was pumped into the system... sustained asset-infl ation – the ‘bubble economy’ – takes off from about 1996 on, not from 1982."

(55): "So, while the entire period after 1982 cannot be explained in terms of credit-creation, the postponement of a general crisis after 1997 can. But as the accompanying credit-bubble burst, beginning in the summer of 2007, it generated a major fi nancial crisis. And, because of underlying problems of overaccumulation, this fi nancial crisis necessarily triggered a profound global economic slowdown."

THESIS TWO

(56): "However, in many respects, the term fi nancialisation can be, and has been, highly misleading. To the degree to which it suggests that fi nance-capitalists and their interests dominate contemporary capitalism, it is especially so. And, where it has been taken to imply that late capitalism rests on the circulation rather than the production of goods – as if we could have one without the other – it has contributed to absurd depictions of the world-economy today. Moreover, the lines between industrial and fi nancial capital are, in practice, often quite blurred, with giant fi rms engaging in both forms of appropriating profit."

(56): "What the term ‘fi nancialisation’ should capture, in my view, is that set of transformations through which relations between capitals and between capital and wage-labour have been increasingly fi nancialised – that is, increasingly embedded in interest-paying fi nancial transactions. Understanding this enables us to grasp how it is that fi nancial institutions have appropriated ever larger shares of surplus-value."

(56): refers to three phenomena, in fact:

1. (57-59) the mutation in the form of world-money that occurred in the early
   1970s: "value-forms have been extended at the same time as value-measures (and predictions) have become more volatile. Th is has given neoliberal globalisation a number of distinct characteristics and a propensity to enormous credit-bubbles and fi nancial meltdowns of the sort we are witnessing at the moment...
   
2. (59-62) the financial effects of neoliberal wage-compression over the past thirty
   years: "Five dynamics fi gure especially prominently here: i) the geographic relocation of production, with signifi cant expansion of manufacturing industries in dramatically lower-wage areas of East Asia and, to a lesser degree, India, Mexico, Eastern Europe, and so on; ii) the downward pressure on wages triggered by a huge expansion in the reserve army of global labour resulting from massive dispossession of peasants and agricultural
   labourers, particularly in China and India; iii) the increase in relative surplusvalue brought about by the boosts to labour-productivity (output per worker per hour) resulting from the combined eff ects of lean-production techniques and new technologies; iv) increases in absolute surplus-value triggered by an increase in work-hours, particularly in the United States; v) sharp cuts to real wages brought about by union-busting, two-tiered wage systems, and cuts to the ‘social wage’ in the form of a reduction in non-wage social benefi ts,
   such as health-care, food- and fuel-subsidies, pensions and social-assistance programmes... Just as the wealthiest households demanded a plethora of fi nancial instruments in which to invest, large numbers of working-class people turned to credit-markets – particularly in the context of dramatically lowered interestrates after 2001 – in order to sustain living standards."
   
3. (62-66): the enormous global imbalances (revolving around the US currentaccount defi cit) that have flooded the world-economy with US dollars: "two interconnected phenomena become crucial to postponing a general slump: monumental growth of debt-loads; and the US current-account defi cit (its shortfall in trade in goods and services and interest-payments with the rest of the world), which combined to allow the American economy to operate as the ‘Keynesian engine’ of the global economy over the past decade. And, here too, as we shall see, the new form of world-money played a central role... Having driven down costs through the course of the crisis, East-Asian fi rms were soon exporting their way back to growth, developing huge trade-surpluses and soaring international reserves (mainly dollars). But this export-led growth was sustained overwhelmingly by the growing trade- and current-account defi cits in the US. As commentators have noted, the American economy eff ectively became ‘the consumer of last resort’. By 2000, for instance, US imports accounted for almost one-fi fth of worldexports, and four per cent of world gross domestic product. But this level of consumption of foreign goods could only be sustained by 2006 at the cost of an $857 billion US current-account defi cit... Th e recovery after 1997, in other words, was built on the pillars of exceptio nally low US interestrates, particularly from 2001; steady growth in consumer-indebtedness; and a swelling US current-account defi cit."
   

(60): "Whereas, in 1991, the wealthiest one per cent of Americans owned 38.7 per cent of corporate wealth, by 2003 their share had soared to 57.5 per cent."

(61): wow: "All of these trends led to a quadrupling of private and public debt in US, from slightly more than $10 trillion to $43 trillion, during the period of Alan Greenspan’s tenure as President of the Federal Reserve (1987–2005)"

(62): important to the larger argument: "The investment-boom in East Asia created enormous excess-capacity in computer-chips, autos, semi-conductors, chemicals, steel, and fi bre-optics. ‘A persistent trend to overcapacity’, observed the World Bank at the time, had induced ‘price wars and intense competition’. One key indicator of these problems of overcapacity and price-wars is the consumption defl ator, which measures prices in consumer-goods. Th at index shows that US prices for consumer-durables – electronics, appliances, cars and more – began to decline in the autumn of 1995. Th is signal of rising productivity and overproduction off ers an important clue as to the structural underpinnings of the crisis that broke out in East Asia (the centre of themanufacturing boom of the neoliberal era)."

(64): facts of overcapacity in China: "According to the Chinese government’s National Development and Reform Commission, China’s steel industry had developed an annual capacity of 470 million metric tons at a time when actual output equalled only 350 million metric tons. Th is excess-capacity of 120 million metric tons was greater than the total real output (112.5 million metric tons) of the world’s second-largest steel-producing country, Japan. Even worse, problems of overaccumulation haunted the ironalloy industry, where capacity-utilisation had slumped to a mere 40 per cent by 2005. And significant overcapacity plagued the auto-, aluminium-, cementand coke-industries. Detailed studies suggested, for example, that by 2005 China’s home-appliance market had overcapacity-rates of 30 per cent in washing machines, 40 per cent in refrigerators, 45 per cent in microwave ovens and a mind-blowing 87 per cent in televisions."

(65-66): problem of re-starting, given the problems that set in with American indebtedness and slowdown: "But private capital had spoken. Belief in the US ‘boom’ was evaporating. Th e real-estate bubble began to defl ate, mortgage-backed securities entered their free fall, hedge-funds (fi rst at Bear Stearns) collapsed, followed by investment-banks. Th e rout was on – and it is far from over. In the process, the capacity of whopping US current-account defi cits, underpinned by debtfuelled consumer-spending, to buoy the world-economy appears to be exhausted. Yet, to rebalance the global economy, to eliminate huge US defi cits and enormous East-Asian surpluses, means to destroy the source of demand that enabled growth in a period of overaccumulation – and it would also mean much larger falls in the US dollar. For this reason, short of a long slump that destroys huge amounts of capital, it will be extremely diffi cult for the world-economy to find a new source of demand suffi cient to restart sustained growth..."

(67): "Th is is what it means when Marx says a crisis involves a destruction of capital. Th e ‘values’ of fi ctitious capitals – stocks, bills and all kinds of paperassets – which were previously treated as if they were real assets (and against which fi nancial institutions borrowed), enter a freefall."

(68): explaining credit default swaps: "But, whereas death-rates are relatively constant (at least for those whose lives can actually be insured), in the midst of a fi nancial crisis defauly-rates are not. To make matters worse, any investor can buy a Credit Default Swap, even if they do not own a single share of the company in question. Th is encourages speculators to literally bet on the failure of a particular company. If you think GM will default on its debt, for instance, buying a CDS on GM debt is a great way to get a payout many times higher than what the CDS costs. As a result, as speculative bets build up, the insuring party (the seller of CDSs) is on the hook for a growing number of claims in the event of default. In crisis conditions, however, the insurer can quickly go under, unable to pay out to every claimant. But, in that event, nobody is protected any longer against default of the toxic waste they might be holding. And that means complete and total fi nancial-market panic."

(69-70): the usefulness of derivatives in a floating-exchange rate regime: "After all, the profi ts made by foreign branches of a corporation – say in Korean won or Turkish lira – can be completely wiped out when repatriated to the home offi ce, as a result of drops in the values of those currencies. Derivatives, by allowing corporations to contract to buy a currency at a particular exchange-rate some time in the future – or to purchase the right to borrow at a certain rate of interest in a given currency – have played a crucial role in helping capitalist enterprises manage these risks."

(71): this is another of McNally's specific claims, which he sees as his contribution: "Yet, by deploying reifi ed, mathematical concepts of space and time, the models which guided derived pricing have eff ectively imploded. As a result, a classic crisis of capitalist measurement is manifesting itself, in part in the form of a breakdown in risk-measurement and derivatives-pricing. During every crisis, value-measurement is radically disrupted and destabilised. Pressures of overaccumulation and declining profi tability induce a destruction of values that re-organise the foundations of capitalist production. In the process, existing capitals are de-valued, until a new and relatively stable valuation is found. In fact, for Marx, an essential feature of crises is that they destroy the old value-relations that persisted through a period of boom, overaccumulation and declining profi tability in order to lay the basis – through destruction and devaluation of capital and labour-power – for a new set of value-norms. Today, as we have seen, derivatives off er an indirect way of trying to measure value by way of measuring risk. But, in the midst of this crisis, the risk-measurement models that have guided derivatives-markets have completely and utterly failed."

(72): and labor? -- "crises are also moments in which the subordination of labour to capital must be re-organised, and in which new spaces of resistance can be pried open. Th ey are also moments in which capital violates its own free-market nostrums and uses public resources to bail out the system, thus opening up space for debates about alternative uses of public powers. Systemic crises are, therefore, moments of great danger and opportunity for the world’s workers."

(72): "Debt, of course, is one of the oldest class relations; repayment of loans has been a great mechanism for transferring wealth from direct producers to landlords and moneyed capitalists. In the neoliberal context, debt has become a powerful weapon for disciplining the working class in the Global North."

(73): this needs to be made much more specific, but is still interesting as a general formulation: "As prices plummet for food and raw materials (copper, oil, coff ee, cocoa, timber, rubber and more) dozens of poorer countries will encounter big drops in their export-earnings. Th is will inhibit their capacities to import food, medicine and other essentials, as well as to service existing debts. Moreover, as private-capital fl ows into ‘emerging market economies’ plummet by about two-thirds in 2009, rates of investment and job-creation will turn down sharply. Trade and currency-crises may ensue, driving poor nations into the dreaded hands of the IMF. Already, Iceland, Hungary, the Ukraine, Latvia and Pakistan have had to turn to the IMF. And more will follow. Once again, the IMF will join with governments and banks in the North to set loan-conditions that open countries in the South to plunder of their assets. Th e only alternative
will be to repudiate debts, as Ecuador rightly plans to do, and to mobilise against the imperial order embodied in the domination"

(74): this is interesting, even if it may not dramatically change anything: "However much they can be derailed or diverted, all such struggles implicitly challenge the domination of society by the capitalist value-form. Th ey assert the priority of life-values – for land, water, food, housing, income – over the value-abstraction and the violent economic and social crises it entails. And one
of the tasks of the Left is to highlight this confl ict – between life-values and capitalist imperatives – that comes to the fore dramatically during times of crisis, in order to pose a socialist alternative that speaks directly and eloquently to the most vital needs of the oppressed."

(74): "It is, as we have seen, the logic of the value-abstraction to express utter indiff erence to use-values, notably to the needs of the concrete, sensuous beings who are bearers of labour-power. What matters for capital is not the capacity of a given commodity to satisfy specifi c human needs;"

(75-76): "While that was a paltry sum, even more paltry is the amount that was actually delivered – merely one tenth of what was pledged, or $2.2 billion, according to the UN Food and Agriculture Organisation. Yet, somehow, governments in the Global North have in short order come up with about $20 trillion to bail out financial institutions – nearly 10,000 times as much as they have anted up to feed the world’s poor. Compressed in that simple fact is the most basic case for socialism."

(76-): a few things, he's arguing, are emerging as clear consequences of this crisis:

1. First, the crisis will induce an enormous centralisation of capital... [many examples given in the article, itself]
2. Second, this crisis will also pose again the question of the balance of global
   economic power and the role of the dollar...
3. Third, centralisation of capital and competition between blocs will also be
   played out by way of attempts to spatially re-organise capital, so that economies
   in the Global North can displace the eff ects of crisis onto ‘emerging market
   economies’ and nations in the Global South... Those economies may then encounter their own version of the Asian crisis. And, if the IMF is called in, Western governments will press
   to buy up assets on the cheap, as was done to South Korea in particular in 1997, after IMF loan-conditions facilitated perhaps ‘the biggest peacetime transfer of assets from domestic to foreign owners in the past fi fty years anywhere in the world’.
   
4. Fourth, just as nations at the top of the imperial order will try to infl ict greater hardship on the South, so we can anticipate moves toward even more draconian restrictions on the movement of migrant-labour...
5. Finally, this crisis also puts a premium on left responses that are clearly socialist in character. Th e notion of calling for a ‘leashed capitalism’ in the face of such a colossal failure of the capitalist market-system represents an equally colossal failure of socialist imagination...

from "the darker nations: a people's history of the third world" by vijay prashad (part IV)

(224): A hundred years after Columbus arrived on the island of Jamaica in 1494, the Arawak population of a hundred thousand dwindled to a handful. In time, the entire population was cleansed, and the island was peopled by English colonial officials and plantation owners as well as enslaved Africans and indentured Indians. Captive labor grew the sugarcane that provided the main economic resource of the island. Rebellions came over time, and these generated a strong consciousness of distaste for the brutality, and paternalism of colonial rule. It took centuries for independence to come, and when it did come in 1962, it was overdue.
(224-225): The new regime of Nelson Manley's People's National Party crafted a social development agenda to counter the chainless bondage of postcolonial life.... Economic policy generally drew from the import-substitution theory, and the government relied on targeted direct foreign investment, notably in the bauxite sector. The latter provided Jamaica with most of its foreign exchange earnings. Discovered in the 1940s, the bauxite reserves fell prey to Canadian and US firms starting in 1952. These firms have since dominated the extraction of the mineral, with Jamaica becoming the largest exporter to North America in the 1960s. But as with sugar and tourism, the Jamaican people did not benefit from their natural resources. The only return to Jamaica came in the way of modest taxes to the government, meager wages to the working class, and a small tribute to the Jamaican managers at the mines and plantations--for this reason, what Jamaica exported despite its fabulous resources was cheap labor, and what it gained for that was a pittance toward its grandiose development aims.
(225-226): Despite the decent rate of growth, Jamaica could not raise the funds to cover its import bill; over 60 percent of the goods used in the country came from abroad (including energy and consumer goods, but also about half its food). Unable to cover its import bill as a result of a failure to diversify its economy, the Jamaican government relied on foreign investment and tourism to balance its books. The erratic, but almost always low prices of its minerals (bauxite) as well as its plantation crops (bananas and sugar) meant that the balance of payments suffered from a chronic deficit.
(226): By the early 1970s, the government reactivated its efforts to break Jamaica out of its impoverished chrysalis at the nether end of global capitalism. Manley's son Michael ran a ferocious and successful political campaign against the global economic system that stacked the deck against countries like Jamaica. Once in power, Michael Manley promoted the construction of democratic socialism for Jamaica, but his regime did not try to disassociate itself from the world capitalist system... Keeping Jamaica hooked up to the infusion of foreign aid or investment meant that the government had to respond to the demands of the foreign money managers rather than the long-term developmental needs of the people of Jamaica.
(227): [DECLINING TERMS OF TRADE] Bauxite was not the only unprocessed commodity to experience a sharp decline in its price into the early 1980s. If the 1970s saw a marginal rise in the price of certain nonpetroleum commodities, by the 1980s there was an across-the-board drop in these prices. Single commodity export-dependent countries lost earnings of as much as $290 billion between 1980-1991 as a result of the decline in their terms of trade. For sub-Saharan Africa, the impact was gruesome. For much of the region, nonfuel primary commodity goods amount for about one-third of the state's export earnings. The decline in the terms of trade meant that these countries lost on average about 5 percent of their gross domestic product...
(229): [DEBT CRISIS] World inflation, high oil prices, and a drop in commodity prices affected the reserves, as it did those of most of the darker nations. In 1960, the total debt of the 133 states that the World Bank counted as part of the "developing countries" held a total public and private debt just short of US $18 billion. In ten years, the debt had escalated to $75 billion., and when Jamaica went into fiscal crisis, it was $113 billion. By 1982, the debt had reached the astronomical figure of $612 billion. While many scholars and commentators blame the oil crisis of 1973-1974 for the ballooning debt, this is a superficial argument. The rise in oil prices due to the action of the OPEC cartel only exacerbated tendencies that had already stymied the social development of the formerly colonized states. The distorted development agenda followed by most of the third World... and the imperialist pressure faced by these states produced a structurally impoverished international political economy. When the oil crisis hit, it provided the conjuncture for the Third World's structural rot.
(229): In 1974-1975, the nonpetroleum exporting states of the Third World had to come up with $80 billion to finance their external deficits. Of this, about $36 billion came from private sources. Commercial banks in the G-7 that found that the rate of return within the advanced industrial states declined as productivity rates grew flat, turned eagerly to fund the Third World states... But the banks would not dole out their capital without cover from the IMF. If the IMF sanctified the state with a short-term standby agreement, it provided a "seal of approval" for more funds. The IMF loans often fell far short of the amount needed, so the IMF acted as insurance for the private commercial banks... The money swept into the Third World, but not without a prospect of return. In 1975, Rothschild reports, "each of the five largest US banks made more than 40 percent of its profits from foreign operations. Chase was an extreme case. It earned 64 percent of its profits abroad, as compared to only 22 percent in 1970.
(230): How could the impoverished pay back these enormous loans?... The defaults did not come because the IMF, backed by the US government and the newly confident elites of the darker nations, strong-armed governments into the cannibalization of their resources to maintain the payment schedules. After the Mexican collapse of 1982, the US government proposed the Brady Plan (1989), which had two elements. First, the banks lent money to cover the debt if the country provided assurances to pay back the loan and the debt, and second, the IMF and the US Department of the Treasury sanctified the loan if the country entered a process of significant economic reform.
(231): [DEBT CRISIS AS TRIBUTE] By 1983, capital flows reversed, as more money came from the indebted states to the G-7 than went out as loans and aid. In other words, the indebted countries subsidized and funded the wealthy nations. In the late 1980s, the indebted states sent an average of $40 billion more to the G-7 than the G-7 sent out as loans and aid; this became the annual tribute from the darker nations. By 1997, the total debt owed by the formerly colonized world amounted to about $2.17 trillion, with a daily debt-service payment of $717 million. The nations of sub-Saharan Africa spent four times more on debt service, on interest payments, than on health care. For most of the indebted states, between one-third and one-fifth of their gross national product was squandered in this debt-service tribute. The debt crisis had winners: the financial interests in the G-7.
(231): During the first six months of 1974, when the fiscal effects of the oil crisis became clear,
the G-7 enjoyed a $6 billion surplus with the nonpetroleum exporting Third World states, but it suffered a $41 billion deficit with the oil exporting states. A year later, the nonpetroleum states owed $21 billion, whereas the G-7 owed the oil group $21 billion. The scale had been balanced.
(231): Furthermore, the oil states... held their profits largely in US dollars, which meant that as the US dollar abandoned the gold standard in 1971, its own standing in the global economy remained high because petrodollars kept it in demand. The rise in petrodollars allowed the United States to abandon the very macroeconomic restrictions it demanded of the Third World, and therefore run a deficit to strengthen its domestic economy and expand its already-considerable military.
(233): The IMF plan was rigorous. First, it called on the government to devalue its currency to discourage imports and increase its ability to export its products. The policy intended to shift the import-substitution thrust to an export-oriented economy. Second, the government had to discourage an increase in wages to keep down the need to import goods. Third, the IMF called for the reduction of the role of the state in the economy... Fourth, the state needed to sell off its public-sector assets and enhance the private enterprises. Finally, the state had to hamper the money supply and raise interest rates to induce "fiscal discipline."
(233): In Jamaica, the immediate effects of IMF policy fell on the rural and urban working class. Inflation soared as the Jamaican dollar faced significant devaluation and price of basic goods began to skyrocket (chicken up 74 percent, salt-fish 285 percent, milk 83 percent, flour 214 percent, and cooking oil 72 percent). The IMF austerity regime dropped real wages by as much as 35 percent in 1978 alone. By 1980, the unemployment rate in Jamaica soared to 30 percent or perhaps more. About 60 percent of Jamaican households began to rely primarily, if not exclusively, on the income of women, many of whom worked in unrewarding sweatshops in Kingston's free trade zone. In that zone, 80 percent of the employees were single mothers whose desperation to keep their families alive meant that three-quarters of them worked overtime.
(234): In 1990, a senior IMF economist studied the IMF-enforced stabilization measures from 1973 to 1988, the period when the structural adjustment bombed the Third World. His measured study found that "the growth rate is significantly reduced in program countries relative to the change in non-program countries." The IMF produced a patient with contracted economic activity, the destruction of the capacity for long-term economic growth, the cannibalization of resources (what is known as "asset stripping"), and a consequent return to being an exporter of raw materials. Much of this resulted in rising inequality in terms of class and gender, in addition to widespread environmental devastation.
(236): By the end of 1980, the per capita income in Jamaica fell by 40 percent.
(237): Marcos, Suharto, and Seaga [Edward Seaga, who succeeded Manley in 1980] mastered the art of political illusion: by a sleight of hand, they posed as efficient nationalists as they opened their countries to unregulated corporations. The national bourgeoisie, represented in Jamaica by Seaga, camouflaged their enthusiasm for "reform" by making the claim that there is no alternative and the IMF made us do it as well as by touting the amount of US and IMF money that flowed into the country as a result of the reforms.
(238): In 1981, the island's gross domestic product was $3 billion, but three years later it fell to $2 billion... IMF-driven globalization exacerbated the collapse of the Jamaican economy... The institutional impact of IMF-driven globalization was heavy. The new reforms pushed by Seaga's government resulted in a weakened responsive state. Between the mid-1980s and 1989, Jamaica's government fired about a third of its public employees, "both through privatization of public companies and through central government layoffs"... The national liberation state was disemboweled in this process.
(238): The neoliberal state now stakes itself more on repression than on responsiveness... From 1979 to 1986, the Jamaican police killed more than two hundred people per year... In the conditions of total social and economic collapse, gang violence or community protection against gang violence became the order of the day. Social anomie intensified alongside IMF-driven reforms, and the neoliberal state responded with the bullet.
(243): The G-7 dominated the IMF procedures and policies, and regarded its rules as being for the darker nations and not for the advanced industrial states. For this reason, the G-7 did not adhere to the IMF structural adjustment demands against budget deficits and subsidies. The G-7 broke the rules when it wanted to... The IMF served the G-7, and not the G-77... The statement showed that whereas almost a hundred Third World states accounted for less than 37 percent of the IMF's voting power, the five leading industrial powers controlled more than 40 percent, while the United States alone held 20 percent of the votes in the IMF.
(245): In the thirty years after 1960, the Tigers' total share of total world exports increased from 1.5 to 6.7 percent. Their share of total exports from the Third World rose from 6 to 34 percent, as their share of Third World manufacturing exports rose from 13.2 to an unbelievable 61.5 percent. Unlike most great leaps forward of this kind, the Tigers did not grow at the cost of extreme domestic inequality. By 1990, all the Tigers showed a substantial improvement in income distribution...
(246): Singapore... had the privilege of being the second most competitive economy in the world (after the US). The GDP of this small island grew from 1965 to 1990 by an average of 6.5% per year... The engine for this explosion was Singapore's exports of manufactures. In1960, only 7.2 percent of Singapore's gross domestic product came from manufactured exports, whereas by 1990 manufactured exports accounted for a little more than three-quarters of the gross domestic product.
(249): The sensation of Singapore and other other Tigers came in large part from a set of advantages exceptional to them. For one, the colonial experience of the Tigers was objectively beneficial. Seized by the British as commercial bases for their China trade, Singapore (1819) and Hong Kong (1841) inherited few of history's problems. There was little agriculture, and what there was soon vanished before the hunger for buildings... Both Singapore and Hong Kong thrived as duty-free ports for opium and other commodities. These were paradises of capital, where the problem of production (and hence workers) was shipped elsewhere. [SEEMS CONTRADICTORY, IN LIGHT OF LATER ADMISSION THAT COMMUNIST TRADE UNIONS PLAYED PROMINENT ROLE IN SINGAPORE] These were almost purely entrepots. Occupied by the Japanese, Taiwan and Korea experienced an assault on their landlord class and forced land reform. Feudalism disappeared at the butt of an Arisaka rifle. In addition, the Japanese colonial machine exported its zaibatsu-state complex for capitalist development.
(249): A brutal war between the British and the Communist Party ran from 1948 until Malaysia's independence in 1957.
(250-251): Politics interfered with the necessary work of development; the ideological framework developed by Lee for PAP secluded the work of development... The Tigers emulated each other on this score: two consecutive dictatorships (led by Park Chung-Hee and Chun Doo-Hwan) controlled South Korea from 1960-1988; in Taiwan, the Kuomintang ruled a one-party state from 1949-1996; and Hong Kong remained a British colony until 1997.
(251): Even as the Third World's bourgeoisie lavished praise on the East Asian miracle in the 1980s, during the 1950s and 1960s, the Tigers traveled a familiar route, albeit with better basic conditions (land reforms and institutions such as the chaebols for industrial organizations). Singapore's PAP, led by the charismatic Lee, followed Goh Keng Swee's advice on state intervention. The Development Plan (1960-64) adopted the import-substitution industrialization strategy. Whatever funds could be harnessed went into state-owned enterprises...
(252-253): [KEY BREAK WITH ISI--THIS WHOLE ACCOUNT IS SLIGHTLY WEAK, I THINK] When Singapore broke from Malaysia in 1965, it had to reassess the import-substitution strategy because now the small island alone did not have a sufficient domestic market to carry through the program. This specific event, the caesura from Malaysia, caused the cabinet to move the island state toward an export-oriented manufacturing plant... To transform Singapore into a major transshipment entrepot and manufacturing site required an enormous infusion of capital... The secret to the Tigers' sensation lies in this original infusion of capital, because only with it could their various institutional advantages shine. A large amount of the investement capital came from PAP's ability to capture domestic savings... Additional money came from US government aid, although this played less of a role in Singapore than in Taiwan ($13 billion) and Korea ($5.6 billion)... More than domestic savings and foreign aid, the Tigers in the 1960s relied on investment from transnational corporations. Lee Kuan Yew recognized early that his goal was "to make Singapore into an oasis in Southeast Asia, for if we had First World standards then business peple and tourists would make us a base for their business and tours of the region." To draw in tourists and finance capital required lenient rules and clean streets. Lee provided the latter through his authoritarian state; his government created the conditions for the former in haste. It worked: between 1960 and 1990, Singapore enjoyed the world's highest investment ratio... By 1973, Singapore abolished quotas and tariffs to create a free-trade port. It created EPZ's, which blossomed because the staet removed all income taxes and allowed them to function without regulation... [YET] The high rates of investment did not change the nature of the Singaporean economy; it produced low-end goods for the world market. Singapore needed to go after the high-end, high-value goods to hasten its development and break out of its dependency on foreign capital. Starting in 1979, PAP inaugurated a new targeted investment strategy. It gave immense incentives for foreign capital to invest in industrail manufacturing, tourism, trade, transport, and communication as well as "brain services" (medical and financial). This "Second Industrial Revolution" required and infusion of skill and a new kind of investment. The import of skill was not new to the Tigers. Because of Communist insurrection and insurgency, the well-educated and upwardly mobile professionals fled to Taiwan and Hong Kong (from China), South Korea (from the North), and Singapore (from China and Malaysia). These professionals brought with them mercantile and technical skills that came gratis to their host societies. In the early years, all the Tigers invested heavily in their human capital: state-funded and managed educational systems that stressed technical skills, and an enhanced social wage that drew and maintained populations... Singapore developed its high-technology firms, but structurally its economy remained dependent on foreign investment (mainly from transnational corporations and private portfolio investment). As Japanese investment dried up in the late 1980s, Chinese investment kicked in. China, boosted by the human capital growth of its socialist era and the EPZ performance on its coastal rim, generated investment for the East Asian manufactures...
(255): IN 1997, the Thai bhat failed, setting off a chain reaction across the rim until the Tigers had to go to the IMF with their hats in hand for a bailout. What had struck the rest of the Third World from the late 1970s onward, hit East Asia two decades later. While the Tigers' collapse appeared structural, as the dust settled it became clear that they had been the victims of financial speculators... China's sheer economic size allowed it to weather the storm, and its stability provided a lifeline for parts of the East Asian world. The commodity price drop explains not only the downturn but also the structural closeness of the Tigers to the rest of the darker nations.
(261): ...[M]ost of the Saudi royal family had enjoyed a pragmatic relationship with Wahhabism: they accorded it respect in public, but lived wilder lives in private (including during long sojourns to Europe). [Crown Prince] Faysal was different. He was a true believer.
(262): The reinvention of tribalism and other atavistic ideas is equally central. Joseph Desire Mobutu, raised in the Belgian Congo by European friars, led the coup against the left-wing prime minister Patrice Lumumba in 1960. Lumumba's Congolese National Movement Party took the newly freed Congo leftward and disadvantaged European capital... Mobutu, backed by the Belgians and the United States, overthrew and killed Lumumba... Within a few years, to consolidate his position, Mobutu conducted the Zaireanization of the Congo: he changed his name (Mobutu Sese Seko) and that of his country (Zaire), and insisted on a series of cultural returns to an idea of the pure cultural heritage of Zaire.... Mobutu stole an estimated $5.5 billion from his country at the same time as he tried to portray himself as a Zairean like any other.
(263-265): Oil came into the picture for Saudi society in the early years of ibn Saud's rule (1933). Hastily, ibn Saud signed concessions to US-British oil firms. The corporations flourished. The Saudis acted as sentries of a reservoir that holds a quarter or more of the world's oil, while the US and British governments offered security for the longevity of the antidemocratic regime... Saudi largess went toward the prolfligate consumption of the royal family and religious charity. By 1958, the oil-rich land was in debt by $480 million. Crown Prince Faysal, who exerted his own authority against his brother King Saud, went to the IMF in 1957, and earned some credits in lieu of a tighter fiscal policy and a devalued rial. The oil merchants thrived, but the Saudi people suffred... The stalled state expenditure exacerbated the population's already-diminished set of expectations. They were tinder for Nasserism, Third World nationalism, and Communism... In 1953, the workers at Aramco conducted an unsuccessful two-week strike to form a union. Then, in July 1956, when King Saud came to Dhahran mass demonstrations greeted him. The workers wanted basic rights, while the population wanted the removal of the growing military base... The year before, at the Taif Air Base in the western mountains of the kingdom, Saudi troops mutinied in Nasser's name. They were executed. In this context, Nasser arrived in Saudi Arabia in 1956... These Nasserite currents came to the fore in the early months of 1958... By March, Saudi frustration with Nasser had reached a high pitch. The crown tried to assasinated him as his airport approached Damascus International Airport The Nasserite threat was always greater than that of the Communists, who in Saudi Arabia numbered few. The Organization of Saudi Communists operated under the aegis of the National Renewal (later, Liberation) Front from 1954 onward. Only in the 1960s did peninsular Marxism make its mark--in Yemen and Oman. The 1962 nationalist revolution in Yemen provided a haven for the export of Third world nationalist and revolutionary ideas across the region... When the Marxists seized power in South Yemen in 1967, the Popular Front was renamed the Popular Front for the liberation of Oman and the Arabian Gulf. The Saudis, now much more militarily confident than they were in the 1950s, financed the resistance against South Yemen and that of the Omani government against the Popular Front. They were scrupulous in the extrication of the Left from the peninsula.
(265): Nasserism, like a virus entered the palace walls... Their leader was Prince Talal bin Abdulaziz, the "Red Prince"... Talal broached the idea of a National Council in 1958, and now the Free Princes moved to gain public support. They had no mass base., and since they did not have the support of their clans, they failed to penetrate Saudi society... Talal used the bulk of 1961 to create secular social institutions in Saudi society and ameliorate unemployment through public works. The Free Princes appeared to be on the road to accomplish a left-wing palace coup, to do what the Free Officers did without the use of the military. Then Faysal moved against Talal... Talal and his group withdrew to Beirut. The Free Princes were squashed...
(266): Not long after Faysal's coup de grace against the Nasserites and the Communists, he hosted the WML. Faysal had a senior partner in Aramco, and behind them was the US government. The US government gave "wholehearted support" to the WML as an instrument to roll back Third World nationalism and dent the USSR by appeal to its large Muslim population (perhaps 45 million)... US president Eisenhower held a summit in 1957 with the Saudis and enunciated his doctrine. The Eisenhower Doctrine was framed to contain Communism in general, but in the specific instance of the Middle East to promote the Saudis and monarchical forces (such as the Shah of Iran and the kings of Jordan and Iraq) as an alternative to Nasserism.
(269): [EVEN THIS ONLY WENT SO FAR--INJUSTICE CAN ONLY BE MADE SO PALATABLE, IN OTHER WORDS] IN 1979, a group of devout Muslim activists organized into the Movement of the Muslim Revolutionaries of the Arabian Peninsula laid siege to the Masjid al-Haram. They defended their actions as the only way to take back the holy shrines from the "drunkards" who "led a dissolute life in luxurious palaces." ... Simultaneously, but independently, the Shia of eastern Saudi Arabia came out in mass demonstrations (many of them were oil workers in Aramco's fileds). The National Guard crushed both the siege and the rebellion. The egalitarian noises from the Iranian Revolution (but no so much the Islamic republic that followed it) petrified the Saudi royals and indeed the entrenched elites across the Third World... The ulema in Saudi Arabia were quick to line up with the monarchy.
(269): The oil price rise after 1973 provided Saudi Arabia with the singular ability among the darker nations to buy off its citizenry. A few years of liquidity in the 1970s allowed the state to increase the social wage, although the monarchy did not fundamentally change the dependent basis of the Saudi economy. Saudi industry produced less than 2 percent of the gross national product, and dates remained the second-largest export item after crude and refined oil... In the fundamentals, Saudi society reflected the same problems as much of the Third World: a one-commodity economy, with a poorly developed industrial sector, a large state apparatus, a growing military (costing about 14 percent of the gross national product), and a languished population. At the whim of fickle oil prices, the Saudi economy went into a nosedive beginning in the late 1970s. The World Bank recommended that the Saudi state shore up its fundamentals, and the royal family conducted a self-directed structural adjustment during the 1980s... For a society with a young population and growing structural unemployment, the social and cultural consequences of austerity were great. As dissent and protest grew, the Saudis met this both through outright repression and an ideological campaign. In 1976, the Saudi royals welcomed the head of the religious police into the cabinet... Chauvinisms of various kinds were encouraged. The royals called for the "Saudiization" of the workforce as a means to turn the blame for unemployment on the five million foreign contract workers (almost a third of the total population).
(271): The IMF instituions prodded the post-colonial states in the 1970s to give up on the delivery of public goods such as education, health care, and relief services, and allow private or charitable entities to do the work. In Pakistan and Egypt, for instance, as the state slowly eroded its public educational system, the exponential growth of cheap Islamic schools provided opportunities for lower-middle-class and working-class youth.
(273): As Part of the Pakistan National Alliance, the Jamaat reaped the benefit of Zia's cutback in educational funding--money now came in from the WML, the International Islamic relief Organization, the Saudi and Kuwaiti Red Crescent, the Saudi General Intelligence Department, the Saudi royals, and other such private avenues. This money created a web of religious schools (madrassas): from nine hundred madrassas in 1971, the number swelled to eight thousand by 1988.
(274): As it undermiend the idea of nationalism, conservative social forces and various powerful social classes gathered together to offer an alternative vision of what it meant to be patriotic, indeed what it meant to be nationalistic. The secular-socialist nationalism of the Third World agenda withered before the rise of a cultural nationalism now deeply invested in racial, religious, and such atavistic differences... National liberation regimes had not been able or did not try to dethrone the old social classes and the older forms of social solidarity but they did create mechanisms to create national solidarity. Public schools, military service, voluntary labor, and other such institutions attempted to make equality a real social value and part of the experience of the citizenry. If the social classes do not mingle, there can be no real national solidarity. That said, once the state ceased to make this token effort, the significance o fht eolder, generally unmolested class bonds now attained a greater deal of purpose.
(275): Globalization and cultural nationalism are not opposites or irreconcilable doubles; they exist together, they feed of each other. Indeed, cultural natioanlism is the Trojan horse of IMF-driven globalization. The mecca of IMF-driven globalization is therefore in the ability to open one's economy to stateless, soullesss corporations while blaming the failure of well-being on religious, ethnic, sexual, and other minorities. That is the mecca of the post-Third World era.
(276): Debt hangs heavy for the bulk of the planet. In 1970, when the Third World project was intact, the sixty states classified as "low-income" by the World Bank owed commercial lenders and international agencies $25 billion. Three decades later, the debt of these states ballooned to $523 billion. An impoverished conversation on debt yields no agenda to combat this fundametnal ailment for the former Third world. These are not "poor" countires. Over the course of these three decades, the sixty states paid $550 billion in principle and interest on loans worth $540 billion. Yet they still owe $523 billion. The alchemy of international usury binds the darker nations.
(276-277): For there was a gradual realization that such progress as was made in the first three decades after 1945 did not imply any fundamental change in the status or real development prospects of Third World countries. Dependency was increasing rather than decreasing, poverty was persisting and the income gap between the Rich North and the Poor south was gettting wider. According to the World Bank, "In 1960 per capita GDP in the richest 20 countries was 18 times more than in the poorest 20 countries. By 1995 this gap had widened to 37 times." The divergence between the North and the South grew as the Third World fragmented. But even this spatial metaphor of the North and South is insufficient; it ignores the mature class hierarchies that had grown within each of the countries in the South and the North.
(281): The limitations of IMF-driven globalization and revanchist traditionalism provoke mass movements across the planet. The battles for land rights and water rights, for cultural dignity and economic parity, for women's rights and indigenous rights, for the construction of democratic institutions and responsive states--these are legion in every country, on every continent. It is from these many creative initiatives that a genuine agenda for the future will arise. When it does, the Third World will have found its successor.