Can Global Capitalism become regulated according to environmental constraints?
Social Sciences Researcher of the CNRS (Centre National de la Recherche Scientifique, France)
ISMEA (Institut des Sciences Mathématiques et Economiques Appliquées, Paris)
Member of INES Executive Committee (International Network of Engineers and Scientists for global responsibility)
Ladies and gentlemen, dear colleagues and friends, the title of my communication is:
"Can Global Capitalism become regulated according to environmental constraints ?"
Of course I am not able to answer, and I believe nobody is, but it is not a reason to give up. To ask questions is a standard behaviour of scientists and very often they can't answer, in some cases during a very long time.
Starting from this point of view, I shall focus my speech on two concerns:
- First: Is the question which appears as the title of this communication a relevant one? Does global capitalism exist as a reality of our time, and if we answer YES, are we authorized (and in which way), to speak about regulation of this global capitalism?
- Second concern: Are there some features and trends of global capitalism that constitute efficient levers for a possible ecological regulation of the system? Can we discern, among the complex movements of this system, some dynamic forces which could help to set this kind of regulation going?
The rality of global capitalism
As concerns the reality of global capitalism and the relevance of the regulation concept, I think that we can see the emergence of this new phase of the capitalist system history since 1970, when started the worldwide destructuration/restructuration process after the so called "three glorious decades". The lightning improvement of computer technologies, communication networks and information processing means have paved the way to qualitative jumps in management of production, trade and markets, for industry as well as for the sector of services, which made possible new opportunities of profit. Simultaneously, in order to put in concrete forms these scientific and technological advances, higher levels of capital concentration became necessary and this necessity resulted in liberalizing international trade and financial markets.
The consequences of these changes are now obvious: lifting all national controls of capital flows has blurred the links between national savings, investment and consumption, and generated new patterns of investment localization, labor organisation, and trade flows at the world level. Also large privatization programmes in many countries made easier woldwide capital concentration and have speeded up the rise of Multinational Corporations, which control now two third of the international trade. Last but not least, the increase in number of taxhavens all over the world allows capital holders and hedge funds managers to direct the international capital flows in their own interest, without national control or tax levying.
Thus modern globalization is not only opening the world markets for the products of capitalist countries as it was in the XIXth century. Modern globalization is the birth and the booming expansion of a new and autonomous worldwide stratum of the capitalist system. I suggest to call it "global capitalism" and to characterize this new integrated socio-economic system by the following main features:
It seems to me that the fast development and the strengthening of these three features are enough for acknowledging the reality of global capitalism as a new stage of development of capitalism.
- a) the worldwide technostructure of Multinational Corporations, which organize the production and distribution processes of goods and services at a global scale, with a high level of scientific and technological inputs and a rapidly growing international capital concentration;
- b) the liberalization of capital flows and the huge development of a worldwide financial market, linked with proliferating tax havens, which limits more and more the capacity of each single country to run its monetary and economic policy with a sovereign power;
- c) the development of an international network of bureaucratic institutions, espacially of the International Monetary Fund, of the World Trade Organization, and of the World Bank, which are now playing the role of managerial apparatus of the global economy, under the political leadership of the G.7 group of states, where the United States of America have a dominating position.
What about the regulation of this new stage?
I am often surprised to read in the medias or even in heterodox scientific reviews that the deregulation policy applied by many governments in the field of capital flows and international trade will come to global anarchy and chaos, as a result of the neo-liberal commands: "laissez faire, laissez aller", total freedom fot the production factors movements, no state intervention in the field of economy and finance.
But here we have to be clear: the truth is that neo-liberalism commands have always been used as an ideology, and never as a concrete economic policy. In fact, global capitalism, as capitalism since its beginning, is carefully and efficiently regulated by state institutions and political will. Again I have no time here to develop this point, but I am sure you will agree with me after considering two examples:
- concerning the production factors, transfers of capital have actually been deregulated, but the labor factor is still very strongly controled by the states, and manpower migrations are very far to enjoy the same freedom as capital transfers. On the contrary, the governments which are the most active supporters of free capital transfers are controling very strictly, with specific laws and bureaucratic institutions, the manpower migration flows. This practice is quite contrary to the neo-liberal theories.
- second example: when the mexican financial and monetary crisis exploded in 1995, what happened? Did the mexican and american governments apply the principle of the neo-liberal theory, that is to say no state intervention and complete trust in the so called invisible hand of the market? Not at all: The President of the United States and the Chairman of the International Monetary Fund decided in 24 hours to mobilize 50 billions dollars of public funds as warrant of the mexican public debt. The largest state intervention in history of capitalist monetary and financial crisis. And when a similar crisis broke out in Asia some weeks ago, the IMF ran exactly the same policy of public intervention, liberating 17 billions dollars at this occasion.
Thus it is clear that public regulation of global capitalism is a reality.
The problem is that this regulation has nothing to do with environmental constraints. If we go back to both of our examples, it is clear that the regulation means used by IMF and the G7 states only aimed at the protection of capital holders interests and at the stability of the global financial market. Although the mexican crisis, for instance, had been generated by the behaviour of these capital holders and of their associates in the mexican government, they did not have to pay the bill. Thanks to the IMF and G7 states intervention, they could recover their funds and their profits, and the financial equilibrium of the global system was saved. Who paid the losses? The mexican people (except the rich individuals involved in the international financial circuit), with a devastating devaluation, the bankruptcy of numerous national firms, a dramatic rise of unemployment and drop of the general public standard of living. No environmental concerns have been taken into account in that story.
Similar scenarios take place whenever IMF or the World Bank, or both together have to manage situations where capital holders interests could be endangered.
Let me also call to mind the project of another gear of this regulation policy, the proposal of a Multilateral Investment Agreement backed by the USA and the EU and presently under consideration at the Organization for Economic Cooperation and Development. Its purpose is to grant transnational investors the unrestricted "right" to buy, sell and move business and other assets whereever they want, whenever they want. If adopted, this agreement will mean forclosure of national development strategies, increased job flight from industrial nations and enormous pressures on countries, rich and poor, to compete for increasingly mobile investment capital by lowering any national environmental and labor standards except profitability.
Not surprising if such a regulation means result in growing social distortions, wealth concentration to one side, growing poverty and exclusion to the other. The UNDP annual report gives a thrilling image of these social distortions.
No doubt that our colleague Francis Fukuyama who believed in the end of history will be deeply disappointed, because the two dynamical trends of global capitalism, impetuous profit seeking of multinational corporations and financial capital on the one side, manyfold resistance movements against growing social distortions and exclusion on the other, are generating numerous sources of economic, political and even cultural rapid changes, and consequently will bring about further episodes of the already rich human history.
The problem is that the criteria of this regulation mode are the short range protection of international creditors interests and the reproduction of their political hegemony, and not the long range preservation of the Earth ecosystem, which is a common interest of the whole world population and will not be achieved as long as ecological constraints and sustainable development requirements are not taken into account.
Are there signs of possible improvements?
In the last part of this speech, I would like to focus on the contradictory resistance movements which can be considered as supporters of alternative and more efficient regulation modes, from the point of view of environment preservation.
The reactionnary trends
On the one hand, there are what we can call reactionnary trends whose common proposals are to reject the globalization processes and to re-establish regulation modes of the past. Among these trends we can find all kinds of fundamentalism, but also many popular movements which are just resisting IMF or World Bank policies and progammes because they are usually worsening poverty, exclusion and environmental degradation.
Such trends have to be analysed with a dialectic way of thinking, because they are carrying in the same time very positive as well as very negative potentialities. There is no doubt that some ideological values with strong political impact are useless or even dangerous, like ethnicism, racism, religious fanatism or chauvinism: they can't produce any effective solution able to deal with global problems in people common interest.
But it would be also uneffective to reject the whole heritage of the past, which holds invaluable resources in terms of scientific and techological knowledge, cultural achievements and concrete collective experience. The presently dominant regulation mode of global capitalism works very often as a destructive factor of this heritage and seeking an alternative mode which could deal with ecological constraints and mankind common interests will only be possible by leaning on people resistances to this destructiveness.
Future oriented trends
On the other hand, we find trends which reflect the birth and even the strengthening of new ways of thinking, new institutions and new social and political behaviour, trying to correct the shortcomings and the negative aspects of global capitalism present regulation, or to bring together social and political forces able to lay down, at the world level, another regulation mode, consistent with the common interests of the people and the biosphere stability requirements. Let us quote some of these trends, which have also to be analysed with a dialectic methodology:
- * On the one hand, there are the networks of international NGOs, already quoted by Prof. Altvater in the opening session, which usually represent active groups of concerned people sharing points of view of common interest. Since the Rio conference in 1992, they are able to work together parallel with the UN summits or other international meetings. New ways of thinking are emerging from these networks. Many of them have succeeded in exerting their influence on the general public and consequently on some governments and even on some international negociations. However, their means of action are weak, and some of them have also proved to be easily manipulated or to act simply as puppets of the states. They also suffer from a lack of democratic control.
- * In each country, also exist a lot of leftist organizations like political parties or unions or local initiatives wich are also resisting global capitalism policies and often join NGOs actions like counter-summits for instance. Such movements can also have a large inflence on the general public but they are usually active in the limits of national boundaries and rarely present at an international level.
- * Thirdly there are the networks of international institutions, which reflect the contradictory aspects of globalization, because you find at this level very technical organizations like many scientific research programmes, meteorological watching networks, etc...until the UNO agencies like FAO, UNESCO, OMS, ILO,...and finally until the central regulation instruments of global capitalism already noticed, IMF, IBRD, UNDP, WTO, OCDE, G7, ...and the central UN bodies: General Assembly and Security Council. Many people underestimate the role and especially the potential of these institutions. But some of them give a useful contribution to the knowledge of the global system in every field of activity. Other are presently used as instruments of global capitalism regulation and for this reason they often show a bureaucratic behaviour and in many cases they are quite inefficient or even destructive. But in the same time, they help to identify new global problems, to study their specific logic and to prepare progams of action, especially in the field of environmental problems. UNO suffers from a lack of democracy, especially in some of their components, but they are also the unique world open forum where every state can express its will. And evidently, if all these resistance movements succeed in changing the regulation mode of the global economic system, UNO organizations will be democratized and restructured, and will continue to play an important role, probably more important as now.
Finally we must point out the first achievements of these resistance movements, which can be considered as elements of a new culture of international dialogue, seeking consensus between people and states on specific and sensitive problems, especially on environmental ones. For instance international conventions or treaties have been settled on very important disarmament measures like nuclear tests ban, chemical and biological weapons, non proliferation, etc...and on other environment protection concerns like desertification, loss of biodiversity, or preservation of the antartic continent. In other cases, like total nuclear disarmament or landmines prohibition, general agreement is not achieved, but a very high international political pressure is pushing in the right direction.
Of course these achievements are only starting points: they are the first steps in using international law as regulation means in aid of environment protection. On decisive global problems like energy consumption, population growth, chemical pollution, deforestation, growing social and economic distortions, etc...no decisive progress are on the agenda, on the contrary: some of these problems are getting worse. And even when an international agreement exists, there are huge difficulties to control its application and to punish those who do not respect their obligations. But we cannot underestimate the importance of such conventions or agreements, when they really deal with environmental problems. International law has certainly to play a decisive role in the future amongst basic regulation means of our technical and economic system, but presently, it is far to have minimum efficient instruments of control and sanction.
Is there a chance that these various elements could achieve a decisive threshold of efficiency?
This is the last point of my paper.
I cannot develop all aspects of this question. Let me only underline one of the completely new characteristics of the capitalist system in our time: it has become a completely close system, ruling the entire planet, and has no more space to expand. This is a serious problem because capitalism is highly unbalanced system which could only survive in the past by conquering and plundering precapitalist socio-economic systems. It means that the extensive mode of expansion capitalism used in the past is now out of order. The system can only use the intensive mode of expansion, based on continuous scientific and technological innovations, which are not possible without an educated and skilled manpower.
Finally, at the end of this short review of some aspects of the regulation problem, I would like to stress two points:
First, the socio-economic system cannot go backwards
Scientific and technological advances will not be annihilated; worldwide management capacities, tools, structures and practices of all institutions working at a global level will not be forgotten and will remain active. Global capitalism has created a material basis for managing its activities at a global level. This basis develops simultaneously with global environmental problems, and if there is a possibility to deal with these problems, this basis has to be used, at least as concertation and coordinating means.
Secondly, the regulation of our socio-economic system according to ecological constraints will be possible only by taking into account long range objectives and the common interest of the whole population of the globe
For the moment, global capitalism regulating means are only working for the interest of a minority, and this paves the way to intense social conflicts for the defense of human rights and the expression of people needs. Only if the large majority of human beings will be able to exert their reponsibility in the management of the global socio-economic system, we will be likely to succed in regulating it according to ecological constraints. In my opinion, highlighting this link between ecological constraints of the Earth ecosystem and people struggles for democracy and justice is the most important issue of this conference.
Melbourne, October 1997