1990s >> 1999 >> no-1134-february-1999

World View: ‘USA: The Fallacy of the Free Market’ and ‘Middle East: Thirsting for Conflict’

USA: The fallacy of the free market

The illusion that is peddled by sharp-suited government spokesmen on television about the benefits of the free market system is just that—an illusion. Every government in the world is in favour of free trade when their owning class is in a favourable position to compete and in favour of protectionism when some competitor from another country has the drop on them.

The British toadies of capitalism are bad enough but, in the USA the hypocritical posturing of the worshippers of the market system is truly nauseating. As the foremost industrial and commercial power in the world, the USA is loud in its praise of free trade as the cure-all for social problems. In practice, though, it often favours the strictest protectionism and some recent examples from the Press starkly prove this.

The notion that it is the soundest economic wisdom to “buy in the cheapest market” may be all very well for American academic economists to expound in the ivory towers of university and business schools, but in the USA when they find that their home produced commodities are being undercut in price the capitalists appeal to their government to protect US products from “unfair” competition. They call any competition at which they are losing “dumping”:

“Anti-dumping duties are a frequent recourse of the US government when faced with a trade problem. As the US trade deficit has mounted, pressure for duties has mounted, pressure for duties has increased rapidly and 36 petitions for anti-dumping have been received by the government so far in 1998, compared with 16 for the whole of last year. Most concerned imports of steel products . . . Ominously, William Daly, the US Commerce Secretary, has invited US manufacturers to make his anti-dumping staff ‘the busiest people in town’ . . . .” (Independent on Sunday, 22 November.)

The US exporters of Chiquita bananas, produced in Central America, used their political muscle to combat the European Union’s favourable trade terms for Caribbean bananas, and got the US government to slap 100 percent duties on such products as sheep’s cheese from the EU to the US. The American Financial Group, who own Chiquita, have recently given $1 million to Democratic and Republican politicians to fight the Caribbean preference which the they claim has lost Chiquita $1,000 million in earnings since the EC ruling of 1983 in favour of Caribbean bananas.

Behind the threats and counter-threats of a trade war the US and the EU are playing for higher stakes than are represented by bananas and sheep’s cheese:

“Andrew Hughes Hallett, professor of economics at Strathclyde University, believes we need to peel back the skin on this row to understand it. ‘I suspect it isn’t about bananas at all and it isn’t about protecting poor farmers either in St. Lucia or Honduras. It’s about political pressure in Washington and Brussels . . . In the EU this dispute is tied up with the power of the agricultural lobby. It’s like a bargaining chip. France is prepared to support Britain which is keen to get a favourable deal for its former colonies, so Britain will be more supportive of France on other issues affecting French farmers’.” (The Herald, 24 December.)

All over the world the US government pursues a policy of free trade or protectionism, whichever is most beneficial to US economic interests, but it is from New Zealand that we learn of the naked power of the US being used to force its products down the throats of unsuspecting consumers.

As the world’s biggest producer of genetically modified food, the US does everything in its power to protect the global ambitions of the agri-chemical firm Monsanto. It is increasingly concerned about European reluctance to accept genetically modified foodstuffs without proper labelling and testing.

In reply to criticisms of the British government that it was being pressured to accept US-produced genetically modified foodstuff, Tony Blair hid behind the cloak of secrecy when he replied:

“By convention it is not the practice of governments to make information on such meetings, or their contents, publicly available.”

In New Zealand no such convention applies and it was revealed in cabinet minutes that economic pressure was being applied to the New Zealand government to accept genetically modified food:

“The Cabinet Minutes, dated 19 February 1998, state: ‘The United States, and Canada to a lesser extent, are concerned in principle about the kind of approach advocated by Anzfa [part of the Australia New Zealand Food Standards Council], and the demonstration effect this may have on others, including the European Union. The United States have told us that such an approach could impact negatively on the bilateral trade relationship and potentially end any chance of a New Zealand-United States Free Trade Agreement.'” (Independent on Sunday, 22 November.)

So there you have it. Blatant economic threats, undisguised self-interest, and no recourse to such fine rhetoric, so beloved by US politicians, as the “free world”, or hypocritical cant about “democracy and the freedom of choice”.

Capitalism is a horrible society—let’s get rid of it.

Middle East: Thirsting for conflict

Ismail Seageldin, vice-president of the World Bank, made a disturbing prediction in 1995: “Many of the wars this century were about oil, but the wars of the next century will be about water.” It was a comment that was to find many echoes at a meeting of UN hydrologists and meteorologists, convened by UNESCO in London back in November.

According to scientists, 7 percent of the world’s people do not have enough water to survive. With the world’s population set to rise by an India every ten years, by the year 2050, with a global population in excess of 10 billion, 70 percent will have an insufficient supply of water.

With similar facts in front of them, the London meeting agreed to a decade-long campaign to highlight the case for urgent action. UNEP (United Nations Environment Programme) has already started the ball rolling and committed itself to making water disputes a priority, currently mediating in disputes in the Zambezi river basin and in the stand-off between Peru and Bolivia over access to Lake Titicaca.

From Africa, which has 19 of the 25 countries with the greatest number of people lacking access to clean water, to Central Asia, where 5 countries contest the Amu Darya and Syr Darya rivers, conflict could indeed break out at any moment, and ironically over the world’s most abundant resource.

There is so much water that, shared out, each person could have 100 billion litres. Of course, 97 percent of this is sea water, and of the remainder only 0.8 percent is accessible. Still, taking into account that a person’s annual requirement is one million litres, there is still enough. The point is that it is not evenly distributed throughout the world and some countries control much greater resources than others. If we add to this the fact that three-quarters goes on growing food, and that a lot is lost through drainage, poorly constructed channels and evaporation, then we really understand UNEP spokesman Klaus Topfer when he declares that the “potential for water disputes is great and the issue needs urgent political action” (Guardian, 2 November 1998).

Egypt anticipates that its population will double to 110 million within 35 years. Even now it is faced with a water shortage and has for some time imported “virtual water”—grain and other foodstuffs which removes the necessity to use water for home-grown food. Egypt finds itself in the unique position of being totally dependent on the Nile, a river whose flow and tributaries are controlled by 8 other countries.

Already, Egypt has rattled its sabre at Ethiopia, which controls 80 percent of the supply and which has embarked upon a series of dams and irrigation schemes along the Blue Nile and, which if extended, would also interfere with Sudan’s supply.

With Egypt looking to irrigate reclaimed desert along its northern coast and needing to increase its share of Nile water by 15 billion cubic metres per year, and with a further 8 countries seeking to increase their share, it takes no great leap in the imagination to see how water is increasingly dominating Egypt’s foreign policy and why Egypt sees the taking of more water by its neighbours as an act of war.

At the other end of the scale, Turkey possesses an abundance of water and has primary control over the flow of the Tigris and Euphrates—rivers that both Syria and Iraq are heavily dependent on.

In 1984, Turkey began the South Eastern Antollia Project at a cost of £20 billion—a mammoth effort to construct 22 dams, 19 hydro-electric plants and thousands of miles of irrigation channels.

As Turkey directs more and more water for its own use, Syria and Iraq feel that should they upset their northern neighbour, water could be used as a weapon, and thus are anxious not to upset the controller of their water supply. Turkey has already used its control of Syria’s water to great effect, forcing Syria to withdraw its support for the Turkish Guerrilla movement, the PKK. And it’s a fair bet that Turkey’s political might will be felt further in the region when the 1984-begun project nears its completion in 2005.

Forty percent of Israel’s water depends on territory occupied in 1967 and still not handed back. Studies of hydrologists’ maps further reveal a pattern of settlement construction in the “occupied territories” along the ridges of aquifers suggesting a wider Israeli game plan to control an increasing share of the region’s water.

Interestingly, at a time when Israel is losing interest in Gaza, it can be found that Gaza’s groundwater is sinking by 8 inches per year. Just as it’s a fact that Israel controls 80 percent of the Palestinian water supply, so too do we find 26 percent of Palestinians with no access to clean water while the average Israeli consumes three-and-a-half times as much water as those Palestinians fortunate to have access.

Meanwhile, Israel’s continuing control of the Golan Heights and south eastern Lebanon enables it to guard a series of pumps and pipelines which moves the Jordan’s water throughout Israel and as far north as the Negev desert.

Israel’s case is echoed the world over. In the former Soviet Union, while the Aral sea continues to shrink because of HEP plants and irrigation, five countries are becoming increasingly dependent on its diminishing waters.

Sensing trouble ahead, the UN adopted a convention on international waters in 1997—basically a framework for sharing rivers and lakes. Before it can become operational it requires 35 signatories. So far only 11 have signed—such is the reluctance of governments to sign such a valuable resource away.

In an age when we have the scientific and technological know how to enable us to solve almost all our problems, it is indeed an indictment on capitalism that so many humans, living on a planet, seven eighths of which is covered in water, have so little access to it. With the ever-present drive to cut costs and make profits, it is little wonder that better irrigation and improved channels are as rare as desalination plants and reservoirs? What wars our master will plunge us into in the coming millennium is anyone’s guess, but among them don’t be alarmed if the cause of many is water and its control by a profit-crazed élite.

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