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The following article appeared in Left
Business Observer #71, January 1996. It was written by Doug
Henwood, editor and publisher. It retains its copyright and may
not be reprinted or redistributed in any form - print, electronic,
facsimile, anything - without the permission of LBO.
Since the heavily advertised death of socialism, if there's
an idea that unites much leftish economic thought today, it's
that globalization is the root of many evils. It's a strangely
amorphous enemy, one at odds with the usual progressive celebration
of diversity, and an interesting shift for a tradition that was
once deeply cosmopolitan.
An excellent laboratory for studying antiglobalism was assembled in New York in November by the International Forum on Globalization, "a project of El Bosque." El Bosque is a project of Doug Tompkins, cofounder of Esprit. The one delightful thing about the conference was the attendance -- 2,000, with a pleasingly low median age. Many more of these conferences are promised over the next few years.
The opening plenary, held in Riverside Church (a project of the Rockefeller family), assembled a long night's worth of speakers -- Maude Barlow (Council of Canadians), John Cavanagh (Institute for Policy Studies), Barbara Dudley (Greenpeace), David Korten (author), Ralph Nader, Carl Pope (Sierra Club), and Vandana Shiva (Third World Network). The MC was adman Jerry Mander, who believes that TV, which he hates, will soon implode of its own contradictions. Mander is on the board of El Bosque and is the program director for Tompkins' Foundation for Deep Ecology, whose funding was acknowledged, along with that of the Goldsmith Foundation.
Korten's book When Corporations Rule the World embodies a lot of the antiglobalist thinking common among progressive nongovernmental organizations (NGOs) and the philanthropists who fund them. The volume, subsidized in part by Tompkins, is blurbed by Archbishop Desmond Tutu; John Cavanagh and Richard Barnet, authors of Global Dreams; catalog merchant and economic moralist Paul Hawken; Doug Tompkins; and Teddy Goldsmith, editor of The Ecologist. The New Internationalist just reviewed it enthusiastically.
In his prologue, Korten says he was born "into a conservative, white upper-middle-class family" who ran a retail business in a small Washington timber town -- and the unexamined consciousness of a small-town worthy permeates the entire book. He went to Stanford, got an MBA and PhD; taught at the Harvard Business School, which he left for the Ford Foundation and then the U.S. Agency for International Development (AID). Korten shares these details "to establish the depth of [his] conservative roots" -- a theme that recurs in his hymns to Adam Smith. While with AID, Korten had an epiphany -- AID was too big, too bureaucratic, and too centralized, stifling local autonomy and initiative. He left AID for the NGO world, where people were "asking basic questions about the nature and process of development."
Korten exhibits an American distaste of big government, without noticing that the U.S. has one of the most decentralized state systems on earth. This decentralization has accomplished not local "empowerment" (a word that deserves a long vacation) but fragmentation, duplication, and bidding wars for corporate investment -- not to mention Jim Crow laws.
It's common in quasi-radical thinking to imagine a Golden Age
with a better set of rulers, now displaced by vile usurpers. In
the old days, says Korten, "rich and poor alike...shared
a sense of national and community interest." So "the
problem is not business or the market per se but a badly corrupted
global economic system that is gyrating far beyond human control.
The dynamics of this system have become so powerful and perverse
that it is becoming increasingly difficult for corporate managers
to manage in the public interest, no matter how strong their moral
values and commitment."
When was this Golden Age? The 1960s, when GE was filling the Hudson with PCBs? The 1930s, when Chase was banking with Nazis? Or the 1890s, when Carnegie's Pinkertons shot strikers? Was it the 1850s, when British industrialists kidnapped children to work in their factories, and when the locally owned bakeries of London worked their staffs up to 20 hours a day to produce bread fortified with, in the words of a contemporary, "a certain quantity of human perspiration mixed with the discharge of abscesses, cobwebs, dead cockroaches and putrid German yeast, not to mention alum, sand and other agreeable mineral ingredients"?
Golden Age myths belong to literature, not nonfictions, but even there they vanish on close inspection. As Raymond Williams tells it in The Country and the City, Leavis' 1930s culture lamented the loss of the "organic community" of the turn of the century; just before the century's turn, Hardy wrote of the lost England of the 1830s; the 1830s had Cobbett writing of the paradise of the 1770s...on back to Piers Plowman. In the Golden Age mode, says Williams, a feudal order is idealized as more "natural"; sure enough, one of the globalization conference panelists described the Middle Ages as a time of "real community." But, for "the uncountable thousands who grew crops and reared beasts only to be looted and burned and led away with tied wrists, this economy, even at peace, was an order of exploitation of a most thoroughgoing kind: a property in men as well as land; a reduction of most men to working animals, tied by forced tribute, forced labour, or 'bought and sold like beasts....'"
Antidevelopmentalists typically complain about how big business
stokes the desire for things to keep the flywheel of consumption
turning. Korten holds up Nike as an example of "the distortions
of an economic system that shifts reward away from those who produce
real value to those whose primary function is to create marketing
illusions to convince consumers to buy products they do not need
at inflated prices." But capitalism has always been a system
that shifts rewards away from the real producers of value. And
illusion-makers are not the prime reward-getters -- senior managers
and stockholders are.
Greenish postmoderns, their elitist asceticism never far from the surface, prefer to talk about consumption rather than the ownership and organization of production. Sure Nike exploits the hell out of Indonesian workers to make big money on overpriced sneakers, but there's nothing fundamentally wrong with the desire to wear stylish shoes.
In a rant like Korten's, the list of woes barely admits any progress -- the lengthening of lives, the reduction in infant and maternal mortality, the partial liberation of women, the spread of literacy -- in the First and Third Worlds. Of course there's a chasm between what is and what could be, but what could be depends a lot on what is. It's evil that Merck will steal plants from indigenous people and then patent them, and be protected for doing so under international trade law, but the plants wouldn't do much good if it weren't for some large, complex organization to develop and process them. Socialize Merck, don't dissolve it.
In developing a prototype for utopia, Korten points to a group
of countries that Alan Durning of the Worldwatch Institute called "sustainers"
($700-7,500 per capita income), vs. the "overconsumers"
($7,500+) and "excluded" (under $700). These correspond
to what the World Bank calls, respectively, middle, high, and
low-income countries. To Korten and Durning, the middle group
(which includes Indonesia, Mexico and Russia) offers the model
of a sustainable life.
Those middle-income countries have, on average, life expectancies 9 years shorter than the high-income (77 vs. 68); a female illiteracy rate of 30%, compared with less than 5%; an infant mortality rate of 39 per 1,000 live births, vs. 7. They include the victims of the structural adjustment programs that antidevelopmentalists rightly criticize; it's strange to see them as models. It's especially strange that a Malthusian should, since the "sustainers'" population growth rate is three times that of the rich countries.
Korten, who even mentions Malthus by name, gingerly endorses the goal of bringing the world's population down to 1-2 billion from the present 5.7 billion, though without saying how. Malthus, at least, was honest enough to advocate the promotion of death: "Instead of recommending cleanliness to the poor, we should encourage contrary habits." Korten probably isn't a partisan of mortality-promotion, but advocating the disappearance of billions of people without saying how invites terrible speculations.
Globalization is shorthand for our evolution into a single
borderless economy, with free flows of money and goods, under
the dominance of several hundred giant corporations. LBO has spent
a lot of time denouncing those things, but never out of a nostalgia
for a past that never was.
The demon of the book -- like that of many populist screeds, left and right -- is the "corporation." To Korten, corporations betray Adam Smith's ideal of competitive markets, by reaching for monopoly and smothering "local enterprise." He seems unaware of Karl Polanyi's claim that free markets impose an unbearable discipline on participants, resulting in deflation in the economic realm and atomization in the social. Korten seems equally unaware of economic history. Despite myths of free competition among small producers, early capitalist Britain was plagued by local monopolies; a town often had a single baker, a single brewer, rather than an array of vendors in benign competition. It wasn't until the development of national markets that real competitive markets developed.
Early capitalism wasn't as local and personal as myth has it; from its beginning it was deeply international. In the U.S., early 19th century merchants imported British industrial goods and exported cotton, acting as financiers at every stage. Their financial arrangements, in Alfred Chandler's words, were a "long chain of credit stretching from the banks of the Mississippi to Lombard Street" in London. Rarely did merchants know the consumers and producers they brought together, a commerce accomplished through a "long chain of middlemen, transporters, and financiers who moved the goods through the economy." Moving a good and its payment from one place to another required a long chain of credits; every player was on the hook to someone else. When the chain was broken, the disruption quickly spread -- one reason for the severity of 19th century financial panics. For all the complaint about modern instability, the 19th century was far more volatile, with panics leading to depressions every decade or so. This was the Smithian market -- anonymous, atomized, unstable.
Market apologists always ignore the costs of market transactions -- comparison shopping takes time, and there's always the risk that you may get burned in any deal -- which can be reduced when things are done within the walls of a single firm rather than through outside markets. While many crimes, from price-fixing to murder, aided the creation of the modern giant firm, there are great advantages to be gained from planning production on a larger-than-local scale.
Along with globalization, another of Korten's usurpers is money,
specifically the landless, unreal kind that flows through fiber
optic cables. Of course the reign of money is horrid, and even
absurd, but under capitalism people work and do business for money;
money is one of our most fundamental principles of social organization.
The end of capitalist production is profit, which comes in money
form, and people who accumulate capital have long shown a propensity
to keep it in as liquid a form as possible.
It's no surprise that a system run for money would devise exotic ways of multiplying it. Korten rightly decries the financial explosion, the $1.2 trillion hurtling about the globe every day, as the volatile, pointless-to-destructive force it is. But it's as difficult to separate finance from capitalist reality as it is to separate money itself; finance is money evolved into more exotic forms. Nor are the exotics recent inventions; futures markets go back a century, options go back three, and foreign exchange gimmickry goes back seven or more. British foreign holdings a century ago were far larger in relative terms than anything seen today. To lament the way money can accumulate while leaving human needs unmet is to lament capitalism, not some recent mutation.
At the end of his book, Korten offers a vision -- of disarmament,
tolerance, gender equality, less consumption, global trust-busting,
debt writeoffs, the transformation of international financial
institutions into democratic, cooperative institutions, voluntary
executive salary caps, grassroots democracy, etc. He offers a
vision of "a market economy composed primarily, though not
exclusively, of family enterprises, small-scale co-ops, worker-owned
firms, and neighborhood and municipal corporations."
Much of this is desirable. But it would be impossible to run a complex economy on this scale only; it's easy to imagine furniture being made this way, but not trains and computers. If Korten means to do away with trains and computers, he should tell us. Leaving aside the matter of scale, any significant restructuring of the ownership of production would be taken as a fight to the death by the existing owners.
But that's not a worry for Korten, because there will be a revolution in consciousness, which will unleash a new cooperative spirit "of those within the system -- including those who head our major corporations and financial institutions -- in addition to the efforts of citizen movements working outside it." There's a habit in books like this to present what seems like a reasonable set of demands and think our rulers will suddenly slap their foreheads, saying, "Ah! We were wrong!" There's no awareness that a serious transformation of corporate behavior would require a serious political threat to private ownership; without that threat, even New Dealish reform is impossible. Instead, Korten points to "an obvious solution: create societies that give a higher value to nurturing love than to making money." Gosh, yes, that would be nice, but how do we get there? Some powerful people don't find that solution so obvious.
Korten and the antiglobalizers are right that economic growth
doesn't necessarily make people happier, and often makes them
miserable; that institutions like the World Bank have made the
rich richer while making the nonrich poorer; that conventional
ideas of free trade are wonderful for managers and stockholders,
but hell on workers and nature; and that a turn away from the
accumulation of things and toward more humane pursuits would be
But to turn from that to a dream of local self-sufficiency is suffocating and reactionary. On this, Korten is outdone by some of his antiglobalizing comrades. Kirkpatrick Sale wants to smash computers and live like the Amish, who happily use antibiotics and sell their produce for cash while refusing to participate in industrial life. The ecofeminist Vandana Shiva views technology as a male disruption of the sacred woman-nature dyad, and advocates a "subsistence" economic model. Shiva, it should be noted, is more popular in the West than in India. As sociologist Swasti Mitter wrote in New Left Review #205, the Bangladeshi women workers she's studied in both their native country and London want jobs, training, and good wages, and do not want to return to their villages.
Shiva opened her talk at the conference by noting that one of the "positive externalities" of globalization was that she'd made so many good friends around the world. Korten's acknowledgments describe his book as "the product of an international collaboration" involving colleagues from around the world. If "globalization" can produce such desirable things as friends and books (even bad ones), perhaps it's wrong to name it as your main enemy.
It's ironic that people should rack up the frequent flier miles while touting the virtues of localism -- writing books and running institutes while telling the masses that they should stay home and tend to their lentils. This recalls T.S. Eliot's remark that "on the whole it would appear to be for the best that the great majority of human beings should go on living in the place in which they were born." At least Eliot, who was born in St. Louis but moved to London at age 26, was an avowed snob.
In its rejection of Marxism, much of the left no longer has a vocabulary for cosmopolitanism, and has apparently given up hope of transforming technology into something kind to people and the earth rather than to stockholders. Vast numbers of people are angrily scared of what the economy is doing to them, but foundation intellectuals, compromised by their blinkered vision and their funders' conservatism, are no place to turn for answers.
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Doug Tompkins, principal funder of the globalization roadshow,
established the Foundation for Deep Ecology (FDE) in 1991. In
1994, its assets were $34 million and it dispensed $2.5 million
in grants. Another Tompkins foundation, El Bosque Pumalin, is
oriented towards his new home, Chile, though based in San Francisco;
it has funding guidelines nearly identical to the FDE's. Tompkins
made his fortune co-founding Esprit with his ex-wife Susie Tompkins.
He preferred the title "Image Director" to his official
one of president and CEO.
The FDE defines deep ecology as "a new movement among westerners that rejects the prevailing anthropocentric (human centered) paradigm of technological society, in favor of a biocentric ethic and practice." Nature exists not as a life-support system for humans, but has its own "intrinsic value." Whatever this means in theory, in practice it's often quite anti-human. Tompkins' favorite theoretician, Dave Foreman, is one of the founders of Earth First!, the folks who spiked trees in the 1980s. Foreman, who dates The Fall at the development of agriculture about 10,000 years ago, welcomed an Ethiopian famine as nature's method of population control; a columnist named Miss Ann Thropy wrote in EF!'s magazine during the days when Foreman controlled it that AIDS, too, did valuable Malthusian work. Deep Ecologists, according to Kirkpatrick Sale, think that the human population of the earth, now approaching 6 billion, should be under 1 billion, with some bids in as low as 100 million.
Tompkins funds the Wildlands Project, guided by Dave Foreman, which aims to depopulate huge swathes of North America and return them to wilderness -- so that "grizzlies in Chihuahua have an unbroken connection to Grizzlies in Alaska," with "pre-Columbian populations of plants and animals." Unexplored is the need, said to be recognized privately by Project members, to reduce the human population by two-thirds for this "rewilding" to work. The FDE also funds the scary Negative Population Growth and Carrying Capacity Network. According to Jeff St. Clair of the Wild Forest Review, the FDE has the strictest Malthusian litmus test of any enviro foundation.
In an act of private rewilding, Tompkins bought 670,000 acres of Chilean forest for $12 million, making him the second-biggest landowner in Chile, and probably earning himself a giant U.S. tax break. His holdings, which divide the country in half, were assembled furtively, giving no clue of his intentions. He wants to turn the land into a park, which he will give the government, but Chilean nationalists are outraged. There is no question that Chile has been ravaged since Pinochet's coup, but some local enviros say Tompkins has done more political harm than ecological good.
Tompkins' stated principles don't stop the FDE's portfolio from holding stocks or bonds of Allstate, which insures cars; Citicorp, and three foreign banks, which fund the globalization the conference bemoaned; Fannie Mae, which greases suburbanization; Grupo Televisa, the Mexican TV network, a nice irony given their localist rhetoric and program director Jerry Mander's hatred of TV; HCA-Hospital Corp. of America; Telefonos de Mexico, which Wall Street viewed as a way of riding the NAFTA "boom"; and Wal-Mart, friend of small towns everywhere.
Those stockholdings reflect the hypercapitalist way Tompkins first made his money, selling stylish garb made in California and Third World sweatshops. In 1972, Esprit shut a factory in San Francisco's Chinatown after the workers organized a union; the NLRB rebuked Doug Tompkins' "paternalism" for seeing the union as an expression of "ingratitude." Esprit took 10 years to pay off the back wages the government ordered them to pay.
[Addition not in print version]
Asked to comment on this contradiction
between the source of his wealth and its present applications,
Tompkins told LBO: Maybe you have me confused with somebody else.
Another pot of money with a sleazy pedigree behind the Antiglobalization roadshow is the foundation started by Sir Jimmy Goldsmith, the well-born corporate raider who has now retired to statesmanship and philanthropy. While his articles denouncing GATT were widely circulated by anti-free-traders, his gifts to Margaret Thatcher were not. Goldsmith, the model for the yacht-based raider in Oliver Stone's Wall Street, had a rapacious career buying companies and shaking money out of them, with not a moment's regard for human or natural consequences. One of his last raiderly acts was the 1990 deal in which he swapped papermaker Crown Zellerbach for friend of the earth Newmont Mining. One of the cost-savings moves he made after taking over CZ in the 1980s, says St. Clair, was to sack the company's environmental scientists; it was one of the few papermakers that bothered to have any. And of course he fired up the chainsaws and went on a logging spree, as always happens when financial reasoning is applied to trees.
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