O/E/D; The Capitalist Consensus

Chapter Three:
On The Systems of Oppression
Understanding Deliberate Maldevelopment

“The hand you hold is the hand that holds you down.”

The Capitalist Consensus

It cannot to be said with a straight face that embrace of neoliberal trade and structural adjustment have resulted in true or equitable economic growth. Out of the Latin American nations only Brazil, Uruguay, Argentina and Chile exhibited growth between 1950-1980; only Chile has sustained it under the rule of a US backed military dictatorship and very extensive tinkering by the American Chicago School. All former Socialist countries have declined in GDP except Poland, some into poverty far worse that the American Great Depression. Sub-Saharan African nations have all gotten much poorer; extreme poverty is in fact growing (Rodrick, 2002). It is widely agreed using the Palma Index that inequality is far more pronounced in developed and developing nations alike than had been though under the GINI measurement. 85 people control the wealth of the bottom 3.5 billion (Oxfam, 2014). Asian Tigers (South Korea, Singapore, Taiwan, and Hong Kong) exhibited growth but are markedly small countries all of which were under highly authoritarian rule for the bulk of their economic expansion and all had crashes in 1997 and 2008. Disruptive financial crises have plagued Mexico, Argentina, Russia, and Turkey. Even Southern Europe is bankrupt.

Nations such as Vietnam, India and China have refused all such neoliberal shock therapy and emerged gradually into strong market economies (Rodrik & Subramanian, 2008). China itself responsible for pulling over 680 million people out of poverty and is now driving a very different kind of development scheme in Africa.

Shock Therapy in particular and Neoliberalism in general is a means for American and Europe to carry out economic dominance wrapped in the veneer of sophisticated economics. The Soviet command economies collapsed because they could not efficiently regulate the market forces. People such as Jeff Sachs and Milton Friedman have advocated withdrawing state subsidies, rapid liberalization of domestic markets and large scale privatization. We would advise you not to allow foreigners to rape your economy. You will be simultaneously crippling your civil service sector, allowing economic advisors to dictate your policies and the only comparative advantage that will emerge is that you will be heavy debt to the World Bank, foreigners will control your assets and your people will be working in sweatshops. That is a high price to pay for some sneakers.

As of today you are neither a net exporter nor importer. In a very tangible sense although your resources are limited and you do not possess a body of technocratic expertise or specialization of sectors and are currently de-linked from the global economy. We advise the ministry from a position of careful economic and historical study. Clearly there is valid middle way in the global financial architecture that does not necessitate choosing between economic extremes. On the one side we have a choice of free markets borrowing from the World Bank, specializing for efficiency; allowing direct foreign investment and leveraging a perceived comparative advantage toward better competition on the international market. On the other you have notions of selective embrace of structures that allow us the maximum levels of autonomy and variety.

Clearly you exist in a globalized economy and a wide body of precedent supports caution in engaging within it rapidly. Looking at the Haitian, Guyanese and Tanzanian examples we need how disastrous it can be to presume that one can uncouple their markets completely. Or in Cuba’s case in the 90’s be tied to only one superpower. Or in Russia’s case to allow oligarchs to quickly buy off, carry off your state assets. There are wide range of consumer and industrial products your citizens may desire to buy that cannot be efficiently produced in your country. That then said we would caution against your borrowing heavily from the IMF or agreeing to any economic terms which link privatization and deregulation. You risk “immiserating growth” (Bhagwati, 1958) where by the hegemon powers can renegotiate trade terms against your interests and cut deals via their supposedly more sophisticated market instruments.

Follow the middle road. Play emerging BRICS bank off World Bank. Allow for clear and direct technical assistance for resource access schemes as pursued by China and Cuba. Make sure all natural resources are utilized to propel domestic scholarship, diversify your economy, maintain that no foreigner can buy land or have controlling stakes in domestic businesses and whatever you do; do not believe that economics is a science. It is more of a witch craft.

On Relative Poverty

Poverty is not like weather conditions or the fate of a romance. It is result of deliberate and planned social policy, utilized to exploit the productive power of the vulnerable at the lowest possible wage or extract the resources from a powerless of corrupt regime collaborating with a hegemon power.

Poverty is pervasive multi-dimensional suffering that is the result of deprivation. It is an integral violation of human rights and an assault on human needs. Poverty is found everywhere, but hidden in plain sight at the core. Measuring poverty is controversial, so they do it as often as they can changing the yard stick every decade or so. First by GDP, then HDI now MDPI. However they (they being the United Nations and NGOs) are relaying on data provided by the 206 governments; all on massively divergent levels of capacity, transparency and ability to conduct a meaningful census.

Relative poverty is not like purchasing power parity, poverty is actually a reasonably objective multifaceted assault on wellbeing caused by deliberate distributive inequality. The solution to poverty in any country is a massive investment in healthcare, education and infrastructure. The kind that the Soviet Union (Russia), China and Cuba used to convert nations of starving, illiterate serfs and peasants into economic super powers. But the Development Enterprise is not actually about alleviating poverty it is about structural adjustment, wrapped in the form of an imagined humanitarian imperative to socially engineer and tinker with globalized supply linkages. Development in Europe yielded the world order of the North West as the US pumped reconstruction money into war ravaged former imperial powers. The final result was the Bilderberg group to coordinate policy and the World Bank to set up lending to third world nations and elf proclaimed neutrals.

Poverty according to the United Nations has halved with 680 less humans living at 1.25 a day since 2000. That has been attributed to China and India’s rapid ascent not development NGOs and aid. In Sub-Saharan Africa, Central Asia and Haiti extreme poverty doubled in the same period. If we can get our head around this rough estimate that 3.5 billion humans throughout the five zones are living below $3.00 a day and that up to 5 million humans are under $10.00 a day and that means family per day; then we see poverty as very pervasive social phenomenon. Relative poverty is the idea that living at $4.00 a day is somehow normal in a place like Brazil or Haiti. That these people should consider themselves fortunate to not live in extreme poverty, or absolute poverty. I will assure you that no matter what nonsense you tell me about purchasing power parity; a plate of basic food in a Styrofoam tray in Brooklyn costs $5.00, in Sao Paulo costs $3.00 and in Port-Au-Prince costs $1.25; but I assure you in all three places living even at $10.00 a day is burden.

The GINI coefficient measures income inequality. The Palma does the same calculating for the radical jump in the upper quintile. Oxfam says that 85 people have as much wealth as the bottom 3.5 billion, said it before and might say state it one more time before the essay is over.

Relative Poverty is a relative term, all forms of poverty are a hardship, humiliation and violation of human rights. But for the sake of this argument let us call relative poverty awareness of ‘starving in the shadow of plenty’, while absolute poverty is simply knowing you are starving and about to die terrified and abandoned.

On Absolute Poverty

The oft repeated number is that absolute poverty means living at or below $1.25 a day and that there are 1.2 billion such people living at that level of deprivation mostly in the semi-periphery and periphery. Absolute poverty is a type of death sentence. It is the result of governments making choices. Choices such as buying armies not building schools. Choices such as stealing the tax payers money and putting it into Swiss Bank accounts not health spending. It is the systematic usage of the state architecture as means to steal from one’s own people. Corruption is so widespread, such an accepted reality that it is heard to even grasp what separates most politicians from polished thieves. Africa is notorious for this, but it is present in all governments.

Absolute poverty and relative poverty occur because of expropriation. Governments make decisions, rational decisions to spend on certain things. The United Nations is the global non-binding world government. Well-fed and well leveraged their diplomats have codified a shockingly prolific array of documents extolling each other forward toward a brave new and verdant world.

But poverty persists because of political choices. The choice between a well fed, literate population healthy body and mind is where the rhetoric truly crumbles away. For starving and dying of preventable disease in the ball mark of a billion lie and die a vanquished mass of human kind. A choice was made and policy signed that all of oligarchs could find no issue with; poverty is the price that is paid to keep us on our plantations.

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