Globalization: from above or below?

Interview with Richard Falk on strategies for changingthe IMF, the World Bank, and NAFTA

By Metta Spencer (interviewer)

METTA SPENCER: As a peace movement, I think we should give some thought to the lack of democracy in the process of globalization. I know you are doing some writing on this issue. Tell me your suggestions.

RICHARD FALK: Basically it's important to allow citizens-voluntarily organized-to participate more directly in the decision-making institutions of the world. This means challenging the influence of global market forces and trying to force states to take account of what their citizens want, as well as what the global market prescribes in terms of efficiency and profit margins and so on.

This is partly an educational matter. People need to learn that the global market is creating a non-sustainable human future by promoting a consumerist ethos that can't be realized without destroying the foundation of life on Earth. So this countervailing force that we are creating is driven by the impulse to protect the environment and those who are being victimized by the mobility of capital. But there is no quick fix to these developments. A dangerous relationship is evolving between the market and the state.

SPENCER: Institutionally, what do we have to do to turn that around?

FALK: I've come to think that the crucial struggle is to reorient leading states and let political leaders-starting with Clinton-know that they cannot succeed merely by carrying out the agenda of the global market. Despite having Gore as an environmentalist and Vice-President, he's been tilting toward these global economic forces.

SPENCER: Gore supported NAFTA. What's your analysis of it?

FALK: It's a prime example of the program of large capital. It was enacted despite the opposition of most elements of organized labor, most minorities, most liberals, religious, and environmental groups-the very groups on which the Democratic party is dependent. This is what I call "globalization from above"-by the authority of the state. I think that needs to be neutralized by what I call "globalization from below" as a countervailing force.

SPENCER: Isn't that the long way round it, this working from below?

FALK: We don't know enough about the dynamics of change to be able to say. Nobody anticipated the changes in Eastern Europe or in the Soviet Union or in South Africa or a number of the other drastic changes that have come about in the last 10 years. Such changes would have seemed very remote a decade ago. We don't know whether indeed this is the long way around, but I'd argue it's the only way to get there from here.

SPENCER: So, what do you tell people they need to do? Remember, it's the peace movement that we're addressing here.

FALK: First it's important to sense how the world has evolved and then to find a specific place to struggle where citizen participation is possible and necessary. One place is in relation to the formation of world economic policy. Try to challenge the notion that the IMF [International Monetary Fund], the World Bank, and the Group of Seven should be without any effective participation by non-Western peoples or by the NGO [Non-Government Organization] community. A politics of transnational democracy is needed as a foundation for opposing corporate or capital-driven globalism. We need to form a people-driven globalism in order to create an equilibrium with this market driven globalism.

SPENCER: How would you get representation on something like GATT [General Agreement on Tariffs and Trade]?

FALK: It's a matter of participating sufficiently in a given area so that one knows what the issues are and where the adverse human effects are likely to be felt. The environmental groups were very effective in doing this in relation to Antarctica and some of the ocean issues, the protection of whales. Greenpeace has been very effective. We need similar groups who are both observing and engaging as activists to monitor the world economy and the U.N. system.

Start getting alternative information through the whole electronic Internet. It offers potential for building democracy of a new sort-democracy that isn't focused on elections. People in the peace movement should regard it as a valuable potential resource because information is an important source of political leverage.

SPENCER: But how are you going to get a seat on the IMF or the World Bank? Whom would you want to put there? How should we choose these people?

FALK: One could have asked the same question 60 years ago about the Supreme Court. How would you get a woman or a black onto the Supreme Court? You change the climate of opinion so that persons with different sorts of sensitivity will be proposed. Then you try, through direct action, lobbying and by using political techniques,depending upon the situation, to exert influence.

SPENCER: I don't believe in federalism very much. It seems to me, the higher one goesin a federal pyramid, the less democratic input one can have. I'm not optimistic about how democratic a lot of the large structures being formed will be-take the European Union for example. Even with the European Parliament, it seems to me it's run by bureaucrats.

FALK: I partly share your point of view but, on the other hand, the federal government is responsible for the promotion of civil rights in the United States in a way that more locally-based governments would not be willing to do. Both have their problems. You are definitely right about the loss of efficiency and compassion in a large bureaucratic setting, but it's also true that local communities can be bastions of reaction or terrible oppression.

SPENCER: And nationalism.

FALK: And ultra-nationalism.

SPENCER: I'm less worried about globalization than its opposite, secession. They are related. I don't know conceptually how to hold together these two trends-globalization, combined with fragmentation at the national level. I don't know why they are happening together. They must be two aspects of some common process.

FALK: I think so. I've tried to argue in this essay I've just finished that it is the failure of the secular state. Because it's being appropriated by the global force, the state is no longer able to provide a basis for human identity. Therefore these more fragmentary kinds of identity tend to become more important. That's certainly true in the Islamic fundamentalist reaction back-lash against globalism. One saw it clearly in the Iranian revolution.

SPENCER: Do you think it would apply to the Soviet case?

FALK: I think that when there's a breakdown of state legitimacy and capability to solve problems and to impose the centralized will on the political community -- when that breaks down, then both suppressed sources of identity and alternate sources of identity become more prominent. And I think that is part of the dynamic of both the former Soviet Union and the former Yugoslavia.

SPENCER: Many of my Soviet friends were glad to see the Soviet Union break up, and that surprised me. Another thing that surprised me was how fervently most of my Soviet peace friends supported the Gulf War.

FALK: I share the view that it's simplistic to have been enthusiastic either about the Gulf War or the breakup of the Soviet Union as it occurred. It expressed a perception that the Soviet Union was essentially an empire and that the principles of self determination, applied to the Soviet Union, would result in its breakup. I think that was the essential understanding there. And as far as the Gulf War was concerned, it was a compound of a lot of different things. Some people thought it was important to empower the U.N. to confront outright aggression. A member country had been annexed by the conquering country, which has never happened before in U.N. history and if the U.N. couldn't deal with that, it would be totally discredited.

SPENCER: At that time, the U.N. was momentarily riding high. It has certainly fallen on harder times since then. Do you foresee a way in which U.N. reform has any chance? And is that an approach to solving the problems of globalization?

FALK: I would have said so three years ago but now I'm very skeptical of the U.N. as receptive to meaningful reform. I think that the most that one can expect is some expansion of the Security Council, and that won't be meaningful.

SPENCER: Just putting some more folks on it?

FALK: I even doubt that will occur. It's likely nothing will happen, at least for a few years. No, I think that would be pretty much a waste of time.

SPENCER: U.N. reform as a campaign would be a waste of time?

FALK: That's right. A lot of good things have been proposed that should be nurtured by people in the peace movement for a more hopeful moment. But in terms of political projects, I think the prognosis is very poor.

SPENCER: I'd like you to flesh out your ideas of how to get a more democratic system of international finance. Where do we go from here?

FALK: It's not easy. This whole area has been unregulated, the banks and corporations are secretive-and it's the kind of secrecy that's respected. Banks are considered very respectable but they hide essentially dirty money all over the world in large sums.

SPENCER: I have a friend who is an ethicist in the business school and several years ago he was saying that we should enact Canadian laws requiring all banks to disclose where they have their money and what their plans are. I bet if you did that to Canadian banks, you had better get ready for a flight of money. You'd have to do it on some larger scale than at the nation state.

FALK: I don't think you can because there are too many countries that benefit from providing havens for banks. The banks don't go to the Cayman Islands for the scenery. I've thought about it a lot. The BCCI [Bank of Credit and Commerce International] scandal was a very important event. We're dealing with forces that are extraordinarily difficult to challenge -- but if they are not challenged, any sort of global democratic process will be very marginal.

SPENCER: Well, there's the dilemma. You'd have to do it on a global scale -- the World Bank, or....

FALK: I think the World Bank and the IMF are somewhat vulnerable because not only are individuals criticizing them, but also countries. Third World countries have been victimized.

SPENCER: So, the trick is to get enough democratic input at that level so that you can do things of that sort.

FALK: Exactly.

SPENCER: I don't think we're going to do that tomorrow.

FALK: It would be self-deluding to think that one could have much impact by addressing only things that might succeed in the immediate future.

SPENCER: But there might be small steps. Can you see any baby steps in that direction?

FALK: Not beyond trying to develop a framework for thinking about these problems. Is that a baby step? One needs to attack the fundamental structures, and that's not easy.

SPENCER: Do you know any organizations who are doing that?

FALK: Oh, sure. There is something called "The Other Economic Summit" -- TOES. Many initiatives are scattered about the world, including several interesting ones in Japan. Nothing has coalesced in a major way as yet, but it could happen.

SPENCER: The groups that try to block something like NAFTA tend to approach it from a nationalistic perspective: "We don't want globalization, period!" I'm ambivalent about that because I'm not very nationalistic and also I think there must be some kind of globalization, that we want to encourage but I don't know what it looks like.

FALK: Nationalism may in some ways be a healthy political reaction in relation to an unregulated global economy that is not accountable to anyone other than its own shareholders. Despite the many difficulties of nationalism, and the pathological forms it's taking in certain areas, it may be a necessary reaction to a premature globalism.

SPENCER: Do you know what a "mature globalism" would look like?

FALK: There would be much more participation from below and accountability from above. As matters now stand, the globalized economic actors are really on their own. They operate all over the world. If they don't get what they want, they shift their locus of operation. The banks can hide money stolen from poor countries and won't allow its recovery. If the Philippines could recover the money that the Marcos family stole and deposited in Switzerland, it would have no foreign debt now.

SPENCER: I thought they got some of it back.

FALK: A trivial amount.

SPENCER: Who's got it now?

FALK: I don't know who is entitled to withdraw the money but Switzerland has these cantonal regulations and they were smart enough to put most of the money in the cantons that make it the most difficult.

SPENCER: It's still sitting there, compounding interest?

FALK: They don't pay interest, you see. The banks get richer on the dirty money than on the clean money, in exchange for the secrecy.

SPENCER: They don't pay interest! So really it's swindling!

FALK: It's high-level white collar crime because you're handling stolen goods in very large sums.

Metta Spencer is the editor of Peace Magazine.

Peace Magazine Nov-Dec 1994

Peace Magazine Nov-Dec 1994, page 11. Some rights reserved.

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