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by James Cooke
Monday, Oct. 30, 2006 at 5:57 PM
One’s opinion of the United Nations reveals a lot about political consciousness; and because perception is usually based on experience, it’s only natural that people from different countries have opposing views about the UN and its pillar institutions— the International Monetary Fund (IMF), World Bank, and the World Trade Organization (WTO). In the United States, familiarity of the UN is limited to vague notions of ‘international democracy’ and ‘peacekeeping’, words that inspire the noblest of intentions; the World Bank and IMF on the other hand are institutions that invoke little reaction among the US public. How and by whom the UN was formed, whose interests it serves, and the actual history of its ‘peacekeeping’ missions are all things rarely examined. It is the purpose of this essay to look at the formation and development of the UN, and in so doing, attempt to show the evolution of the capitalistic system itself, which was ‘reborn’ upon the back of these hardly-neutral organizations.
It’s impossible to understand the United Nations without first studying the buried corpse it was built over—the League of Nations. After World War I, the victorious allies sought to enrich themselves at the expense of the losers through the Treaty of Versailles. Afterwards, the victors consolidated their power by the giant political pact of the League of Nations. Although the League was first articulated by Woodrow Wilson’s propaganda spiel ‘Fourteen Points’, the United States refused to ratify it, opting for the later-proven strategy of isolationism. Wilson’s Fourteen Points was an attempt to explain the fundamental problems that lead to World War I. It was understood that the economic interests of different nations lead eventually to trade-based alliances, trading blocs, eventually finding expression in military pacts and warfare. This is why Wilson, in his third point, called for the “removal of economic barriers between nations”.
The League of Nations was riddled with problems unsolved from World War I. Instead of breaking down trade-barriers, the war created 17 new ones— the number of nations that emerged from the disbanded Ottoman and Austro-Hungarian empires. Germany, instead of being crushed, still retained a mighty industrial-backbone, which, like all industrial nations, would eventually seek markets and raw-materials from outside its boarders, threatening the interests of France and England. Nothing could be done about the fact that there were various powerful nations co-existing that, having similar levels of military and industrial might, would continue to collide with the ‘regional interests’ of other nations; WWI had in fact exasperated this problem by reducing England’s power while raising the US’.
After ten years of the League’s existence the above weaknesses started to expose themselves. In response to the worldwide recession of the 1930’s, the great powers formed regional trading-blocs with the countries they had influence over; the U.S., Japan, England, France, and Germany were all masters of their respective zones. These trading blocs were the natural response of the powerful nations to the problems of global recession, since their domestic industries became protected from the competition of the other powers. Ultimately, the trading blocs worsened the conflagration, the crisis deepened, and trade partners turned into military allies.
Before the above problems fully manifested themselves, the League was able to be of some worth in promoting commerce and preventing warfare. The collapse of the Austrian economy was prevented, territorial disputes between Finland and Sweden were resolved, and war between Greece and Bulgaria was averted; the economic and military might of the League proved a successful deterrent to the ‘excesses’ of smaller countries— it was the stronger nations that would prove impossible to control.
The League’s utopian goal of ‘world peace’ was brightly displayed at the International Disarmament Conference of 1932. As it turned out, the different countries of the world thought it to be in their ‘national interest’ to maintain a large military; the domestic steel and war manufacturers enjoyed the business in producing arms, while the commodity-producers appreciated the open markets that the weapons allowed them. Much of the conference was aimed at pressuring Germany to dismantle its military; however, Germany cleverly demanded that the other nations disarm to its level— once this demand was rejected, and the hypocrisy was exposed, the nation now under Hitler was given the pretext for dropping out of the League in 1933, returning to the expansionist program demanded by its profit-seeking corporations.
The initial decline of the League of Nations began with France’s military occupation of Germany in 1923. The League was unable to convince France to drop the plan, who justified the adventure as a debt-collecting mission. Although this event showcased the League’s powerlessness, larger problems loomed. Japan used an alleged terrorist attack as a pretext for an invasion of Manchuria; China pleaded for the League’s intervention, but Japan rejected negotiations and the belligerency was accepted. Japan, viewing the League purely as a nuisance, rescinded its membership in 1933, freeing itself to pursue its expansionist ambitions.
The most blatant example of the League’s incompetence occurred when Italy invaded Ethiopia in 1935. While Italy was ravaging the country— based on an obviously false pretext— Ethiopia’s head of state Haile Selassie gave the following plea to the League of Nations:
“…And in that unequal struggle between a Government commanding more than forty-two million inhabitants, having at its disposal financial, industrial and technical means which enabled it to create unlimited quantities of the most death-dealing weapons, and, on the other hand, a small people of twelve million inhabitants, without arms, without resources having on its side only the justice of its own cause and the promise of the League of Nations.”
Selassie accurately predicted that if no assistance was given to Ethiopia, the League of Nations would lose all credibility and eventually collapse. The League’s collapse was hastened by Japan’s continued belligerence, military aggression and appeasement of Hitler, and the Spanish Civil War— in short, World War II.
The term ‘United Nations’ was first used to describe the military allies united against the ‘Axis Powers’ during WWII; and like the League of Nations before it, this would be how the present-day UN was formed—yet another ‘victor’s spoil’ approach. Before WWII had even ended, the western powers— the U.S., France, and England— had already agreed on a post-war arrangement of the colonial world: each would retain control over their colonies and regions of influence. It was only later that all the winners of the war, including Russia, China, and Eastern Europe, were allowed to take part in dividing the pie.
After WWII, international commerce was essentially destroyed; capitalism, for good or bad, had grounded to a halt. Resurrecting this failed system was the goal of the United Nations immediately after the war. The foundation for the new global-economic arrangement was erected at the now-infamous Breton Woods conference, where the institutions that would oversee capitalism’s development— the World Bank, International Monetary Fund (IMF), and the General Agreements on Tariffs and Trade (GATT) — came into existence. These organizations determine how the global economic system works and who it works for.
The new arrangement was to begin where the old system had left off, meaning, that the U.S. had a tremendous economic, industrial, and military advantage over the rest of the western world— a power it intended to exploit. During the Breton Woods ‘negotiations’, the famed British economist John Maynard Keynes tried to inject his more-democratic vision of capitalism into the new framework (something that would benefit Britain), but was brushed aside by the harsh realities of monopoly and power wielded by the US. The United States awarded itself power unknown in the history of civilization— it would have the final say over the institutions that ran the global economic system, and be responsible in providing the military means to maintain the new arrangement.
If the newly-formed UN had learned one thing from WWII, it was merely a rehashing of last war’s lesson: trade restrictions ruin international peace. Therefore, ‘free trade’ was the catchphrase for the new system. Central to a smooth-running system of commerce are stable exchange rates— the lack of these is also considered one of the causes of WWII, since trade and investment becomes uncontrollable and risky without them. Because of the US’ complete dominance in the financial sphere, the dollar was able to act as the stabilizing currency for the whole world.
Free trade however, was not meant to be equal trade. The winners of the war made sure that they had power over the other nations in the world. To this day, the main allied victors of WWII retain their institutionalized advantages within the UN— the best example being Security Council membership. The Security Council is the one organ of the UN that has the power to make decisions that all other governments must abide by; this monopoly of international power is shared by China, France, Russia, England, and the U.S. To make the Security Council as Democratic as possible, each member was given a veto for every decision— a policy that insures that the powerful nations are in consensus in pursuing a joint interest. In this way, the Security Council functions as an arbiter between the big powers. Problems arise however, when a veto is used, and a member decides to act alone; the UN becomes powerless.
To insure that this powerful group’s domination was not limited to decrees, the Nuclear Non-Proliferation Treaty was created, which declares that only Security Council members shall have access to nuclear weapons. This treaty, which has been ignored by India, Pakistan, Israel, and North Korea, is being used as a pretext for an increase in hostilities with both Iran and North Korea.
The World Bank
Each of the institutions created at Breton Woods have numerous loopholes that create favorable conditions for the industrial countries while maintaining de-facto colonial status for the poorer nations. Understanding these contradictions to ‘world peace’ and ‘the elimination of poverty’ are essential in grasping the true mission of the United Nations.
Nobody benefits from the UN institutions like the corporations and banks of the industrial nations, who, through debt, protectionism, subsidies, and the advantage of technology, wield an unbreakable advantage over the poorer nations. Contrary to the mission statement of the UN organizations, the last thing anybody wanted was for the non-developed countries to develop— this would mean industrial competition, not to mention a complete lack of economic and political leverage.
Although the World Bank was an official product of the UN, its actual workings are controlled by different nations, with the behind-the-scenes corporations having the final say on matters. Like the rest of the UN institutions, the World Bank is slated to benefit the wealthy nations at the cost of the poorer. This is done at the World Bank by methods of membership and voting rules, where the number of votes is given to the nations who have the most shares— much like how a corporation is run. The U.S., having the largest economy in the world, has the loudest voice in decision making. With nearly 17% of the international vote, and with an 85% majority needed in each decision, the U.S. has absolute veto power over every major decision. In this clever accounting method, the World Bank is assured to be dominated by the largest, wealthiest nations.
Originally, the World Bank played a progressive role, helping to rebuild a shattered Europe. Its first loan, 250 million dollars to France, was the beginning of a global plan to rebuild the industrial nations with the purpose of resuming international trade. U.S. corporations needed markets for their goods, and thus encouraged the re-growth of Europe and Japan out of self-interest. Loans were made to build infrastructure, power-plants, factories— all the necessities for a nation to become fully developed and independent. Once Europe was stabilized, the World Bank turned its attention to the third-world, where it would drastically change its mission, becoming a usurer rather than a developer.
One of the ways that the World Bank produces and maintains inequality is by the nature of the loans it makes. Lender countries demand that their loans be repaid in the same currency it was lent; this means that borrower countries, whose currencies are always worth a fraction of the developed countries, must sell much more than they buy. It is often the case that more loans are needed to repay previous ones, evolving into the all too familiar pattern of poverty inherit in the World Bank system. Debt is a powerful tool, enabling the lender nation’s cheap access to the raw materials, markets, and privatization contracts of the debtor nations. This relationship has been a fundamental tactic in maintaining de-facto colonial status for the third world.
In response to the exchange-rate problem that helped accelerate WWII, the IMF (International Monetary Fund) was created. The basis for the new international exchange system was to revolve around the U.S. dollar, which, because of its tremendous superiority, could serve as the world’s reserve currency— pegged to gold at 35 dollars an ounce. The IMF is responsible for the general supervision of the capitalist system, providing insight into troubled areas, alerting nations to possible systemic problems, and offering remedies.
Managing the flow of currencies, and providing financing to counteract ‘balance of payments’ issues were also the primary functions of the IMF upon its inception. As the system of global commerce grew and became more complex, the job of the IMF increased in difficulty, especially when its sound economic advice started being ignored by the powerful nations.
The formation of GATT was also seen as a response to a harsh lesson learned by WWII. GATT was the organizational embodiment of the demand for free-trade. Instead of trading blocs, where certain regions would be the sole beneficiary of low tariffs, multi-lateral (all nations) treaties were seen as instrumental to promoting world trade and preventing war. The trade talks would be consensus-based, with the premise that small sacrifices in certain areas would benefit the system as a whole.
GATT, like the World Bank and IMF, also benefits industrial nations at the expense of all the others. Third-world nations do not have the machinery that lowers the costs of their domestic products (most importantly agriculture) while lacking the infrastructure and capital to produce ‘high-value’ goods that bring wealth to a nation. When a country lowers its import-tariffs— a typical demand of GATT — cheaper products from developed nations invade the country, destroying the domestic industry. Although GATT was rightfully seen as essential to promoting the new economic system, the context it worked under— that of rich nations and poor nations— would automatically help sustain an international relationship of inequality and perpetual poverty.
Every round of trade talks until recently has resulted in international agreements on different issues of trade, lowering the barriers in-between nations. The evolution of GATT into its current, monstrous form (the WTO) is symbolic of the international expansion of capitalism and its need of institutions that encourage its basic tendency— growth.
The Cold War
Soon after its inception, the UN found itself in a precarious position. Because it was a system that concerned itself primarily with the upkeep of international capitalism, the very existence of the U.S.S.R— and soon China— was considered a threat. To be sure, having the U.S.S.R on the Security Council would prove to be a major hindrance for the industrial nations (the U.S.S.R used most of its 122 UN vetoes during the early years of the UN). The irreconcilableness of the conflicting economic systems soon manifested into the Korean War, where the once colonized nation of Korea— after shedding off the shackles of the Japanese— found itself caught between the interests of two superpowers. The Korean War was the United Nations’ first war mobilization effort, the primary goal of which was to prevent the birth of another so-called communist country. In Korea, this involved the immense repression of popular movements for independence and the slaughter of countless people dedicated against foreign intervention and occupation.
After the destruction and partition of Korea, the battle between the two systems – private and state-owned production— would express itself in the Western world as the ‘fight against communism’. This was a euphemism referring to the process of military intervention needed to keep foreign markets open, and consequently, third-world nations subservient to the western powers. The other industrial nations approved of the U.S. acting as capitalism’s policeman, since they benefited also from the commercial exploitation of the targeted countries; this policing duty required the US to spend the now-familiar billions on its military, resulting in a nearly-perpetual state of military intervention and warfare.
Although the economic base of the U.S.S.R and the 1st world nations were in conflict, the intentions of the political leadership of both systems— maintaining their respective existence and privileges— allowed for compromise and cooperation. Aside from all its inflammatory rhetoric, the western world depended on the U.S.S.R and China for their work in squashing potential revolutions— a phenomenon that would arouse the repressed people of both systems, therefore acting as an equal threat. For fifty years the social fury voiced in various European nations was funneled into the dead-end Communist parties that took orders from the U.S.S.R. Every time a Communist party of a particular nation gained influence, it either led its constituency to dull reformism or physically crushed the rising movements, inevitably resulting in the generational mood of failure and disillusionment that still exists today. This remarkable service performed by the U.S.S.R would soon be sorely missed by the West, who now had no substantial buffer to the social outrages that capitalism produces.
The all-encompassing ‘fight against communism’ became the UN’s pretext for destroying national independence movements. Any national leader who sought to distance himself from the international finance oligarchy was labeled a communist and taken action against. The United Nations’ first peacekeeping mission is exemplary of the actual intentions of this nefarious organization, setting an unfortunate precedent for future military interventions.
In 1960, the United Nations entered the Congo at the request of Patriace Lumumba, the Congo’s first democratically elected Prime Minister— often hailed as the founder of ‘pan-Africanism’, a philosophy of African unity that was born in response to centuries of colonial abuse. Lumumba’s rhetoric was based around opposition to the greater powers, and working towards satisfying the needs of Africans rather than the interest of international capital. In response, Belgium, the local colonial power, after accusing Lumumba of being a communist, financed an opposition movement within the Congo that postured as a local independence movement. Lumumba naively pleaded to the UN to help suppress the obviously illegal actions of Belgium and its puppet militia. Seeing Lumumba as the bigger threat, UN ‘Peacekeepers’ stood by and watched as he was kidnapped and murdered by the Belgian-financed opposition group. To this day, Lumumba is representative of many revered nationalistic leaders who were slain under the watchful eye of the international community (Belgium has since apologized for their role in the fiasco).
The above events of the Congo have evolved into a finely tuned strategy of western domination, with the UN functioning nicely as a legal cover. The pattern is simple: if any third-world nation strays from the path set by international finance, a variety of measures will be taken against it until a new government favorable to western interests is in place. The methods used to achieve this are numerous: The World Bank and IMF might withdraw financing; the UN may publicly denounce the new leadership; a ‘rebel’ group financed by an industrial nation may declare war on the existing government; a military coup might take place; a neighboring puppet-nation may invade— all these methods, and many more, have been used all over the world to destroy movements deemed threatening to the overall health of the world capitalist system. The UN has played an all-important role in these workings, either through the often-repressive missions of its ‘peacekeepers’, Security Council decisions, or, as often is the case, complete inaction in the face of repression and atrocity.
Problems of the UN
Many of the UN’s high ambitions have proven to be unachievable, not to mention contradiction-ridden and short-sighted. The best example of delusional thinking lies in the UN’s supposed primary goal of world peace. Although the UN system has employed many intelligent people in order to prevent the big-powers from colliding in the economic sphere, such accidents are inevitable. Capitalism is a system in constant motion, where wealth is transferred from country to country, falling into the pockets of different corporations who wield differing levels of government control and military capability.
The stability of the UN system was insured as long as the original arrangement, with the U.S. as international banker and policeman, remained stable; it also presupposed that the level of power shared by the industrial nations did not change, so that an agreed upon share of third-world exploitation could continue. The above, rigid structure worked as long as it resulted in continued growth for the big countries while the smaller countries continued their submissiveness, with everybody else accepting their proper place. This is obviously no longer the case. As a result of the natural processes of capitalism, different nations have risen, some have fallen, with the latter desperately holding on to their systematized advantages. A ‘breaking point’ has indeed been reached, with an epidemic of war and international tension unseen since the 30’s.
Another difficulty of the UN is its claim that the growth of commerce in general is good for the world at large. It is the duty of the International Labor Organization (ILO) to insure that the prosperity of the average worker is not overlooked during the mad dash for profits. The ILO is yet another relic from the defunct League of Nations, and has proven itself to be equally useless. To the dismay of billions of people across the globe, the pillar institutions of the UN have found that really cheap labor is good for international business. In response, the ILO creates reports, holds a yearly conference, and has even won the Nobel Prize; its true effectiveness however, is known to most. The WTO successively demanded that the ILO reduce the scope of its workings, making its mission statement vague enough so that any corporation could skirt its mandates. In the countries where international investment is highest, so is wage-slavery— a term that is in no way an exaggeration to the majority of the earth’s population.
The above two discrepancies of the UN charter became more acute when the new economic arrangement experienced its first recession; the perfectly planned institutions of the UN started to show their faults, and a downward spiral of international relations began— a process that continues today in a more dangerous and critical state.
The problems inherent in the post-war arrangement fully expressed themselves in 1971, the year Nixon ‘shocked’ the world by dismantling the foundation of the Breton Woods agreement. The global system of exchange-rates, based on the dollar’s convertibility to gold, was erased.
To this day there are those who blame Nixon for screwing with the world’s economy and creating the financial chaos that continues today. Contrary to popular belief, it was a move that could no longer be avoided. The global political arrangement, though successful for decades, had become completely unsustainable. Decades of world military-policing had shrunken the U.S.’ economic dominance, to the point where there were more dollars floating around the world than gold in its banks. The debts couldn’t be paid: the dollar was overpriced.
Another unintended consequence of the post-war arrangement was the emergence of the European and Japanese economies as competitors of the United States, both in commodities and currencies. The U.S.’ total economic dominance had clearly ended, and with it, the ability to serve as the world’s stabilizing currency and central banker; the unwavering hand that controlled the ‘free market’ started to tremble.
Nixon’s maneuver marked the end of not only stable exchange-rates, but also the largest economic expansion of capitalism’s history. The western nations, after successfully integrating the productive powers of the assembly line, would never again see such tremendous growth rates. The countries dominating UN policy found themselves having to adjust to the new circumstances, and did so by a variety of methods. Floating exchange-rates were adopted, making the economic system more flexible, but also more volatile and reactionary. To compensate for this, the UN institutions started changing their policies, trying to adjust to the lack of stability by tightening the screws in the developing nations. The UN, both economically and militarily, became more predatory.
Modern UN Policy
In any critique of recent World Bank or IMF policy, the term ‘neoliberalism’ invariably comes up; the word is often negative, portrayed as a thoughtless strategy that has failed in its mission and in need of replacement. Neo-liberalism however, is merely an extension of the founding principles of the UN, albeit under more desperate circumstances. The term can be summed up briefly: no restrictions on the movement and growth of capital. This is nothing new, and is in fact the basis of the ‘free trade’ ideal that the Breton Woods conference was founded on. Because the world economy was never able to fully recuperate after the recession of the early 70’s, and the growth rates of nearly every country had steadily fallen, the protectors of the capitalist system have intensified their pursuit of profits by demanding that free-trade and other commerce-aiding policies be injected into every crevice of the globe; the frantic drive of this process took on a new character, requiring a new name: neoliberalism.
Included in neoliberal policy is the maddened drive in attacking the wages, benefits, and general conditions of workers. Much of capitalism’s meager growth in the last twenty years is based on the siphoning of wealth from workers; this is why we see stocks rise when giant transnationals have announced a giant lay-off or wage reduction plan; this is also why ‘outsourcing’ exists in the first place— growth rates have stunted and investors are demanding returns, finding them only where labor can be purchased for peanuts. During the previous era’s gigantic expansion, concessions could be made to workers, however, the boundaries of the nation-state proved too small for the stockpiles of cash that needed investment— corporations demanded the freedom to roam internationally to pursue returns. Lowering national boundaries, as well as restrictive laws on corporations, are necessary policies if capitalism is to be continued. Therefore, the UN institutions have likewise encouraged the free-reign of capital, helping whenever they can in lowering the boundaries of foreign nations to accept injections of wealth from the wealthy countries.
The IMF, whose mission it was to oversee exchange rates, suddenly found itself irrelevant in the face of the abandoned U.S. gold-standard. In order to avoid being an anachronism, it gathered its economists together, brainstormed, and amended its constitution. The new IMF would have broader, farther-reaching powers, working with a newly-revamped World Bank to ‘stabilize’ third-world countries amid a more unpredictable economic climate. Since exchange rates everywhere were floating, the third world would be a beacon of security and safe investment. Thus, regulating third-world economies now required more drastic measures, and the UN’s pillar institutions have risen to the challenge. The dual functions of securing foreign investment in developing nations, while completely ‘integrating’ these economies into the international system (a euphemism for allowing corporations free reign to exploit and pillage), necessitated new, drastic policy changes.
One of the key ways that the IMF has emboldened itself is by employing ‘structural adjustment programs’. Upon receiving a loan or grant from the IMF, developing countries are required to make adjustments to how their economies are run. Typically, these changes are a hodgepodge of neoliberal reforms, usually including deregulation (privatizations of state-controlled industries), restrictions on social spending (including basic infrastructure), currency devaluations, eliminating capital controls, lowering of tariffs and the erasing of state subsidies. All of these policies do in fact aide international commerce, and likewise have debilitating effects on the native population. Aside from the fact that IMF policy has destroyed third-world living conditions, there are additional outrages. The above IMF policies are now widely-considered responsible for creating or inflaming famine in Malawi, Ethiopia, and Niger, not to mention the worsening conditions of the average Iraqi. The lack of worldwide economic stability, as well as the general ineffectiveness of the IMF, is highlighted by the fact that, since 1980, over 100 countries have experienced banking collapses, drastically weakening their citizens’ already poor standard of living. The immense wealth of international finance now works under a rape and pillage mentality: wealth floods into a country, investors take advantage of favorable conditions, inflate the local economy, and leave before the stack of cards collapses.
The evolution of the World Bank is another flagrant indication of the state of global economy. The Bank is now headed by well-known neocon Paul Wolfowitz, a fact of no small importance. Europe, like the rest of the world, did not object to this appointment because the neocons, rather than being a subversive, underground sect, are instead the representatives of the modern international finance community, having like-minded associates in governments across the globe.
The workings of the World Bank, like its IMF counterpart, attest to the inherent conflict between the needs of corporate profit and the interests of people. Although the World Bank claims that ‘development’ is part of its mission, a closer inspection proves this to be lip-service. The so-called development programs of the World Bank are typically construction projects to aide in the extraction of raw materials that are shipped out of the country to the developed nations. Bridges and roads are built that connect a World Bank funded shipping-port to copper or silver mines; ‘free trade zones’ are constructed next to the ports, where slave-labor is brought in to create goods that only citizens from developed countries can afford. Money is seldom given to countries for the development of roads and bridges for community usage, nor is money loaned to these countries to develop industries that build the machines capable of creating infrastructure and wealth; this work is outsourced to developed countries, much like the ‘reconstruction’ contracts given to corporations after a heavy-dosage of American militarism.
The World Bank also has a long and nefarious history when it comes to corruption. One way this is done is by the tacit support the Bank gives dictators and undemocratic governments, granting them enormous loans. These loans are used to enrich both the lenders and the ruling-class of the developed nation at the expense of tax-payers in both countries. After a dictatorship establishes ‘order’— yet another euphemism referring to the complete suppression of democratic demands of wealth distribution— foreign investment comes pouring into the country. The amount of foreign cash quickly floods the native economy, and the limited room for a sound investment is soon realized in the form of a crash. A case in point example of this process occurred under Clinton’s watchful eye, when the Mexican economy was crushed by neoliberal policies, and U.S. taxpayers were forced to inject 50 billion into a supposed ‘bail out’. The only people who saw that money were wealthy U.S. speculators, who entered the Mexican pyramid scheme a bit late in the game. To regain ‘stability’ after the crash, Mexico was again forced to adopt a variety of neo-liberal reforms, the result has been nothing less than devastating, with the continued flood of immigrants attesting to this fact. The reputation of the World Bank as an international money laundering apparatus has been so widely discussed that Paul Wolfowitz, who oversaw the squandering of World Bank money in Indonesia, has made it his personal mission to oversee a ‘war on corruption’.
That other, more elusive offspring of Breton Woods, GATT, has evolved as well in consequence of the changing world economic situation. The progress of trade talks – typically resulting in the lowering of trade-barriers and the expansion of trade in general— are a good indicator of the general health of the capitalist system, which demands ever-growing expansion for the insatiable demand of profit accumulation. If multi-lateral trade talks begin to stagnate, you can bet that the overall growth of international commerce has already begun to slow, and a general trend of protectionism has begun.
After Breton Woods, GATT made considerable progress in promoting world trade. Each time a consensus was reached, the often-monotonous talks were referred to as a ‘round’. Since the initial round in Geneva in 1948, participation in GATT has gone from 23 countries to the 102 countries that took part in the ‘Uruguay Round’ that ended in 1992 (after 6 years), which marked the organization’s evolution into the World Trade Organization (WTO). Every meeting of these international trade summits, until now, has resulted in agreements on lowering different types of trade barriers.
The WTO is simply a more official version of GATT, complete with a large bureaucratic structure, code of law, and enforcement measures. The creation of the WTO itself is a telling indicator of world economy, reflecting businesses’ need to compensate for the steady drop in international growth.
Radicals have focused enormous energy on protesting this particular offspring of capitalism, pointing to its secretive meetings, the enormous social effects of its decisions, and the fact that the WTO can declare a country’s laws— including environmental, social programs, etc— to be illegal trade barriers. In this assessment radicals are half right: yes the WTO is responsible for a policy that has often horrendous effects on large swaths of people throughout the world, but in this respect it is no different from the IMF, World Bank, and for that matter, capitalism itself. The WTO cannot be considered as an entity separate from the system of global commerce, no matter how crucial an ingredient it may be.
All the major Breton Woods children require an element of force to maintain; this is where the military side of the UN enters the scene, and the notorious ‘peacekeepers’ are put to work. In the last 20 years, there have been 16 African countries subjected to UN peacekeeping missions. Traditionally, the UN has intervened during or after civil war takes place. The timing of a UN intervention, and which side the UN allies itself with, are not unimportant details.
After WWII, Africa was left largely in the hands of its colonial masters, the French and English. Soon thereafter, a wave of independence movements rose across the continent, and the Europeans were forced to rule by proxy— another well-worked tactic of neo-colonialism. Behind the multitude of civil-wars fought in Africa over the last 20 years are often the workings of western nations, who supply and finance groups they believe will act in their interest. In any military conflict in Africa, the UN is sure to intervene on the side that will comply with World Bank and IMF policies. In the past the UN has tacitly granted permission (by saying nothing) to western nations to militarily intervene in the affairs of African nations, with ‘peacekeepers’ consecrating the adventures. Because the western world has been increasingly desperate for markets and raw materials, this tactic of domination has become increasingly brutal—the most fitting example being Rwanda.
The catastrophe that was Rwanda cannot be explained by ‘ethnic tensions’ like the world press would have us believe, but rather was the product of inter-imperialist conflict, the two sides being the British, who supported the Hutus, and the U.S., who were backing the Tutsis. The UN was well aware of the slaughter that was about to take place, but found itself powerless when faced with the interests of two countries on the Security Council. So the U.N. played deaf and dumb while the two sides fought it out (a not uncommon tactic of the UN). When the Tutsis came out victorious, after committing their fair share of atrocities, the UN came back on the scene, eager to help stabilize the country (the UN, along with Belgium— the old colonial master— has since apologized for enabling the massacres to take place).
A more recent example of this diabolical process occurred in Haiti, where the Democratically-elected President Jean-Bertrand Aristide was for the second time removed from power, this time by the always-mysterious ‘rebels’. Aristide’s crimes against the international community were two fold: he reversed the previous puppet regime’s plan to privatize all state-owned companies, and he funded a variety of social programs— two things that global commerce frowns upon. An economic aid embargo was put into place, with international financing— including the IMF and World Bank— suddenly refusing loans.
What then followed was the usual pattern of imperialist intervention. Millions of dollars were given to ‘opposition groups’ inside Haiti, who helped prepare the ensuing military action with floods of propaganda; the US puppet regime next door, the Dominican Republic, was used as the base to train former Haitian army officials, many of whom were war criminals— yet later to be portrayed by the US media as Democracy-seeking heroes willing to succumb to the international community after their victory.
When the action began, the rebels were aided by an occupying force of US, French, Canadian, and Chilean troops, all who helped stabilize the new regime by suppressing the 92% of the country who had voted for their displaced President. This particular coup was planned far in advance, with a UN Peacekeeping force introduced with lightning speed that gave legitimacy to the new government of butchers. Haiti is one of many examples of the UN Peacekeepers acting more as a brutal occupying army than an independent mediator; but Haitians were used to such strong-arm tactics, and militantly protested the new dictatorship. The UN’s response, as always, was shameless, and involved ‘observing’ massacres staged by the police, or engaging in full-out warfare against neighborhoods that energetically supported Aristide. Some of these raids have involved hundreds of troops, tanks, and helicopters. Meanwhile, the western media complicity ignored the events, reporting just enough to create confusion. Only recently has the Haitian majority won back a level of independence, thanks to the militant protests against an obvious attempt of the dictatorship to quell social unrest through fraudulent elections.
The two horrific examples of Haiti and Rwanda are but a fraction of the atrocities committed by the powerful nations under the guise of the UN; in many of the cases, the reason for the intervention was the same: a country tried to free itself from the clutches of international finance, striving for some degree of independence. The leaders of such nations are always labeled tyrants, dictators, destabilizes, demagogues, and now, terrorists. However, the UN and its institutions have a long history of supporting real Dictators and tyrants, as long as they offer their countries to the appetites of international corporations and banks. Dictators in fact, are preferred by the international community, since they are able to provide ‘investment security’ in the way of dismantling trade unions, social services, and dissent in general. The UN’s real reason to intervene and ‘stabilize’ governments around the world is candidly stated by the World Bank’s website, where we read:
“Our presence in a potential investment can literally transform a "no-go" into a "go." We act as a potent deterrent against government actions that may adversely affect investments. And even if disputes do arise, our leverage with host governments frequently enables us to resolve differences to the mutual satisfaction of all parties”.
Such security can only be guaranteed by the barrel of a gun, something that is needed to suppress the masses of people adversely affected by the economic policies of UN institutions. The unity of purpose behind the UN, World Bank, IMF, and GATT combine for a daunting power, which has been used to steadily crush the third world to a point where billions of people on earth are either starving, or near the threshold. On the other hand, the transnational corporations have grown steadily stronger, and the share-holders of these firms have enriched themselves well beyond the capacity of any ruling-class in history. However, there are cracks in the system. The reverberations of decades of inhumanity and greed have expanded alongside the progress of global integration; the economic system that once destroyed only the lives of non-whites is now devastating people in every country, with the situation promising to only worsen.
The mounting crisis
In the past decade there have been innumerable signs that the post-war arrangement among nations is in its death-throes. Many of the facades that the imperial countries have been working behind have been exposed— the set-up that was to prevent war and promote prosperity has been revealed as a hoax. It must first be mentioned that much of the world had long ago caught on to the real intentions of the UN. In most of Africa, Central America, the Middle East, and Eastern Europe, the work of UN Peacekeepers has always corresponded with repression and dictatorship. Now however, the ruptures in the scheme have widened, to the point where a flood of reaction and discontent are filling the globe.
The Asian financial crisis was an event that led to a mass exodus from UN institutions. The neoliberal programs adopted by many Asian countries helped hasten and deepen a depression that lingers on to this day. Since the crash, most of the countries, including China, India, Thailand, and the Philippines, have forgone the IMF and sought financing elsewhere. The same is true in Latin America, where the large economies of Mexico, Brazil and Argentina are likewise separating themselves from the IMF. Argentina and Mexico both experienced disastrous economic collapses that have helped fuel hatred of the UN institutions throughout the region. As a result, both the IMF and World Bank are facing a budget crisis due to lack of funding. The fact that these highly effective tools of imperialism are facing a complete lack of credibility, not to mention extinction, is a telling sign of the current global-systemic deterioration.
An equally major indictment of capitalist fragility is on display at the current ‘Doha round’ WTO talks, which tout an impressive membership of 149 countries. Many of the round’s participants have declared the talks dead, while issuing dire warnings about the global implications. This happening is especially daunting to the overall health of the capitalist system, which was reconstructed upon the basis of free, multi-lateral trade. If the Doha round does in fact end in complete failure, it will be the first time in GATT/WTO history. Especially troublesome is the growing tendency to form bi-lateral trade agreements, bringing with it several consequences. First, bi-lateral trade agreements are typically between a powerful nation and a weak one; after securing a number of such agreements, a powerful nation may have what can be considered a ‘trade bloc’, where the country is master of his region of commerce— as was the case before WWII. Secondly, the tendency of bi-lateral trade means that the general process of trade is restricted by a web of different agreements, where various laws and tariffs slow global trade circulation. The end result is that the current economic downturn is worsened.
As it turns out, the powerful countries are only concerned with multi-lateral trade agreements when they stand to benefit from them. During economic downturns, governments seek to protect their native corporations from international competition, with agriculture acting as the most relevant example. Europe and the US both have expressed little intent in reducing agricultural subsidies to the other’s liking— and for good reason. Both continents are dominated by conservative governments, where rural votes play a crucial role. Reducing agricultural subsidies to farmers, both large and small, would be tantamount to committing political suicide. Eliminating subsidies in any country has become increasingly difficult in general, since the large corporations who benefit from such programs control the politicians making the laws.
The Doha round has also produced a newfound rebelliousness in the emerging and developing nations, known as the G23— led by China, India, and Brazil. This new group, aligning itself against the dominant members of the G-8, represents over half of the world’s population. Although the G23 has prided itself on standing up to the traditionally dominant nations, the end result is more head butting and less agreements, creating more difficulties for the global economy as a whole. In the end, the less developed countries will most likely be forced into bi-lateral agreements, where they will still be bound to the powerful nations’ dictates. The G23, if it is at all successful, will simply give its dominant members more global power at the expense of the countries of the G-8. The really poor countries will remain so.
As multi-lateral trade stagnates and the world economy veers sharply towards recession, the formation of pre-WWII trading blocs is accelerating. Virtually every region of the world has either entered into a bloc, or is considering the possibility. Presently, NAFTA and the European Union constitute the two most economically powerful blocs, although the Southeast Asian trading bloc (ASEAN) may become of equal weight if China and/or Japan enter the pact. The different trading blocs have varying levels of economic and political integration; thus far, only the EU trading bloc combines ‘defense’ with economic activity, though other regions are considering similar paths. The historic end result has been war.
Indeed, because in is impossible to separate the modern nation from its economic base, the narrow-interests of commerce are being broadly politicized by different governments; global economic tensions have risen to the point where military rhetoric is being used in reference to currency and trade discussions— US politicians have referred to China’s undervaluation of its currency as ‘an act of war’. To be sure, China’s monstrous growth continues to be seen as a threat from the US. In response, the US has pursued the pre-WWII policy of England in response to Germany’s industrial rise— containment. The US has surrounded much of China’s boarders with client states, allies, or military intervention. China continues to pursue raw materials from around the world to meet its energy needs, while also building up its military in response to the aggressive actions of the US— a clashing of ‘regional interests’ between the two powers that results in warfare can be considered a safe bet.
Like its predecessor the League of Nations, the UN is currently experiencing a crisis of legitimacy. The current trouble is being caused by the organization’s inability to achieve its supposed goal of world peace. A worldwide trend of militarization has been steadily mounting, with the UN either aiding in the bloodshed, or powerless to stop it. The Gulf War was the first agreed upon UN mobilization, an act many in the area rightly saw as imperialistic and oil-based. The collaboration set a dangerous precedent of warfare that is becoming a danger to world peace. The next big international operation followed shortly after, in Yugoslavia, which was touted— like always— as a peace mission. Germany used the event as a pretext to expand its military for the first time since WWII. It hasn’t looked back since.
Next was the Iraq War, showcasing just how irrelevant the UN had become. Before it began its military campaign, the US addressed the Security Council in a most condescending matter, demanding that the UN sanction the war effort, or sit by and watch. Official permission was not granted, and the US acted alone. After the bombs had fallen, the UN sought to hide the obvious friction by offering its belated seal of approval through various provisions to the new government; but this act of appeasement would not prevent more war.
Part of the US’ international belligerence is expressed through Israel, whose contempt for the UN has spanned decades. The Security Council has issued numerous resolutions that Israel refuses to acknowledge, and because it has the tacit support of the US, it doesn’t have to. This relationship reached a new low however, with the recent bombing and invasion of Lebanon, consolidating the UN’s lack of global credibility.
For three weeks, Israel partook in full-scale destruction of Lebanon, while the world looked on in horror. The US had prior knowledge of the attack and worked tirelessly to prevent a ceasefire, while the people of Lebanon were made refugees or slaughtered. In a striking case of historic déjà vu, Lebanon’s Prime Minister Fouad Siniora pleaded his countries case to anyone who would listen, in an unmistakably similar tone to the above-quoted address of Ethiopia’s then President Haile Selassie:
“As the world watches, Israel has besieged and ravaged our country, created a humanitarian and environmental disaster, and shattered our infrastructure and economy, putting an intolerable strain on our social and economic systems. Fuel, food and medical equipment are in short supply; homes, factories and warehouses have been destroyed; roads severed, bridges smashed and airports disabled…”
The US-Israeli partnership proved an unstoppable force for the UN, who was inept to prevent the bloodshed. Although much of Europe voiced rage and disgust over the Lebanon invasion, it has since played the role of scavenger; different European countries have used Lebanon’s need for ‘peacekeepers’— in this case a euphemism for Hezbollah suppression— as a pretext for furthering their military ambitions. Italy and Germany both clamored at the opportunity to pursue their ‘regional and political interests’. Germany has been especially ambitious lately, with troops scattered about in the Balkans, Afghanistan, Sudan, and the Congo.
The above outrages have fully exposed the UN for what it is, and dissident governments are starting to talk openly about it. The latest meeting of the UN General Assembly contained candid speeches about the entire UN arrangement, pointing in particular towards the unequal power in of the Security Council, its abuses, and motive of imperialism. Hugo Chavez’s infamous speech contained the following gem:
“…I don't think anybody in this room could defend the system… Let's accept -- let's be honest. The U.N. system, born after the Second World War, collapsed. It's worthless…”
And, from Iranians ‘crazy’ President, Mahmoud Ahmadinejad:
“Today, it is undeniable that the Security Council, most critically and urgently, needs legitimacy and effectiveness. It must be acknowledged that as long as the Council is unable to act on behalf of the entire international community in a transparent, just and democratic manner, it will neither be legitimate nor effective…”
The aggressiveness of US foreign policy is solely responsible for the above distain for the UN, as well as the international arms race that deepens every year (the US House recently approved the largest military spending bill ever, at 8 billion!). The recent military adventures of the United States have created concern and reaction among countries internationally. To make matters worse, the US has encouraged its allies, especially Japan, Australia and India, to drastically increase military spending, most likely to ‘contain’ China. In response, China, since 1999, has invested double-digit percent increases in military spending, to be continued for some time; this has already been pointed out as a subject of concern by Donald Rumsfeld and other military higher-ups, who have used China’s spending as a pretext for their continued provocations.
Sadly, in lieu of the immense instability and global tensions created by the above affairs, more war looms. U.S. politicians have exhausted themselves performing acrobatic rhetoric as they try to paint the countries of Iran, Syria, North Korea and Sudan as ruled by insane dictators planning to take over the world. One thing that all these countries have in common is that, because of economic embargoes, US investment is nowhere to be found. Although US politicians claim the embargoes are due to poor human-rights records, plenty of their current allies reveal this to be a lie.
Because the giant wealth of the US has been unavailable to the ‘axis of evil’ nations, they have sought investment elsewhere. China, Russia, and Europe have thus made economic gains at the US’ expense, resulting in UN Security Council consensuses that are harder and harder to come by— the US wants to implement ‘regime change’ in the countries that the other superpowers consider friends, if not cordial business partners.
Any attack on the above-mentioned US targets would very well spurn the downfall of the UN. This eventuality would be seen by many higher-ups in the US as a good thing, since its pet organization is evolving— much like the WTO— into more of a pest. To make his perspective on the matter clear, Bush nominated the notorious UN critic John Bolton to represent the US internationally; he has since used the position to create confrontation and political fallout. The US’ spite for the UN has reached such a degree that Bush sneeringly called the Iran issue a ‘test’ for the international body, meaning, that if the UN doesn’t sanction military action, it will become irrelevant. If the US withdraws its UN membership (something that’s been talked openly about) the subsequent chain of events will most likely accelerate an already hostile global situation.
The inherent problems of post WWII capitalism are now on display for all to see, so much so that an all-out global depression is being discussed openly by the ‘experts’. The IMF, in trying desperately to regulate the world economy, is finding its repeated warnings fall on deaf ears. Most of its dire predictions are based on the immense ‘imbalances’ that the US economy now works under as it tries to please its resident corporations by grabbing markets and raw materials via warfare. The US knows that its military capabilities prevent it from any real international oversight, and has distanced itself from global treaties and economic agreements out of necessity, less it deliver its native corporations to the guillotine that is international competition. This fact exemplifies the key flaw in the idea that suggests that ‘free trade prevents war’. Nations will cooperate with each other as long as it’s in their best interest; during times of economic expansion, the impulse to cooperate is great, the future seems bright. In times of recession, this pattern turns into its opposite: free trade becomes a hindrance and a threat. The UN’s job becomes that much harder as the superpowers of the world find themselves encroaching on each other’s interests; agreements in the Security Council become exceptions.
The approaching economic crisis has been a long time in the making, yet skillfully avoided for years with the help of global free-trade agreements and the enormous use of credit; both of these avenues have reached the exhaustion point. The debts born from the credit strategy will soon have to be paid with interest, and international free trade has evolved into protectionist measures and defensive trading-blocs. This sad state of global capitalism has led to desperate tactics, most notably the international attacks of worker’s wages and benefits, complimented by global militarism. The UN, more than any other institution, embodies the decline of the global economy, since its recent actions represent the degeneration of the economic base it was built to protect. Although it is imaginable that a new rearranging of the world could lead to another ‘golden era’ of capitalism, it would first require the painful process of war— no regime has surrendered its position of global dominance without putting up a fight. The US’ recent actions are a modern testament to this historically-proven fact.
The above events have radicalized broad layers of the world population, many of whom focus their rage on the UN organizations and their neoliberal policies, seeing them as unnatural growths rather than necessary creations. As a remedy, doses of nationalism are mistakenly prescribed to cure these international ailments. The middle-class radicals, especially shocked by their declining living standards (which they blame solely on ‘outsourcing’) are finding solace in the backward politics of nationalism as well, to the point where Pat Buchanan, a notorious racist, is now seen as an inspirational force. History has shown these policies to only deepen crises and produce more war. The latest machinations of globalization are simply the demands of capital seeking growth outside national boundaries— restricting this growth, either by outlawing outsourcing or capital flight in general, will only accelerate the current global predicament, inevitably leading to political confrontation and reaction. An international economic system based on the expansion of profit cannot be ‘reigned in’ by individual nations.
Thus, the socialization of society’s wealth stands out as the only common-sense solution to the disease of capitalism— a system that creates poverty and war for the benefit of a few at the expense of the many. Demanding that the tremendous wealth and productive power of society be used for the needs of people rather than the demands of profit is the practical answer for those asking important questions about social progress.
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