Fences and Windows (7 page)

The current open talk in Washington about the need to unseat Venezuelan president Hugo Chavez shows that this deadly logic didn’t die with the Cold War. But these days,
the free market’s interference with democracy usually takes subtler forms. It’s a directive from the International Monetary Fund requiring governments to introduce user fees in health care, or to slash billions from public services, or to privatize a water system. It’s a plan cooked up by the World Bank to erect a massive dam, implemented without consulting the communities displaced by the project, ones whose way of life will disappear. It’s a World Bank report calling for more “flexibility” in the labour market of a heavily indebted country—including restrictions on collective bargaining—in order to attract foreign investors. (If they resist and defend themselves, they may well find themselves classified as terrorists, and all means to suppress them will become permissible.)

And sometimes the interference is a complaint to the World Trade Organization that public ownership of a national postal service “discriminates” against a foreign courier company. It’s a trade war waged against countries that decide, democratically, to ban hormone-treated beef or to provide free AIDS drugs to their citizens. It’s the incessant clamouring for tax cuts from business lobbies in every country, based on the ever-present threat that capital will flee if we don’t grant the corporations’ up-to-the-minute wish list. Whatever the methods employed, “free markets” rarely stand by and tolerate truly free peoples.

When we talk about the relationship between globalization and democracy, we need to look not only at whether nations have won the right to cast ballots every four or five years but also at whether citizens still consider those
ballots meaningful. We must look not only for the presence of electoral democracy but also examine the day-to-day quality and depth of those liberties. Hundreds of thousands take to the streets outside trade meetings not because they oppose trade itself but because the very real need for jobs and investment is systematically being used to undermine all our democracies. The unacceptable trade is the one that erodes sovereign rights in exchange for foreign investment.

What I dislike most about the trickle-down democracy argument is the dishonour it pays to all the people who fought, and fight still, for genuine democratic change in their countries, whether for the right to vote, or to have access to land, or to form unions. Democracy isn’t the work of the market’s invisible hand; it is the work of real hands. It is often stated, for instance, that the North American Free Trade Agreement is bringing democracy to Mexico. In fact, workers, students, indigenous groups and radical intellectuals are the ones slowly forcing democratic reforms on Mexico’s intransigent elite. NAFTA, by widening the gap between rich and poor, makes their struggle more militant, and more difficult.

In the place of such messy, disruptive, real-world democratic movements, President Bush offers a calm, soothing lullaby: just relax and wait for your rights to come to you. But contrary to this lethargic vision of trickle-down democracy, globalization in its current form doesn’t bring liberty. Neither does the free market or the ready availability of Big Macs. Real democracy—true decision-making power in the people’s hands—is always demanded, never granted.

March 2001

Next Friday, trade ministers from the thirty-four countries negotiating the Free Trade Area of the Americas will meet in Buenos Aires. Many in Latin America predict that the ministers will be greeted with protests much larger than the ones that exploded in Seattle in 1999.

The FTAA’s cheerleaders like to pretend that their only critics are white college kids from Harvard and McGill who just don’t understand how much “the poor” are “clamouring” for the FTAA. Will this public display of Latin American opposition to the trade deal change all that? Don’t be silly.

Mass protests in the developing world don’t register in our discussions about trade in the West. No matter how many people take to the streets of Buenos Aires, Mexico City or São Paulo, defenders of corporate-driven globalization just keep on insisting that every possible objection lobbed their way was dreamed up in Seattle by somebody with newly matted dreadlocks slurping a latte.

When we talk about trade, we often focus—and rightly so—on who is getting richer and who is getting poorer. But there is another divide at play: which countries are presented as diverse, complicated political cultures where citizens have
a range of divergent views, and which countries seem to speak on the world stage in an ideological monotone.

In North America and Europe, debates are raging about the failures of the current trading system. And yet such diversity of public opinion is rarely attributed to citizens of Third World countries. Instead, they are lumped into one homogenous entity, spoken for by dubiously elected politicians or, better yet, discredited ones such as Mexico’s former president Ernesto Zedillo, now calling for an international campaign against “globophobes.”

The truth is that no one can speak on behalf of Latin America’s five hundred million inhabitants, least of all Zedillo, whose party’s defeat was in large part a repudiation of NAFTA’s record. All over the Americas, market liberalization is a subject of extreme dispute. The debate is not over whether foreign investment and trade are desirable—Latin America and the Caribbean are already organized into regional trading blocs such as Mercosur. The debate is about democracy: what terms and conditions will poor countries be told they must meet in order to qualify for admission to the global trade club?

Argentina, the host of next week’s FTAA meeting, is currently in open revolt over massive cuts to social spending— almost US$8 billion over three years—that have been introduced in order to qualify for an IMF loan package. Last week, three cabinet ministers resigned, unions staged a general strike and university instructors moved their classes to the streets.

Though anger at wrenching austerity measures has focused primarily on the IMF, across the continent it is
rapidly expanding to encompass trade deals such as the proposed FTAA. For proof of the dangers, many Latin Americans look to Mexico. The North American Free Trade Agreement came into force on January 1, 1994, and seven years later, three-quarters of the population of Mexico live in poverty, real wages are lower than they were in 1994 and unemployment is rising. So despite the claims that the rest of Latin America wants a NAFTA to call its own, the central labour associations of Brazil, Argentina, Paraguay and Uruguay—representing twenty million workers—have come out against the plan. They are now calling for countrywide referendums on FTAA membership. [As is Brazilian presidential candidate Lula da Silva who, at the time of writing, was pegged to win the October 2002 elections.]

Brazil, meanwhile, has threatened to boycott the Quebec summit altogether, furious at Canada’s ban on Brazilian beef. Ottawa cited safety concerns but Brazilians think it had more to do with Canadian resentment over Brazil’s subsidized jet manufacturing. The Brazilian government is also wary that the FTAA will contain protections for drug companies that will threaten its visionary public health policy of providing free generic AIDS drugs to anyone who needs them.

Defenders of free trade would have us believe in the facile equation of trade = democracy. The people who will greet our trade ministers on the streets of Buenos Aires next week are posing a more complex and challenging calculation: how much democracy should they be asked to give up in exchange for trade?

March 2002

On the same day that Argentine President Eduardo Duhalde was embroiled in yet another fruitless negotiation with the International Monetary Fund, a group of Buenos Aires residents were going through a negotiation of a different kind. On a sunny Tuesday earlier this month, they were trying to save themselves from eviction. The residents of 335 Ayacucho, including nineteen children, barricaded themselves inside their home, located just blocks away from the national congress, and refused to leave. On the concrete facade of the house, a hand-printed sign said, “IMF Go to Hell.”

It may seem strange that an institution as decidedly macro as the IMF would be implicated in an issue as micro as the Ayacucho eviction. But here in a country where half the population has fallen below the poverty line, it’s hard to find any sector of society whose fate does not somehow hinge on the decisions made by the international lender.

Librarians, teachers and other public sector workers, who have been getting paid in hastily printed provincial currencies, won’t get paid at all if the provinces agree to stop printing the money, as the IMF is demanding. And if deeper cuts are made to the public sector, as the lender
is also insisting, unemployed workers, 30 percent of the workforce, will be even closer to the homelessness and hunger that has led thousands to storm supermarkets demanding food.

And if a solution isn’t found to the recently declared medical state of emergency, it will certainly affect a woman I met on the outskirts of Buenos Aires. In a fit of shame and desperation, she pulled up her blouse and showed me the open wound and hanging tubes from a stomach operation that her doctor was not able to stitch up or dress due to a chronic shortage of medical supplies.

Maybe it seems rude to talk about such matters here. Economic analysis is supposed to be about the peg to the dollar, “pesoification,” and the dangers of “stagflation”—not children losing homes or elderly women’s gaping wounds. Yet the reckless advice being hurled at Argentina’s government from beyond its borders perhaps demands a little personalizing.

In free-market circles, the consensus is that the IMF should see Argentina’s crisis not as an obstacle to further austerity but as an opportunity: the country is so desperate for cash, the reasoning goes, that it will do whatever the IMF wants. “During a crisis is when you need to act, it’s when Congress is most receptive,” explains Winston Fritsch, chairman of Dresdner Bank AG’s Brazilian unit.

The most draconian suggestion has come from Ricardo Cabellero and Rudiger Dornbusch, a pair of MIT economists writing in
The Financial Times
. “It’s time to get radical,” they say. Argentina “must temporarily surrender its sovereignty on
all financial issues & give up much of its monetary, fiscal, regulatory and asset management sovereignty for an extended period, say five years.” The country’s economy—its “spending, money printing and tax administration”—should be controlled by “foreign agents,” including “a board of experienced foreign central bankers.”

In a nation still scarred by the disappearance of thirty thousand people during the 1976 to 1983 military dictatorship, only a “foreign agent” would have the nerve to say, as the MIT team does, that “somebody has to run the country with a tight grip.” Yet it seems that repression is the necessary pre-condition to the real work of saving the country, which, according to Cabellero and Dornbusch, involves prying open markets, introducing deeper spending cuts and, of course, a “massive privatization campaign.”

It’s the usual recipe, only this time, there’s a hitch: Argentina has already done it all. As the IMF’s model student throughout the nineties, it flung open its economy (which is why it’s been so easy for capital to flee since the crisis began). As far as Argentina’s supposedly wild public spending goes, a full third goes directly to servicing the external debt. Another third goes to pension funds, which have already been privatized. The remaining third—some of which actually goes to health care, education and social assistance—has fallen far behind population growth, which is why shipments of donated food and medicine are arriving by boat from Spain.

As for “massive privatization,” Argentina has dutifully sold off so many of its services, from trains to phones, that the only examples of further assets Cabellero and Dornbusch can think
of privatizing are the country’s ports and customs offices.

No wonder so many who sang Argentina’s praises in the past are now rushing to blame its economic collapse exclusively on national greed and corruption. “If a country thinks they’re going to get aid from the United States, and they’re stealing money, they’re just not going to get it,” George W. Bush said in Mexico last week. Argentina “is going to have to make some tough calls.”

Argentina’s population, which has been in open revolt against its political, financial and legal elite for months, hardly has to be lectured on the need for good governance. In the last federal election, more people spoiled their ballots than voted for any single politician. The most popular write-in candidate was a cartoon character named Clemente, chosen because he has no hands and therefore cannot steal.

But it’s hard to believe that the IMF is going to be the one to clean up Argentina’s culture of payola and impunity, especially since one of the conditions the lender has placed on new funds is that Argentina’s courts stop prosecuting bankers who illegally pulled their money out of the country, drastically deepening the crisis. And as long as the destruction of this country is presented as a uniquely national pathology, it will conveniently keep the spotlight off the IMF itself.

In the familiar narrative of an impoverished country begging the world for a “bailout,” a crucial development is being obscured: many people here have little interest in the IMF’s money, especially when it will clearly cost them
so much. Instead, they are busily building new political counter-powers to both their own failed political structures and the IMF.

Tens of thousands of residents have organized themselves into neighbourhood assemblies, networked at the city and national levels. In town squares, parks and on street corners, neighbours discuss ways of making their democracies more accountable and filling in where government has failed. They are talking about creating a “citizens’ congress” to demand transparency and accountability from politicians. They are discussing participatory budgets and shorter political terms, while organizing communal kitchens for the unemployed. The president, who wasn’t even elected, is scared enough of this growing political force that he has begun calling the
“asambleas”
antidemocratic.