H. Global Political Crisis of Imperialism

To some extent, as we saw above, a neoliberal policy in the Third World is a solution to both the accumulation crisis and excess of democracy in the First World. The class struggle is transferred from the First to the Third World, and the Third World is used as a base of attack on first. Transnational corporations write off old investments in the First World, use decaying industry there as a cash cow to support new and more profitable investment in the Third World.

As with other aspects of the neoliberal reaction, however, there are built in limits. Neoliberal policies in the Third World contain the seeds of a global political crisis. This is almost certain to be an acute crisis in the medium term. But even in the short term, the dangers to the global capitalist order are very real.

At some point, the effects of neoliberalism (and especially the jacked-up version of the Uruguay Round) are likely to cause political unrest in so many countries of the Third World, and the emergence of so many more populist or national figures like Chavez and Lula, that a coordinated movement among several such countries will emerge.

If several significant TW countries staged a surprise, coordinated repudiation of their national debts, and withdrew from the Bretton Woods agencies, the effects on the neoliberal system would be devastating.

It's interesting that we've seen a near-collapse of central power in Argentina, with the emergence of a variety of grass-roots economic and political organs of self-government; and anti-neoliberal populist regimes in Brazil and Venezuela--all in just a couple years' time. As the impacts of the Uruguay Round and other neoliberal policies make themselves felt in the Third and Fourth world, with the resulting political unrest and emergence of populist and nationalist movements, we can expect more and more such defections. At some point, such countries are likely to stop negotiating with the IMF individually, and attempt a joint action of some kind.

Imagine if several significant Third World countries made such a coordinated withdrawal from the Bretton Woods institutions, and repudiated their international debts. They could combine this with other genuinely free market reforms, like abrogating the intellectual property and industrial property provisions of GATT, so that native-owned competition might emerge to Western corporations, and be allowed to adopt modern production technology without restraint. If the domestic power of feudal oligarchies was broken in these countries, and with it their collusion with Western agribusiness, the land could be deeded to the actual peasant cultivators or agricultural laborers. A number of countries might enter into an accord to legalize mutual banks, LETS, and all other voluntary credit or money systems--and possibly organize a state asset-backed currency of some sort for trade between themselves, as an alternative to dependence on the dollar. They might announce a policy, finally, of ceasing to subsidize from state revenues the infrastructure projects on which Western capital depended to be profitable in their countries: that would mean all electricity, transportation, etc., services would be paid for by western firms on a cost basis. Rather than "privatizing" state enterprises by auctioning them off to kleptocrats and TNCs, they might transform them into either producers' or consumers' cooperatives--at least as genuine a form of privatization as the looting commonly practiced, but one that never seems to be adopted in Jeffrey Sachs' version of "free market" reform.

If this seems overly fanciful, consider Brazil's recent proposal for a free trade area among the G-20 group of developing nations--without the imprimatur of the Usual Suspects. The purpose, said Brazil's president, was "to fully exploit the potential among us, which does not depend on the concessions of the rich countries...."⁵²

Such a movement might even coordinate with the OPEC countries or China in adopting the Euro as a medium for international trade--the equivalent of a monetary atom bomb on the U.S.

If any one country undertook such measures, the CIA would probably begin immediate destabilization attempts, as it did with Allende's Chile or Chavez's Venezuela; but if several countries made such a withdrawal from the world corporate system simultaneously, pledged each other mutual support, and appealed for support to the people of the rest of the world, it might be more than the U.S. could handle. This latter would include mobilizing popular discontent against non-supportive regimes throughout the Third and Fourth worlds, promoting defaults and withdrawals by even more countries, and radical opposition within the core of the Empire itself.

With the serious political divisions between international capital, such a movement might even attract the support of a great power rival to the U.S. The Europeans, Russians or Chinese would be quite likely to ignore any U.S. attempt to impose trade sanctions. Any would-be rival "Eurasian bloc" of such powers might, indeed, welcome the movement as a form of strategic leverage, the same way the USSR welcomed the old nonaligned movement.