fw: THE CRISIS OF THE GLOBALIST PROJECT & THE NEW ECONOMICS OF GEORGE W. BUSH By Walden Bello

[claudia westermann]

From: n.bullard at focusweb.org
To: focus-on-trade at lists.riseup.net


*************************************************

THE CRISIS OF THE GLOBALIST PROJECT & THE NEW ECONOMICS OF GEORGE W. BUSH
By Walden Bello*

(Prepared for the McPlanet Conference, Berlin, June 27, 2002.  The 
original version of this piece will appear in the Fall issue of New 
Labor Forum.)

"Capitalism constantly erodes man and woman's being-in-nature 
(creature) and being-in-society (citizen) and, even as it drains them 
of life energy as workers, it moulds their consciousness around one 
role: that of consume
r. Capitalism has many "laws of motion," but one of the most 
destructive as far as the environment goes is Say's law, which is 
that supply creates its own demand. Capitalism is a demand-creating 
machine that transforms li
ving nature into dead commodities, natural wealth into dead capital."
Walden Bello, McPlanet Conference, Berlin, 27-29 June 2003

I would like to thank the Heinrich Boll Foundation, ATTAC Germany, 
and all the other organizers of this conference for inviting me to 
this very important meeting.  What I would like to do in this 
introductory talk is to d
iscuss the key elements of the global conjuncture.  I would like to 
paint, in broad strokes, the global political and economic context in 
which we must situate our environmental activism.

Let me begin by taking you back to1995, the year the World Trade 
Organization was born.  The offspring of eight years of negotiations, 
the WTO was hailed in the establishment press as the gem of global 
economic governance
  in the era of globalization.  The nearly 20 trade agreements that 
underpinned the WTO were presented as comprising a set of 
multilateral rules that would eliminate power and coercion from trade 
relations by subjecting bo
th the powerful and the weak to a common set of rules backed by an 
effective enforcement apparatus. The WTO was a landmark, declared 
George Soros, because it was the only supranational body to which the 
world's most power
ful economy, United States, would submit itself. In the WTO, it was 
claimed, the powerful United States and lowly Rwanda had exactly the 
same number of votes: one.

Triumphalism was the note sounded during the First Ministerial of the 
WTO in Singapore in November 1996, with the WTO, International 
Monetary Fund (IMF), and the World Bank issuing their famous 
declaration saying that the
  task of the future was the challenge now lay in making their 
policies of global trade, finance, and development "coherent" so as 
to lay the basis for global prosperity.

THE CRISIS OF THE GLOBALIST PROJECT
By the beginning of 2003, the triumphalism was gone.  As the fifth 
Ministerial of the WTO approaches, the organization is in gridlock. 
A new agreement on agriculture is nowhere in sight as the US and the 
European Union s
toutly defend their multibillion dollar subsidies.  Brussels is on 
the verge of imposing sanctions on Washington for maintaining tax 
breaks for exporters that have been found to be in violation of WTO 
rules, while Washing
ton has threatened to file a case with the WTO against the EU's de 
facto moratorium against genetically modified foods.  Developing 
countries, some once hopeful that the WTO would in fact bring more 
equity to global trade
, unanimously agree that most of what they have reaped from WTO 
membership are costs, not benefits.  They are dead set against 
opening their markets any further, except under coercion and 
intimidation.  Instead of heraldi
ng a new round of global trade liberalization, the Cancun ministerial 
is likely to announce a stalemate.

The context for understanding this stalemate at the WTO is the crisis 
of the globalist project--the main achievement of which was the 
establishment of the WTO--and the emergence of unilateralism as the 
main feature of US
foreign policy.

But first, some notes on globalization and the globalist project.

Globalization is the accelerated integration of capital, production, 
and markets globally, a process driven by the logic of corporate 
profitability.

Globalization has had two phases: the first lasting from the early 
19th century till the outbreak of the First World War in 1914; the 
second from the early 1980s until today.  The intervening period was 
marked by the domi
nance of national capitalist economies characterized by a significant 
degree of state intervention and an international economy with strong 
constraints on trade and capital flows.  These domestic and 
international constra
ints on the market, which were produced by the dynamics of class 
conflict internally and inter-capitalist competition internationally, 
were portrayed by the neoliberals as having caused distortions that 
collectively accou
nted for the stagnation of the capitalist economies and the global 
economy in the late seventies and early eighties.

As in the first phase of globalization, the second phase was marked 
by the coming to hegemony of the ideology of neoliberalism, which 
focused on "liberating the market" via accelerated privatization, 
deregulation, and tra
de liberalization.  There were, broadly, two versions of neoliberal 
ideology-a "hard" Thatcher-Reagan version and a "soft" Blair-Soros 
version (globalization with "safety nets.)"  But underlying both 
approaches was unleas
hing market forces and removing or eroding constraints imposed on 
transnational firms by labor, the state, and society.

THREE MOMENTS OF THE CRISIS OF GLOBALIZATION
There have been three moments in the deepening crisis of the 
globalist project. The first was the Asian financial crisis of 1997. 
This event, which laid low the proud "tigers" of East Asia, revealed 
that one of the key t
enets of the globalization-the liberalization of the capital account 
to promote freer flows of capital, especially finance or speculative 
capital -- could be profoundly destabilizing.  The Asian financial 
crisis was, in f
act, shown to be merely the latest of at least eight major financial 
crises since the liberalization of global financial flows began in 
the late seventies.   How profoundly destabilizing capital market 
liberalization coul
d be was shown when, in just a few weeks' time, one million people in 
Thailand and 21 million in Indonesia were pushed below the poverty 
line.

The Asian financial crisis was the "Stalingrad" of the IMF, the prime 
global agent of liberalized capital flows.  Its record in the 
ambitious enterprise of subjecting some 100 developing and 
transitional economies to "str
uctural adjustment" was revisited, and facts that had been pointed 
out by such agencies as the United Nations Development Program (UNDP) 
and United Nations Conference on Trade and Development (UNCTAD) as 
early as the late
  eighties now assumed the status of realities.  Structural adjustment 
programs designed to accelerate deregulation, trade liberalization, 
and privatization had almost everywhere institutionalized stagnation, 
worsened pove
rty, and increased inequality.

A paradigm is really in crisis when its best practitioners desert it, 
as Thomas Kuhn pointed out in his classic The Structure of Scientific 
Revolutions, and something akin to what happened during the crisis of 
the Coperni
can paradigm in physics occurred in neoclassical economics shortly 
after the Asian financial crisis, with key intellectuals leaving the 
fold--among them Jeffrey Sachs, noted earlier for his advocacy of 
"free market" shoc
k treatment in Eastern Europe in the early 1990s; Joseph Stiglitz, 
former chief economist of the World Bank; Columbia Professor Jagdish 
Bhagwati, who called for global controls on capital flows; and 
financier George Soros
, who condemned the lack of controls in the global financial system 
that had enriched him.

The second moment of the crisis of the globalist project was the 
collapse of the third ministerial of the WTO in Seattle in December 
1999.  Seattle was the fatal intersection of three streams of 
discontent and conflict th
at had been building for sometime:

- Developing countries resented the inequities of the Uruguay Round 
agreements that they felt compelled to sign in 1995.

- Massive popular opposition to the WTO emerged globally from myriad 
sectors of global civil society, including farmers, fisherfolk, labor 
unionists, and environmentalists.  By posing a threat to the well 
being of each se
ctor in many of its agreements, the WTO managed to unite global civil 
society against it.

- There were unresolved trade conflicts between the EU and the US, 
especially in agriculture, which had been simply been papered over by 
the Uruguay Round agreement.

These three volatile elements combined to create the explosion in 
Seattle, with the developing countries rebelling against Northern 
diktat at the Seattle Convention Center, 50,000 people massing 
militantly in the streets,
  and differences preventing the EU and US from acting in concert to 
salvage the ministerial.  In a moment of lucidity right after the 
Seattle debacle, British Secretary of State Stephen Byers captured 
the essence of the c
risis:  "[T]he WTO will not be able to continue in its present form. 
There has to be fundamental and radical change in order for it to 
meet the needs and aspirations of all 134 of its members."

The third moment of the crisis was the collapse of the stock market 
and the end of the Clinton boom.  This was not just the bursting of 
the bubble but a rude reassertion of the classical capitalist crisis 
of overproductio
n, the main manifestation of which was massive overcapacity.  Prior 
to the crash, corporate profits in the US had not grown since 1997. 
This was related to overcapacity in the industrial sector, the most 
glaring example
being seen in the troubled telecommunications sector, where only 2.5 
per cent of installed capacity globally was being utilized.  The 
stagnation of the real economy led to capital being shifted to the 
financial sector, re
sulting in the dizzying rise in share values.  But since 
profitability in the financial sector cannot deviate too far from the 
profitability of the real economy, a collapse of stock values was 
inevitable, and this occurre
d in March 2001, leading to the prolonged stagnation and the onset of 
deflation.

There is probably a broader structural reason for the length of the 
current stagnation or deflation and its constant teetering at the 
edge of recession.  This may be, as a number of economists have 
stated, that we are at
the tail end of the famous "Kondratieff Cycle."  Advanced by the 
Russian economist Nikolai Kondratieff, this theory suggests that the 
progress of global capitalism is marked not only by short-term 
business cycles but also
  by long-term "supercycles."  Kondratieff cycles are roughly fifty to 
sixty-year long waves.  The upward curve of the Kondratieff cycle is 
marked by the intensive exploitation of new technologies, followed by 
a crest as t
echnological exploitation matures, then a downward curve as the old 
technologies produce diminishing returns while new technologies are 
still in an experimental stage in terms of profitable exploitation, 
and finally a tro
ugh or prolonged deflationary period.

The trough of the last wave was in the 1930s and 1940s, a period 
marked by the Great Depression and World War II. The ascent of the 
current wave began in the 1950s and the crest was reached in the 
1980s and 1990s. The pro
fitable exploitation of the postwar advances in the key energy, 
automobile, petrochemical, and manufacturing industries ended while 
that of information technology was still at a relatively early stage. 
>From this perspecti
ve, the "New Economy" of the late 1990s was not a transcendence of 
the business cycle, as many economists believed it to be, but the 
last glorious phase of the current supercycle before the descent into 
prolonged deflatio
n. In other words, the uniqueness of the current conjuncture lies in 
the fact that the downward curve of the current short-term cycle 
coincides with the move into descent of the Kondratieff supercycle. 
To use the words o
f another famous economist, Joseph Schumpeter, the global economy 
appears to be headed for a prolonged period of "creative destruction."

ENVIRONMENTAL CRISIS AND CAPITALIST LEGITIMACY
I have been talking about moments or conjunctural crystallizations of 
the crisis of the globalization project.  These moments were 
manifestations of fundamental conflicts or contradictions that were 
unfolding unevenly ove
r time.  A central smoldering contradiction was that between 
globalization and the environment.  I would now want to devote a few 
words to how the environmental crisis has proven to be a central 
factor unravelling the leg
itimacy of the globalization project, indeed of capitalism as a mode 
of economic organization itself.

Both before and after the World Summit on Environment and Development 
in Rio de Janeiro in 1992, the sense was that while the world 
environmental situation was worsening, consciousness of this fact was 
leading to the crea
tion of the global institutional and legal mechanisms to deal with 
the problem.  The Rio Summit's agreeing on Agenda 21, a global 
program for environmental improvement that would have counterpart 
country programs, seemed
to mark a major step forward in terms of global cooperation.

The late eighties and early nineties were, moreover, a period when a 
number of multilateral environmental agreements were inked and 
appeared to be making headway in reversing the global environmental 
crisis, like the Mont
real Protocol putting controls on the production of CFCs to preserve 
ozone layer, and the CITES Treaty putting tough controls on trade in 
endangered species.  Also, with the coming to power of Bill Clinton 
and Al Gore in
1992, an environmentally correct administration seemed to be in place.

Several moves stalemated this process.

First, the establishment of the WTO.  As Ralph Nader put it, the WTO 
placed corporate trade "uber alles," meaning practically all 
dimensions of economic and social life except for national security. 
In other words, laws
protecting natural resources and the environment needed to be changed 
if they were seen as imposing standards that were seen as unfair to 
foreign trading interests.  In a series of landmark cases-the 
tuna-dolphin case bet
ween the US and Mexico, the turtle-shrimp controversy pitting the US 
and Asian countries-it seemed that national environmental laws were 
being subordinated to free trade.  The thrust seemed to be to bring 
environmental pr
otections in different countries to the lowest common denominator 
rather than to bring them up to the highest standards.

Second, the aggressive push by corporations to exploit advanced food 
technology and biotechnology alarmed environmentalists and 
citizenries all over.  The EU's ban on hormone-treated beef from the 
US--enacted in response
to popular demand in Europe-- continued despite the WTO's viewing it 
as illegal.  Likewise, genetic modifications in agricultural 
production coupled with resistance to ecolabelling on the part of US 
firms such as Monsanto
  triggered a consumer backlash in Europe and other parts of the 
world, with the precautionary principle being invoked as a powerful 
weapon against the US corporations' criterion of "solid science." 
Also, the aggressive e
ffort by US biotech firms to extend patenting to life forms and to 
seeds led to strong resistance by farmers' groups, consumer groups, 
and environmentalists to what was denounced as the "privatization" of 
the aeons-long i
nteraction between nature and communities.

Third, the strong resistance of the US industrial sector to 
acknowledge the fact of global warming, at a time when the speed of 
the melting of the polar ice caps was accelerating, was perceived as 
a brazen attempt to put
profits ahead of the common interest. This perception could only be 
reinforced by the successful corporate effort to stalemate a 
collective global effort to effectively deal with global warming 
during the Clinton administ
ration and finally to kill it when the Bush administration refused to 
sign and ratify the already weak Kyoto Protocol on climate change.

The aggressive anti-environmental posture of US corporations was one 
of the factors that led to a great distrust of business even within 
the United States, with 72 per cent of Americans surveyed by Business 
Week in 2000 s
aying that business "has too much power over their lives," leading 
the country's prime business weekly to warn:  "Corporate America, 
ignore these trends at your peril."

At the same time, developing countries felt that the US was using 
environmental arguments to slow down their development with its 
position that the greenhouse gas emissions of developing countries 
needed to be also subjec
t to substantially the same restrictions imposed on the developed 
countries before Washington would sign the Kyoto Accord.  Indeed, 
such suspicions were not unfounded, since Bush administration people 
were targeting China
, whose rapid development was seen as a strategic threat to the US. 
Environmentalism was being deployed in the US's effort to maintain 
its geo-economic, geopolitical edge.

By the early 2000s, then, the global consensus represented by the Rio 
Summit had unraveled, and it all but collapsed under the massive 
corporate greenwashing campaign that was unleashed at the World 
Summit on Sustainable
Development (also known as Rio+10) in Johannesburg in September 2002. 
"Sustainable development," a vision that attempted to reconcile 
economic growth with ecological stability fell by the wayside, and 
Herman Daly's apoca
lyptic image of an economic system marked by hyper-growth 
outstripping in record time an ecological system created over aeons 
seemed closer to realization as US, European, and Japanese capital 
worked closely with a pollut
ion-friendly government to make high-growth China both the workshop 
and wastebasket of the world.

A few years ago, many agreed with economist Herman Daly that 
ecological deterioration is due to the inexorable drive of the 
man-made system of production to fill with geometric speed the 
limited space created over eons by
  nature.   From this perspective, slower growth and lower rates of 
consumption were the key to environmental stabilization, and this 
could be achieved through policy choices supported by the public.

Increasingly, this analysis is giving way to the more radical view 
that the main culprit is an unchecked capitalist mode of production 
that unceasingly transforms nature's bounty into commodities and 
incessantly creates n
ew demands. Capitalism constantly erodes man and woman's 
being-in-nature (creature) and being-in-society (citizen) and, even 
as it drains them of life energy as workers, it moulds their 
consciousness around one role: that
  of consumer. Capitalism has many "laws of motion," but one of the 
most destructive as far as the environment goes is Say's law, which 
is that supply creates its own demand. Capitalism is a 
demand-creating machine that tr
ansforms living nature into dead commodities, natural wealth into dead capital.

Environmentalism, in short, has regained its radical edge over the 
past decade, moving the critique of globalization to a critique of 
the dynamics of capitalism itself.

THE NEW ECONOMICS OF THE GEORGE W. BUSH
The interlocking crises of globalization, neoliberalism, capitalist 
legitimacy, and overproduction provide the context for understanding 
the economic policies of the Bush administration, notably its 
unilateralist thrust.
  The globalist corporate project expressed the common interest of the 
global capitalist elites in expanding the world economy and their 
fundamental dependence on one another.  However, globalization did 
not eliminate comp
etition among the national elites.  In fact, the ruling elites of the 
US and Europe had factions that were more nationalist in character as 
well as more tied for their survival and prosperity to the state, 
such as the mil
itary-industrial complex in the US.  Indeed, since the eighties there 
has been a sharp struggle between the more globalist fraction of 
ruling elite stressing common interest of global capitalist class in 
a growing world e
conomy and the more nationalist, hegemonist faction that wanted to 
ensure the supremacy of US corporate interests.

As Robert Brenner has pointed out, the policies of Bill Clinton and 
his Treasury Secretary Robert Rubin put prime emphasis on the 
expansion of the world economy as the basis of the prosperity of the 
global capitalist clas
s.  For instance, in the mid-1990s, they pushed a strong dollar 
policy meant to stimulate the recovery of the Japanese and German 
economies, so they could serve as markets for US goods and services. 
The earlier, more nat
ionalist Reagan administration, on the other hand, had employed a 
weak dollar policy to regain competitiveness for the US economy at 
the expense of the Japanese and German economies.   With the George 
W. Bush administrati
on, we are back to economic policies, including a weak dollar policy, 
that are meant to revive the US economy at the expense of the other 
center economies and push primarily the interests of the US corporate 
elite instead
  of that of global capitalist class under conditions of a global downturn.

Several features of this approach are worth stressing:

- Bush's political economy is very wary of a process of globalization 
that is not managed by a US state that ensures that the process does 
not diffuse the economic power of the US.  Allowing the market solely 
to drive glo
balization could result in key US corporations becoming the victims 
of globalization and thus compromising US economic interests.  Thus, 
despite the free market rhetoric, we have a group that is very 
protectionist when it
  comes to trade, investment, and the management of government 
contracts.  It seems that the motto of the Bushites is protectionism 
for the US and free trade for the rest of us.

- The Bush approach includes a strong skepticism about 
multilateralism as a way of global economic governance since while 
multilateralism may promote the interests of the global capitalist 
class in general, it may, in man
y instances, contradict particular US corporate interests.  The Bush 
coterie's growing ambivalence towards the WTO stems from the fact 
that the US has lost a number of rulings there, rulings that may hurt 
US capital but s
erve the interests of global capitalism as a whole.

- For the Bush people, strategic power is the ultimate modality of 
power.  Economic power is a means to achieve strategic power.  This 
is related to the fact that under Bush, the dominant faction of the 
ruling elite is th
e military-industrial establishment that won the Cold War.  The 
conflict between globalists and unilateralists or nationalists along 
this axis is shown in the approach toward China.  The globalist 
approach put the emphasi
s on engagement with China, seeing its importance primarily as an 
investment area and market for US capital.  The nationalists, on the 
other hand, see China mainly as a strategic enemy, and they would 
rather contain it ra
ther than assist its growth.

- Needless to say, the Bush paradigm has no room for environmental 
management, seeing this to be a problem that others have to worry 
about, not the United States.   There is, in fact, a strong corporate 
lobby that believe
s that environmental concerns such as that surrounding GMOs is a 
European conspiracy to deprive the US of its high tech edge in global 
competition.

If these are seen as the premises for action, then the following 
prominent elements of recent US economic policy make sense:

- Achieving control over Middle East oil.  While it did not exhaust 
the war aims of the administration in invading Iraq, it was certainly 
high on the list.  With competition with Europe becoming the prime 
aspect of the tr
ans-Atlantic relationship, this was clearly aimed partly at Europe. 
But perhaps the more strategic goal was to preempt the region's 
resources in order to control access to them by energy poor China, 
which is seen as the
US' strategic enemy.

- Aggressive protectionism in trade and investment matters. The US 
has piled up one protectionist act after another, one of the most 
brazen being to stall any movement at the WTO negotiations by defying 
the Doha Declarati
on's upholding of public health issues over intellectual property 
claims by limiting the loosening of patent rights to just three 
diseases in response to its powerful pharmaceutical lobby.  While it 
seems perfectly willin
g to see the WTO negotiations unravel, Washington has put most of its 
efforts in signing up countries into bilateral or multilateral trade 
deals such as the Free Trade of the Americas (FTAA) before the EU 
gets them into s
imilar deals.  Indeed the term "free trade agreements" is a misnomer 
since these are actually preferential trade deals.

- Incorporating strategic considerations into trade agreements.  In a 
recent speech, US Trade Representative Robert Zoellick stated 
explicitly that "countries that seek free-trade agreements with the 
United States must pa
ss muster on more than trade and economic criteria in order to be 
eligible. At a minimum, these countries must cooperate with the 
United States on its foreign policy and national security goals, as 
part of 13 criteria tha
t will guide the US selection of potential FTA partners."  New 
Zealand, perhaps one of the most doctrinally governments to free 
trade, has nevertheless not been offered a free trade deal because it 
has a policy that preve
nts nuclear ship visits, which the US feels is directed at it.

- Manipulation of the dollar's value to stick the costs of economic 
crisis on rivals among the center economies and regain 
competitiveness for the US economy.  A slow depreciation of the 
dollar vis-à-vis the euro can be i
nterpreted as market-based adjustments, but the 25 per cent fall in 
value cannot but be seen as, at the least, a policy of benign 
neglect.  While the Bush administration has issued denials that this 
is a beggar-thy-neighb
or policy, the US business press has seen it for what it is: an 
effort to revive the US economy at the expense of the European Union 
and other center economies.

- Aggressive manipulation of multilateral agencies to push the 
interests of US capital.  While this might not be too easy to achieve 
in the WTO owing to the weight of the European Union, it can be more 
readily done at the
  World Bank and the IMF, where US dominance is more effectively 
institutionalized.  For instance, despite support for the proposal 
from many European governments, the US Treasury recently torpedoed 
the IMF management's pr
oposal for a Sovereign Debt Restructuring Mechanism (SDRM) to enable 
developing countries to restructure their debt while giving them a 
measure of protection from creditors.  Already a very weak mechanism, 
the SDRM was ve
toed by US Treasury in the interest of US banks.

- Finally, and especially relevant to our coming discussions, making 
the other center economies as well as developing countries bear the 
burden of adjusting to the environmental crisis.  While some of the 
Bush people do n
ot believe there is an environmental crisis, others know that the 
current rate of global greenhouse emissions is unsustainable. 
However, they want others to bear the brunt of adjustment since that 
would mean not only exe
mpting environmentally inefficient US industry from the costs of 
adjustment, but hobbling other economies with even greater costs than 
if the US participated in an equitable adjustment process, thus 
giving the US economy
a strong edge in global competition.  Raw economic realpolitik, not 
fundamentalist blindness, lies at the root of the Washington's 
decision not to sign the Kyoto Protocol on Climate Change.

THE ECONOMICS AND POLITICS OF OVEREXTENSION
Being harnessed very closely to strategic ends, any discussion of the 
likely outcomes of the Bush administration's economic policies must 
take into account both the state of the US economy and the global 
economy and the b
roader strategic picture.  A key base for successful imperial 
management are expanding national and global economies-something 
precluded by the extended period of deflation and stagnation ahead, 
which is more likely to sp
ur inter-capitalist rivalries.

Moreover, resources include not only economic and political resources 
but political and ideological ones as well.  For without 
legitimacy-without what Gramsci called "the consensus" of the 
dominated that a system of rule
is just-imperial management cannot be stable.

Faced with a similar problem of securing the long-term stability of 
its rule, the ancient Romans came up with the solution that created 
what was till then the most far-reaching case of collective mass 
loyalty ever achieve
d till then and prolonged the empire for 700 years.  The Roman 
solution was not just or even principally military in character.  The 
Romans realized that an important component of successful imperial 
domination was consen
sus among the dominated of the "rightness" of the Roman order. As 
sociologist Michael Mann notes in his classic Sources of Social 
Power, the "decisive edge" was not so much military as political. 
"The Romans," he writes,
  "gradually stumbled on the invention of extensive territorial 
citizenship."   The extension of Roman citizenship to ruling groups 
and non-slave peoples throughout the empire was the political 
breakthrough that produced "
was probably the widest extent of collective commitment yet 
mobilized." Political citizenship combined with the vision of the 
empire providing peace and prosperity for all to create that 
intangible but essential moral ele
ment called legitimacy.

Needless to say, extension of citizenship plays no role in the US
imperial order.  In fact, US citizenship is jealously reserved for a
very tiny minority of the world's population, entry into whose
territory is tightly controlled.  Subordinate populations are not to be
integrated but kept in check either by force or the threat of the use
of force or by a system of global or regional rules and institutions--
the World Trade Organization, the Bretton Woods system, NATO--
that are increasingly blatantly manipulated to serve the interests of
the imperial center.

Though extension of universal citizenship was never a tool in the
American imperial arsenal, during its struggle with communism in
the post-World War II period Washington did come up with a
political formula to legitimize its global reach. The two elements of
this formula were multilateralism as a system of global governance
and liberal democracy.

In the immediate aftermath of the Cold War, there were, in fact,
widespread expectations of a modern-day version of Pax Romana.
There was hope in liberal circles that the US would use its sole
superpower status to buttress a multilateral order that would
institutionalize its hegemony but assure an Augustan peace
globally.  That was the path of economic globalization and
multilateral governance.  That was the path eliminated by George
W. Bush's unilateralism.

As Frances Fitzgerald observed in Fire in the Lake, the promise of
extending liberal democracy was a very powerful ideal that
accompanied American arms during the Cold War.   Today,
however, Washington or Westminster-type liberal democracy is in
trouble throughout the developing world, where it has been reduced
to providing a façade for oligarchic rule, as in the Philippines, pre-
Musharraf Pakistan, and throughout Latin America. In fact, liberal
democracy in America has become both less democratic and less
liberal.  Certainly, few in the developing world see a system fueled
and corrupted by corporate money as a model.

Recovery of the moral vision needed to create consensus for US
hegemony will be extremely difficult.  Indeed, the thinking in
Washington these days is that the most effective consensus
builder is the threat of the use of force.  Moreover, despite their talk
about imposing democracy in the Arab world, the main aim of
influential neoconservative writers like Robert Kagan and Charles
Krauthammer is transparent: the manipulation of liberal democratic
mechanisms to create pluralistic competition that would destroy
Arab unity.  Bringing democracy to the Arabs is not so much an
afterthought as a slogan that is uttered tongue in cheek.

The Bush people are not interested in creating a new Pax Romana.
  What they want is a Pax Americana where most of the
subordinate populations like the Arabs are kept in check by a
healthy respect for lethal American power, while the loyalty of other
groups such as the Philippine government is purchased with the
promise of cash. With no moral vision to bind the global majority to
the imperial center, this mode of imperial management can only
inspire one thing: resistance.

The great problem for unilateralism is overextension, or a mismatch
between the goals of the United States and the resources needed
to accomplish these goals.  Overextension is relative. That is, it is
to a great degree a function of resistance.  An overextended power
may, in fact, be in a worse condition even with a significant
increase in its military power if resistance to its power increases by
an even greater degree.  Among the key indicators of US
overextension are the following:

- Washington's continuing inability to create a new political order in
Iraq that would serve as a secure foundation for colonial rule
- its failure to consolidate a pro-US regime in Afghanistan outside
of Kabul
- the inability of a key ally, Israel, to quell, even with Washington's
unrestricted support, the Palestinian people's uprising
- the inflaming of Arab and Muslim sentiment in the Middle East,
South Asia, and Southeast Asia, resulting in massive ideological
gains for Islamic fundamentalists-which was what Osama bin
Laden had been hoping for in the first place
- the collapse of the Cold War Atlantic Alliance and the emergence
of a new countervailing alliance, with Germany and France at the
center of it
- the forging of a powerful global civil society movement against US
unilateralism, militarism, and economic hegemony, the most
recent significant expression is the global anti-war movement;
- the coming to power of anti-neoliberal, anti-US movements in
Washington's own backyard-Brazil, Venezuela, and Ecuador-as
the Bush administration is preoccupied with the Middle East
- an increasingly negative impact of militarism on the US economy,
as military spending becomes dependent on deficit spending, and
deficit spending become more and more dependent on financing
from foreign sources, creating more stresses and strains within an
economy that is already in the throes of stagnation.

In conclusion, the globalist project is in crisis.  Whether it can
make a comeback via a Democratic or Liberal Republican
presidency should not be ruled out, especially since there are
influential globalist voices in the US business community-among
them George Soros-- that are expressing opposition to the
unilateralist thrust of the Bush administration.   In our view,
however, this is unlikely, and unilateralism will reign for sometime
to come.

We have, in short, entered a historical maelstrom marked by
prolonged economic crisis, the spread of global resistance, the
reappearance of the balance of power among center states, and
the reemergence of acute inter-imperialist contradictions. We must
have a healthy respect for US power, but neither must we
overestimate it.  The signs are there that the US is seriously
overextended and what appear to be manifestations of strength
might in fact signal weakness strategically.

* Walden Bello is professor of sociology and public administration
at the University of the Philippines and executive director of the
Bangkok-based Focus on the Global South.

*************************************************
Focus on Trade is a regular electronic bulletin providing updates
and analysis of trends in regional and world trade and finance, with
an emphasis on analysis of these trends from an integrative and
interdisciplinary viewpoint. Your contributions and comments are
welcome. Focus on Trade is edited by Nicola Bullard
(n.bullard at focusweb.org).

Please contact us c/o CUSRI, Wisit Prachuabmoh Building,
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