House Organ, June 2000

Poverty. Directly after the anti-WTO victory in Seattle last November, the media announced that globalist elites from Bill Clinton on down had finally become dead serious about "poverty alleviation" in the poor countries of the world. At the UN’s Tenth Conference on Trade and Development (UNCTAD) held last February in Bangkok, elite speakers such as UN chief Kofu Annan explained that many people and countries are excluded from the "globalization process," and that poverty reduction presupposes that everyone and every country share in the gains of economic globalization. Leading global bureaucrats and economists also spoke publicly about the growing inequality between the world’s rich and poor (for example, citing an UNCTAD report that the world’s poorest 48 countries fail to benefit from free trade and globalization and face worsening economic and social conditions in the future). In his "farewell address," ex-IMF boss Michael Camdessus noted the "widening gap between the rich and poor...and the gulf between the most affluent and most impoverished nations" then surprised some listeners with the admission that globalization "has yet demonstrated that it is concerned enough, or capable of overcoming the great concerns of out time – world poverty and its alleviation."

In sum, the media and global establishment are paying more attention to world poverty and they seem to be more aware that the "globalization process" entails some very high economic, social, and political stakes. Close scrutiny of the elite’s theories of globalization and poverty thus would seem to be essential for red-green and feminist political strategy, since the former wish to abolish not only poverty but also the basic (commodity) forms of capitalist wealth, and the latter are increasingly concerned that women make up a growing majority of the world’s poorest people. Especially will it pay to examine in detail Camdessus’ own theory of poverty and its alleviation, since we can assume that he is speaking for a large part of the global elite hence that his views are likely to be less idiosyncratic than those of, say, a World Bank ecologist.

A little history. This was not the first time in the neoliberal era (c.1980-present) that global elites have discussed the causes of and cures for poverty. But it was one of the first times that top elites associated in various ways poverty and globalization. And it was probably the first time that economic elites spoke about poverty with such (feigned) passion (doubtless because of the South’s rejection of a goodly portion of the North’s WTO agenda in Seattle plus the anti-globalist victory in Seattle). Bangkok was important partly because it provided Camdessus and others a platform to review and systematize the most advanced neoliberal thinking about poverty and its alleviation.

In the neoliberal era, maldistribution of wealth and income and world poverty were first acknowledged "officially" in 1987 by UNICEF in the wake of the South’s debt crisis and IMF/World Bank "structural adjustment programs" (SAPs) of the late 1970s and 1980s. SAPs were loan packages to rescue the South from a debt crisis that struck in the mid-1970s and came to a head in 1980-1982. The IMF loans were peculiarly conditional: debtor countries had to offer the blood, sweat and tears of their people and their people’s future as collateral.

The SAPs were three-pronged, like the devil’s fork:

The SAPs gave neoliberalism its first real formal shape and definition. The combined effect of all three "adjustments" (the IMF said) would be to end "market distortions," allocate investment funds to sectors with the highest profit rate, increase foreign investment, and, finally, to raise the rate of growth of GDP and reduce the incidence of poverty. The IMF line was that this Rube Goldberg machine would permit debtor countries "adjusted" by IMF chiropractors to repay immediately their original North benefactors – banks and other financial institutions – and, ultimately, the IMF/World Bank loans themselves.

The way it worked: Much South government debt owed private bankers in the North was transformed into debt owed the IMF and some North governments, that is, was socialized. The IMF rescued government elite borrowers in the South and protected lenders in the North against any further risk, which was shifted to (mainly) U.S. taxpayers who would take the fall in the event a country in the South defaulted on its IMF loan(s). The super-exploitation of workers and peasants in the South however was expected to yield sufficient surplus value to enable South governments (in time) to pay back the IMF.

The IMF/elite line, dubbed the "rising tide" principle, was that by increasing the wealth of the rich, the number of poor would decline. The elite premise was that the free market was "entire and perfect, wanting nothing" and that slow economic growth (or worse) and poverty were not the result of any flaw in capitalism but rather in a country’s political institutions. The debt crisis was thus officially theorized as the offspring of government mismanagement and corruption (a theory that neoliberal elites of ontological necessity return to time and again, as during the 1997 financial crisis in Asia and in the Camdessus speech in Bangkok last February).

There was one small problem with the elite neoliberal "theory" (which like all ideology has a kernel of truth). By the early 1980s it was becoming obvious to open-minded observers that the facts pointed in a direction contrary to IMF predictions. Slow per capita growth and recession, and growing poverty, were seen by many as the result of factors beyond the control of individual South countries, particularly the poorest export economies. Oil prices had quadrupled in 1973-74 in a world economy where profits were already declining. The South was suffering not only a decline in investment and a rise in (oil) import prices but also a drop in export earnings as a result of world economic and political turmoil. South governments then attempted to reduce balance of payments deficits and restart economic growth by borrowing from banks in the North to fund local investment projects, which however were soon sabotaged by rising world interest rates. (Oil billionaires, both governments and individuals, had deposited barrels of petrodollars in North banks, which immediately sought out distressed South governments with offers of big-time loans and credits, as if their lives – profit margins – depended on them.) Finally, stagflation and in selected countries, hyperinflation, forced central banks and treasuries to slam on the monetary brakes, making a terrible situation in the South much worse.

The debt crisis was in truth the child of the general crisis of capitalism in the 1970s plus the attempt by the South to extricate itself from this crisis by protecting its currencies and expanding its home investments with borrowed funds. The SAPs were the tool used by the IMF/World Bank and U.S. government to force much of the South to abandon economic policy oriented to national development and to join U.S. imperialism’s new global order. The South would be "adjusted" to resemble more the Anglophone image of economic and political virtue.

Just a little more history. In its 1987 critique of the IMF/World Bank SAPs, UNICEF proposed the first of what would be many "compensatory" anti-poverty plans put forth by the global elite during the next ten years or so, to "target" poverty. Some of these plans had some local success but by the anti-WTO Seattle watershed there were many more poor people and countries in the world and their poverty was deeper and meaner. This was particularly true of the ecological wealth at the disposal of the landless and land poor agriculturalist and laborer: less land per family, less water, less food, fuel and fodder; more water and soil pollution; in the cities, more pollution of all kinds, more congestion, less living space per household, and a meaner urban existence; and seemingly much greater exposure of the poor to "natural disasters" – all due first and foremost to the "normal" workings of neoliberalism, which included periodic major and minor financial and real economic crises. The result: the growth of a massive populist movement that rejected the tenets and practices of neoliberalism in some countries with a fervor equal to that generated by the anti-colonialism/neocolonialism movements of the 1940s-1960s.

Among the worst effects of neoliberalism was the decline in public investments in schools, health clinics, public health, sanitation, drinking water, pollution control and recreation, especially in the half a hundred poorest countries. This was no accident: it was the result of deliberate SAP policy and in a sane world would be regarded as criminal negligence at the very least. The poor depended most on these investments, which are the kind of outlays most offensive to the economist/ideologues of the IMF and World Bank and the big bankers and investors in the North (and not a few in the South) who these institutions served. Since privatization was an essential component of the SAP policy mix, neoliberal economists believed that it was "economically efficient" to force countries to reduce state investments and sell the infrastructure to private investors looking more to make a profit, less to delivering power, light, water, and sanitation to the poorest of the South. For another thing, the SAPs battled inflation with high interest rates, both of which were regarded as the products of public budget deficits and public investments "mismanaged" by "corrupt" officials. The IMF and Co. also believed then (and now) that government and quasi-government bureaucracies are too big and too numerous, not only because they were associated with budget deficits and inflation, but because politically they could field a small army of militant state workers and tecnicos whose struggles on behalf of the poor were seen by economists and investors as so many "barriers to overcome" in the way to higher profitability.

By 1990, the World Bank admitted that the authors of the SAPs were studiously ignoring their impact on poor countries and people. By the early 1990s the U.N. Development Program’s (UNDP) first Human Development Report and the World Bank’s World Development Report were promoting new theoretical initiatives and the regional development banks largely followed suit. One was labor-intensive development as a key to "poverty reduction." Another was the blinding insight that economic growth doesn’t trickle down to the poor, as the IMF said it would. "Investing in the poor" via targeted programs and outlays on education and health were needed to alleviate poverty.

Neoliberal policies and practices throughout the 1990s however overwhelmed local reform efforts not only in the poorest countries but also in many if not most "emerging market countries." The relationship between neoliberal macroeconomics and the microeconomics of poverty reform is complicated: suffice to say here that the scope and limits of the latter are fundamentally determined by global financial markets, global patterns of investment, the laws of the centralization of capital (big news today), global raw materials and energy markets, regional and national labor markets, and so on (not to speak of civil wars, the main cause of which is economics). In 1996, a World Bank report titled Taking Action confessed that poverty reduction in Africa had failed – that at most 30 percent of Bank-assisted investment and "adjustment" projects had "pro-poor components," projects that were doubtless among the very smallest in terms of the amount of loans extended and money spent.

Back to Bangkok, February, 2000. I think it’s fair to say that more members of the global political elite (not the economic ruling class) agree that the SAPs did (and do) more harm than good with respect to wealth and income distribution and poverty; and that there are more poor and that more of these are turning away from globalism politically and that they (the elite) better do something about it. (See this issue of CNS for a critique of development economist Jeffrey Sachs’ recent pronouncements.) As Michel Camdessus warned, growing inequality and poverty within and between nations is "morally outrageous," "economically wasteful," and the "‘ultimate’ threat to stability in a globalizing world." How these three concepts are articulated with one another in Camdessus’ mind, the ex-IMF boss doesn’t say. Presumably inequality and poverty are the "ultimate" threat not because they are "wasteful" but because they are "morally outrageous." Economics as such (the "economically wasteful" line) is relevant because wealth and income levels are low in absolute terms. But the average person (including myself) neither knows nor cares whether an economy is "efficient" in Camdessus’ neoliberal economics sense of the word. Countries with "efficient" economies can be mean-spirited and "morally outrageous" from a popular standpoint. Alternatively, countries may be wildly inefficient without moral approbation. The problem, then, is not an inefficient allocation of resources as such, as defined by people who use the word "efficiency" as a cover for "profitable," for example, "too much" land producing food for domestic consumption, "not enough" in export agriculture (a common neoliberal complaint). Efficiency, meaning profitability, in Mexican agriculture, the day after NAFTA struck that country, increased; at the same moment, the Zapatistas went into open rebellion. The problem of social instability as Camdessus defines it would seem to concern low absolute levels of resources and income, not how these resources are allocated and how income is expended. Yet economists pride themselves on the number of ways they can argue that efficient economies are also economies that grow fast. So, in the last analysis, Camdessus seems to be saying that neoclassical (neoliberal) economics and its peculiar theory of capitalist economic growth (peculiar because it abstracts from class and property relationships) is essential to the salvation of the world. This will surely comfort the c. 50 percent of the world’s working classes who are unemployed, underemployed, or subemployed (employed at less than a living wage), the largest proportion of which are women of color.

As there is between rich and poor, there also appears to be a widening gulf between nationalist and globalist elites, the former believing that maldistribution is the result of too much globalization, the latter arguing that poverty is the result of too little globalization. In the first camp are politicians such as Malaysia’s Prime Minister Mahathir Mohammed who argue that world poverty is growing because of a surplus of power by transnational corporations and banks and a deficit of power exercised by South governments (including his own). The first camp wants to orient their countries less to globalist and more to nationalist development (for example, by expanding their national car and aircraft industries) while the second camp wants to stick with the globalist model and make it "work better."

Michel Camdessus used the UNCTAD venue to present arguably the global elite’s most sophisticated theory of pro-globalist reform. Poverty is to be alleviated by "accelerating growth via foreign investment" (which is also Annan’s position). "Globalization can now be seen in a positive light," Camdessus said, "as the best means of improving the human condition throughout the world." He reassured his listeners, "Globalization does not threaten poor nations if foreign investment...helps reduce gaps in wealth."

The question arises, how is it possible to reallocate foreign investment from regions where profit rates are high (e.g., Southeast Asia up to 1997) to regions where profits are low (e.g., many Latin American and most African countries)? What must be changed to stimulate a relative shift of investment funds from the North to the South and from the more developed to the underdeveloped parts of the South?

The heart of Camdessus’ project of neoliberalism with a human face is a five-point program, which presumably has been approved by some big shots in the IMF and the World Bank, and one or more North Ministries of Treasury. This project is best interpreted as "what capital wants" in the way of reform to "alleviate poverty" hence to avoid "economic inefficiency" and "social disorder" not to speak of a bad conscience within elite circles.

The first three points are predictably neoliberal. The first is "sound macro-economic policies," which means among other things spiking interest rates during foreign exchange crises, to defend the currency, prevent inflation, and mitigate against massive capital flight of the type witnessed in 1997. "Sound policies" also means more foreign investment, to increase the demand for local currencies to prevent foreign exchange crises, to bring skills, organization, needed business services and the like to poor countries, and to integrate all countries more tightly into the globalist order. Camdessus doesn’t comment on the fact that most foreign direct investments today are mergers and acquisitions, adding little or nothing to a country’s capacity to produce goods and services.

The second point is "the promotion of free markets." This speaks to the issue of "economic efficiency" (liberalized input and output markets and foreign trade and investment, and privatization) and also comes as no surprise.

The third point is more interesting. This is to weave a "web of laws that support the functioning of markets," which implies speeding up deregulation and privatization but also a kind of revolution from above of corrupt and inefficient bureaucracies in the South (see below).

The fourth and fifth points appear at first glance to be genuine social reforms but (as noted above) on examination turn out to be particularly insidious examples of neoliberal policy. One reform is to construct "well-targeted and cost-effective social safety nets in education and health care" and to provide more "income-earning opportunities for the poor." Another reform is to formulate "country-driven strategies that make poverty alleviation the centerpiece of economic policy." As noted, neither reform seems to be problematical at first sight; it’s the second look that reveals the depth of Camdessus’ cynicism. Take the issue of social safety nets. Camdessus’ focus is not on human suffering and need. Human beings are rather "targets" whose worth is to be measured by cost-benefit analysis, like any other investment project or commodity. Cost-ineffective safety nets for AIDs sufferers, for example, need not apply. Note also that Camdessus’ "safety nets" cover only the employable (exploitable) working class. Retirement benefits and workman’s compensation are conspicuous by their absence, as are housing and other allowances for the tens of millions of displaced poor seeking jobs in the industrial districts of the South. Family benefits for impoverished women and children are also off-base. "Safety nets" for Camdessus are thus defined as safety nets for capital, to expand the supply of well-trained labor with healthy bodies and willing minds. Education and health-care spending are forms of human capital, not social welfare. Camdessus seems to be indifferent to the breakdown of traditional safety nets – extended families, village life, and craft or guild insurance systems – which have little to do with the functional needs of the labor market and much to do with the traditions and values of organized living and working communities. The retired IMF boss has cooked up a welfare system for capital, not labor, which might be the ultimate neoliberal trope.

Camdessus’ last reform, "country-driven strategies" to alleviate poverty, is proposed as the "center-piece of economic policy." First, this doesn’t mean a redistribution of wealth and income from the North to the South (these are "country-driven" strategies remember), or from capital to labor (which Camdessus would regard as anti-foreign investment hence anti-development).

Camdessus’ version of poverty alleviation does imply redistribution from one or another group within each poor country to the poor. What group could this be, other than the infamous "corrupt bureaucracies" and "rent-seeking officials" that according to IMF lore almost wrecked economic development in Southeast Asia? "Country-driven" strategies to reduce poverty would seem to mean IMF globalist strategies to rid the South of private-state buddy arrangements and bureaucracies that are best described as spoils allotment systems. Camdessus wants "honest government" that will help the poor a little by helping international investors a lot (the latter of course are heatedly demanding more transparency and accountability on the part of South bureaucracies and banks).

In sum, the "international community" especially the "investor" stands to be the big winner if South spoils allotment systems could be magically transformed into "honest" Anglophone-like liberal democracies. What Camdessus really wants is to replace old national elites with new foreign investors and global technocrats; politics with economics; rent-seeking with profit-seeking; rule by bribe and pay-off with the rule by capital. Corrupt as many are, some national elites remain enamored of economic development oriented to the needs of the nation including labor, small farmers and the poor, which is one reason that Camdessus’ project can be seen as a species of 21st century neocolonialism.

Camdessus is not bashful about recommending policy changes to the North, too. The first is that the poorest countries (including the HIPCs, the "heavily indebted poor countries") should be given "unrestricted market access in the developed world for their exports." This is a recommendation to further integrate the factories and farms of the poor countries into the structures of transnational corporations (organizationally) and the circuits of capital (economically) that begin and end in New York, London, Tokyo, Paris and Frankfurt. Larger or less-poor countries such as Argentina, Brazil, India, and South Africa, among others, would not to be awarded more market access, only those countries doomed to be more thoroughly globalized (if and when the foreign investor and IMF economist can reform the military and bureaucrats running the show today). Global-led not national-led development would be the result. This would be inevitable: in the Camdessus scheme of things export industries would be able to get cheap credit and technical assistance, pay relatively high wages, and so on, which would stifle sectors producing for the home market.

In effect, Camdessus wants to make the law of value work better globally by opening North markets to the products of the poorest South countries – products that can be purchased in the North at the lowest possible price. The macroeconomics: a reduction of the cost of wages (the value content of the consumption basket) hence an increase in relative surplus value in the North; less pressure on labor to demand increases in money wages in the North hence weaker unions; and less inflation in the North. And in the South? The poor countries would be more at the mercy of the world market, especially liberalized financial markets. Here, too, Camdessus’ plan is for the haves, not the have nots: again, the rich are sometimes willing to help the poor if they can help themselves even more.

Camdessus’ second recommendation to the North is to "back up pledges to reduce poverty with financial support" and especially to relinquish the old excuse of "aid fatigue." Recommencing foreign aid for development might be a stretch in the U.S., which gives almost 90 percent of its foreign aid to Israel and Egypt, for political reasons (the carrot needed to keep Middle East oil safe for American democracy, the stick being the blockade of Iraq, which is killing off the next generation of Iraq workers and soldiers). More charitably: more foreign aid but within the tight parameters of the world capitalist market so as to help the poor become more efficient commodity producers and exporters and better consumers. This distorted version of a global New Deal would help to solve system problems as the elites understand them, for example, the worry that the apparent global trend toward balanced budgets is reducing world aggregate demand hence economic growth. At the same time it seems to address the problem of social integration as defined by world elites and ruling classes – the need for social order or social peace. "Social justice," a top demand by anti-globalist forces of all political stripes, is not in Camdessus’ policy lexicon. Hence the older and very clear difference between popular demands for social justice and ruling class demands for social peace (for the former, "first social justice, then social peace;" for the latter, "first social peace, then social justice’) is obliterated. Thus the banishment of the language of class struggle by 21st century globalist elites and economic ruling classes.

Camdessus’ final recommendation to the imperial North is to "restrain the sales of military equipment to sensitive regions, abolishing the provision of export credit for military purposes" in the trade rules of most North countries. This can be linked to attempts to dampen regional conflicts that might require North or NATO military intervention and also more interestingly to Camdessus’ proposals to reform the political systems and state bureaucracies of the poor countries (see below).

These changes are meant to go hand in hand with standard neoliberal policies: "liberalization of trade, payments, and capital movements." Camdessus argues that liberalization presupposes a reformed international financial structure including replacing the G7(8) annual summit with a G30 summit, which would include all those countries with executive directors on the boards of the IMF and World Bank. This Camdessus describes as a "representative grouping of world leaders with unquestioned legitimacy." Immanuel Wallerstein remarked that the implication of Camdessus’ position is that G7 doesn’t have "unquestioned legitimacy," an interesting admission if only by inference. A stronger criticism is that any G30 organized under conditions of intra-imperialist rivalries and the super-exploitation of the South by the North would be riddled with up to four times the conflict that presently divides G7 – the Seattle WTO fiasco writ huge, as it were. There’s not a chance in the world that a political class drawn from the elites of 30 leading countries could regulate world economy in any but the most nominal sense. In the export/foreign investment/high tech world of 21st century capitalism – where giant global corporations and banks compete on dozens of fronts, where governments of the industrial economies look out for their own countries first and last, where foreign exchange rates are politically as well as economically determined, and where international agencies themselves are presently in a state of crisis – the idea that a G30 could amount to anything but a traveling circus would seem to be ludicrous.

The twin problems of system disintegration and social disintegration (or system and social crisis) in world economy and society will therefore likely to fester and undergo periodic crises of different types. The world will become more economically vulnerable, especially with the U.S. experiencing one of the most unsustainable booms in its history. Camdessus himself thinks that the U.S. economy and inflated asset markets are the number one macroeconomic problem in world economy today, more dangerous even than Japan’s stagnation. A negative savings rates, an increasingly huge current accounts deficit, a relatively strong dollar primarily because the U.S. remains the most (paper) profitable place for foreigners to put their money (thanks to the bust in Asia, the weakness of the euro, and Japanese stagnation, on the one hand, and a hugely inflated market for tech stocks, on the other hand), all spell trouble. He might have added the biggest problem, namely, that the U.S. has lost whatever soul it might once have had. These dangers pose even greater dangers for capitalist world society. There is growing popular rejection of the U.S. Treasury’s version of globalization, (as noted) one main form of U.S. imperialism. Experts and oracles point to the dangers of ethnic/populist disturbances on every continent of the world. Social morbidity and political turmoil and upheaval, in turn, discourage foreign investment, which in Camdessus’ world is the key to unlocking the untapped surplus value and riches of world economy, the way to grow material abundance and to alleviate of poverty.

We might be in for a vicious circle of economic system and social disintegration, each of which feeds on the other, both of which our ruling and political classes have been blind to until very recently. In this sense, the anti-WTO, anti-globalist movement can be seen as a wake-up call. Yet none of the four major candidates for the President of the World raised, never mind tried to answer, a single question or problem of the type posed above.

The normal operation of globalist capital produces poverty and marginalization; a crisis-stricken world economy would turn this poverty and marginalization into social upheaval and political fury the likes of which the world hasn’t seen for a long time. In turn, this would dampen and at the limit halt foreign investment, which the world elites regard as the "secret of accumulation" and economic growth, worsening the economic situation.

I have no idea whether a Camdessus-type project will be or even can be systematically applied on a world-wide basis. Some (including myself) sense that the global elites are running scared and are concerned first and foremost with restoring stable G7 economic growth, by trying to talk Japan out of its doldrums, talk the euro up, and talk the U.S. stock market-driven, hyper-consumption economy down. Measured by the bushels of elite economic rhetoric harvested by the media every week, poverty alleviation on a global scale takes distant second place to the restoration of stable and sustainable G7 economic growth. If so, a serious try for a Camdessus-style solution to world poverty is not yet on the agenda.

The obstacles seem to be greater than the strength of the forces pushing for "good government." Needed would be something like the progressive reform movement in the U.S. at the turn of the l9th century, when machine politics and ethnic monopolies of local power inhibited economic restructuring following the crisis of the 1890s. The lesson of history is that "good government" presupposes a class of progressive reformers accountable to big capital. A hundred years ago big capital was largely national capital, while big capital today is global in scope and it is difficult to understand what legitimacy European or U.S. transnationals or even international agencies have in this touchy and difficult area of political and administrative reform. (This is especially true given that the transnationals are typically part of the problem of corruption not part of the solution.) Mexico for example has been experimenting in its own way with "good government" attempts for many years without major success. To take the extreme case, Russia remains a political and administrative nightmare. How the poorest countries can pull off solutions that elude Mexico, Russia and other countries "fighting corruption" is beyond my understanding. In the U.S., the progressive movement "reinvented government" by introducing civil service, the city manager system of local government, and a dozen other major reforms. Local government became more responsive to modernizing capitalist banks and firms and less beholden to ethnic working class political machines. The result, finally, was the typical city as "growth machine," which is driving regional accumulation today. But where does global capital or global elites find the legitimacy, money, and skills to construct rational bureaucracy a la Max Weber? Yet the UNDP and Camdessus and others are partly right when they link "bad government" to weak investment incentives and profits in the South. One can for example cite the crisis of 1997-98 in Southeast Asia as the crucible in which the movement for transparency and accountability was significantly strengthened in that part of the world.

I read Camdessus this way: globalization is marginalizing the small or subsistence farmer, the crafts and trades, the independent merchant, and so on – all producing for local or the home market – and the commons are being enclosed at a fast rate. On the other hand, global capital accumulation creates relatively few good jobs, nowhere near enough to absorb the landless and land poor reserve armies of labor. The problem for Camdessus then would seem to be to rationalize national defense and state administration and electoral processes along Western lines to accelerate the transformation of the poor and marginalized into workers producing surplus value and consumers who help to realize that surplus value. In my mind, this isn’t possible without a strong nationalist identity on the part of elites and masses alike. This might legitimate the many globalist measures that have negative or only future payoffs meanwhile permitting global capital to penetrate and take over the national economy. But this requires the absurd premise that a nationalist elite (such as governs Malaysia) will serve a globalist master (which Malaysia has to a great degree avoided). Neither Camdessus or the UNDP seem to have any solutions to this puzzle. And this is not even reckoning the demands of the anti-globalist movement itself – demands that in Camdessus’ mind are confined to the issue of maldistribution and poverty alleviation but which in internationalist anti-globalist circles in reality challenge the whole global project from top to bottom, from the tyranny of money to the commodification of the world.

A final note. The kernel of truth in the globalist theory of government and administration is simply this: a government that isn’t half-way honest and a bureaucracy that isn’t half-way transparent and accountable lacks the political legitimacy and administrative rationality, respectively, required to respond in flexible ways to the rapidly changing parameters of global capitalism. The ideal Weberian bureaucracy is a perfect form for doing routine business but highly imperfect for the creative and risk-taking business of dealing with the erratic exigencies of global capital. Less "political" and face-saving decision-making, more creative budgeting and more emphasis on individual initiative and horizontal sharing of information and planning, more collaboration between specialized agencies, and the like become essential (not just in the South but also the North). Some would point to Tokyo as a leading example of what not to do in an economic crisis although I wouldn’t rule out the IMF itself for leading honors in that department. How many hundreds of scholars have used the word "flexibility" to define the most pressing need in today’s high-tech global capitalism? Twenty million Frenchmen have proven to be wrong more than once in the modern history of France. Twenty hundred or thousand business school types, researchers and journalists can’t be wrong.

Marx first grasped the two-sided and contradictory nature of "flexibility" in the setting of capitalist economy generally and production in particular. Marx demonstrated that laborpower is not "variable capital" in the quantitative sense unless it can be used flexibly in the qualitative sense. This means that laborpower can’t produce more surplus value unless the boss is free to vary the use or consumption of laborpower in different ways. A simple mind experiment: if the division of labor in every factory, mill and farm in the world were for some reason totally inflexible, ossified, capitalist production (surplus value production) would come to a screeching halt. An empirical statement: one reason why the U.S. economy is doing well relative to its competitors today has to do with its relatively high degree of flexibility, in input and output markets, in technological change, on the factory floor. Marx was also keen to point out that such variability was a "matter of life and death" for capital during periods of economic slump or crisis. Everything we know about global capital in the neoliberal era confirms Marx’s insight and reasoning. The down side for capital: laborpower as variable capital in the qualitative sense in its most extreme form means that "every worker can do every job" in a workplace, which is commonplace wisdom in small or family businesses, but more difficult to accomplish in big workplaces (which is one reason why big capital decentralizes production while it further centralizes control and money). The contradiction is, in its simplest form, "the more variable is laborpower, the more surplus value the worker can potentially produce, but the more multi-skilled is the owner of laborpower, the greater is his or her ability to operate a factory or business (with other workers) without management supervision, coordination or control." This is essentially what Marx meant, I think, when he drew out the logic of crisis/increase in variability of laborpower/increase in potential surplus value/rise in the capacity of workers for self-management. The contradiction is formed by the last two steps in the logic: the worker is more exploitable and less exploitable at the same time. Which will be true, politics will decide.

Something like this contradiction is developing today, not just in the workers’ self-management programs in capitalist workplaces, but also in the workplaces we call "society" – school rooms, community health clinics, environmental planning, park and fish and game management, family caring work, community policing of the police...the list is long. I understand that much if not most of this work is self-exploitation in some general social sense of the word; but much of it isn’t. As noted, politics decides.

"Good government" means something like "good workplace," in the sense that citizens are expected/expect ourselves to participate in aspects of communal life and labor. For capital this adds up to "community capital." The community examines itself, Foucault-like, to learn its collective strengths and limitations, to present itself to capital as a "good investment." For labor/citizenry, this adds up, potentially, to "community power," which means a community able to organize itself for goals that have nothing to do with the tyranny of money and everything to do with the social, political, cultural, and physical health and welfare of the community itself. (It is fascinating and awesome to see this dialectic at work in a progressive town such as Santa Cruz. Politics decides, but someone always asks, "what is politics, anyway," and someone gives an answer no one forgets, "politics is the means to the good life.")

Total Variability is what global capitalism everywhere is striving to create. (Just consider capital’s rate of cooptation of NGOs.) Since human beings are both the variers and variables, the more progress capital makes, the more rapidly can it seal its own fate. Here we could segue into theories of civil society, and theories of political ecology, theories of radical democracy, theories of feminism and ecofeminism...and maybe somebody will take a stab at doing so. But first the inner connections between Marx’s concept of "variable capital" and the perhaps foolish concept of "Total Variability" would need to be examined. Don’t forget, though, global capital is placing more demands on workers, and also on women, communities, administration, on nature. There are fundamental grounds for common concern among women, oppressed minorities, workers, ecologists who speak for natural communities. Neoliberalism in practice is the subordination of use value by exchange value, by mobilizing each and every person in all aspects of our lives to assist in the production and accumulation of capital. As noted before in House Organ, the self-expansion of capital – where "self’ is defined as everything and everybody in the service of using money to make more money – is a psychotic enterprise. It is driving millions of people crazy in various ways. Don’t forget, either, that capital "expands or dies," which unless we seriously consider our predicament means "expand and die." – April 15, 2000