Received from Spectre Magazine

Louis Proyect lnp3 at
Fri Oct 29 08:00:13 MDT 1999

Welcome to SpectreMail, the free news and comment e-mail service of Spectre
magazine.  Spectre is a radical socialist international quarterly.
Although we enjoy the sponsorship of a number of organisations, Spectre is
editorially independent.  Contributors speak only for themselves or the
organisations to which they belong.

If you do not wish to receive any more mailings, please visit our website
at where you can unsubscribe anytime.  Please feel
free to respond to anything you read here or in the magazine.

If you are interested in subscribing to Spectre Magazine, see the box at
the end of the mailing.  If you would like to know more before parting with
your hard-earned cash, please visit our web-site which is currently
generously hosted by one of our sponsors, the Socialist Party of the
Netherlands, at

Spectre tries to cover a wide range of subjects of interest to a broad
progressive audience, with the main focus being on international relations,
development issues, and resistance to corporate power, militarism and the
undemocratic rule of super-national financial institutions.  We are for
human dignity, equality and solidarity, and against the alphabet soup that
threatens to drown all three: EU, IMF, WTO, NAFTA, NATO etc, etc.  We have
so far featured well-known writers such as Noam Chomsky and Edward S.
Herman, politicians from across the spectrum of Green and Red, including
Tony Benn of the British Labour Party, Marianne Eriksson of Sweden's
Vanster Party, and Irish Green Patricia McKenna- as well as many 'ordinary'
women and men whose voices would otherwise not be heard.  We hope that this
free and frequent mailing will be able to maintain this quality.

In our forthcoming Autumn 1999 edition you will find features East Timor,
corruption in Russia, the UN report that reveals the growing division
between rich and poor, the return of the Multilateral Agreement on
Investments, the international erosion of workers' rights, and Germany's
role in EU expansionism.  Contributors include Edward S.Herman, Ken Coates
and Denise Comanne.  We also have our regular features from Dutch Socialist
Party leader Jan Marijnissen and Mat Coward -- those of you familiar with
Mat's work will be astonished to know that he has so far been unaccountably
overlooked for any similar position of authority.  To give you a taster,
here's this issue's interview -  with Eric Toussaint, author of the recent
Pluto publication, Your Money or Your Life.


Spectre talks to Eric Toussaint, Belgian author of a new book Your money or
your life which describes the way in which powerful states and the
multinational corporations based in them use the indebtedness of the
developing world  to line their own pockets at the expense of the poor, and
to reinforce the relations of power that keep the plunder going.

One of the issues discussed in your book is the increasing concentration of
wealth in fewer and fewer hands. Elsewhere in this issue we mention a UN
Human Development Report that makes the same observation. The figure you
quote is that in 1996 348 people owned a total of one thousand billion
dollars; by the following year you needed only 225 to put the same figure
together. At the same time, of course, poverty rates are increasing almost
everywhere. Isn't this process also bad for capitalism? You quote numerous
mainstream economists who seem to hold this view. If so, why is it
happening? Is it mere greed, or some inherent feature of the system?

First we'd better bring the figures up to date, because the very latest
report, the one you cite, gives the number needed now as 200. It gets
smaller every year. However, to come to your question, if there was a sort
of world government capable of defending the general interest of
capitalism, this concentration of wealth, which of course translates into a
drop in global demand, would be seen as going against that interest. But
there is no such government, no central management of the system. On the
contrary, capitalism is a mode of production which is, to some extent,
anarchic in its functioning. The fact of global impoverishment poses
problems for the rate of growth by putting a brake on the realisation of
the value of the sum of goods produced, but this does not stop each
capitalist from pursuing his or her own immediate interests, which include
the reduction of wages. The result is that each individual capitalist
contributes to this impoverishment.

In addition, the capitalist seeks advantage in the competition with others,
and this can lead to concentration of ownership, hostile takeovers and so
on. The resulting oligopoly - the domination of the market by a few firms -
can also be against the general interest of capitalism, reducing, for
example, the capacity for technical innovation. So, your question touches
on one of the system's great contradictions, between the interests of each
individual and the general interests of capital.

25 years ago capitalism seemed far less ideologically monolithic than is
now the case. How can we explain the triumph of neoliberalism, its
absolutely dominant position in mainstream political and economic thought?

Since the turning point in the system around the early 1970s we have seen
an enormous offensive from capital. It is on the back of this that the
neoliberal idea came to dominate. Earlier there were different schools, but
now if you call yourself a Keynesian you're considered almost a
revolutionary, you're marginalised. This neoliberal school existed long
before this - earlier in the century, in the 'teens and 'twenties. It was
eclipsed during the Great Depression, when interventionism came back into
fashion. Even if the neoliberals were isolated, however, thinkers like
Hayek and Friedman, the University of Chicago people and the Montpelerin
Society, continued their work in preparation for the counter-offensive.
With the reversals of the 1970s, and above all the victories of Thatcher
and Reagan, neoliberalism made its comeback.

Now, however, it's entering a new crisis, because the economic model which
it advocates is itself in crisis. The rate of growth in the industrialised
countries remains very low, and the South East Asian countries which are
supposed to be its big success are experiencing huge problems. In three
great regions of the world where we had been told that the neoliberal model
has triumphed - Latin America, Central and Eastern Europe, and South East
Asia - we have witnessed crises of the system. Public opinion is
increasingly calling into question the model and the tenets upon which it's
based - for example, the idea that private enterprises are necessarily more
efficient than those in public ownership.

All these privatisations have shown this to be untrue, while it is also
evident that privatised concerns have lost any commitment to public
service. People see the need for renewed regulation by the state. We've
seen such economic instability, the growth of speculation, the collapse of
a number of important finance houses.
Moreover, in this last case governments have intervened to prevent an
individual instance of instability mutating into a full-scale systemic
crisis - an example was when the US central bank, the Federal Reserve, used
direct, authoritarian methods to rescue the hedge fund Long Term Capital
Management. A true neoliberal would have said, let it go bankrupt, the
state should not intervene, the market must decide who sinks and who swims.
A lot of people began to think, well, these people don't respect their own
principles, and if they don't respect them when it comes to rescuing rich
investors why not drop them when it's a matter of the common interest, of
the good of humanity? The result is that a growing section of the world's
population is returning to the view that the fundamental elements of life -
water, air, the general environment, the food supply - are public goods,
not private goods.

They are blaming privatisation, deregulation and so on for mad cow disease,
for the dioxin scandal, for all kinds of environmental degradation, for
exposing us to the dangers of genetic manipulation of foodstuffs. More
people are convinced that the general interest would best be served by such
matters as water distribution being brought into public ownership, or that
public bodies should regulate the distribution of food. This represents the
return of a socialist way of looking at things, even if the term
'socialist' remains discredited in many people's eyes by the experience of
Stalinism in the east and social democracy in the west. As recent elections
have shown, people look at Schroder or Blair and they're not too happy with
what they see.

A major theme of your book, and of your broader political work, is the
problem of Third World countries' indebtedness. Is it possible for you to
summarise the reasons why most African countries and many poorer countries
elsewhere came to be burdened by huge unserviceable debts?

Poorer countries were encouraged by western banks to borrow money during
the 1970s. The present debt crisis, which first blew up in 1982, is due to
the combined effects of the sudden increase in interest rates by the US
Federal Reserve towards the end of 1979, the fall in export revenues and a
halt in further loans from banks. It has been managed by the governments of
the North and multilateral financial institutions - the IMF and World Bank
- in order to force back into a cycle of dependence those countries of the
Third World and Eastern Europe which had succeeded in acquiring a certain
level of industrialisation and therefore a measure of financial muscle. As
for the least developed countries, their subordination to the interests of
the leading industrial powers has been enhanced.

Between 1982 and 1998, the countries of the periphery - that's to say those
of the Third World and Central and Eastern Europe - repaid more than four
times the total sum they had borrowed. Despite this, their total debt grew
by precisely the same proportion. International creditors - the IMF, World
Bank, the Club of Paris (a grouping of western creditor nations) and the
Club of London (made up of western private banks) dictate terms, most
importantly in the form of Structural Adjustment programmes (SAPs), which
are no more than a tool designed to bring the debtor countries to heel.

What are the general effects of this debt burden, on the countries
themselves, and internationally?

The debt system is an enormous mechanism for transferring the wealth of
wage-earners and small producers of the South to the capitalists of both
North and South. It isn't only the capitalists of the rich countries which
benefit, but privileged elites within the Third World who profit from the
impoverishment of their own populations. In 1998 $250 billion was repaid by
the Third World countries - this doesn't include the ex-Eastern Bloc - and
only $40 billion received in Overseas Development Aid (ODA). Moreover, this
transfer of wealth is not only attractive in a direct sense, but because it
enhances the domination of the most industrialised nations - the member
states of the G7 - over the periphery.

In recent years we've seen that, by reinforcing the debt, the G7 countries
and the multinational corporations (MNCs) based in them have succeeded in
forcing those countries which had created for themselves a certain space
for manoeuvre - South Korea, Brazil, Mexico - to accept SAPs dictated by
the IMF and World Bank. Behind these SAPs you can clearly see the interests
of western multinationals, which have been able, for example, to buy -
acquiring it in dribs and drabs - the South Korean corporation Daewoo.
The most striking result of the debt, however, is of course the direct
impoverishment of huge swathes of the world's people. There is a large
number of countries in which more than half the population is living below
the level of absolute poverty, defined by the World Bank as $1 a day-

But in your book you criticise this definition.

Yes, because for example if you go to Brazil, or even a much poorer country
such as Senegal, you simply can't survive on $1 a day. If people do survive
on such an income, it's because of collective solidarity which doesn't work
through cash but through mutual aid, women's domestic labour, things which
stand outside the framework of market relations.

Some of the effects of this terrible impoverishment were brought out at the
recent conference held in Lusaka on the subject of the AIDS pandemic. Life
expectancy in certain African countries - Uganda, Tanzania, Rwanda - has
fallen in recent times by as much as 12 years. This is directly linked to
the debt crisis, by the simple fact that the countries which have suffered
most from AIDS have paid out, between them, four times as much in exterior
debt repayments as they have been able to spend on addressing the crisis
through health education or health care. Most people in these countries
have no access to basic health care, yet the debt must be repaid.
It's significant, too, that no G7 minister was present at this conference.
When the G7 met earlier this year in Cologne and was presented with a
petition of six million signatures organised by the debt relief campaign
Jubilee 2000 with the support of celebrities like the rock singer Bono,
they had to come up with some response. Then of course the media's
attention moves on and, when it comes to proposing concrete measures, these
heads of state are nowhere to be found.

In the short term, what can or should be done?

The debts must be annulled. In order to achieve that, however, we would
have to create very different relations of forces than exist today. It
wouldn't be hard to annul Third World debts, actually, because they
represent only a small proportion of the world's total public external debt
- about $2,000 billion, compared to around $6,000 billion, for example, for
the EU's member states - so, if you add the US and Japan, you can see that
Third World debts could be annulled without its posing any threat to the
world's financial system. But, for the reasons I gave in answer to your
previous question, it isn't going to happen. It's only by challenging the
existing arrangements of power that things will be changed - by a political

Every time there is a crisis in a developing country, such as that in East
Timor now, we in the West are asked by a range of organisations to give as
generously as possible. Every time you respond to such appeals, however,
you're aware that emergency aid is by definition no solution to the
problems that lay behind the crisis, behind all of these crises. What can
we in the west do to help people tackle those?

Well, the political struggle to which I've just referred needs to be
combined with other campaigns, to change the trade relations between North
and South to make them more equitable, to establish a new global economic
order. Then there is the question of the complicity between the North's
financial institutions and the rich elites of the South. For example we
need a public inquiry into the location of funds salted away in western
banks or stock portfolios by Third World dictators and the capitalists who
surround them, and a means of returning these funds, where they are the
result of theft, to the peoples from whom they have been stolen. A further
issue concerns the necessity for a tax on capital transfers, something like
the so-called Tobin tax - not necessarily precisely that, as there are
numerous proposals worthy of consideration.

A movement, ATTAC, has grown up internationally to campaign for such a tax,
though it lacks support in Britain and other English-speaking countries,
and is also weak in the Netherlands and, with the exception of Norway, in
the Nordic countries. In fact, as this is where most of your readers are to
be found, I'd like to appeal to them to get involved. At the moment it's
strongest in the Latin countries of Europe, in Japan, and in certain
developing countries, notably Brazil. the Philippines and South Korea. As
an international campaign ATTAC can play an important role in unifying
activists in different kinds of campaigns. The interests of international
solidarity groups, feminists, environmentalists, trade unionists, people
campaigning against unemployment, are all touched by the failure to tax
speculative capital and the resulting instability, the financialisation of
the economy.
One important matter which ATTAC hasn't taken up, however, is the
development of increasingly aggressive military alliances, principally NATO.

Yes, the English title of your book hints at the threat of force. We have
seen force used recently, and a complete and unilateral redefinition by
NATO of its role in the world. Are we facing a growing and real threat of
militarism? Elsewhere in this edition of Spectre, for example, Ken Coates
says that NATO's attack on Yugoslavia means that nothing will ever be the
same again.

Well, I don't agree completely with that statement, but I would agree that
the recent war reinforced the US position of leadership, its status as
principal power at every level - military, economic, political... This
habit of military intervention to create or support states resulting from
fragmentation of bigger states is leading to the existence of numerous
nations whose fragility makes them easy prey for the multilateral financial
institutions. For example - and this is what I meant when I said I didn't
quite agree with Ken Coates that everything had changed because of this war
- look at the way in which the European Union and United States intervened
in Bosnia, and I think you'll see that the turning-point was already evident.

The Dayton Accords which ended the Bosnian War state, to take one instance,
that the president of Bosnia's national bank must be a citizen neither of
Bosnia nor of any of its neighbouring countries. The appointee is in fact a
western European whose salary is paid by a western multilateral financial
institution, the European Bank for Reconstruction and Development. (EBRD).
The upshot is that one of the fundamental institutions characterising a
sovereign state is in the case of Bosnia completely controlled by external
forces. Naturally if foreign powers pay the bank president's salary he or
she can only follow the wishes of these powers. So what we're seeing in
Kosova was already happening in Bosnia. Apart from this quibble, I agree
with the spirit of Ken Coates' remark. Fundamental changes have taken place
in the last few years which force us to reassess the question of how to
combat these military alliances, force progressive opinion to make this one
of our priorities.
Not only Kosova, but the Gulf War and armed attacks on Afghanistan and
Sudan in 1998, all clearly show that if it believes that its national
security interests are threatened, the US will not be restrained by any
idea of respect for national sovereignty.

On this point, however, I want to make one thing clear, and that is that I
do not believe that we should support the creation of a European army or
reinforcement of European armed forces to put them on a footing to be
deployed anywhere and everywhere in the world. We have to struggle against
EU militarism as well as its US counterpart. We should be campaigning for
the dissolution of military pacts, a graduated but total demilitarisation,
an end to the arms industry, and the development of radical, peaceful
solutions to conflicts.

One of the central ideas behind Spectre is that, because the same processes
are going on in almost every country of the world, a response which
attempts to organise across borders and other traditional barriers is
imperative. We are opposed to the European Union as standing in the way of
such cooperation. There are some, claiming to be of the left, who take a
more benign view of the EU, who see it as perhaps reformable. Where do you
stand on this question?

International cooperation is indeed vital. I am neither 'pro-European' nor
nationalist. We need an alternative European project as an element of a new
international order, a Europe which admits to an historic debt to the
peoples of the periphery, one which would find ways of transferring wealth
from rich to poor instead of in the opposite direction. I would like to see
a Europe which took sides against existing global power relations, instead
of one which seeks to compete for global leadership with Japan and the US.
But any such Europe, a people's Europe, would have to ensure maximum
autonomy of its constituent peoples, suppressing international frontiers,
but not national identities and different cultures.

Eric Toussaint is Chair of the Committee for the Abolition of Third World
Debt, based in Brussels and known by its French initials, CADTM. If you
want to know more about the problem discussed above, buy his book, Your
Money or Your Life: The Tyranny of Global Finance (Pluto Press, 322pp,
£17.99). He was speaking to Steve McGiffen and Marjorie Tonge.


A coalition of North American organisations has brought out an excellent
brief guide to the WTO.  A Citizen's Guide to the World Trade Organization
explains the body's role in the transformation of the globe into a
corporate paradise.  As the booklet says, "A global system is being created
where corporations have all the rights, governments have all the
obligations, and democracy is left behind in the dust.  Find out why tens
of thousands of angry activists will shortly descend on Seattle by sending
$3 (from inside the US) or $3.50 (from elsewhere) to Apex Press, Suite 3C,
777 UN Plaza, New York, NY 10017, USA.  US residents can pay with money
order; others need a credit card.  Email JRizzi52 at for further
details, including reduced rates for multiple orders.


The Financial Times, which is the only British mainstream newspaper still
worth reading and which should (and usually does) know better, has taken to
calling opponents of further global liberalisation 'anti-trade'.  Short of
producing everything you need yourself, which seems an unlikely
achievement, it's hard to see how anyone could really be  opposed to trade
as such.  Caroline Lucas, recently elected British Green Euro-MP, expressed
perfectly what WTO-opponents are really against in a letter published by
the same newspaper on October 14th.
"World trade rules," Dr. Lucas said, "are, in a number of significant ways,
damaging the environment, undermining poor people's livelihoods, and
setting back animal welfare provisions by decades.  World trade rules on
production and processing methods are preventing governments from being
able to choose between imports which have been produced in socially or
environmentally damaging ways, and imports which are being fairly traded.
And world trade rules are putting citizens at risk by preventing
governments from being able to exercise the precautionary principle when it
comes to genetically modified foods or hormone-treated milk."  Quite.


... to the three women recently cleared of criminal damage by a Scottish
court.  Charges arose from the three Trident Ploughshares 2000 activists'
attack on a nuclear submarine base at Faslane.  The judge based her
instruction to the jury to record a not guilty verdict on the principle
that a crime may be committed if its purpose is clearly to prevent a
greater crime.  As nuclear weapons have no other purpose than mass murder
and destruction, this was indisputably the motive of the women's actions.
Tories and Liberal Democrats were livid, which is of course always a good
measure of justice of any action.  Scottish Nationalists have said that
their party will use the ruling to demand the removal of nuclear weapons
from Scotland.

... and to one of our sponsors, the Socialist Party USA, which has just
nominated long-standing activist for peace and justice David McReynolds for
President.  Strange to think that this honest, dedicated, charming man
won't win - do people really prefer a four-yearly choice of deadbeats, war
criminals, and the otherwise unemployable  - or is there something
undemocratic going on here?  But be warned, guys... SPUSA's candidate for
Veep has a charming baby and Spectre is plotting to import a cute dog.  Can
we lose?  We hope to cover the McReynolds campaign in some detail, so watch
this space.

Finally, Spectre also carries reviews of books and magazines.  Here's a

Noam Chomsky Fateful Triangle : The United States, Israel and the
(Pluto Press, 544 pp, £14.99 paper, £45 hardback)

Noam Chomsky's 1983 study of the role that US foreign policy objectives
played in the Middle East always remained an immensely valuable work, an
accessible, thorough, and penetrating analysis that could be recommended to
anyone wishing to begin to find their way through the seemingly
interminable labyrinth of conflicts that undermines the peace of Western
Asia. Now, by adding chapters on the Palestinian uprising ( the intifada),
Israel's war on the Lebanon, and the so-called 'peace process', Chomsky has
both brought the book up to date for those who knew the original, and made
it attractive to a new generation of readers. The history of Israel's
Lebanese adventures, and the supportive role of the United States in
relation to them, adds merely one more hollow laugh to the gruesome joke of
NATO's 'humanitarian' reasons for bombing Yugoslavia.
Here we see atrocities which Milosevic, if guilty as charged, cannot match:
a slow-drip genocide - and not always so slow at that - backed up by the
deliberate and systematic destruction of Arab culture, architecture, and
the means of production. More recently, the wrath of the Israeli war
machine has been directed at areas of settlement - villages destroyed,
individuals attacked, beaten and tortured, a repression which results not
from the excesses of war, but one which is supported by a code of
anti-Palestinian laws as vicious as anything dreamed up by apartheid South

Of the states which have, in the twentieth century, been founded on an
openly-held principle of racial exclusivity, only Israel survives, a blight
on humanity in which, according to Amnesty International, torture is
effectively legal, and which can, because of its indispensable role in
upholding US interests in the Middle East, make war, internally or
externally, with impunity. Read the preface, too. Edward Said, the
Palestinian-American academic recently subjected to a Zionist-inspired
smear campaign in sections of the US media, offers a useful introduction
not only to Chomsky's book but to the issues with which it deals.

The reviewer, Steve McGiffen, is Spectre's editor.


send UK£8 or its equivalent in any major currency (Europe), or US$18 or
equivalent (outside Europe) to Spectre, BP5, Bxl 46, rue Wiertz, 1047,
Brussels, Belgium.  We'll wing it to you straight away, and if you mention
that you heard about us from SpectreMail, the first mailing will include a
free back issue.

If you no longer wish to receive SpectreMail, please visit our website at and choose 'unsubscribe'.


Louis Proyect

(The Marxism mailing list:

More information about the Marxism mailing list