In the developing world, there is a pattern of inequality caused by the powerful subjugating the poor and keeping them dependent. Outside influence is often a large factor and access to trade and resources is the usual cause. It is often asked why the people of these countries do not stand up for themselves. In most cases when they do, they face incredible and often violent oppression from their ruling elites and from outsiders who see their national interests threatened.
Consider the following from the United Nations:
Everyone has the right to work, to just and favourable conditions of work and to protection for himself and his family [and] an existence worthy of human dignity … Everyone has the right to a standard of living adequate for the health and well being of himself and his family, including food, clothing, housing and medical care.
— Universal Declaration of Human Rights, 1948
And contrast that with the following around the same time, from a key superpower that helped create the United Nations. It is from George Kennan, head of the US State Department planning staff until 1950, and his comments on US relations with Far East:
we have about 50% of the world’s wealth, but only 6.3% of its population.…In this situation, we cannot fail to be the object of envy and resentment. Our real task in the coming period is to devise a pattern of relationships which will permit us to maintain this position of disparity.…To do so, we will have to dispense with all sentimentality and day-dreaming; and our attention will have to be concentrated everywhere on our immediate national objectives.…We should cease to talk about vague and… unreal objectives such as human rights, the raising of the living standards, and democratization. The day is not far off when we are going to have to deal in straight power concepts. The less we are then hampered by idealistic slogans, the better.… We should recognize that our influence in the Far Eastern area in the coming period is going to be primarily military and economic. We should make a careful study to see what parts of the Pacific and Far Eastern world are absolutely vital to our security, and we should concentrate our policy on seeing to it that those areas remain in hands which we can control or rely on.
— George Kennan, U.S. State Department Policy Planning, Study #23, February 24, 1948. (See also Foreign Relations of the United States 1948, Vol. 1, No. 2, 1976 for the full text where this was first published; The text to the part on realism of US relations in the Far East; David McGowan,Derailing Democracy, (Common Courage Press, 2000), p.169; Noam Chomsky, What Uncle Sam Really Wants, (Odian Press, 1993), Chapter 2.
While it is recognized that strong institutions, a functioning and non-corrupt democracy, an impartial media, equitable distribution of land and a well structured judicial system (and other such factors), etc. all help in realizing a successful nation and society, a lack of any of these things can lead to a marginalization of a sector of people. Often, it can be a very large sector.
For example, those likely to lose out in such an equalizing effect are the rich, elite power holders.
As a result of their ability to own and/or influence one of these above-mentioned things, they affect the lives of millions. This is a pattern seen throughout history. Take for example the medieval days of Europe where the wealthy of the time controlled land via a feudal ruling system and hence impoverished the common people intentionally.
- The rulers (Kings etc), would proclaim their “Divine Right” to rule over their subjects.
- They had an army of Lords and Bishops to advise on policies that benefited these groups (religion was used—and still is—to control and influence people, while Lords and Knights were an extension to the ruling family that would carry out the wishes.)
- They would heavily tax the people of their land.
- Not allowing the peasants to own the land upon which they lived meant that they would be stuck in poverty and dependency.
- When the elite could no longer tax the poor, they started to tax the wealthy nobility.
- It was only at that point did the revolutions such as the French Revolution take hold (because now the nobility had their wealth affected and were able to influence the peasants to fight for their cause.)
- While this helped bring more rights, once the “people” won, there were concessions made that allowed the elite to retain their power, but to share it a bit more.
Trading superiority was maintained by raiding and plundering areas deemed as a threat. Summarizing from the works of the Institute for Economic Democracy:
- The old European city states, which were centers of wealth, would control their countryside as the source of their resources and production, and hence, the source of their wealth. If the countryside became more efficient and produced better, or threatened to trade with other neighboring cities, this would be seen as a threat to the wealth, power and influence of the city. These peripheries would therefore be raided and their means of production would be destroyed.
- The cities would fight over each other for similar reasons.
- For continual support, those rulers would proclaim various reasons to their people, of maintaining security and so on (not unlike what we hear today about national security). Even some laws were established that basically allow these practices.
- A strong military was therefore necessary (just as it is today) to ensure those trade advantages were unfairly maintained.
- Those European city states evolved into nation states and imperial powers, and the countryside expanded to include today’s “third world”, which was much of the rest of the world. The effects of colonialism and imperialism are still felt today.
The “discovery” of the Americas, expansion of trade routes etc brought much wealth to these “centers of empire” which helped fuel the industrial revolution, which required even more resources and wealth to be appropriated, to continue this growth. Mass “luxury” consumption in Europe expanded as well as a result of the increased production from the industrial revolution.
But this had a further negative impact on the colonized nations, the “country side”, or the resource-providers. For example, to keep profits up and costs down, they used slavery where they could, sometimes transferring people across continents, introducing others when indigenous populations had either been wiped out, decimated, or proved too resistant in some way.
Europeans also carved out artificial borders to reflect their territorial acquisitions, sometimes bringing different groups of people into the same borders that had never been forced to live together in such short times. (Some poorer countries today still suffer the effects of this.)
As with the previous wars throughout Europe’s rise, World War I and II were also battles amongst the various European empires who struggled over each other to control more of the world’s resources and who would “decide the rules of unequal trade”.
Except for religious conflicts and the petty wars of feudal lords, wars are primarily fought over resources and trade. President Woodrow Wilson recognized that this was the cause of World War I: “Is there any man, is there any woman, let me say any child here that does not know that the seed of war in the modern world is industrial and commercial rivalry?”
— J.W. Smith, Economic Democracy: The Political Struggle for the Twenty-First Century, (M.E. Sharpe, 2000, 1st Edition), p.58
Plundering the “countryside” to maintain dominance and control of the wealth-producing process has been an age-old process.
These mercantilist processes continue today. Those policies of “plunder by raid” have continued, but include a more sophisticated “plunder by trade”:
The powerful and cunning had learned to plunder by trade centuries ago and societies ever since have been caught in the trap of those unequal trades. Once unequal trades were in place, restructuring to equal trade would mean the severing of arteries of commerce which provide the higher standard of living for the dominant society and collapse of those living standards would almost certainly trigger open revolt. The world is trapped in that pattern of unequal trades yet today.
— J. W. Smith, Economic Democracy: The Political Struggle for the Twenty-First Century, (1st Books, 2002, 2nd Edition), Chapter 2
The geopolitical events of the post World War II era have been crucial for their impacts on poverty and most other issues. J.W. Smith summarizes this:
Virtually the entire colonial world was breaking free, its resources would be turned to the care of its own people, and those resources could no longer be siphoned to the old imperial-centers-of-capital for a fraction of their value.… If India and the rest of the world’s former colonies continued to take the rhetoric of democracy seriously and form the nonaligned bloc as they were planning, over 80 percent of the world’s population would be independent or on the other side of the ideological battle. And, if Japan, Germany, Italy, and France could not be held (it was far from sure they could be), that would leave only the United States, Britain, Canada, and Australia, about 10 percent of the world’s population, still under the old belief system, and even there the ideological hold would be tenuous at best. After all, if there were no countryside under the firm control of an imperial center, the entire neo-liberal/neo-mercantilist belief system will have disappeared.What Western nations were observing, of course, was the same potential loss of the resources and markets of their “countryside” as the cities of Europe had experienced centuries earlier. “National security” and “security interests,” which citizens were coached (propagandized) to believe meant fear of a military attack, really meant maintaining access to the weak, impoverished world’s valuable resources. The “domestic prosperity” worried about was only their own and the “constantly expanding trade” were unequal trades maintaining the prosperity of the developed world and the impoverishment of the undeveloped world as the imperial-centers-of-capital siphoned the natural wealth of their “countryside” to themselves.… Those crucial natural resources are in the Third World and developed world capital could never compete if those people had their own industrial capital and processed their own resources into consumer products. With their own industrial capital, and assuming political and economic freedom as opposed to world neo-liberal/neo-mercantilist law dictated by military power, they could demand full value for their natural resources while simultaneously underselling the current developed world on manufactured product markets. The managers-of-state had to avert that crisis. The world’s break for freedom must be contained.
— J.W. Smith, The World Breaking Free Frightened the Security Councils of Every Western Nation, Economic Democracy; The Political Struggle for the 21st Century (1st Books, Second Edition, 2002), Chapter 7
While European nations are now more cooperative amongst themselves (in comparison to the horrors of World War II) and the U.S. had long taken the lead in the international arena, for the rest of the world, international trade arrangements and various economic policies still lead to the same result. Prosperity for a few has increased, as has poverty for the majority.
Today’s “corporate globalization”, is an example where the wealthier companies and nations are able to determine the rules, shape the international institutions and influence the communication mechanisms that disseminate information to people.
In this backdrop, how do developing nations contend with poverty?
- During the Post World War II period, during the Cold War, poorer country governments often found that if they tried to improve the situation for their people, they could have been perceived as a threat or worse still going communist. They may have faced external pressure, external meddling in internal affairs or even military intervention by the powerful nations.
- The powerful nations would of course claim this was necessary for something like world stability, national interest, or to save the other country from themselves, but it would often be to do with protecting “their” national interests, such as a secure and constant supply of cheap resources or some other reason related ultimately to maintaining influence and power.
- Dictators and other corrupt rulers have often been placed/supported in power by the wealthier nations to help fulfill those “national interests” in a similar way the old rulers of Europe used the Lords and Knights to control the peripheries and direct resources to the centers of capital. (Although, now, increasingly, “democracies” are supported, but ones where the economic choices are so limited, that the “democracy” provides a similar environment that a dictatorship did, for foreign investors, but without the overt violence and oppression.)
- This means that it is hard to break out from poverty, or to reduce dependency from the US/IMF/World Bank etc.
Structural Adjustment (SAP), as described in a previous section on this web site, is an example of that dependency. Neoliberal economic ideology has been almost blindly prescribed to poor countries to open up their economies.
The idea is that opening markets for foreign investment will also help improve exports and contribute to economic growth. Cutting back on social spending (e.g. health and education) which are seen as inefficient will also help pay back loans and debts.
But what ends up happening is the poorer nations lose their space to develop their own policies and local businesses end up competing with well-established multinationals, sometimes themselves subsidized (hinting a more mercantilist economic policy for the rich, even though free market capitalism is the claim and the prescription for others).
Hence, many back the economic neoliberal policies without realizing the background to it. It is another example that while international trade and globalization is what probably most would like to see, the reality of it is that it is not matching the rhetoric that is broadcast.
J.W. Smith has researched this in depth and the following offers a relevant summary:
The Third World remains poor because the powerful strive to dominate every choke-point of commerce. One key choke-point is political control through the “co-respective” support of local elites. Where loyalty is lacking, money will be spent to purchase it. If a government cannot be bought or otherwise controlled, corrupt groups will be financed and armed to overthrow that government and, in extreme cases, another country will be financed to attack and defeat it.… The pattern has been well established repeatedly throughout history and throughout the world, as noted by the well-known philosopher Bertrand Russell,An enormous proportion of the income of nations and individuals, nowadays, is blood money: payment exacted by the threat of death. Therefore the most prudent nation is the nation which is in the best position to levy blackmail.…Modern nations are highwaymen, saying to each other “your money or your life,” and generally taking both.
— J.W. Smith, The World’s Wasted Wealth 2, (Institute for Economic Democracy, 1994), p. 134.
(To find out more about the political dimensions of the economy of the world and to see the detailed links between history (how it is both told and repeated), politics that are always at play and the effects on the economy the world over, visit the Institute for Economic Democracy web site. It provides much more in-depth research into these backgrounds and in far more detail than what I have summarized above.)
With this in mind, why would so many people not oppose such things? There are many reasons, including:
- Most people don’t know—this is not an accident. It is in the interest of power-holders to ensure as little is questioned by outsiders as possible. Whether it be via an aristocracy or by simple distortion of information, educational systems, or whatever, different nations have had various means to handle this.The smart way to keep people passive and obedient is to strictly limit the spectrum of acceptable opinion, but allow very lively debate within that spectrum—even encourage the more critical and dissident views. That gives people the sense that there’s free thinking going on, while all the time the presuppositions of the system are being reinforced by the limits put on the range of the debate.— Noam Chomsky, The Common Good, Odonian Press, 1998
- Those that have opposed such things in the past may have been persecuted in some way. In some societies those who try to say something may just face ridicule due to the embedded belief systems which are being questioned, while in other societies, people may even face violent oppositions.
- Some dare not entertain the thought that the work they may be doing could be at the expense and exploitation of someone else. The following summarizes this aspect quite well:[W]e should be familiar with the sincerity with which people will protect the economic territory that provides them their livelihood and wealth. Besides the necessity of a job or other source of income for survival, people need to feel that they are good and useful to society. Few even admit, even to themselves, that their hard work may not be fully productive. This emotional shield requires most people to say with equal sincerity that those on welfare are “lazy, ignorant, and nonfunctional.”Those above the poverty level vigorously insist that they are honest and productive and fulfill a social need. It is important to their emotional well-being that they believe this. They dare not acknowledge that their segment of the economy may have 30 to 70 percent more workers than necessary or that the displaced should have a relatively equal share of jobs and income. This would expose their redundancy and, under current social rules, undermine their moral claim to their share. Such an admission could lead to the loss of their economic niche in society. They would then have to find another territory within the economy or drop into poverty themselves.— J.W. Smith, The World’s Wasted Wealth 2, (Institute for Economic Democracy, 1994), p. 90.
J.W. Smith, quoted above, also points out (and details in his work) how we have moved from “plunder by raid to plunder by trade” in recent centuries. The complexities of some of today’s economics and trading systems also make it harder to address root causes of poverty:
Although in [the] early years the power brokers knew they were destroying others' tools of production (industrial capital) in the ongoing battle for economic territory, trade has now become so complex that few of today’s powerful are aware of the waste and destruction created by the continuation of this neo-mercantilist struggle for markets. Instead, they feel that it is they who are responsible for the world’s improving standards of living and that they are defending not only their rights but everybody’s rights.This illusion is possible because in the battle to monopolize society’s productive tools and the wealth they produce, industrial capital has become so productive that—even as capital, resources, and labor are indiscriminately consumed—living standards in the over-capitalized nations have continued to improve. And societies are so accustomed to long struggles for improved living standards that to think it could be done much faster seems irrational.
— J.W. Smith, The World’s Wasted Wealth 2, (Institute for Economic Democracy, 1994), p. 158.
And when considering how today’s global economic model promotes the liberalization of capital more and more, the effects of rapid flows of capital and other impacts of over-liberalization is borne largely by the poorer members of society:
A French humorist once wrote, “When it’s money you’re after, look for it where it is most abundant, among the poor.” Governments now do this more than ever because the poor are rooted, stationary, “slow”; whereas the big money is nomadic and travels at the speed of bytes. Stationary money (of local businesses, professionals, wage and salary earners) will be taxed to the limit for the simple reason that it can be got at.
— Susan George, The Lugano Report, (Pluto Press, 1999), p. 186
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