12/15/97, christopher chase-dunn wrote:
>
>>The attached appeared in the Indian newspaper, _The Hindu_ on
>Dec. 12th.
>
>A lost decade for Asia?
>
> Date: 12-12-1997
>
> By Ravi Arvind Palat
>
> Just as the 1982 debt crisis showed the exhaustion of an
>inward looking, import substitution industrialisation strategy, the 1997
>meltdown signals the unviability of the vaunted Asian models.
>...Encouraged by the World Bank and the International
> Monetary Fund, their Governments invested borrowed funds in massive
> ``Think Big'' investments in steel and heavy industries, in armaments
>and resource extraction, in automobiles and other consumer goods.
Two different causes are being offered for these failures: faulty national
strategy, and over-investment by the international financial community.
What is a country to do these days, other than follow the advice of the
international community and seek its niche within globalization? How can a
nation be held up on one day as a model to be emulated, and then on the
next day blamed for mismanagement on the basis of the selfsame policies?
And why are the international gurus so quick to know exactly what the
"errors" of these countries were, and so eager to push through specific
reforms, when just the previous week they were praising and investing in
those econonomies? It think the second cause deserves deeper
investigation: overinvestment followed by flight of capital.
There seems to be a kind of randomness to these investor flights which
leave financial chaos in their wakes, a kind of lemming-like rush from
early rumors of liquidity problems, a rush that becomes a self-fulfilling
prophecy.
I don't question that there's a volatile unpredictability to international
money flows, but there are some patterns that deserve some noticing.
There are several ways to characterize these kinds of market crashes,
depending on which consequences you look at. The focus of many reports is
"the effect on the local situation": the devastation caused by the
collapse.
One can also analyze the same events from the point of view of the big &
smart investors: they came into the market, bid up prices, and then exited
with a tidy overall profit, leaving the house of cards to fall on others.
In this sense it was a "looting", as we had with the S&L industry, or with
Mexico. And after the collapse, old properties can be selectively
repurchased at bargain prices (sell your cake and have it too). Such a
"looting" amounts to a transfer of wealth from the local economy to
international money manipulators.
Are such looting episodes fortuitous, or was there perhaps an intention on
someone's part to artifically build up balloon economies, specifically to
accomplish well-timed profit taking before the inevitable burst? In the
case of the S&L debacle, with Bush putting his son in a position to profit,
the feds suppressing revelations until it was too late, and much other
evidence, the case for intention is rather strong. (See Greider: "Who Will
Tell the People").
In the case of market crashes, I don't know, I haven't seen direct evidence
for intention, but there is a circumstantial case to be made, a case that
points to opportunity and motive.
_Opportunity_ comes from the lemming-like nature of the general investment
community: when all the official pronouncments say (as they did) that
Mexico or SE Asia are great investment opportunities, then the money rushes
in, and when big players begin selling, the money rushes out. The
opportunity is there for a clique of big players, perhaps in collusion from
officials in various institutions and government, to create and use such
bubbles as a routine way of generating capital growth for themselves, which
would of course be their presumed _motive_.
But one can still ask "Why SE Asia (or Mexico), and why at such-and-such a
time?". Here one needs to analyze the events in terms of their
consequences for globalization. As I've written in various articles, and
as I believe to be obvious in any case, some of the objectives of
globalization are: (1) the disempowerment and impoverishment of nation
states, (2) the transfer of sovereignty to elite global bureacracies, and
(3) the dismantlement of government services and benefits. To this list I
will add (4) "the undermining of national ability to control the domestic
economy" -- a special case of (2).
The SE Asian economies were to a considerable degree heretics to the
globalist faith: they were pursuing semi-protectionist agendas of national
economic development, in direct contradiction to the neoliberal faith of
open markets and free trade, and they were getting by with it, in fact
doing quite well; and they were even, it seemed, managing their debt
responsibly.
But now, after the crash, these same countries are forced to go hat-in-hand
to Japan and the IMF for a "bailout" -- a bailout made necessary by the
manipulations of the same international financial community whose interests
the IMF represents. And the terms of such bailouts is always the same:
tightening the screws of the globalist takeover, enforcement of the four
globalist objectives listed above.
The countries have been financially weakened by the crash (objective 1),
will be forced to move their economies closer to neoliberal orthodoxy (4),
ceding sovereignty (2) by their very acquiesence, and will be forced to
retrench on many of their worker benefits (3). Japan as well is
financially weakened (1) by taking on the responsibility of bailout
co-funder. Similary, the US was financially weakened (1) by its _very_
expensive, NAFTA-induced underwriting of the Peso, as well as by the S&L
bailout.
Cirumstantially, then, these crashes and crises have served a very definte
purpose: they have substantially and rapidly advanced the tide of
globalization across a broad front of objectives. Should we chalk this up
to conincidence? Should we suspect intentional manipulation? Who would be
the players involved?
I don't rule out coincidence as a possibility: I'm sure a case can (and
has) been made that these events were unexpected even in the highest
circles. But my gut inutition smells a rat: these episodes are simply too
convenient, too productive, and too susceptible to manipulation, to be
lightly dismissed as chance.
With that background, I'll skip to the chase, jump to my "most likely scenario".
I see the financial community, including high-level manipulators, to be in
the role of "predictable pirates": they have a known modus-operandi of
bidding up markets, taking profits, and leaving a burning ship (collapsed
market) in their wake. The big manipulators routinely look for such scams,
of varying orders of magnitude, and make their moves, which bring in a
mulitiplier effect from me-too lemming investors. Many such cases are
documented in "The Global Trap" (a highly recommended book out of Germany
by Martin and Schumann). Frequently these kinds of moves are very rapid,
taking place over a day or two, but the same principles can apply to
longer-term sequences of transactions.
At a higher level, I see manipulators at very high levels in the globalist
hierarchy -- including officials of governments, banks, and international
bureaucracies -- who have ways of guiding the pirates toward particular
victims at particular times, so as to maximize the globalist payoff from
the raids. Globalization doesn't just "have friends in high places"; "high
places" are populated almost exclusively by avid pro-TNC globalists.
What are their "ways of guiding the pirates"? I don't have any special
knowledge in this regard, but I can't see that it would be that difficult.
First of all there's the "old boys" network: I'm sure most of the biggest
financiers, bankers, and regulatory officials know one another, and have
various histories of working together, trading favors, etc. There would be
plenty of unofficial channels in which to launch schemes of various sorts,
drop hints, etc.
Advance knowledge of how governments and the IMF would react to a given
scenario, and how bad they would let things get before stepping in, would
be invaluable to insiders; selective dissemenation of such information
could be one "guidance" mechanism to lure pirates toward this or that
target.
It must be kept in mind that globalization is a well-funded and
well-organized global campaign which includes operations like the
destabilization of the USSR and Yugolavia, elections of pro-globalist
candidates throughout the West, starvation of Iraq and North Korea, etc.
Globalization is major league hardball, and the use of financial pirates to
further globalist objectives, as with the Mafia in Russia, seems quite in
keeping with the motives, means, and modus-operandi of the globalist elite.
rkm