CHAPTER I

GLOBALIZATION OR HUMANIZATION

A QUESTION OF PRIORITIES IN HUMAN DEVELOPMENT

 OLIVA BLANCHETTE

            Economics has become a dominant factor in modern political life. It used to be that the life of a city or a nation could be guided by high moral or spiritual principles and by cultural aspirations of communion. But now it seems that everything we do in modern societies is governed by some economic necessity to which we must sacrifice our other spiritual and social aspirations and values. It seems that political consciousness, or the consciousness of a community, has become totally subordinate to economic consciousness, or the consciousness of commercial interests.

            It has not always been this way, In fact, if we go back to the Greeks, who were the first to advance the idea of politics as dedicated to the pursuit of the good life, meaning the higher things of life in accordance with reason and virtue summed up in social justice for a community, we find that economic necessity hardly ever came into the scope of political consideration. In its original meaning the term "economic" itself, as understood by the Greeks, had to do with principles or laws (nomoi) for governing a household (oikos). These were matters of necessity in Greek society as well as in any other society, but they were dealt with on the level of the family, which included wives and slaves, as well as husbands. Political life had to do with the broader, more liberal pursuits of the polis or community.

            This is how Plato and Aristotle saw things; they both organized their political thought around the four cardinal virtues of prudence, justice, courage and temperance, following the lead of Socrates in his appeal to the more noble side of Athens that transcended its economic interests, Questions of economic necessity hardly come up in Plato's Republic, except with reference to the luxurious life. Aristotle mentions moneymaking at the beginning of the Nicomachean Ethics, but only to dismiss it as a matter of means toward the good life and not as an end one might strive for, like pleasure, honor, or contemplation. These three ends he does consider positively in determining what we mean by the good life. The only thing both Plato and Aristotle say about economic necessity in their political philosophy has to do with social justice as it is understood in the light of a community: too great a disparity between the rich and the poor or too great a disproportion among them makes continuing life in a community impossible and hence unjust, no matter how the wealthy have come by their riches.

            It is the expansion of economics into the whole of political life in modern times that has revolutionized this ancient view of the relation between the economic and the political. We see this expansion clearly in the title of the book, Adam Smith, The Wealth of Nations, written by the moralist who launched the modern science of political economics. He began to define wealth in political, rather than household terms. Thus we now speak of political economy, instead of just plain economics and of laws of supply and demand in the creation of such wealth through markets. The seeds for this expansion of economics into the whole of political life, however, were sown at the origin of modern political philosophy in social contract theory, where necessity of securing property became the principle or the sole foundation for establishing political life itself under an authority that would hold everyone in awe of its power and where possessive individualism became the only reason for agreeing to live under a government.

            Hegel, as a social and political philosopher, had to struggle against this subordination of the good of a community to the good of individuals in isolation. At first he longed for a return to the Greek idea of political life as the life of a people, a Volk, which represented for him, not just the highest ideal of human life, but also its best and most beautiful actualization ever achieved on earth. It was the study of modern economics that shook him from this nostalgia for Greece and made him realize that there was no return to this beautiful society in harmony with nature and the gods. From this study of economics came his philosophy of the modern State as the solution to the problem of restoring the priority of the spiritual or the ideal of community life over the necessity of organizing the whole of a people's life around economic contingencies. Hegel's solution consisted in reinstating the political society, now institutionalized as the State, as higher than civil or economic society as organized by corporations and in promoting the spiritual development of a people over and above its economic development.

            We all know what Marx came to think of this idealization of the State. He saw it as only an ideology, a means for perpetuating the rule of an economic ruling class. Nevertheless, it was Hegel himself who had first discovered the dimension of economic necessity that is integral to the modern bourgeois State. Marx learned this from Hegel and then used it against him to attack his theory of the State, though without any attempt to promote a more truly spiritual kind of community life beyond economic success or possessive individualism. In trying to bring everything back to the economic dimension of civil society, Marx's idea of the historical economic class struggle was derived from Hegel as well as from the whole of modern bourgeois political philosophy, but without ever taking seriously Hegel's attempt to restore a communal spiritual life in the context of modern economic necessities and possessive individualism.

            In line with this effort of Hegel, I reflect here on the dynamics of modern human development. In a way, what Marx had to say early in his life about communism could be understood in the same line as the solution to the riddle of history. However, his way of thinking became focused exclusively on the economic necessities of modern bourgeois society in order to bring out its contradictions and so hasten its downfall, as if there were nothing communal in it that could be salvaged for the human spirit. In other words, Marx pulled the debate right back to its modern bourgeois economic principles of competition in the marketplace and left it there, without allowing for any solution to the problems of society other than that of a monumental class struggle to substitute one economic system for another.

            What came of Marx's efforts, thanks to Engels and Lenin, was another economic image that only mirrored that of the bourgeois system, a state capitalism that entered into competition with previously established bourgeois capitalism. This state capitalism eventually lost out in this competition when it collapsed internally through sheer incompetence. Its last remnants in Eastern Europe, Russia, China and Cuba are in the process of disappearing through the leveling effect of globalization in what has now become a single worldwide economy. But the problems of humanization which Marx as well as Hegel were trying to address in such an economy, have not disappeared. In fact, given the actual globalization of this economic system -- a globalization which was anticipated by Hegel and Marx as they viewed and defended the emerging European colonialism at the beginning of the 19th century -- the problems of humanization loom ever larger and more acute for all around the globe. We run the risk of becoming engulfed in a movement that submerges the richness of human values and diversity into the single dimension of economic value or just doing business for its own sake or for the sake of profit.

            The question for us here is: How can we reestablish the priority of human, spiritual and communal values in the face of an overwhelming force of economic necessity that now reaches to the remotest regions of the earth with its monolithic or oligopolistic system, or a universal melting pot condensing everything into one thing, money or financing, regardless of any spiritual diversity? Is there still room for liberation and humanization in this system that now encompasses us all as in a large economic pot kept in a constant stir for its own benefit, no matter what happens to the less advantaged members of any society in the process?

            This is the question I would like to explore here. Judging from the way I have framed the question, some might surmise that I tend to be rather negative or pessimistic with regard to the prospects of finding any solution to this problem of humanization in such a massive and overpowering economic system. Actually, however, I do have great faith in the resilience of the human spirit even among the most oppressed people in the world. There are infinite resources for humanization and liberation that remain untapped in the human spirit, especially among the poor and the disadvantaged of the earth, who can appreciate the need for liberation better than anyone else. The problem is to allow or to enable these resources to find their own voice and to start working for their own humanization. It is not for me to say just how this will be done. It is more for me to describe the problems resisting our efforts toward humanization and liberation, for unless we understand the magnitude of the problem we cannot take any appropriate steps to overcome it.

            I shall try to describe the problem, or the challenge, in two steps. First I shall describe the phenomenon of economic globalization as it has come about in our time from a center of economic development to a periphery of underdevelopment. Then I shall show how privileged groups or individuals, or large corporations, have come to dominate the world in and through this system, superseding even political authority, in order to turn whatever they touch to their advantage or profit and to perpetuate their world domination under the guise of markets that are purportedly free to everyone. In conclusion, I shall speak about solutions to this problem of humanization and liberation in the face of such an overwhelming economic necessity dictated by an ever-decreasing number of large corporations.

THE PHENOMENON OF ECONOMIC GLOBALIZATION

            The phenomenon of globalization in the economy is a momentous fact in world history with which we must contend, but one that is largely hidden from the casual observer or the public eye. Its enormous ramifications affect the choices made by millions of people around the world. However, it is largely ignored by most people, especially those who stand closest to the center of the phenomenon and benefit from it without wanting to say or having anything to say about it. Even those who report the news concerning business and the economy seldom advert to this central fact of the economy and how it affects decisions made worldwide. Even though it is called a global system, few people stop to look at how the system works as a whole, which, to borrow a phrase from Hegel and Marx, is generally behind the backs of most people.

            If we are to face up to the challenge of globalization in our own decision-making as human beings, and not leave all decision making in the hands of a dominant global economic system, we must understand how the system works in pursuit of its own ends. These ends are perhaps in fact not the same as our ends as human beings and members of the human community. We must examine the system, much as Marx did the 19th century bourgeois economic system, not to get deeper into it and remain there as Marx did in his purely economic analysis of the class struggle, but in order to find ways of escaping from it and finding a more humane way of living the good life.

            Partly we tend to ignore the fact of globalization in the economy because it disguises itself in the language of liberal economics about free markets, free trade and global competition. It is a highly centralized planning system, as we shall see, but it gives the semblance of haphazard activities of buying and selling in different markets that appear disconnected from one another even though they are highly integrated by large corporations which oversee the whole. It consists of many markets, commodities, stock, bond, futures, labor, money, foreign exchange. But at the core are the financial markets that have interests in all these markets. Over all these markets there hangs a certain mystique of freedom and competition, although no one knows what is going to happen next, about how fortunes are made and lost or whether there will be work for tomorrow or food to put on the table. At the center of the world economic system there are the large corporations who know better than anyone else which way things can go and who can make things go their way before anyone else gets a chance to do anything.

            To understand the function of globalization in the world economy, we must look beyond this mystification of markets to what has actually happened to the economy that affects the lives of people throughout the world. This requires an economic analysis of world history, without going into all the details that occupy financial analysts in their daily interactions. Their concentration on particular deals is usually what obscures the global dimensions of the economy and leaves them in the dark. Let us look at some of the salient features of today's international economy to see how it became globalized compared to earlier times. Let us consider the more prominent components of the economy, such as bringing commodities to market, production, labor, investments, finances and their relation to the environment, in order to see the effects of the economy on us. These components of the economy are the more important ones that directly affect human development.

            First we examine the market in commodities, which has now become world trade or simply the world market. Prior to modern economic development, trade was a relatively local phenomenon. Trade used to take place in local markets where self-sufficient households met their economic needs by coming together to exchange their surplus goods for goods they needs. In time, people prospered, especially in Europe, and procured more distant goods, such as spices and silk from the East or gold from newly discovered lands. Thus began globalization in trade which took the form of colonialism, even as it had done in ancient Greece with the economic expansion of Athens and Sparta. But world trade was still only partially globalized. It was a fringe phenomenon around local or national economies in no way approaching the full-fledged globalization of our day. Even in the less developed parts of the world where their colonial status tended to make them much more dependent economically on the colonizing powers, it was impossible for them to remain or to become even relatively autonomous and self- sufficient in their economy.

            Now, however, with the advent of total globalization, the days of relative local or national economic autonomy and self-sufficiency are gone, even for the ruling central powers. If we look at the U.S. which has by far the largest economy of the world and which no other economy in the world can afford to ignore, we see that globalization has infected the system to its very core. The U.S. may be the most powerful economy in the world, and it may continue to be so, notwithstanding the challenge of the European Monetary Union. Yet, it is more conscious than any other entity of its dependence on global trade, global competition, global investments, global interest rates, global currency exchange rates and so on. A crisis in any part of the global economy is considered a crisis for the American economy and impacts its national interest. To be sure, in the U.S., Europe, Japan, or other developed economies, there is still room for some local entrepreneurship in business, more so perhaps in the U.S. than anywhere else. If we look at what happens to the successful entrepreneurs in these countries we find that as they grow bigger, they usually have to compete in a world market fraught with competitors from other parts of the world. If they do not, they will be absorbed or bought out by corporations that do operate in the world market. Well over 90 percent of the business that is carried on in the U.S. or in other highly developed countries is conducted by the relatively few large corporations that operate on a world scale and compete with one another in what is now the world market. Every successful business man is conscious of this fact.

            The same globalizing phenomenon can be seen in the realm of production which is at the core of economic activity. Here the point can be made with several examples taken from either highly-developed or less-developed economies. The assembly plant produces a highly sophisticated product, such as the automobile, for developed economies. It is still thought by many that different brands of automobiles are produced mostly within the confines of one national economy or another: American cars in the U.S., German cars in Germany, and Japanese cars in Japan. However, anyone who looks at the phenomenon of how cars are produced will realize that this is far from being the case. Whereas, there may still be a few cars that are produced by manufacturers who make all of their parts themselves, most of the cars that appearing on the world market are world cars, not just in the sense that they are sold in many parts of the world, but also in the sense that they are assembled from parts produced in different parts of the world. Different manufacturers buy parts all over the world, sometimes even from competitors in the world market, and depend on suppliers from many areas of the world for the parts they need to construct their final product. It is nearly impossible to find a modern automobile that has been built in only one country. Most cars are made up of parts from different companies; brand represents nothing more than the name chosen at the assembly plant or in a corporate headquarters. The same thing could be said about electronic goods, clothing, or other mass-produced commodities for markets that spread across borders everywhere.

            Another facet of the global dimension in production can be seen on the level of specialized production which often characterizes less or underdeveloped countries. The more developed countries are not relegated to the sort of specialized production found in poor countries. The economic productivity of poorer countries is usually limited to supplying parts or a single crop or raw material which are required in another area of the global system. In this division of production we see how the poor countries are caught up in the world economic system and made to depend on it even more for their livelihood. Usually, one thinks economic activity makes life more prosperous for all concerned. This is not the case for economies that are forced to specialize by the world system. They can prosper only if the price of the commodity they offer on the world market remains high enough, which usually does not happen for very long, or if they are allowed to diversify their production through outside investments. People of poor countries are more severely locked into this world production system for their survival than those in rich countries; they depend on it totally, often despite the lack of decent livelihood or recompense for their labor.

            The structure of labor parallels this structure of production in the global system. People seldom have a chance to labor directly to satisfy their basic needs or to better their lives. They are forced to labor in an exchange system which may or may not remunerate them sufficiently to meet their needs or improve their lives. In the developed countries labor has developed an adequate countervailing force to assure the rights of laborers to a just or liveable wage, decent working conditions or other social benefits. This has become a standard in estimating production costs in certain parts of the global economy. In other parts of the world there are no such standards, and labor remains weak and at the mercy of the organizers of production, who usually show very little mercy or justice in their treatment of workers. The expansion of production to a global dimension has thrown the local labor markets into chaos. Even the countervailing force of labor in the developed countries is being eroded by relocating production facilities across national borders or from one area of the globe to another, from places with standards to places without standards. In this chaos, organizers can take advantage of labor everywhere. They can withdraw or threaten to leave populations without work in one location while they force people in other locations to work for the lowest wages, without benefits and decent working conditions. The global system provides economic advantage through relocating production to various parts of the world, thereby exploiting the weakness of labor everywhere; this is referred to as neo-liberalism in Third World countries. This liberalism is new only in the sense that the global system has given the organizers of production new opportunities to cut their labor costs at the expense of workers and communities, depriving them of a decent standard of living. All this impresses upon us the reality of globalization in our planetary economy. One more component confirms this reality and holds it in place, namely, the financing and investment component. Every economic system has its own banking and monetary system to sustain the circulation of goods and commodities. The global system is no exception, no matter how mysterious that system might appear to the casual observer. Once a society gets a bartering system and begins using money to facilitate the exchange of commodities, there are always people who participate in the economic system by managing money, by creating reserves and credit and by lending or advancing money for those who wish to launch or expand enterprises or to buy up the expensive goods that appear on the market. People in the business of exchanging money rather than goods profit by borrowing at a lower interest rate and lending at a higher rate of interest. Their product is the service of making money available wherever and whenever it is necessary for the other economic activities of producing, buying and selling.

            In the Middle Ages all the kings had their bankers and financiers who were concerned only with a particular national system. The first international financiers were the families or individuals who bankrolled the great commercial enterprises that extended from the Far East to the Mediterranean and then around the European continent to the North Sea and the Baltic Sea. They were enriched by lending money to borrowers willing to take risks transporting goods on the high seas. They thereby amassed fortunes over several centuries before the Industrial Revolution. These people were also able to launch the Industrial Revolution by investing their money into the new modes of production as well as in the expanded commerce made possible by new modes of production and transportation. Until the Second World War most industrialized nations had their own banking systems presiding over the national economy, usually clustered around one large central bank charged with keeping the national economy sound and operational. Most banks within any given country seldom looked for business beyond their own boundaries, even the central bank had little to do with what was happening in other parts of the world.

            After World War II things began to move toward globalization in the financial component of the economy as well. At that time most of the industrialized nations were in ruins, their economic systems in shambles, except for the U.S. World leaders with their financiers, bankers and economists met at Bretton Woods in New Hampshire to start planning on pulling a new economic system out of the ashes of the War. That is when such large international institutions as the International Monetary Fund and the World Bank were established as mechanisms for stabilizing the value of currencies in the network of nations struggling to rebuild their economies and for making funds available to the different nations in need so that they could restart their industrial machines. Those institutions worked very well for that purpose of rebuilding among the industrialized nations for twenty years. They were very much needed until most of the industrialized nations were back on their economic feet and ready to start competing with one another in an international economic order.

            At that time, by the mid-1970s, the original purpose of the IMF and the World Bank had been served, but they remained as institutions on the economic world scene which they had helped to create and in which they would soon start serving purposes other than the one for which they had been created. After the mid-1970s a new phenomenon began to develop on the banking scene due to the emergence of the Euro dollar alongside the dollar backed by the U.S. government. This dollar was a currency, which was still being used as the standard of comparison for other currencies, but was now in the hands of private banks operating outside the pale of any regulated banking system. With large amount of this supra-national currency in hand, these banks now had new opportunities for increasing their profits on money they lent beyond what any regulated system would allow. At first it was only a trickle of money that Russia and China did not want to see captured in any Western national banking system. This soon became a huge flood of money after the energy crises of the 70s. Then the Arab oil-producing nations accepted payment for their oil only in dollars and deposited these dollars in Euro-dollar accounts in large private banks. These operated outside the regulated banking systems because they paid a higher interest on deposits. This is when private banks became international lenders to governments as well as to large multinational corporations, leading up to the enormous debt crisis of Third World countries that emerged in the 80s. Once again large corporations, this time financial institutions, were allowed to spread their influence recklessly across national boundaries and wreak havoc in the economies of poor countries with loans that should never have been made and that did not serve the good of the people for whom they supposedly were made. These were bad loans in every sense of the term from the very beginning, but they were never rescinded and only at the turn of the millennia were they substantively forgiven. They simply became the basis for a new international monetary system which the IMF and the World Bank were now called upon to enforce. Hence the financial crises of the 80s and 90s in Latin America and the more recent ones in East Asia. The ironic thing is that the management of the crisis is placed in the hands of the IMF, which is now in the business of protecting the international monetary system that caused the crisis in the first place and that keeps it as an open wound in the economy of poor, indebted countries.

            This is called neo-colonialism in poor countries, in tandem with neo-liberalism in the organization of production. It is new because the colonizing power is no longer another nation as such, but a set of private financial institutions, using the clout of public institutions such as the IMF along with the clout of governments that support the IMF and its now private clients in order to enforce their hold over entire nations. There is no getting away from this phenomenon of globalization which dictates to entire nations what they can and cannot do in euphemistically-called "strategic adjustment programs."

            There are other aspects of this phenomenon of economic globalization which we could discuss, such as the threat to the environment, which is especially impoverishing in underdeveloped countries. But we have seen enough to know it is something we have to contend with everywhere in the world, in rich as well as in poor countries. In rich countries it is hidden under a very complex cover of social relations, but it is no less real and problematic when we want to determine our own priorities in human development democratically. But first let me say a little more about this global phenomenon of the economy and how it is controlled by large corporations who show concern only for their margin of profit and not for the well-being of anyone they deal with, least of all for any common spiritual or political good.

THE DOMINATION OF LARGE CORPORATIONS IN THIS PHENOMENON

            We have a global economic network which controls the destiny of billions of people, not just in one nation but in all nations, rich and poor, North and South, West and East. Given this kind of system, it is important to understand who pulls the strings and with what purpose in mind. We are accustomed to think that governments pull the strings in most systems and that they do so in view of some common spiritual good for a community or a nation. But where is the government that can cope with the global economic system that is already in place and functioning for its own ends without the bidding of any single government? It is surely not the United Nations, though as an institution it does try to exercise some authority to establish peace and justice in the world. Nor is it in any other international court of appeals that can oversee the global economic system as a whole. Does this mean that there is no one in control of the system and that it is operating purely as a "free market," as we are told constantly in the press and by certain economists? Or does it mean that the system is in fact being controlled secretly behind closed doors by private institutions which are not open to the public and seeking their own private ends, such as profit making, often at the expense of the public or the common good of peoples around the world?

            Everyone more or less suspects that there is someone in control of the global economic system, or controlling parts of it large enough to keep everything else in place whether at the top or the bottom. Not everyone, however, sees clearly who this someone might be and how they manage to keep their control a secret. What I would like to do here is identify who or what this someone is and bring out its purpose in exercising its control over the global economy. I shall speak of this someone as the large corporations which are now organized to operate on a global scale and which can be numbered among three or four hundred at the most. These corporations are often referred to as multinational, even though they are still identified by their national origin, for instance, Sony is Japanese, GM is American, Siemens is German and Lloyds is British. Many of them are thought of as industrial corporations in the business of production, but for the most part they are financial institutions in the business of managing money on a worldwide basis, buying and selling or closing plants and other corporations that actually do produce goods and, of course, selling goods wherever there is money to be made. All this is a matter of just doing business as far as they are concerned, but I would like to argue that it is also a matter of continuing their control over the global economic system they have created for their own private advantage.

            We should first recognize that these large corporations are the creators of the global economic system. This system did not happen accidentally, as if by spontaneous generation from the mythical "free market." It came about as a result of planning by corporations, which, though they may have been small in their beginning, kept on expanding their sphere of business in competition with other corporations who were also expanding their spheres across national boundaries. We cannot go into the details of this planning here, but one can see something about how it enlarged to its worldwide dimension if one looks at how some of these large corporations came to be the international corporations that they are. One can do this by looking at any one of these world corporations, no matter what their national origin, but let us indicate briefly how the phenomenon took place, starting from corporations with relatively humble American origins.

            The phenomenon of globalization for American corporations began to take place early in the 20th century before World War I. At that time many American corporations already had successful operations or subsidiaries producing and selling American products in England and other parts of Western Europe. This beginning, however, was cut short by the First World War and the Great Depression; after World War II the phenomenon really took off. During the 1950s and 1960s, large corporations began to move both nationally and internationally in order to assume greater market share at the expense of smaller firms, showing a marked tendency toward monopolizing every sphere of business in which they were interested. If they did not always succeed in monopolizing the system, they did succeed in oligopolizing it, so that in most spheres we were left with even fewer large firms competing amongst themselves in the various markets around the world. The U.S. market itself ceased being wide open for anyone to join according to the untrammeled laws of supply and demand. It was no longer a system of perfect competition, where monopoly was supposed to be excluded and a free play of market forces reigned.

            Some economists began talking of the existing system as one of imperfect competition, i.e., one in which some kind of monopoly was coming into play. Since the emergence of such large firms late in the 19th century under the leadership of moguls like Rockefeller, J.P. Morgan and Carnegie, there had always been a certain suspicion of large firms in the U.S. But that had not prevented more and more of them from emerging and coming to dominate most industries. It was noted, for example, by John Kenneth Galbraith, in his book on American Capitalism, that wherever a few giant firms dominated a particular industry, competitive market structures did not exist, and that such domination by a few giant firms was found in most segments of industry, as well as finance.

            The only way some semblance of free market could be preserved in such circumstances was by developing counteracting forces on the part of consumers and workers in addition to government anti-trust regulation. In spite of these opposing forces, however, it was noted that, as firms grew larger in any particular market, such as oil, automobiles, or beverages, there tended to be fewer of them. There remained only a few, sometimes 6 or even only 2, where previously there had been dozens of firms, if not hundreds. These tended to exert ever greater domination over the markets which they controlled much to their mutual advantage, even though they stopped short of monopolizing and merging into one mega-firm. Even without explicit collusion among these few firms at the head of each industry, which was against the law, they managed to keep prices within a range that was acceptable to all of them and to keep other competitors from entering their market because they might have undercut the prevailing prices or challenged their total control of the market.

            These few large corporations were able to keep other competitors out of their markets by the sheer size of their operation. This was made possible by the gigantic size of the American market itself at the time, whether in oil, automobiles, beverages, etc. The size of the American market enabled gigantic firms to develop by eliminating smaller firms. The large firms could then dictate what would be brought to market and at what price in their huge market. In every segment of the American economy, it was always the same phenomenon of concentration of a few large firms at the head of the market and the exclusion of other firms from the competition.

            If law suits were brought against the large firms for violating anti-trust and anti-)price-fixing laws, each firm had a powerful legal division to defend it in the courts or to prolong the procedures by wearing down the government lawyers. As a result the charges were either dropped or reduced to trivial proportions that the firms could easily absorb as part of the cost of doing business. The same thing is happening today in the same way as the three or four large tobacco companies defend themselves against suits charging them with knowingly undermining the health of American citizens.

            The largest, fastest-growing market system of the world after World War II was an oligopolistic system where only a few large firms enjoyed any real freedom of competition. These firms were free to decide what to bring to market and what price to charge, and only some small market that the large firms had not yet taken over could enjoy such freedom. There was still room for small entrepreneurs, less than 10 percent of the American market, to start new firms and do business. Over 90 percent of the huge American market was held in the hands or under the control of less than 200 to 300 large firms. The only thing that these large firms did not completely control was the labor market because of the strong independent unions at the time, but the large firms were able to get around this constraint by automatically raising their prices to compensate for the added cost of labor.

            During the Cold War, which only fueled the tendency toward globalization among large firms, interesting comparisons were made between the American and the Communist economic systems. Both were described as Centralized Planning Systems. On the one hand, the Communist system was characterized as a Centralized Public Sector Planning System, a form of State Capitalism. Under government control it devised Five-Year Plans both at home and abroad. On the other hand, the American system was seen as a Centralized Private Sector Planning System, much more hidden from the public eye, but no less real. This was much more effective as a form of centralized planning since it was hidden. (Cf. John R. Munkirs, The Transformation of American Capitalism: From Competitive Market Structures to Centralized Private Sector Planning [Armonk, N.Y.: Sharpe, 1985].)

            I cannot attempt to give even a short description of this private sector planning system, but it consisted mainly of an interlocking system of directors among a few large financial firms and a larger group of industrial firms that could control over 90 percent of what was being produced in the U.S. There were no more than several hundred directors who sat on multiple boards and came into contact with one another regularly at different board meetings of this central core of perhaps a thousand large firms. They were not much more numerous than their counterparts in the inner core of the Communist parties who were devising their own Five-Year Plans on the other side in competition with the leading industrial nation of the world.

            We now know who was to win in this competition between two large centralized economic systems, but we must not forget that the planning and domination on both sides was of the same nature. The only reason why the American model won is that the Communist model turned out to be less efficient. It collapsed as a capitalist system from the inside, while the American system has not yet collapsed and shows no sign of losing its totalitarian grip on the world economy.

            While America was the supplier of goods to a world ravaged by war under the Bretton Woods's monetary agreement at the end of World War II everyone in America could be kept happy. There was plenty of work for everyone, wages were good, and there was an abundance of goods brought to market at an affordable price. Meanwhile the rest of the world, especially Europe with the exception of the Communist bloc, was digging itself out of its economic hole with the help of financial aid from America and goods bought from American firms with that financial aid. Thus American firms became increasingly involved in the world economy, drawing profit both from financial aid distributed abroad only to be reintegrated into the American oligopolistic system and from the large and prosperous American market itself.

            But goods were not the only thing being exported by these large firms, who were the first to enter into the international market which they were in the process of creating. They were also exporting their own way of doing business, according to their model of oligopoly. When Europe and Japan began to emerge as economic powers in their own right in the mid-1970s, they discovered that they could enter into the existing competition only by developing oligopolistic systems of their own. This they were able to do easily enough because they had a model to follow and they were unhampered by anti-trust and anti-price-fixing laws. In fact, for these late-comers to the oligopolistic system, governments became part of the planning system together with the large national firms, yielding a mix of public- and private-sector planning which American firms considered unfair in their competition for markets in these foreign lands.

            What arose, then, were a set of new, large oligopolistic firms in Europe and Japan which could and did compete successfully with large American firms in various markets. The net effect was to extend the oligopolistic market system to the entire world and to transform it into a totalitarian system, now capable of totally disposing of the upstart totalitarian Communist system on the other side.

            This may seem to exaggerate the totalitarian aspect of this developing global system. Were there not a number of firms large enough to operate freely in this world system, and did these new firms not restore a certain competitiveness to the market? It is true that large American firms began to encounter a kind of competition from the outside which they had never encountered within the American market. Large European and Japanese firms were able to encroach on the market of American firms as had no one else for decades. The large American firms were now experiencing real competition for the first time from these large foreign firms that could undercut their prices and remain in business.

            Nevertheless let us keep in mind that these new firms now operating on a world market were still relatively few and also quite large, not only in their own national markets, but more importantly also in comparison to smaller firms and even to the entire economy of smaller nations around the world, which still could be eliminated from competition. The ability of the large European and Japanese firms to remain in competition with the American large firms was conditioned by their being large enough themselves so that they could survive among the shrinking number of players in the market. What we got then was only a slightly larger set of large firms competing with one another on a world-scale and dominating a single world market. If we look at the way the more recent arrivals operate in the world market, we find that they have reinforced an oligopolistic system once dominated by large American firms by adding a few more large firms from other nations. In other words we still have the same oligopolistic model of economy functioning as a supra-national global system, only it is no longer just American or Japanese or European, but simply worldwide, beyond any national boundaries. At the core of this system is still a fairly restricted "Club" of large firms which holds sway, not only over workers, consumers, and smaller firms all over the world, including Post-Communist societies, but also over large and small nations.

            I cannot describe this global system here, nor again explain how it functions in detail. Let me just mention The Money Mandarins: The Making of a Supra-National Economic Order (New York: Pantheon Books, c1986), by Howard M. Wachtel, a labor economist in the U.S. The book which describes how the system emerged with the collapse of the Bretton Woods agreement in 1974 and 1975, how it has developed since then into an international monetary system vulnerable to all sorts of speculation, and how it survives its own ups and downs with the help of the International Monetary Fund (IMF) and the World Bank (WE). These quasi-public institutions, originally set up at Bretton Woods to facilitate bringing relief to countries mired in poverty and rubble, now serve to protect the monetary interests of large firms operating on the international credit markets.

            What we have in the world today is a single, interlocking system of large firms in competition with one another that plans economic activity on a worldwide scale. From its centers in New York, London, Tokyo, Frankfurt and Singapore it reaches out in every direction around the globe, North and South, East and West, into formerly Communist countries, as well as into other emerging markets. It exchanges billions of dollars electronically all day and all night, while different parts of the world sleep or carry on their daily activities. A recent estimate has put the figure as high as $12 trillion dollars turning over daily in the foreign exchange market in 1997, as compared to only $190 billion dollars in 1986 (See Yergin and Stanislaw, The Commanding Heights [New York: Simon & Shuster, 1998], p. 371). It is difficult to understand what such large sums of money actually mean, but it is clear that there has to be a system to make such enormous amounts of transactions possible daily and that in this system there are winners and losers, as evidenced by the financial crises in the late 90s among East Asian economies. This system is constantly on the watch to implant itself in new places, like Yugoslavia or Africa. This is called investment, but it also becomes a means of dictating what is to be done in countries where it takes hold through so-called structural adjustment programs. Wherever they see a potential market for themselves, whether it be in China, which is still a Communist country, or Korea, or Ghana, the various large firms from different nations are interested in being the first to penetrate. At the same time they remain on the watch to keep themselves in the advantaged position they have developed in the places where they are already implanted, like the U.S., Western Europe and Japan. Moreover, whenever they see some of their number faltering, as in Thailand, Indonesia, or more importantly in Japan, with the risk that the entire system may be brought crashing down, they show a great interest in rescuing these large firms or banks so that the balance of control remains in the system.

            These firms preach an ideology of free market and free trade around the world, but in this world market only they are free to operate as they see fit. Thus freedom does not extend to consumers, workers, smaller local firms, or even supposedly sovereign nations caught in their web. This is true from the smallest to the largest, from Haiti, the poorest nation in the Western hemisphere, to the U.S. itself, the largest and richest nation in the world. The mega-firms are really supra-national in the power they exert, though at times, when they are in trouble in some spots, say because of bad investments or loans turned sour, they look for a bailout from the county of their origin or the country of their investment. They can count on being given such loans because they are so large that they have become essential to the economic system of each nation, or more exactly because the economic well-being and survival of every nation depends on its oligopolistic system.

            These firms want free trade among nations and are against all barriers. They want whatever advances free trade, like the European Monetary Union and the North American Free Trade Agreement (NAFTA), because they know that no one else is in as good a position to take advantage of such agreements as are they. Once such agreements are in place, they are the first to take advantage of them on both sides of any border, often at the expense of people on both sides, including workers, consumers, smaller firms, or even nations. This can be seen in the European Union, and with NAFTA in both Mexico and the U.S. If President Clinton was refused "fast track" trade negotiating authority by the American Congress, the most serious legislative defeat of his presidency, it is because the American people no longer trusted him to protect their interests in his rush to do the bidding of the large multi-national corporations, Japanese and European as well as American. All are equally able to take advantage of the situation by trading from both sides of any border at the same time.

            These large firms are now set up as truly multi-national through subsidiaries in many nations, which usually are eager to have them come into their territory. Each multinational firm then does business with itself and for itself, in competition with other large firms, absorbing smaller firms on either side of the border. This they have begun to do with recently privatized firms in former Communist countries, leaving very little operating space for other, more genuinely entrepreneurial firms. They show little concern for the consequences of their operating policy on the social good of local communities. Indeed they locate there expressly to take advantage of low wages and weak environmental protection laws, conditions which they can no longer find in their country of origin.

            The story could go on and on. It could include the on-going crisis in international financial markets and the effects which this collapse has had in Third World countries or in what are now called emerging markets, rather than nations. The understanding is that these nations will now have to submit to new strategic adjustment programs imposed by the International Monetary Fund to keep certain large key firms afloat in the global market, while others are let go because of their excesses in lending or borrowing at key moments of their development. This is what we see happening, for example, in the structural adjustment program imposed by the IMF on South Korea. This forced it to give up a large part of its autonomy in the management of its economy to the international financial institutions.

            All this is part of an ongoing process that is truly supra-national in the sense that it is something above nations. Nations themselves, large and small, are caught up in the ebb and flow of this monetary system around the globe which dictates who is up and who is down and who is reduced to stagnation in the backwaters of the system. Everywhere the economy prevails over every other aspect of human life. The economy does not benefit the poor as well as the rich, or the common good of nations as well as the private good of large corporations. Rather, the oligopolistic economy grows at the expense of the poor and marginalized for the benefit of an ever-shrinking number of large multinational corporations. Meanwhile nations are losing more and more of their sovereignty and their ability to resist the dictates of large corporations or to act on behalf of their own public good. What we have is a new kind of rule in the world, one that is universal or cosmopolitan, but one under the control of large corporations and financial institutions seeking only their own private advantage and profit. The political and spiritual aspects of human life appear to have been totally absorbed by a supra-national economic power vested in a relatively small number of individuals or corporations who can dictate by a click of the mouse who wins and who loses in the struggle for human development.

THE PROBLEM OF JUSTICE AND LIBERATION, OR HUMANIZATION, IN THE FACE OF GLOBAL ECONOMIC DOMINATION

            This is the supreme problem we have to face as human beings in the world today. It is surely the supreme problem for the billions of people who continue to endure poverty and hunger at the hands of a system that has benefitted many economically, but has also excluded or marginalized countless more from those same benefits, no matter what they try to do for themselves. It is no less a problem for those who have benefitted from the system, because it raises serious questions of justice and rights with regard to the good life to which all aspire as human beings and to which everyone is entitled by his/her labor and participation in the human community, which is our common good.

            There is no space here to go deeply into the human side of this problem. I have endeavored mainly to elaborate on the enormity of the problem we have to face as human beings. It is, I might add, a problem of our own making, much as Heidegger endeavored to elaborate on the problem or the challenge of technology in modern society. I have tried to describe the phenomenon or the fact which is for the world the supreme challenge. Each has to face this phenomenon in their own distinct way as a human being. It is important to survey how people are responding to this challenge around the globe and what opportunities for humanization, if any, they are finding therein. It is urgent to know how the priority of the human and the spiritual over the economic is being affirmed and restored in diverse places in the face of such overwhelming economic forces that insinuate themselves secretly into our very way of thinking as an ideology.

            It is essential as well to know of some ways of resisting the force of this economic ideology which has been instrumental in creating such large, overpowering corporations. The Federal Government should be dedicated to the promotion of social justice and the common good above all else, but it has done little that is encouraging with regard to the issues described above. If we look at how the political system works in the U.S., we find it largely dominated by the special interests of the large corporations that support it financially through donations to electoral campaigns. These corporations use influence to further their ends in the global market or to resist any regulation of their activities that may be in keeping with the common good. Internally or nationally, the U. S. Government does exercise a certain amount of regulation of business activity, to keep excesses from inordinately damaging social justice and the common good, but these regulations tend to affect smaller corporations more than the large corporations with their means of getting around most regulations. Internationally, the Federal Government does everything to give free reign to large corporations in the pursuit of greater profits, enabling them, not only to get around all regulation, but also to turn the world into a sweat shop with the lowest of wages and the worst of working conditions, without regard for the benefit of those they are exploiting. In fact, as has been pointed out by Ralph Nader, it even sacrifices the rights of its own citizens to the World Trade Organization, which by agreement now has the right to rule on alleged violations of "free trade" behind closed doors without any sort of judicial process.

            Where one does find some resistance to the cultural invasion of large corporations in the U.S. is more on the side of consumer advocates like Ralph Nader, who has become a hero of American culture in his fight against large corporations and their constant violations of rights and justice in carrying on their business. To be sure, this is a fight that addresses mainly individual rights of fair play within the American economy, but it has the spiritual effect of freeing us to seek higher and better goods than what large corporations are willing to offer us of their own accord. Environmentalists also carry on the same kind of resistance to the destructive ideology of development fostered by large corporations for the rights of nature, so to speak, or more exactly for the right of people to live in a healthy environment, rather than one sacrificed to the drive for greater profitability. This too is the kind of resistance one finds mainly in countries that are well-off economically, but it has a liberating kind of effect on people. It is unfortunate that underdeveloped countries do not have the same kind of resistance to the invasion of large corporations. Because of the dire necessity in which they find themselves, they are forced to give up their natural patrimony as well as their labor for a pittance.

            One could talk also about the American labor movement, which has been mentioned as a countervailing force to large corporations in the American economy. But there the picture of resistance is less clear. Big labor has had a good record in demanding better or more just wages and working conditions for workers in the U.S., but it has closed itself off from the needs of workers in other parts of the world. In this it has been coopted by large American corporations, which learned to integrate them as part of their cost structure. Now that these same corporations have gone multinational American big labor finds itself at a great disadvantage in pursuing its demands. Large corporations can now move their production to other parts of the world, where labor is much cheaper, and they no longer need expensive American labor as much to carry on their business even in the U.S. The American labor movement has been slow to recognize the strategic importance of this globalization for large firms. American labor unions have fallen behind in their resistance to large corporations. Only now are they beginning to realize that they must join forces with workers around the globe in fighting for better wages and better working conditions, instead of acting as if they were only in competition with these other workers who are poorer than they and therefore willing to work for less. We see this in their reaction to the NAFTA agreement, where they are now beginning to struggle for better wages and working conditions on the Mexican side of the border as well as on the American side, since that is a way of maintaining their own position in the face of large corporations as well as bettering that of Mexican workers.

            Finally, there is a more subtle kind of resistance to the domination of large corporations, a spiritual kind of resistance which can be found in the U.S. as well as in other parts of the world. This includes all sorts of people, ordinary people around the country, activists of all sorts like former President Carter and many politicians, as well as many Non-Governmental Organizations (NGO's) like Qxfam America and the U.S. Network for Global Economic Justice. Many of them are religious, like Bread for the World, a Quaker organization, and the Catholic Relief Agency. They feel invaded and abused by the large corporations' ways of doing business even in their own country. They feel a sense of communion with the poor and the deprived around the world because of this same way of doing business, which tramples over the rights of human beings to a decent life everywhere it goes. These are people who suffer from the reversal of priorities in our political life and from the subordination of everything human to crass and powerful commercial interests. They regret deeply the priorities of our government's foreign policy, which is always and everywhere to protect the interests of the large corporations and the economic system they have built up for themselves globally, whether it be through our State Department, the IMF and the World Bank, or military intervention, usually at the expense of poor people around the world. The policy is always to protect what is euphemistically called the economy of a particular country, meaning keeping intact the investments and the loans of large corporations to poor countries through strategic adjustment programs, no matter how bad these were from the beginning. They leave the people most affected by these programs to shift for themselves and further deprive them of the means for their own economic development by forcing them to produce cash crops for the creditors, rather than food for themselves.

            These Americans value more in life than commercial success or falling in with the latest fashions dictated to the public by large corporations. They value social justice for all around the globe and value economic development itself as a minimum requirement for the good life of all, not just the few who control the global economic system. They strive for a reestablishment of such moral and spiritual priorities as justice and friendship in political life, so that everyone can be recognized as a human being entitled to a certain part of the wealth produced by his or her own labor as well as to an opportunity to begin to think of something beyond merely surviving in the midst of devastation. Economic survival and prosperity are not the only goods we should strive for as human beings, but they are a beginning of something that transcends material and commercial conditions. The people I am speaking of value the spiritual side of human development much more than the commercial or the economic, but they take economic betterment as a condition for every other sort of betterment of the human spirit. That is why they are so concerned about the economic betterment of everyone in a world as the division between the rich and the poor become worse and worse.

            The above are the parameters of the problem. We need ways of solving the problem that will reestablish the priority of moral and spiritual values for every human being on earth over a global economic system that benefits so few people with such an excess of wealth amid widespread poverty.