a conservative on the WTO

[Jim Devine <jdevine@xxxxxxxxxxxxxxx>]

Here's a very conservative fellow's take on the WTO. It is interesting that
he has a somewhat "postmodern" view of the incoherence of the opposition to
the WTO. In some ways, it's a direct response to Barkley (and Brad). He
also presents an inadequate perspective on Bolshevism, but that's really
not very important to his point.

Globalizers Are the Bolsheviks of Their Day: Abolishing all economic
barriers without regulation can destroy cultures and societies.

 By EDWARD N. LUTTWAK

 The great scientific discovery that gave us penicillin was achieved by Sir
Alexander Fleming for one reason alone: When his routine cultivation of
bacteria for an experiment failed because some mold contaminated the petri
dish, Fleming immediately realized that it was not his original experiment
that was important, but rather the "disturbance" that ruined it.

 Once he focused on the mold, it was a straightforward deduction that it
produced something that could kill bacteria--an antibiotic. Likewise, when
we consider what happened at the World Trade Organization meeting in
Seattle, the key is to isolate the important phenomenon from all the
confusion. Not the violence, which was the work of a tiny number of
cultists; not the failure of the conference itself, which is the normal
result when big international conferences are organized too quickly to
respect an arbitrary date; not even the unexpected dimensions of the
protests, which is possible because air fares are so low these days.

 It was, rather, the incoherence of the protest that is truly significant.
The politicians, bureaucrats and businesspeople who believe that the
Seattle demonstrations were only a "disturbance" because environmentalists,
trade-unionists and protectionists cannot form a coherent opposition to
globalization in their respective countries are missing the point. What is
significant is precisely the fact that there is only one truth and only one
model on the WTO side, while there are many different reasons to oppose
globalization.

 Two generations ago, it was the Bolsheviks who proposed a single Leninist
model for all industrialized countries. Today, the new Bolsheviks are the
advocates of what I call turbo-capitalism, who believe that all economies
should be opened to all forms of competition by privatizing everything,
abolishing all economic regulations and removing all barriers to
international commerce. Again, fundamental differences between countries
are being ignored. The privatization of public services, for example, works
very well if there is a dynamic and fearless anti-monopoly unit of
government constantly attacking emerging monopolies, as the U.S.
Justice Department is now destroying the power of Microsoft. Then we see
services improve and tariffs go down.

 But without that counterforce, public services become private monopolies
that make a few people very rich and impose high costs on the entire
economy. That is what happened in England with water and railway services
and in Italy, where one man was allowed to monopolize the private
television industry.

 Likewise, the deregulation of the financial sector works well if there are
modern laws to prevent abuses of power--and a highly motivated financial
police with powerful computers and talented professionals such as the
Security and Exchange Commission in the United States, which fined and
jailed not only the billionaire junk
bond king Michael Milken but also countless stock exchange manipulators and
corporate barons. Half the top men in the London stock exchange would be in
prison if they had operated on Wall Street.

 In other words, if you have the Ferrari engine of a fully privatized,
deregulated economy, you'd better have brakes just as powerful. Yet what we
have seen in recent years is the promotion of free markets without any real
effort to create equally dynamic controlling institutions. In Britain, Bill
Gates would be Lord Gates of
Windows, far more untouchable than Prince Charles. A French Microsoft would
be a sacred institution and the anti-monopoly official who dared to start a
case against it would find himself on a one-way flight to the Polynesian
island where they test nuclear weapons. In Russia, he would have his own
offices in the Kremlin,
with an open door to Premier Boris Yeltsin. In Italy, he would buy himself
three or four political parties to become the prime minister of his own
coalition.

 The much larger question that globalization specifically raises is nothing
less than the relationship between culture and commerce. To stop European
subsidies for wheat production not only would help the wheat farmers of
Argentina, Australia, India and the U.S. but also would stop the
destruction of the environment in northern France and elsewhere in Europe.
To fully open the Japanese rice market, on the other hand, would destroy
the culture of rural Japan with its festivals and folklore--in other words,
the Japanese part of Japan, whose industrial areas are nothing but a local
version of undifferentiated modernity. Because the Japanese operate their
economy to sustain their society and not the other way around, they
correctly think that it is idiotic to destroy what they value most for the
sake of a minor increase in efficiency. It is only in the Third World where
state action is twisted to benefit the privileged few that turbo-capitalism
is always a good idea.

 Just as the old Bolsheviks ignored all structural differences among
countries in their insistence that only state ownership of everything would
eliminate economic inequality, today's "turbo-capitalists" do the same when
they insist that all trade barriers are inefficient (true), that a
globalized world economy would be much more productive (true) and that all
impediments to free trade should therefore be abolished (a giant non
sequitur, because impediments may protect not only inefficiencies but also
national cultures and societies).

 This was the real significance of the Seattle demonstrations: Through
their very diversity, they exposed the one-model extremism of the new
Bolsheviks who would sacrifice everything for the sake of efficiency--and
without even the counterweight of functioning regulatory institutions.

 - - -

Edward N. Luttwak Is a Senior Fellow at the Center for Strategic and
International Studies in Washington

Copyright 1999 Los Angeles Times

Jim Devine jdevine@xxxxxxxxxxxxxxx & http://clawww.lmu.edu/~JDevine