Look Inside this
Bestselling Book!
Global Research,
March 01, 2016
by Michel
Chossudovsky
In the expanded
second edition of Chossudovsky’s international best-seller, the author outlines
the contours of a New World Order which feeds on human poverty and the
destruction of the environment, generates social apartheid, encourages racism
and ethnic strife and undermines the rights of women. The result as his
detailed examples from all parts of the world show so convincingly, is a
globalization of poverty.
This book is a
skillful combination of lucid explanation and cogently argued critique of the
fundamental directions in which our world is moving financially and
economically.
In the enlarged
second edition, the author reviews the causes and consequences of famine
in Sub-Saharan Africa, the dramatic meltdown of financial markets, the demise
of State social programs and the devastation resulting from corporate
downsizing and trade liberalisation.
“This concise,
provocative book reveals the negative effects of imposed economic structural
reform, privatization, deregulation and competition. It deserves to be read
carefully and widely.”
- Choice, American Library Association (ALA)
“The current system,
Chossudovsky argues, is one of capital creation through destruction. The author
confronts head on the links between civil violence, social and environmental
stress, with the modalities of market expansion.”
- Michele Stoddard, Covert Action Quarterly
Click to learn more
about The Globalization of Poverty and the
New World Order by Michel Chossudovsky
Preface to the
Second Edition
Barely a few weeks
after the military coup in Chile on September 11, 1973, overthrowing the
elected government of President Salvador Allende, the military Junta headed by
General Augusto Pinochet ordered a hike in the price of bread from 11 to 40
escudos, a hefty overnight increase of 264%. This economic shock treatment had
been designed by a group of economists called the “Chicago Boys”.
At the time of the
military coup, I was teaching at the Institute of Economics of the Catholic
University of Chile, which was a nest of Chicago trained economists, disciples
of Milton Friedman. On that September 11, in the hours following the bombing of
the Presidential Palace of La Moneda, the new military rulers imposed a 72-hour
curfew. When the university reopened several days later, the “Chicago Boys”
were rejoicing. Barely a week later, several of my colleagues at the Institute
of Economics were appointed to key positions in the military government.
While food prices
had skyrocketed, wages had been frozen to ensure “economic stability and stave
off inflationary pressures.” From one day to the next, an entire country was
precipitated into abysmal poverty: in less than a year the price of bread in
Chile increased thirty-six times and eighty-five percent of the Chilean
population had been driven below the poverty line.
These events
affected me profoundly in my work as an economist. Through the tampering of
prices, wages and interest rates, people’s lives had been destroyed; an entire
national economy had been destabilized. I started to understand that
macro-economic reform was neither “neutral” – as claimed by the academic
mainstream – nor separate from the broader process of social and political
transformation. In my earlier writings on the Chilean military Junta, I looked
upon the so-called “free market” as a wellorganized instrument of “economic
repression”.
Two years later in
1976, I returned to Latin America as a visiting professor at the National
University of Cordoba in the northern industrial heartland of Argentina. My
stay coincided with another military coup d’état. Tens of thousands of people
were arrested and the Desaparecidos were assassinated. The military takeover in
Argentina was a “carbon copy” of the CIA-led coup in Chile. Behind the
massacres and human rights violations, “free market” reforms had also been
prescribed – this time under the supervision of Argentina’s New York creditors.
The International
Monetary Fund’s (IMF’s) deadly economic prescriptions applied under the guise
of the “structural adjustment program” had not yet been officially launched.
The experience of Chile and Argentina under the “Chicago Boys” was a dress
rehearsal of things to come. In due course, the economic bullets of the free
market system were hitting country after country. Since the onslaught of the
debt crisis of the 1980s, the same IMF economic medicine has routinely been
applied in more than 150 developing countries. From my earlier work in Chile,
Argentina and Peru, I started to investigate the global impacts of these
reforms. Relentlessly feeding on poverty and economic dislocation, a New World
Order was taking shape.
Meanwhile, most of
the military regimes in Latin America had been replaced by parliamentary
“democracies”, entrusted with the gruesome task of putting the national economy
on the auction block under the World Bank sponsored privatization programs. In
1990, I returned to the Catholic University of Peru where I had taught after
leaving Chile in the months following the 1973 military coup.
I had arrived in
Lima at the height of the 1990 election campaign. The country’s economy was in
crisis. The outgoing populist government of President Alan Garcia had been
placed on the IMF “black list”. President Alberto Fujimori became the new
president on the 28th of July 1990. And barely a few days later, “economic
shock therapy” struck – this time with a vengeance. Peru had been punished for
not conforming to IMF diktats: the price of fuel was hiked up by 31 times and
the price of bread increased more than twelve times in a single day. The IMF –
in close consultation with the US Treasury – had been operating behind the
scenes. These reforms – carried out in the name of “democracy” – were far more
devastating than those applied in Chile and Argentina under the fist of
military rule. In the 1980s and 1990s I traveled extensively in Africa. The
fieldresearch for the first edition was, in fact, initiated in Rwanda which,
despite high levels of poverty, had achieved self-sufficiency in food production.
From the early 1990s, Rwanda had been destroyed as a functioning national
economy; its once vibrant agricultural system was destabilized. The IMF had
demanded the “opening up” of the domestic market to the dumping of US and
European grain surpluses. The objective was to “encourage Rwandan farmers to be
more competitive”. (See Chapter 7.)
From 1992 to 1995, I
undertook field research in India, Bangladesh and Vietnam and returned to Latin
America to complete my study on Brazil. In all the countries I visited,
including Kenya, Nigeria, Egypt, Morocco and The Philippines, I observed the
same pattern of economic manipulation and political interference by the
Washington-based institutions. In India, directly resulting from the IMF
reforms, millions of people had been driven into starvation. In Vietnam – which
constitutes among the world’s most prosperous rice producing economies –
local-level famines had erupted resulting directly from the lifting of price
controls and the deregulation of the grain market.
Coinciding with the
end of the Cold War, at the height of the economic crisis, I traveled to
several cities and rural areas in Russia. The IMF sponsored reforms had entered
a new phase – extending their deadly grip to the countries of the former
Eastern bloc. Starting in 1992, vast areas of the former Soviet Union, from the
Baltic states to Eastern Siberia, were pushed into abysmal poverty.
Work on the first
edition was completed in early 1996, with the inclusion of a detailed study on
the economic disintegration of Yugoslavia. (See Chapter 17.) Devised by World
Bank economists, a “bankruptcy program” had been set in motion. In 1989-90,
some 1100 industrial firms were wiped out and more than 614,000 industrial
workers were laid off. And that was only the beginning of a much deeper
economic fracturing of the Yugoslav Federation.
Since the
publication of the first edition in 1997, the World has changed dramatically;
the “globalization of poverty” has extended its grip to all major regions of
the World including Western Europe and North America.
A New World Order
has been installed destroying national sovereignty and the rights of citizens.
Under the new rules of the World Trade Organization (WTO) established in 1995,
“entrenched rights” were granted to the world’s largest banks and multinational
conglomerates. Public debts have spiraled, state institutions have collapsed,
and the accumulation of private wealth has progressed relentlessly.
The US-led wars on
Afghanistan (2001) and Iraq (2003), mark an important turning point in this
evolving New World Order. As the second edition goes to print, American and
British forces have invaded Iraq, destroying its public infrastructure and
killing thousands of civilians. After 13 years of economic sanctions, the war
on Iraq plunged an entire population into poverty.
War and
globalization go hand in hand. Supported by America’s war machine, a new deadly
phase of corporate-led globalization has unfolded. In the largest display of
military might since the Second World War, the United States has embarked upon
a military adventure, which threatens the future of humanity.
The decision to
invade Iraq had nothing to do with “Saddam’s weapons of mass destruction” or
his alleged links to Al Qaeda. Iraq possesses 11 percent of the World’s oil
reserves, i.e. more than five times those of the US. The broader Middle
East-Central Asian region (extending from the tip of the Arabian peninsula to
the Caspian sea basin) encompasses approximately 70% of the World’s reserves of
oil and natural gas.
This war, which has
been in the planning stage for several years, threatens to engulf a much
broader region. A 1995 US Central Command document confirms that “the purpose
of US engagement . . . is to protect US vital interest in the region –
uninterrupted, secure US/Allied access to Gulf oil” .
In the wake of the
invasion, Iraq’s economy has been put under the jurisdiction of the US military
occupation government led by retired General Jay Gardner, a former CEO of one
of America’s largest weapons producers.
In liaison with the
US administration and the Paris Club of official creditors, the IMF and World
Bank are slated to play a key role in Iraq`s post-war “reconstruction”. The
hidden agenda is to impose the US dollar as Iraq’s proxy currency, in a
currency board arrangement, similar to that imposed on Bosnia-Herzegovina under
the 1995 Dayton Accord. (See Chapter 17.) In turn, Iraq’s extensive oil
reserves are slated to be taken over by the Anglo-American oil giants.
Iraq’s spiralling
external debt will be used as an instrument of economic plunder.
Conditionalities will be set. The entire national economy will be put on the
auction block. The IMF and the World Bank will be called in to provide
legitimacy to the plunder of Iraq’s oil wealth.
The deployment of
America’s war machine purports to enlarge America’s economic sphere of
influence in an area extending from the Mediterranean to China’s Western
frontier. The US has established a permanent military presence not only in Iraq
and Afghanistan, but it has military bases in several of the former Soviet
republics as well. In other words, militarization supports the conquest of new
economic frontiers and the worldwide imposition of the “free market” system.
Global Depression
The onslaught of the
US-led war is occurring at the height of a global economic depression, which
has its historical roots in the debt crisis of the early 1980s. America’s war
of conquest has a direct bearing on the economic crisis. State resources in the
US have been redirected towards financing the military-industrial complex and
beefing up domestic security at the expense of funding much needed social
programs which have been slashed to the bone.
In the wake of
September 11, 2001, through a massive propaganda campaign, the shaky legitimacy
of the “global free market system” has been reinforced, opening the door to a
renewed wave of deregulation and privatization, resulting in corporate
take-overs of most, if not all, public services and state infrastructure
(including health care, electricity, water and transportation).
Moreover, in the US,
Great Britain and most countries of the European Union, the legal fabric of
society has been overhauled. Based on the repeal of the Rule of Law, the
foundations of an authoritarian state apparatus have emerged with little or no
organized opposition from the mainstay of civil society.
The new chapters
added to this second edition address some of the key issues of the 21st century:
the merger boom and the concentration of corporate power, the collapse of
national and local level economies, the meltdown of financial markets, the
outbreak of famine and civil war and the dismantling of the Welfare State in
most Western countries.
In Part 1, a new
Introduction and a chapter entitled “Global Falsehoods” have been added. Also
in Part 1, the impacts of “free markets” on women’s rights are examined. In
Part II, on sub-Saharan Africa, the chapter on Rwanda has been expanded and
updated following fieldwork conducted in 1996 and 1997. Two new chapters,
respectively, on the 1999- 2000 famine in Ethiopia and on Southern Africa in
the post-Apartheid era have been added. The chapter on Albania in Part 5,
focuses on the role of the IMF in destroying the real economy and precipitating
the breakdown of the country’s banking system.
A new Part 6
entitled “The New World Order” includes five chapters. Chapter 18 centers on
the “structural adjustment program” applied in Western countries under the
surveillance of the World’s largest commercial and merchant banks. The ongoing
economic and financial crisis is reviewed in Chapters 19 and 20. Chapters 21
and 22 examine, respectively, the fate of South Korea and Brazil in the wake of
the 1997-1998 financial meltdown, as well as the complicity of the IMF in
furthering the interests of currency and stock market speculators.
Global Research
Publishers, 2003 | ISBN 978-0973714708 | 400 pages with complete index
Michel Chossudovsky is Professor of Economics at the University of Ottawa
and Director of the Centre for Research on Globalization (CRG), which hosts the
critically acclaimed websitewww.globalresearch.ca . He is a contributor to the Encyclopedia
Britannica. His writings have been translated into more than 20 languages.
The Globalization of
Poverty and the New World Order is available to order from Global Research!
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