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‘A universe we choose’ – Part 1 June 14, 2007

Posted by Andreas in History, Politics, rant, Society, South Africa.

Sam and I wrote this about a year or two ago, but then didn’t manage to sell it to anyone. So now I’m inflicting it on you (in three parts nogal). It’s still relevant, I reckon.

‘A universe we choose’ – The Fight against Corporate Globalisation: A South African perspective (Part 1)

by Sam Wilson and Andreas Späth

In 2000, a cholera outbreak around Ngwelezane in rural KZN killed nearly 200 people and infected more than 80 000 others. Why the outbreak? The government had recently terminated a 17-year-long, apartheid-era supply of free water. Those too poor to buy their water found themselves forced to gather it from wherever they could find it, storm drains, dirty rivers, stagnant pools…. hence the cholera.

For millions, our whole conception of ‘a new South African identity’ is inextricably tied to the pride we have in the democratic principles enshrined in our Constitution. Drenched in ubuntu and patriotism, our constitution specifically promises, among other basic human rights, access to adequate housing, food and water.

So what happened here? Did our government really put its profit margin above the lives of these people? Could our national priorities have shifted that much in less than a decade?

(Then) Wits academic Patrick Bond is just one of the critics blaming our government for adopting neoliberal economic policies that put profit before people. Government is turning basic services like water and electricity into commodities, and then selling them off to the highest bidder. From there, it’s a quick step to insist upon a 100% cost recovery model from ‘customers’, regardless of how poor these individuals may be. No money, no water.

What prompted our government to take such a step? For a lot of reasons, but not least of which the fact that the World Bank and International Monetary Fund (IMF) have made no bones about the fact that they will be plenty cheesed off if SA doesn’t go this route. In the words of writer-activist Ashwin Desai, ‘our transition to democracy… was trumped by the transition to neoliberalism’.

What is neoliberalism?

For the last quarter of a century, neoliberalism (sometimes also referred to as the Washington Consensus) has been the economic theory that has allowed the astonishing success of corporate globalisation.

Initiated by University of Chicago economist Friedrich von Hayek and a group of his students including Milton Friedman, it is a theory that has been aggressively pursued by large governments, the IMF, World Bank and World Trade Organisation (WTO). Margaret Thatcher was a particularly zealous neoliberalist.

Basically, neoliberalism is designed to maximize profits and efficiency by making the movement of goods, resources and finances (but not people) between nations freer and easier. How is this achieved?

· Strict insistence on free market principles.

· Severe cuts in public expenditure for social services (Remember the school lunch furore in the UK: ‘Maggie Thatcher stole my milk money?’).

· ‘Flexible’ labour relations, with reduced wages and an emphasis on part-time, contract and casual labour (derisively christened the ‘McJob’ by critics).

· Privatisation of state-owned assets and services.

· Removal of tariffs and regulations that act as barriers to international trade and investment.

It isn’t that simple though, as neoliberalism comes with a built-in side order of hypocrisy. While countries in the North insist that we in the South offer up complete financial and trade transparency, they are at the same time rigorously protecting their own sensitive markets. Sparkling wine, anyone?

So, who benefits? Let’s look at it this way. In 1999, the total sales of each of the five biggest companies (General Motors, Wal-Mart, Exxon Mobil, Ford Motor, Daimler Chrysler) exceeded South Africa’s GDP. That’s a lot of sales.

We hear the term corporate globalisation bandied about a lot… and it is just these kinds of figures which underpin the concept. Simply put, as new markets are ‘encouraged’ by the WTO and IMF to open their trade doors as wide as possible, so the supercompanies come storming in… with corporate machinery that can dominate commerce, production, finance and culture faster than you can say ‘Happy Meal’.

And the statistics are truly mind-boggling: more than half of the world’s biggest economies are not countries, but corporations, the vast majority of which are based in North America, Western Europe and Japan – hence the old East/West divide has given way to North/South in politico-speak.

While a few Northern supercompanies may have amassed untold wealth and power under neoliberalism, critics argue that inequalities between the rich and poor have increased in virtually all countries as a result of it. The world’s top 200 corporations’ combined sales were 18 times the combined annual income of the 1.2 billion people living in “severe” poverty.

The wealth gap between the rich countries of the North and the nations of the third world has grown steadily. Uruguayan writer Eduardo Galeano uses this example: ‘Western Governments pay their farmers a subsidy each year for every cow they rear. Halve that subsidy. You are looking at about the annual salary of a peasant in a poor country. Basically, applying free market principles and thinking globally, the average impoverished third world peasant is worth about half a cow’.



1. Ian - June 15, 2007

Who are neoliberal corporate degenerates who wouldn’t buy this? Very well put, look forward to the next installments!

2. Andreas - June 15, 2007

Haha, we didn’t really try to sell it very hard…

3. Sam - June 15, 2007

Actually, the funny thing is we did sell it to a glossy magazine and were paid and everything. they just didn’t ever run it.

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