Global Warning

By Buell, John | The Humanist, May-June 1997 | Go to article overview

Global Warning

Buell, John, The Humanist

If a modern-day Rip Van Winkle had fallen asleep a decade ago to awaken this month, he would surely be shocked by the stories in his morning newspaper. The absence of the Soviet Union would surely catch his eye. But Rip might also be startled to observe how joyless most citizens of the West have become in the days following the collapse of our erstwhile adversary.

It is hard to remember today how euphoric political, intellectual, and business elites were about the prospects of extending free market institutions to the rest of the globe. The opening of foreign markets was supposed to bring greater prosperity to the peoples of Eastern Europe and, in turn, open up new opportunities for Western businesses. The Japanese intellectual Francis Fukayama was so bold as to proclaim that history had ended; only one model of political economy would endure.

This new global economy, however, has been most successful in bringing Third World inequalities to the United States. Over the last decade, the top 1 percent of American families has seen its share of total national wealth rise from 33 percent to 42 percent. Meanwhile, the bottom 80 percent of families has seen its share of wealth fall from 19 percent to 15 percent. Similarly, the new world economy has not produced the levels of growth long promised as the reward for accepting harsh, free market `reforms." Economies in most of the major industrial democracies are essentially stagnant. Workers and the middle class are restive everywhere.

The explanation of the day among political leaders is that the world is undergoing the costs of "transition" to a more prosperous economic order. On the contrary, I would argue that, without the breakup of the Soviet Union, the threat of nuclear annihilation has diminished somewhat, only to be replaced by enormous economic and social risks.

The new free trade regimes have inordinately strengthened the rights of business elites to relocate factories throughout the globe. These new corporate freedoms carry risks seldom discussed or even recognized. One consequence of these freedoms has been a movement in the European social democracies to scale back a range of benefits to workers, including unemployment compensation, health, and social security programs. Although these benefits remain more generous in Western Europe than in the United States, they face increasing business opposition everywhere. Communism's demise plays a role here too. With the decline in the military threat of the Soviet Union and no possibility of discontented workers receiving its aid or being tempted by its example, European leaders feel no reluctance about shredding the safety net. When grass-roots groups protest cutbacks, they meet a constant response: the demands of global competition require a low-cost workforce.

Russia's travails have other economic implications, as well. This nation stands near economic collapse. Stephen Cohen, a Russian studies expert at Princeton University, reports in a recent issue of the Nation that American media have barely acknowledged the full dimensions of "insider privatization, impoverishment, and disintegration of the middle class" in Russia. Rather than a future market for our goods, Russia may become a sinkhole for future public and private aid.

As communism and European social democracy unravel the New Deal welfare state, never as fully elaborated as its European counterparts, has virtually collapsed. Fewer than 40 percent of American workers are now covered by unemployment compensation. The success of union-busting campaigns over the last decade leaves only about one in ten private sector workers still unionized. Welfare as an entitlement has been eliminated, and there is enormous pressure to scale back social security and other benefits.

While these trends have obvious implications for social justice, they carry much less noticed risks for international stability. Put simply, the world is engaged in a social experiment as vast as the initial transition to capitalism two centuries ago. …

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Global Warning


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