A Shareholder Pickets Outside the Waldorf
I own shares in a few companies that are members of the World Economic Forum. My CEOs will be meeting from Jan. 31 through Feb. 5th at the Waldorf Hotel with CEOs from about a thousand other companies to figure out how to make more money for me. But Iâ€™ll be outside picketing.
The WEF is a private club of corporations and a few very rich individuals that started meeting about thirty years ago at a time when profits were falling and it was hard to find good investments in the US and Europe.
People with money were looking abroad but many third world nations had rules that slowed down certain kinds of speculative investments. So did the First World countries, for that matter. For back in the early 1970â€™s it was an economic truism that unregulated money flows meant wild swings that could derail real economic development.
WEF members, stuck with lots of money to invest, needed to reverse that truism. The most visionary dreamed of supra-national institutions to enforce a new kind of financial globalism. The World Trade Organization (WTO) is one of the institutions that the WEF proudly claims to have spawned during its first decade of meetings.
They also helped to change the mandates of the IMF and the World Bank so that those two Keynesian institutions would act on new economic principles that they (and we) call â€œneo-liberal.â€
One of the tenets of neo-liberalism is that governments should not be in business, even the business of providing public services. Therefore public assets like telephone lines, railroads, hospitals, schools and even jails should be sold (cheaply) to private companies who then sell services like schooling and transportation to the public.
This is called â€œprivatization.â€ Itâ€™s advantage is that is opens up new protected businesses to companies that were running out of opportunities back home.
That brings me to one of the WEF member companies I own shares in. Suez Lyonnaise is a French based water company that makes money by taking over and running public water systems.
Frankly though, there arenâ€™t many First World localities that want their services. They had a gig in Grenoble, France, but they were kicked out for bribing the mayor to get the contract. The mayor went to jail but my company directors remained free and moved on. Even after the Grenoble convictions Suez Lyonniase was able to take over the Johannesburg water system.
Water privatization is controversial in South Africa because the African National Congress hoped to provide water (and electricity if possible) to poor black communities. But a private water company has to charge costs â€œplus.â€
In Argentina (a model of neo-liberal economics) one of my French companies took over a local water system and raised fees by 400%. Thatâ€™s how they make money for me?
In order to prepare the way for privatization of a public service, the IMF pressures governments to start charging in advance of the sales. So after Johannesburg privatized, other South African localities introduced water fees to get people used to paying for water. One community levied a four Rand minimum charge.
That low fee was a kind of baby step toward privatization. Still some people who couldnâ€™t pay had their service turned off and took to fetching water from the river. The result was a devastating Cholera epidemic. Yet the IMF pressures South Africa to go on with its privatization program.
I donâ€™t know anyone who believes that water privatization is inherently sensible. Before the current global era most economists, including Adam Smith, I imagine, would have rated a government as backward if it couldnâ€™t provide basics like clean drinking water to all its people.
Like the other neo-liberal principles, privatization simply reflects the desperation of companies like Suez Lyonnaise that canâ€™t find constructive ways to get a return on their money.
To be fair to the WEF, there will be some people inside the meeting who have the same doubts as those of us picketing outside. A few, including George Soros, are troubled by the misery that their kind of globalization brings to ordinary people.
Like WEF member Bill Gates, Soros has spent a lot of his private money on disease control in countries like Russia where neo-liberal rules have wiped out public health services. But even WEF members whose eyes are too glued to the bottom line to notice a passing Cholera epidemic are worries this year.
Globalization was a concept they invented as an answer to their investment problems. Growth in the first world had slowed down, as it does every several decades. The investorâ€™s response was to move money abroad.
The four sacred precepts of neo-liberalismâ€”privatization, liberalization of money flows, balanced budgets and â€œfreeâ€ tradeâ€”were devised to make Third World investments safer by making it easier to move money quickly and by transferring the investment risks to the people in poor countries.
With the new rules in place, money lurched from region to region. Speculative investment sprees were followed by deep recessions in one Third World country after another. In a mere three decades of corporate style globalism devastating booms and busts hit every continent except the Arctic and the Antarctic. Thanks to the global institutions they helped create, most of the WEF members got their money out safely each time. But where can they put it now?
As the WEF meets this year, we face the first truly world-wide recession of the global era. Every major nation has been hit at once. That will make people inside the Waldorf look more critically at the economic rules their club has promoted during its first thirty years of existence.
Unfortunately we canâ€™t count on them to come up with the new set of rules we need. Though many are bright and knowledgeable, their responsibility to grow my money makes their thinking short range and desperate. Most WEF members will cling to neo-liberal shibboleths like privatization until the last tiny Third World economy has been â€œopenedâ€ and wrecked.
Though it frightens me to realize it, we, who are so often called â€œanti-globalists,â€ will have to come up with new global rules that work for the common good. Our chants outside meetings like this one are the only voices suggesting to the public that another world is possible. So even though Iâ€™m an investor, Iâ€™m going to be outside the Waldorf Hotel in NYC on February 2nd, shouting as loud as I can.
Barbara Garson is the author of â€œMONEY MAKES THE WORLD GO AROUND: One Investor Tracks Her Cash Through the Global Economy from Brooklyn to Bangkok and Backâ€ Penguin Paperback Feb 2002.
P.S. The new Patriot Act makes it difficult for lawyers to help any non US citizen arrested at a demonstration. We advise non-citizens to keep well away from the police even at this peaceful, legal activity.
As a matter of fact, our lawyers tell us that the Patriot Act defines terrorism so vaguely (intimidation meant to change a governmentâ€™s policy) that a march or rally against neo-liberal economics could in certain climates get us all defined as terrorists.
As citizens we would at least have the opportunity to challenge the law. That makes it a good time for non citizens to use caution and for citizens to come out in great numbers to test our right to demonstrate.