Zac Goldsmith: Time’s up for the global economy

It’s time to face the fact that the globally integrated economy is both undesirable and unachievable, says Zac Goldsmith. It’s time to change direction to prevent further social and environmental breakdown. It’s time for a new agenda – and a new system of world leadership –

Until quite recently, concern about the state of the planet was greeted with derision. Today, almost everyone agrees that we are in trouble.

In the past few months, the World Wide Fund for Nature, the United Nations Environment Programme and even the National Academy of Scientists – which advises president George W Bush – have all separately warned that the Earth’s capacity for regeneration is passing.

Time is not on our side. But while the warnings are repeated time and again, there is no sign that they are being heeded.

Albert Einstein once said that you can’t solve a problem using the same criteria that gave rise to it. In many ways that explains why decision-makers, when confronted with problems, invariably interpret them in a way that justifies solutions that already fit their agenda.

For decades now, few goals have been as widely declared as the attainment of something called “progress”. But very rarely does anyone bother to define what is meant by the word, except that it is achieved through economic growth.

If you generate economic growth, then you have progressed. But economic growth as a goal is extremely limited. For one thing it’s measured against yardsticks that can add but cannot subtract.

Take GDP. If a nation’s GDP increases, all is well. If it sinks, the experts panic. But GDP is a mechanism for measuring any form of economic activity, regardless of whether that activity is good or bad.

To put that in context, when the Exxon Valdez oil spill caused chaos off the Alaskan coast, GDP went up. So what any normal human being would regard as horrible, the economic system measures as growth.

Nevertheless, economic growth, or progress, is the agenda. And the best way to maximize economic growth is to create a single global industrial market economy – whose prime beneficiaries are, needless to say, the giant multinational corporations.

That has been the agenda for decades, and the result is that the corporations have grown enormously powerful. Today just 500 corporations control 70% of world trade; of the biggest 100 economies in the world, half are business corporations.

With their financial power, it is impossible to exaggerate their political influence. Every task force, every committee, every department of every government sector is rife with corporate representatives.

In the UK, there is a minister for science in charge of biotechnology policy who is one of the country’s biggest biotech investors, and who donated £9 million to the governing Labour Party.

In the US, according to former US secretary of labour Robert Reich: “There’s no longer any countervailing power in Washington. Business is in complete control of the machinery of government. It’s payback time and every industry and trade association is busily cashing in.”

The trouble is that almost all of our leaders believe a nation’s success can best be judged by how well it attracts foreign direct investment. Since a third of all foreign direct investment is accounted for by just 100 corporations, that means that all countries are competing for the affections of a tiny handful of corporations. And, as we know, the best way to attract businesses that are spoiled for choice is to provide tax breaks, subsidies and low standards.

Big businesses are in control of the global economy. They not only set the agenda. They are the agenda. That is why, when world leaders gathered at the World Summit in Johannesburg a few months ago, few people – particularly among the young – were surprised when nothing ground-breaking emerged.

Boringly enough, I did read through some of the draft agenda before the conference took off. It is true, as has been repeatedly noted, that US lobbyists deleted key chunks of text. But the conference was flawed even without their interference.

Sixty years ago world leaders met to lay out their development plans for the third world. At the time there was unanimous agreement that the answers to poverty lay in economic growth and world trade.

Since then, exactly as planned, there has been a five-fold increase in world economic growth and a nineteen-fold increase in world trade. But over the same period, poverty has vastly increased, and the environment is close to ruins.

The project has quite clearly failed to deliver. But at Johannesburg, except for a change in language, there was no change whatsoever in the criteria.

For as long as corporations write the rules, every problem will necessarily become an excuse for profit-making. The solution to ocean pollution will always be genetically engineered, pollution-eating microbes. The solution to cancer will always be drugs.

If the global economy is rendering millions destitute, if it is exhausting the planet itself, then we have to ask ourselves whether it can be made less brutal. My view is that it can’t. There are lots of reasons why that is so. Here are three.

First, the conditions that suit the corporations are incompatible with those that suit everyone else. In a recent annual report, the head of Campbell Soup Company wrote: “As I look to the future, I shiver with business excitement. That’s because Campbell Soup Company is engaged in a Global Consumer Crusade… The aim is to convert millions of new customers to Campbell brands every year. We are moving across the oceans and into new nation-states and blocs. The joy of it is that we can’t be fined for speeding…”

Multinationals cannot cope with diversity. Diversity, in the real sense, is their greatest obstacle. How could two companies – Cargill and Archer Daniels Midland – control 80% of world grain within the context of a diverse local food infrastructure?

Multinationals need a single mass of identical consumers, each dependent on the same products and services that they alone provide. Diversity is the basis of healthy environments, economies and communities. It is the antithesis of the corporate monoculture.

Second, the global economy depends fundamentally on vulnerability. Joseph Stiglitz, the former chief economist at the World Bank, said that his biggest criticism of the IMF was that it applied the same development criteria to every country, regardless of geography, culture or conditions.

In the south, the criteria go as follows. Countries are advised to take loans to build the infrastructure they need to be part of the global economy. They are told to service their new debts by selling off their natural assets, such as minerals and forests. And to generate revenue, they are told to do away with their domestic food base and specialize for export markets.

The whole process hinges on a number of major assumptions: that these nations will always be able to rely on the global distribution of food; that the land will always accommodate intensive agriculture for export; and that they will always be able to afford the imports they need to survive.

If any one of these assumptions were flawed, the result would be disastrous. Well, they are flawed. Countries are going bankrupt. Previously self-sufficient countries are now dependent for their survival on food aid.

Industrial agriculture is exhausting the land and poisoning people. The effects have already proven devastating. Breadbaskets the world over are becoming deserts, and 80% of all the world’s malnourished children live in countries whose economies have already been oriented towards export.

And when a country has already sold its natural assets, presided over the collapse of its rural economy and been made wholly dependent on a volatile global economy, what does it do? It lowers its standards still more, hoping to attract the big business boys – just like everyone else.

Third, even if you believe that economic globalization is desirable, it is nonetheless impossible. It has been calculated that, if the whole world were to consume the way Americans do, we would need at least six identical planets.

Lester Brown of World Watch estimates that if every family in China were to increase its egg consumption by just one egg per week, it would exhaust the entire grain supply of Australia just to feed the chickens required.

When benign leaders talk generously of third world nations catching up, it sounds great. But it’s just not possible. Our civilisation prides itself on its rigorous application of mathematics, but it has failed to make the most basic of all calculations.

Our leaders, across the political spectrum, tell us that globalization is inevitable. That’s not only untrue, it’s absurd. The global economy is the result of human decisions. And the efforts that are needed to restore balance today are nothing compared with what we are going to need to keep the global economy going. And those are not a patch on what we can expect to need if the global economy continues.

Who, for instance, is going to house the hundreds of millions of refugees created by climate change? Where is our food going to come from if land continues to be destroyed? In China alone, 900 square miles are turning into desert each year.

The globalizers tell us that it is unrealistic to imagine we can overcome the free market. Well whatever you want to call the current system, it is the epitome of unrealism. Nor is it, in any sense, “free”.

The global economy could not operate were it not for the direct subsidies heaped upon it, not to mention the indirect subsidies. What is it worth, for instance, to UK supermarket chain Tesco to have members on virtually every UK government task force? What are the endless regulations worth to the big producers, which stifle and choke their smaller counterparts?

Despite what we are led to believe, shifting direction is not an impossible task. Nor are the steps that we are going to have to take especially radical.

We can start by bringing the food economy home, by recognizing and diverting the massive support that intensive agriculture for export enjoys and by lobbying for resources to be invested in rebuilding the domestic food infrastructure that has been systematically dismantled.

We can lobby to have the trade treaties renegotiated, so that communities and the environment come first. We can lobby for a change in the way the lending institutions spend

our money overseas. We can demand the adoption of the Precautionary Principle – which assumes, in this dangerous age, that new technologies are guilty until they are proven to be innocent.

And we can do everything possible to nurture, rather than destroy, strong local economies – which are by far the best insurance we have against continued social and environmental breakdown.

The global economy is unrealistic, undesirable and impossible. We can choose to allow things to continue and collapse, as they are already beginning to do. Or we can push now for the change that millions are demanding.

Zac Goldsmith
Zac Goldsmith is editor of The Ecologist magazine. www.theecologist.org