Creative Fractures: Sociology and Theology

By M. D. Litonjua

The world is one of increasing diversity and pluralism. Our world is one of the different and of the many. Even the individual personality and the social self are increasingly diverse and plural. This is especially evident in racial and ethnic identities. The Ohioan, the New Yorker, the Texan, all became, after the cauldron of the Civil War, the American. Now the American is continually being hyphenated: Native-American, African-American, Latino-American, Asian-American, and a host of other hyphens. In the academy, the dichotomy between the fox who knows many things, and the hedgehog who knows one big thing (Archilocus), is giving way to different combinations and variations of learning, teaching, and expertise, as demanded by and reflecting the diversity and complexity of society and world.

While these differences and pluralisms can lead to fragmentation, these fractures can also be creative. The ethnically hyphenated person who straddles two cultures need not be marginal to both, but can use the riches of his/her diverse experiences to cross-fertilize the cultures of which they are now part and parcel. The other, the different, especially the poor, must not be marginalized, pushed to the margins of society as outcasts; they need to be empowered for their betterment and for the common good of society. The academic, well-versed in several disciplines, should not be considered master of none, but can bring the insights of one discipline to tame the fundamentalism of another discipline and to expand the horizons of all.

In one form or another, to a greater or lesser extent, this is what I have tried to do in the essays gathered in this second collection, the first being Critical Intersections (2006).

• Language: English
• Publisher: AuthorHouse
• Release date: Feb 1, 2011
• ISBN: 9781452098319

M. D. Litonjua

M. D. Litonjua is professor emeritus of sociology of the College of Mount St. Joseph in Cincinnati, Ohio. He holds a Ph.D. in Sociology from Brown University, an M.B.A. from the University of Missouri in St. Louis, and Licentiates in Philosophy and Theology from the University of Santo Tomas (Manila). He is the author of Liberation Theology: The Paradigm Shift; Structures of Sin, Cultures of Meaning: Social Science and Theology, 2nd ed.; Critical Intersections: Religion and Society; and Creative Fractures: Sociology and Theology.

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Contents

Preface

Third World/Global South:

From Development to Globalization to Imperial Project

False Dichotomies and Misplaced Unity in the Sociology of Third World/Global South Development

International Free Trade, the WTO,

and the Third World/Global South

The Socio-Political Construction of Globalization

CONTENDING IDEOLOGIES:

Liberal Democracy and Religious Fundamentalism

Neoliberalism and Catholic Social Teaching

Liberal Democracy and Catholic Social Teaching

Religious Zealotry and Political Violence in

Christianity and Islam

The Human Jesus, the Divine Christ: A Personal Reflection

The Failure of Vatican II: Collegiality and Structural Reform

Business, Law, and Ethics: A Critical Reflection

What is Truth? What is Reality?

Whose Truth? Whose Reality?

Understanding and Appreciating Hans Kung’s Trilogy

Two Women of the Philippines: Imelda Marcos

and Corazon Aquino

REFERENCES

ABOUT THE AUTHOR

Preface

The world is one of increasing diversity and pluralism. Our world is one of the different and of the many. There was a time when the Enlightenment project of the universal was celebrated. Universal ideas, ideals, and values were pursued and promoted. E pluribus unum was the clarion call of modernity. But with postmodernity, we soon realized that universalism was constituted by the values and prejudices of dead white males, as they were called. The particular, the different, the other were the subordinate, the marginalized, the oppressed. The drive toward the universal – insofar as and because they are human – values, ideas, and ideals remains valid and perennial, but it has to allow room, recognition, and realization of the particular, the different, the other.

Even the individual personality and the social self are increasingly diverse and plural. This is especially evident in racial and ethnic identities. The Ohioan, the New Yorker, the Texan, all became, after the cauldron of the Civil War, the American. Now the American is continually being hyphenated: Native-American, African-American, Latino-American, Asian-American, and a host of other hyphens. In the academy, the dichotomy between the fox who knows many things, and the hedgehog who knows one big thing (Archilocus), is giving way to different combinations and variations of learning, teaching, and expertise, as demanded by and reflecting the diversity and complexity of society and world.

While these differences and pluralisms can lead to fragmentation, these fractures can also be creative. The ethnically hyphenated person who straddles two cultures need not be marginal to both, but can use the riches of his/her diverse experiences to cross-fertilize the cultures of which they are now part and parcel. The other, the different, especially the poor must not be marginalized, pushed to the margins of society as outcasts; they need to be empowered for their betterment and for the common good of society. The academic, well-versed in several disciplines, should not be considered master of none, but can bring the insights of one discipline to tame the fundamentalism of another discipline and to expand the horizons of all.

In one form or another, to a greater or lesser extent, this is what I have tried to do in the essays gathered in this second collection, the first being Critical Intersections (2006).

Two articles, Third World/Global South: From Development to Globalization to Imperial Project, and International Free Trade, the WTO, and the Third World/Global South, were published in the Journal of Third World Studies.

Four articles, False Dichotomies and Misplaced Unity in the Sociology of Third World/Global South Development, The Socio-Political Construction of Globalization, Contending Ideologies: Liberal Democracy and Religious Fundamentalism, and Religious Zealotry and Political Violence in Christianity and Islam, were published in the International Review of Modern Sociology.

The Failure of Vatican II: Collegiality and Structural Reform is revised and updated from the version earlier published in Critical Intersections.

A shortened version of Two Women of the Philippines: Imelda Marcos and Corazon Aquino was published in the St. Louis Post-Dispatch where I was a book reviewer from 1984 to 1993.

01

Third World/Global South:

From Development to Globalization to Imperial Project

The decolonization process of the 1960s brought the newly independent countries of Africa into the halls of the United Nations, swelled the membership of the General Assembly, and called attention to the social, economic, and political problems of the countries that will be grouped together as the Third World. The newly independent countries of Africa and the countries of Asia that became independent after World War II came together through their leaders in 1955 at Bandung, Indonesia, to form a movement that would not be aligned in the Cold War then raging between the First World, the industrialized, capitalist, and democratic countries of the West, and the second World, the communist countries. Later joined by the countries of Latin America, independent since the 19th century, the term Third World would be applied to them. It was first used by the French economist and demographer Afred Sauvy in 1952 who saw the Third World (Tiers Monde) as a modern parallel to the Third Estate (Tiers Etat) of the French Revolution, the class of commoners after the aristocracy and the clergy. It was a brilliant but flawed idea (Stavrianos 1981; Prashad 2007).

With the breakup of the Soviet Union and the liberation of Eastern Europe, with the practical disappearance, in other words, of the Second World, the poor, underdeveloped countries of the Third World are more often referred to today as South or developing countries, surely an improvement over the former designation, backward countries. Third World continues to be a useful and powerful analytic concept, however, because its problems are not only and primarily economic, much less geographic. The historical, social, economic, political, and cultural landscape of the countries grouped under that term is conditioned by the cumulative and continuing effects of colonization, imperialism, and Western domination (Hadjor 1993: 1-14). There have also been dramatic changes, foremost of which is the rise to economic power of China, India, and the dragons of Asia. Still the majority of poor people continues to reside in the Third World, sometimes therefore referred to as Two Thirds World. In recognition of the phenomenon of globalization, the most recent designation is Third World/Global South.

The West has been an important part of modern Third World/Global South history, not only during colonialism but even after independence. This article traces the stages that countries of the Third World/Global South have gone though and the policies they have been subjected to in their post-colonial struggle for political independence and economic development. The article marks three stages: the development project, the globalization project, and the imperial project.

The Development Project

In 1960 no fewer than seventeen former colonies in Africa rushed to freedom, achieved political independence, and became members of the United Nations, the most in any one year. It was a time of euphoria and high hopes. On December 19, 1961, on a proposal by the President of the United States, the U.N. General Assembly, in Resolution No. 1710, designated the decade as the United Nations Development Decade, during which it urged its member-nations to intensify efforts, to mobilize and sustain support for measures that will accelerate progress towards self-sustaining growth of underdeveloped countries. The target was a minimum annual rate of growth of aggregate national income of five percent at the end of the decade. In Resolution 1711, the General Assembly expressed hope that the flow of capital and technical assistance be substantially increased so that it may reach as soon as possible approximately one percent of the combined national incomes of the economically advanced countries. In Resolution 1715, the General Assembly called upon member-states to review their contributions to the support of the work of the Expanded Program of Technical Assistance and the Special Fund, later to be transformed into the United Nations Development Program (UNDP), so that the combined budgets of these two organs in the year 1962 may reach the target of $150 million (United Nations 1961).

For his part, the newly elected President of the United States, the youthful and charismatic John F. Kennedy launched the Alliance for Progress in March 1961, a ten-year plan aimed at establishing economic cooperation between North and South America. Among the goals called for in the charter signed at an inter-American conference at Punta del Este were: an annual increase of 2.5 percent in per capita income; the establishment of democratic regimes, price stability, more equitable income distribution and land reform, and economic and social planning. The plan called for Latin American countries to pledge a capital investment of $80 billion over ten years, while the United States agreed to supply $20 billion within the same decade. But because Latin American countries still had to pay off their debts to the U.S. and other First World countries, and because profits usually returned to the U.S., and profits exceeded new investment, by March 1969, the U.S. Ambassador to the Organization of American States (OAS) explained to the House Committee on Foreign Affairs that when you look at the net capital flows and their economic effect, and after all due credit given to the U.S. effort to step up support to Latin America, one sees that not much money has been put into Latin America at all (Smith 1999: 150-52). By the time Richard Nixon took office in 1969 and without his support, the program was widely viewed as a failure.

The developed and the developing worlds in the U.N.’s Development Decade and in the U.S.’ Alliance for Progress embarked on a new age of partnership. In addition to the East-West problem, the North-South problem, manifested in the widening economic gap between the developed countries of the Northern hemisphere and the developing countries of the Southern hemisphere, was recognized as threatening the peace and prosperity of the entire world. President Kennedy signaled the new sense of purpose in his inaugural address: To those peoples in the huts and villages of half the globe struggling to break the bonds of mass misery, we pledge our best efforts to help them help themselves. . . . If a free society cannot help the many who are poor, it cannot save the few who are rich. The countries of the Third World had thrown off the yoke of colonialism, now they needed to cast aside the burden of their poverty. But there were also strategic considerations. In the ideological confrontation between West and East which was at its peak, the promise of poverty alleviation was a weapon to be deployed in the building of alliances against Communism. In the case especially of the United States, the Alliance for Progress was meant to blunt the allure of Fidel Castro’s Communist Cuba.

By the 1970s, designated as the Second Development Decade, the development movement was running out of steam. The idea that transfers of capital and technical know-how would quickly overcome mass poverty was proven to be wrong. Many developing countries had achieved high rates of economic growth – increases of 5 percent or more of GNP – but little of it had trickled down to the poor. On the contrary, their numbers had swollen, the rates of population growth had grown – as had the gap between rich and poor peoples, between rich and poor nations. Development analysts concluded that the Development Decade must include measures deliberately targeted at the poor to help them meet their basic needs for food, water, housing, health, and education. In 1972, Robert McNamara, the architect of the Vietnam War, became President of the World Bank, and directed governments in developing countries to redesign their policies so as to meet the needs of the poorest 40 percent of their people. The cornerstone of the new development strategy was a direct attack on poverty and its economic slogans were: Redistribution with Growth and Meeting Basic Needs. Mere economic growth was not enough. Development came to aim at increasing the productivity and raising the standard of living – longer life expectancies, more adequate diets, better education, better housing, and more consumer goods – of formerly colonized peoples.

The idea of an international integrative development process, one in which the developing countries would work in close interaction with the developed countries, provided the framework needed to articulate the developing countries’ position in the international economic order. The heart of the interaction was trade. So, early on in 1964, the United Nations Conference on Trade and Development (UNCTAD) was formed, out of which was organized a caucus of developing countries, the Group of 77, their original number. UNCTAD I in 1964, UNCTAD II in 1968, and UNCTAD III in 1972, however, failed to produce results. Then came the sudden and unexpected rise of economic power of Third World countries following the oil shock brought about by the Organization of Petroleum Exporting Countries (OPEC) in 1973, to be followed by another shock in 1979. In 1974 Third World countries in the U.N. called for a New International Economic Order (NIEO), to replace the existing international economic order which was designed by and for the benefit of First World countries, which declaration for its establishment was passed by the General Assembly on April 4, 1974. Third World countries attempted to utilize their newly found economic leverage to demand a new structure of international economic relations and a new set of rules affecting trade, industrialization, transfer of technology, and foreign assistance (Sauvant 1981).

Michael Todaro (1989: 609-12, 601) listed twenty-five key objectives of the NIEO, of which four main points of the Program of Action deserved attention: 1) Renegotiating the debts of developing countries; 2) Redefining the terms of trade and assuring greater access to developed country markets; 3) Reforming the IMF and its decision-making process, and 4) Attaining UN official development assistance targets. Some of the more concrete proposals included the indexation of primary commodity prices to those of manufactured goods, the creation of a Common Fund and the establishment of buffer stockpiles to help stabilize commodity price fluctuations, the preferential treatment of less developed country exports by a nonreciprocal lowering of tariff barriers by the developed West and Soviet bloc nations, and the goal that each economically advanced nation should progressively increase its development assistance to 0.7 percent of its GNP. In the end, the NIEO never became more than a rallying cry for the Third World. Third World countries lacked the economic power to replicate the economic leverage the OPEC cartel was able to wield. Most of all, First World countries refused to accede and to loosen their hold on the world’s economic power.

The 1980s brought the chill of worldwide recession and the colder chill of the new Reagan administration, which was tangentially interested in the Third World. The conservative and elderly Reagan intended to break the implicit social contract of the managed capitalism of the postwar period, by damning government as the problem and by preaching the magic of the unfettered market. The meeting of twenty-two national leaders at Cancun, Mexico, in October 1982, which Reagan reluctantly attended and from which nothing resulted marked for all practical purposes the end of the development project for the Third World.

The theoretical perspective that undergirded the development project was modernization theory, then the regnant theoretical paradigm of the postwar period. Modernization theory posited that all countries could be arranged alongside a continuum from traditional to modern societies, with Third World countries gathered near the traditional pole, while First World countries are clustered near the modern extreme. First World countries were once upon a time traditional societies but have traveled along the continuum to become modern societies. The path therefore has already been created for Third World countries to follow suit. Not only that, but more importantly, the First World can help the Third World become modern through capital infusion, economic assistance, and the transfer of technology. Most influential is this regard was Walt Rostow (1960) who specified the five stages Third World countries need to go through to become modern. His influence stemmed especially from his role as adviser to the Kennedy and Johnson administrations and from the presentation of his ideas as a non-Communist manifesto.

Soon, however, and especially in the light of the failure to bring about development, modernization theory was deluged with criticisms. It was ethnocentric, based as it was on the experience of the West; it attended only to factors internal to a particular nation-state, without taking into account external factors in its past and present history; the conditions of twentieth-century Kenya are totally different from the circumstances of sixteenth-century England when the latter emerged from being a traditional society; it posited a misplaced polarity between tradition and modernity in the study of social change. Modernization reflected the spirit of its age, its idealism and optimism, its ethnocentrism and anticommunism. It soon ran into trouble, because it was not producing its intended results (Tipps 1973).

Two other competing theoretical perspectives emerged. Dependency theory, which is a distinctive view from Latin America, was first proposed by Andre Gunder Frank (1969) and later refined by Fernando Henrique Cardoso – later President of Brazil – and Enzo Faletto (1979). The key contribution was the recognition of factors, historical, economic, political, and cultural, external to the Third World nation-state that impinge on its development. The development of the First World created and continues to maintain the underdevelopment of the Third World. Before colonialism, Third World countries were undeveloped; because of colonialism, they became underdeveloped. Development and underdevelopment were two sides of one coin. It was a time when the Western idea of progress and prosperity, and the Western domination of the world began to be criticized, when Third World peoples began to see themselves as victims of Western progress and development. It was a time that saw the rise of liberation movements, liberation struggles, liberation ideologies, and even liberation theologies on the part of differently oppressed minorities.

While modernization had the nation-state as its unit of analysis, while dependency theory studied the relationship between rich and poor countries and its impact on the latter, the modern world-system theory of Immanuel Wallerstein (1974) looked at the entire world. The world capitalist economy, which is the contemporary form of the modern world-system, is characterized by an international division of exploitation defined not by state borders but by an economic division of labor in the world. This results in three categories of countries: the core countries dominate the capitalist-world economy and exploit the rest of the system with their economies differentiated and therefore relatively free from outside control; the peripheral countries are highly specialized countries, largely dependent on the export of raw materials, and are exploited by the core; the semi-periphery is a residual category that encompasses a set of regions between the exploiting and the exploited. The economic status of a particular nation, therefore, depended on its location in the international division of labor and exploitation. Wallerstein looked forward to the possibility of a world socialist government that would reintegrate the economic and the political sectors. Both dependency and world-system theories, however, did not have an impact on Western policies toward the Third World.

The Globalization Project

The neoliberal globalization project has two aspects: its neoliberal ideology and its global reach. Neoliberalism had its origins in the stagflation of the 1980s which could not be cured by the then regnant Keynesian economics. Stagflation provided the opening for President Ronald Reagan of the United States and Prime Minister Margaret Thatcher of Great Britain to introduce the monetarist and libertarian ideas of Milton Friedman, a hitherto marginal economics professor at the University of Chicago. The economic mantra of neoliberalism is liberalization, privatization, deregulation, and depoliticization for free markets to work their magic. Globalization was made possible by the microelectronic revolution which shrouded the planet with new communication and transportation technologies like a hairnet and which in turn shrank space and time. The result was neoliberal global capitalism, where economic barriers between nations have fallen, competition has become the struggle for the fittest to survive, finance capital reigns supreme, national governments have lost control of their economies, labor has shriveled in power, and transnational corporations scour the globe for the cheapest labor costs and the highest profits and returns to their investors, as they design new products, reorganize labor processes, relocate production sites, establish supply networks, and form commodity chains in the global marketplace. They rule the world as global economic empires (Barnet and Cavanagh 1994; Korten 1995).

The post-World II social contract, the remarkable accommodation between capitalism and democracy where democracy offset the economic power of large-scale production and widely dispersed its benefits to bring growth and prosperity to the middle-class, has been shredded. The capitalism that is being spread by globalization is characterized by Edward Luttwak (1999: 27) as turbo-capitalism, because it is so profoundly different from the strictly controlled capitalism that flourished from 1945 until the 1980s, and which brought the sensational novelty of mass affluence to the peoples of the United States, Western Europe, Japan and all other countries that followed in their paths. What its advocates

celebrate, preach and demand is private enterprise liberated from government intervention, unchecked by effective trade unions, unfettered by sentimental concerns over the fate of employees or communities, unrestrained by custom barriers or investment restrictions, and molested as little as possible by taxation. What they insistently demand is the privatization of state-owned businesses of all kinds, and the conversion of public institutions, from universities and botanical gardens to prisons, from libraries and schools to old people’s homes, into private enterprises run for profit. What they promise is a more dynamic economy that will generate new wealth, while saying nothing about the distribution of wealth, old or new.

Neoliberalism appeared next as structural adjustment programs proposed by the International Monetary Fund (IMF) to solve the debt crisis of the Third World. As a result of the dramatic increases of oil prices in 1973 and 1979 by the Organization of Petroleum Exporting Countries (OPEC), Western international, especially American, banks found themselves drowning in petrodollars, which they then lent to Third World countries. By the early 1980s, starting with Mexico in 1982, it was clear that Third World countries would not be able to pay back their loans, would default, and declare bankruptcy. Fearing the effects of such bankruptcies on the entire world banking system, the IMF agreed to loan Mexico enough money to prevent a default, but required in return certain economic policies and reforms if there was any hope that Mexico would be able to repay its loans. The practice of requiring reforms came to be known as conditionality, and the bundle of reforms as structural adjustment programs. This action towards Mexico set a precedent for subsequent bailouts throughout Latin America, Asia, and Africa in the following decades.

The conditional reforms of structural adjustment programs were soon synthesized by John Williamson (1990) as policy instruments in ten areas – fiscal discipline, reorientation of public expenditures, tax reform, interest rate liberalization, unified and competitive exchange rates, trade liberalization, openness to foreign direct investment, privatization, deregulation, and security of property rights – about whose proper deployment Washington could muster a reasonable degree of consensus. (Note that Williamson did not advocate free capital mobility.) Washington refers to the political Washington of congress and administration, the technocratic Washington of international financial institutions, the economic agencies of the Federal Government, the Federal Reserve Board, and think tanks. Thus, this set of desirable economic policies came to be labeled as the Washington Consensus, which reflected the worldview that market forces, liberalized trade, and general freedom in economic matters were more efficient, promoted a better allocation of resources, and resulted in greater prosperity than a system characterized by controls and restrictions.

The Washington Consensus originally meant to create a regime to manage the debt of Third World countries had the intended effect of imposing a new discipline on affected countries, of creating a new framework for the relationship between First World/Global North and Third World/Global South countries, and of marking a fundamental shift in world order from national development to globalization. From the end of the Second World War and the demise of colonialism, as pointed out in the first section, the development project was framed in national terms. Under the aegis of the policy instruments and prescriptions of the Washington Consensus – the Brussels Consensus in the European Union – development was reframed as incorporation and integration into the emergent global economy. Instead of project loans, policy loans came to be utilized in forcing economies, societies, and cultures into the straightjacket – Thomas Friedman (1999) dubs it the golden straightjacket – of the globalization project (McMichael 2004). The International Monetary Fund (IMF) and the International Bank for Reconstruction and Development, more popularly known as the World Bank (WB) – the original Bretton Woods institutions – have fundamentally changed their original mandates and, with the more recent World Trade Organization (WTO), have become the global enforcers of the neoliberal globalization project, imposing a one-size-fits-all adjustment program to all countries that come under their purview.

With the failure of socialism in the Soviet Union and Eastern Europe and the apparent triumph of liberal capitalism and liberal democracy, the globalization project came to maturity with globalization being assiduously pursued under the flag of neoliberalism, the contemporary version of economic liberalism, emphasizing the market economy, limited government, free trade, deregulation, and privatization. Neoliberalism is the new market fundamentalism, legitimating the unleashing of capitalist economic forces throughout the globalized world. It has become the central value and the principal method of restructuring personal, social, and ecological relations on the global level. Neoliberalism, the fundamentalist ideology of laissez faire capitalism, of pure and raw capitalism, is sweeping across the one world in the making, commodifying and commercializing human life and everything it touches – without moral moorings, without human values and considerations, without humane intentions and aspirations. It is a revived Social Darwinism. The neoliberal tunnel vision "looks backward to the late nineteenth century, seeking to revive the radical, unregulated capitalism of the Gilded Age and that era’s belief that material progress depends on the fiercest forms of unchecked competition" (Dionne 1996: 12).

Neoliberalism aims to create not only a market economy, but a market society – one market under God, as Thomas Frank (2000) puts it – and even a global market order, that is, neoliberalism would let the market, and solely the market, shape social decisions and set social priorities not only on the national level but on the global level as well. Nothing illustrates the neoliberal logic better than the memorandum written by Lawrence Summers (1991), then chief economist for the World Bank, in which he argued that since the costs of health impairing pollution depends on the foregone earnings from increased morbidity and mortality . . . the economic logic behind dumping a load of toxic waste in the lowest wage country is impeccable, that under-populated countries in Africa are vastly under-polluted so that the initial increments of pollution have very low cost, and that the demand for a clean environment for aesthetic and health reasons is higher in low mortality countries than in high. Therefore, the problem with the arguments against all of these proposals for more pollution in LDCs (intrinsic rights to certain goods, moral reasons, social concerns, lack of adequate markets, etc.) could be turned around and used more or less effectively against every Bank proposal for liberalization. The response of Brazil’s then Secretary of the Environment Jose Lutzenberger was: Your reasoning is perfectly logical but totally insane . . . Your thoughts [provide] a concrete example of the unbelievable alienation, reductionist thinking, social ruthlessness and the arrogant ignorance of many conventional ‘economists’ concerning the nature of the world we live in. Summers was appointed the U.S. Treasury Secretary in 1999 and served through the remainder of the Clinton administration, and was later on named president of Harvard University, from which he resigned due to controversial remarks about women. Lutzenburger was fired shortly after writing his response.

William Greider (1997) compares the global economy to a huge machine that is reaping tremendous benefits for a few, but wreaking enormous havoc in the lives of the many. It is a wondrous machine whose efficiency churns out excess supplies of goods and services, but which exerts downward pressures on prices and wages. Thus, the dynamics of the global economy play out as a human struggle in which peoples and nations, rich and poor alike, face a multiplicity of opportunities and dangers. Some win; more lose. The manic of global capitalism is especially evident in finance capital, which Greider (1997: 250) calls the Robespierre of this revolution. Finance capital is the driving force of expansionary capitalism. It fuels increasing production, starts new ventures and new enterprises, and enables the creation of multiplying new wealth. In the global economy, finance capital has become totally unfettered and completely mobile, besting the best efforts of governments to contain or regulate it. But the most alarming aspect of globalized capital is not its speed or its volume, but its price (Greider 1997: 234). It has become detached from real economic activity, but thrives on debt and speculation. Fortunes are made and lost in financial markets without much reference to productive activities. They have become casino economies. Greider (1997: 227) points out that finance capital’s capacity to become deranged in search of higher returns has played out again and again in different forms of manias and crashes, which disorders, history also informs us, have been corrected in grim and violent ways: economic depressions and great wars.

Global competition and technological revolution enable perhaps twenty percent of the world’s population to reap the fruits of globalization, leaving eighty percent losers and victims of the unfettered global capitalist economy. Globalization has lifted millions from poverty, especially in China and India. The number of billionaires has even grown so that there are now billionaires even in some Third World/Global South countries.

At the same time, inequality has increased, dramatically illustrated in 1992 by the United Nations Development Program as a champagne glass in which the richest fifth gets 82.7 percent of the world’s total income, while the poorest fifth receives 1.4 percent. The losers in globalization are not only the poor of the Third World but the alleged beneficiaries in the affluent West, the working class who have lost jobs and incomes (see Brennan 2003; Wade 2007a, 2007b, 2007c; Pogge 2008). Therefore, the principal dilemma provoked by globalization is inequality. . . . [and] the backlash to globalization . . . is centered on a single concept – getting globalization right, in the sense of making its benefits more available and making them more equitable between countries and within countries (Tulchin and Bland 2005: 2). Even the prestigious Foreign Affairs has weighed in, noting that inequality is greater now than at any other time in the last 70 years, and calling therefore for a New Deal for globalization by redistributing income (Scheve and Slaughter 2007). Indeed, if inequality, actual or perceived, is, throughout the world, the greatest motivating force in politics (Pennock, 2001: 257), unequal benefits and burdens drive the increasingly contentious politics of globalization. The primary conflict in today’s world [is] not between North and South but between an alliance of dominant classes of North and South against dominated classes of North and South (Navarro 2007: 15).

The market, it is true, is the most efficient, productive, and profitable economic mechanism in the long history of human ingenuity. We need markets, but we do not need to glorify them nor to demonize them, much less to enshrine them as idols or to rigidify them as ideologies. But to claim that the free market alone must make decisions, set priorities, and solve problems in the economic, social, political, and environmental fields in the emerging global order is ideological and idolatrous. Everything in the market is for sale (Kuttner 1997) – to the highest bidder. The market reduces everything to a commodity. The market knows the individual only as a consumer. Thus, the market inevitably and structurally creates inequalities and injustices. The market knows no value except price as fixed by supply and demand. The market knows no public goods, nor the common good. The market runs roughshod over human dignity and human community. The market ignores human poverty and human solidarity. The market destroys social solidarities and leaves the poor to fend for themselves. The market enthrones the deracinated individual because in Margaret Thatcher’s infamous words, there is no such thing as society, only individuals, to which she later added, and families. The market cannot create social justice and social peace. Left to itself, the unfettered market easily becomes a tool of predation by the wealthy and the mighty. Left to itself the unregulated global market leads to Predatory Globalization, as Richard Falk (1999) titles his critique. But that is precisely the problem because in the global economy, as Lester Thurow (1996: 1, 5) points out, the market, and the market alone, rules. . . . ‘Survival of the fittest’ capitalism stands alone.

The totally free market cannot stand alone, cannot perform its miracles of efficiency, productivity, and profitability by itself. For the market to function, it has to depend on the physical infrastructure of communications and transportation built and maintained by the government; it needs the rule of law, the right to private property, enforcement of contracts, penalties against fraud and corruption, an independent central bank, regulatory and supervisory bodies, regulation of finance, tax collection, which only the state can provide. For the market to result in benefits that redound to the many, it has to rest on an institutional infrastructure, it has to be managed within a juridical framework that controls its mobility and volatility, that tames its excesses and cruelties, that distributes gains and costs equitably, that directs it towards the goals of social justice and peace.

For most countries of the Third World/ Global South, neoliberal globalization has had destructive and polarizing effects, lacking as they do the institutional infrastructure or juridical framework necessary to make capitalism fair and equitable. They see neoliberalism as neoimperialism, a new incarnation of the political economy of dependence and exploitation that they all too familiar with. After its emergence from decades of authoritarian rule and after experiencing a wave of democratization, Latin America, the continent that followed most closely the prescriptions and policies of neoliberal globalization as laid down by the IMF and the WB, has suffered the most from the ills effects of the global economy. After a decade of neoliberal reforms imposed from above and afar, many Latin American countries can only show increasing social inequalities and social disintegration (Oxhorn and Ducantenzeiler 1998). Even the neoliberal The Economist (2006) has devoted a cover story to The Battle for Latin America’s Soul after the failure of neoliberalism. The choice, as the Latin American Jesuits (1996) present it, is: For Life and Against Neoliberalism.

Meanwhile, the economies of Asian countries that did not follow the neoliberal path are flourishing. Japan, the first non-Western nation to attain First World status, and the little dragons of Asia – South Korea, Taiwan, Singapore and Hongkong – that became the fastest growing economies of the world in the 1980s, attributed their phenomenal economic success to their developmental states, a term originally taken from Chalmers Johnson’s (1982) study of postwar Japan. The theory of the developmental state points to two characteristics: its efficacy and its autonomy. The state is efficacious when it has the capacity to lay down developmental goals and paths and to bring them to developmental fruition. The state is autonomous when it is insulated from vested interests in society and has the independence to pursue goals and courses of action (Litonjua 1994, 2001). Peter Evans (1995) adds that the autonomy must be embedded in external networks that connect the state apparatus to important segments of civil society, which in the case of Japan and the little dragons is with business. Embedded autonomy gives efficacy to the developmental state. This holds true to a greater or lesser degree also with the later economic success of China and India and of the second tier of little dragons in Southeast Asia. One thing sure is that they followed a very different approach to reforms from those imposed by Western economic norms (Rodrik 2007). It is a sign of the cultural hegemony of the ideology of neoliberalism that Japan, against the resistance and opposition of the World Bank, had to fight for and finance the paper, The East Asian Miracle, detailing the lessons of the economic success of the developmental states of Asia (Wade 1996).

The Imperial Project

For the Third World/Global South, or Two-Thirds World, the development project of the 1960s has transmutated into the globalization project of the 1980s and is being transmogrified into the imperial project of the new century. The rationale behind the current imperial project was articulated by no less than one of the most ardent cheerleaders of globalization, Thomas Friedman (1999: 373):

Sustainable globalization requires a stable power structure, and no country is more essential for this than the United States. . . . The hidden hand of the market will never work without a hidden fist. McDonald’s cannot flourish without McDonnell Douglas, the designer of the U.S. Air Force F-15. And the hidden fist that keeps the world safe for Silicon Valley’s technologies is called the United States Army, Air Force, Navy and Marine Corps. And these fighting forces and institutions are paid for by American taxpayer dollars.

Chile had pointed the way. It was there that the first wholesale application of neoliberal ideas was made following the first 9/11, in 1973, that is. This was the date when the democratically elected president of Chile, Salvador Allende, was violently ousted from office by General Augusto Pinochet. Not only was the country shocked by the violent coup of Pinochet, but it was also traumatized by severe hyperinflation. Pinochet turned to Milton Friedman who advised a rapid-fire transformation of the economy – tax cuts, free trade, privatized services, cuts to social spending and regulation. It became known as