Margaret Legum
Against Global Apartheid: South Africa Meets the World Bank, IMF and International Finance by Patrick Bond (UCT Press)
University of the Witwaters- rand Professor Patrick Bond is one of South Africa’s most ruthless and meticulous analysts and critics of the neo-liberal international economic paradigm, especially as it applies in South Africa. There are a number of books like Bond’s around it is rare to come across a new book making the case for the unfettered rule of the market. Perhaps that is because its supporters think the case has been made, since the world economy operates largely by its injunctions. In other words, Tina (“There is no alternative”) still rules.
But I wonder. One value of his book is its account of the widespread rejection of Tina and the Washington Consensus about economics by academics, leading political economists, governments and popular movements. The World Bank itself has lost several leading economists who could no longer accept the policies and rationale for its prescriptions. One of these, Joseph Stiglitz, a Nobel prize winner will visit South Africa this month. Another sceptic, MIT’s Paul Klugman, in 1998, at the height of the “Asian Tiger” financial collapse, announced his conversion from IMF crisis-management techniques to “the unsayable words of capital controls”.
Bond covers the whole range of global forces and global markets from trade to the Bretton Woods institutions, from contestation of ideas to case studies, including HIV/Aids. But he focuses, in my view correctly, on the shackling effect on governments of uncontrolled capital movement, and the taboo on capital controls. Because capital is so mobile, governments must woo it by adopting policies that can poison their own economies. Low-tax regimes, high rates of interest, privatisation of public services, minimal government regulation these maximise the profitability of capital, but also restrict and distort the wider economy and undermine equality. Poor countries especially suffer because economic restriction entrenches poverty.
This is extremely dangerous for democracy. The only loci of accountability at this time are within the sovereign nation state. If the vote, as an expression of public opinion, has a limited effect on public policy, the result must be either political apathy or the politics of the street.
Bond is a mine of detailed information on the international civil society movement that takes to the streets because this is the only language that seems to be audible in the Washcon corridors of power. He is personally sanguine about the outcome of this encounter: “nothing less than democracy is at stake I have no doubt that a movement for genuine democracy is on the immediate horizon.”
Maybe he is right. Exactly how that happens will depends on whether national governments recover their courage and their strength soon enough to pre-empt financial and political collapse as we have seen with increasing frequency.
Bond provides a detailed account of South Africa’s financial history over more than a century, concluding with a number of actions that could be taken now to stabilise our currency and develop an inclusive economy. These include a dual currency mechanism along the lines of the old finrand.
But when contemporary history comes to be written, the ideology of unregulated globalisation of capital and trade may well be seen to be relatively short-lived. Bond points out that in 1990, 35 countries still had capital controls. Since then, in the face of a rash of financial shocks, new forms of control have been introduced, or old ones retained.
It is no coincidence that Africa, the continent that was forced because of its relative weakness most faithfully to implement the structural adjustment policies of the Washcon, is also the one that has suffered most in terms of economic decline, market share and terms of trade. Bond’s book expertly puts the continent and South Africa into a scholarly record of the way the world economy operates.
Some of us may not take to some of his language. I personally don’t call people I disagree with “cliques”; and some of the classic Marxist terminology “over-accumulation” comes to mind is unnecessarily obscuring. In writing about economics we have to be careful not to reinforce the nonsense that only economists can understand what is at the heart of politics.