Free Markets and Globalization

Technological innovations have facilitated the growth of free market and a globalized world. The free market is now played on an international arena where the game rules are shaped by powerful nations and corporations, who use international financial institutions and trade agreements to dismantle the barriers to free trade every country erects to protect its resources and the vulnerable section of its population.

In his bestselling books ‘Confessions of an Economic Hit Man’ and the recent ‘The Secret History of the American Empire’, author John Perkins tells the gripping tale of how he had, as an ‘economic hit man’, or EHM, helped the US to control global economy by using foreign aid as a strategic weapon. The lending agencies like World Bank and IMF, hand-in-glove with the super powers, lay stringent conditions for granting loans known as “Structural Adjustment Programs”, which require developing nations to privatize natural resources and downsize public social welfare programs like education, water, and health care.

Reduction in trading barriers has helped developing countries attract investment and improve growth prospects; yet, it has benefited only a small percentage of the population and has led to a huge chasm between haves and have-nots. Forced liberalization of the capital markets of East Asia led to the 1997-8 crisis. Similar stories exist elsewhere in Argentina, Ethiopia, Kenya, etc.

The hidden fists behind the free markets support even dictatorships, so long as they can bring “stability” necessary for trade. The most glaring examples of super power interference are the ones witnessed in the case of Iran in the early 50’s and Iraq in early 90’s.

The slashing of government funding to biomedical research institutions make the life saving drugs for AIDS, cancer, TB, and malaria out of reach for the poor. Usurping of forests and tribal homelands to build dams and mine minerals throttles the web of local economies, and destroys local community and its culture. In India, thousands of tribal children in Orissa, Maharashtra and Rajasthan remain malnourished, because the public distribution system for food has been dismantled to create markets for agribusiness.

In the 60’s and 70’s in India, the agricultural research funded by the Rockefeller Foundation, Ford Foundation and agencies like the World Bank and IMF ushered in ‘Green Revolution’ through introducing high yield hybrids of rice and wheat that required imported irrigation pumps, diesel, fertilizers and pesticides; degraded the soil; and caused depletion of underground water. This ruined the livelihoods of poor farmers who, incidentally, had little access to financial institutions.

The position of farmers has become worse with the advent of GM (genetically modified) seeds. Multinational seed companies have promoted GM seeds as a key technology for feeding growing populations. Fewer than half a dozen giant multinational companies control the world market in GM seeds- Monsanto, Cargill and DuPont of the America and Syngenta of Switzerland.

Farmers adopting the GMO technology have to pay far more for their seeds because they are prohibited from saving the seeds from the previous harvests as they had been traditionally doing for thousands of years.

The GM crops destroy the micro-organisms of the soil and the food chain that depend on it – weeds, insects, birds and other wildlife, and replace it with genetically uniform crops that are more susceptible to disease. They require the use of highly toxic ‘broad spectrum’ herbicides designed to wipe out all plants other than the crops that have been genetically engineered to tolerate the herbicide.

Biotechnology giants like Monsanto have also developed ‘suicide seeds‘: seeds engineered to produce sterile crops. This technology ensures that farmers have no option but to return to the seed companies year after year.

The rules of the game have to be adhered to by all the participating players, but super powers can always twist the rules to their advantage. While developing countries are asked to lower their agricultural subsidies, the US spends billions of dollars in subsidies for their farmers. The recent ban on outsourcing, or the tariffs on Chinese steel are some examples of the contradictory policies of the USA.