Economic and Financial practices with regard to unequal development
Marc OLLIVIER
Introduction
In order to avoid the most misunderstanding and confusion possible, it would be in order to point out to the reader that the composition of the following text is based upon
certain postulates. This will enable readers to better adjust their comments, critiques or
suggestions either in regards to the definitions and approaches used or concerning the
chosen line of thought and resultant conclusions.
Which economic approach?
A multitude of viewpoints reigns over the definition of Economics (according to
economists their science would be "broken up"), but we do not intend to tackle this
problem in the present text; in fact, the main goal of this text is to start the debate in
the field of dominant economic and financial practices in attemps to come to an agreement within the INES network on a minimum plan of action on these grounds. However, for purposes of clarity, we must atleast introduce the conception of this
scientific field to which we shall refer throughout the text.
The exploration of the characteristics and beginnings of unequal development demands
taking a historical step back. Discussing measures to be taken in order that inequality
in development does not end in stopping all attempts to acheive "Sustainable development" naturally leads to examining the political conditions that make such a
achievement possible. Both these demands lead to the retention of a very large
conception of the economic field, which encompasses on the one hand the history of
human activities consacrated to the production and sharing of goods and services
required to satisfy the needs of society and its members, and on the other, the political
organisation of these activities with regards to the current needs of living human
societies.
Such a definition allows us both to know where we stand in relation to all modes of
production, exchange and consumption that human societies have carried out, including
even before exchange and currency came into being, and to take up the problems of
organisation and social control that come about thanks to "economic policy". This
definition equally allows us to throw off the shackles of purely monetarist approaches
by clearly showing that monetarised economy is but one economic system amongst
others, and by placing the accent of the specific ends of economic activity on individual
and collective needs of human beings, and not on statistical indicators or technical
instruments like the steadiness or not of payment balances, currency values and the
shift of market prices.
What is unequal development from an economic standpoint and why is it a threat
to international security?
We shall define unequal development as a process that generates increasing disparity
between social groups in regards to their possibilities of accessing developmental
means (involvement in the organisation of social work and access to working means
adapted to their qualifications) and in regards to their possibilities of accessing goods
and services that are necessary for satisfying their needs (training and education at the
existing technical and cultural level, maintenance of their capabilities to get involved
in the various forms of activity in their society and the possibility to contribute to the
reproduction of that society and its survival).
In reality, disparity between social classes and between peoples is very ancient. One
need only look back to the time when various forms of work division, specialisation of
social functions, stabilisation and reproduction of the social classes became well
pronounced in most of human societies. Until nowadays these inequalities did not pose
an obstacle for the development of humanity; contrarily, all ways of organisation and
sharing of goods and services production relied more and more on a social structure
consisting of dominant and dominated classes of which the global productivity was
higher than that of former, more egalitarian systems. These modes of production were
therefore developed on the basis of high social disparity. Capitalism itself was also
issued in on this basis whilst the classes that were organising production and exchange
with monetary and financial instruments and then with private industrial
technologies became dominant.
Why are these inequalities becoming a factor in the precarity of our development
today? Mainly for two reasons that we shall now develop: the expansion of the
capitalist mode of production has become planetary in scope, and secondly it is
accompanied by a technological development incomparable in strength. These two
aspects show up within a process that includes the entire human species, which is a
situation never seen before throughout history.(1)
Social, idealogical, political and military tensions that in the past endangered each
society or each group of humans during its own particular existence, is expressed foday
on an international scale. These tensions and conflicts, that have very often sterilised
the concentration of energy and means necessary for the long-term reproduction of every
society, are manifest on the global scale of our species. This is the principle reason that
inequality in development has become in our time, as opposed to what it was before, a
planetary risk.
If the question of recovering the key to assuring development in the long-term becomes
increasingly hurrysome, it is also because our anticipation of the future, based on
present shifting underway in the world, leads to thinking that our present mode of
development cannot be persued for much longer. It still seems difficult to chart our
journey from this viewpoint, but a great number of scientists are persuaded that this
development will become incompatible with the physical constraints we impose upon
the planetary ecosystem which constitutes our domain of vitality. Some observers add
that the degradation of the conditions of material life (chemical pollution) and social
life (destruction of the social fabric, lose of cultural roots, rotting of institutions due to
the Mafia) as well as the coming about of planetary catastrophes anthropic in nature
(nuclear bombing of Japan, Chernobyl explosion) are tangible indicators that show, on
our scale of time, that we have already attained these thresholds of incompatibility.
The concept of "Sustainable development" came to be in this perspective of blocked
development in human societies . This brings about very large debates to make sense out
of this concept in order to pinpoint the conditions under which it is to be implemented (2).
Man wonders about the durability of his development at the time when he fears losing
it: what conditions must be fulfilled in order to recover this durability? What price
must be payed in exchange for an "eco-development" paradise or to recover the golden
age of ensured durabililty?
What role do economic practices and theories play in the phenomenon of unequal
development and in the perpective of its regulation which would be profitable to a
long-lasting developmental process?
In the domain of the Social Sciences as in that of the Natural Sciences, the mouvements
of the real world (that is those of human societies) existed and were transformed well
before human thought turned its attention these matters trying to make sense of them
by elaborating representations, models and theories both in the form of the "wild
thought" as ethnologists would say and in the form of scientific thinking. As the
planets turned about the sun before Copernicus imagined a heliocentric model, the
social practices of the human race interacted with the terrestrial environment for
millions of years before paradigms of sociology, economy and other humanities were
elaborated. It is therefore necessary to carefully distinguish between the "societal practices"(3) and scientific theories: whilst the former constitute the whole complex
reality of life for the human race since it appeared on earth, the latter are only a very
small part of all these practices and their impact on them is complex, using a whole
series of mediations and fulfill multiple functions that are difficult to analyse and
understand.
Most analysts recognise that the evolution of the capitalist economic system and the
societal practices that go along with capitalism played and still plays a driving role
in the relatively recent phenomenon of the globalisation of the economy and
accelerated generalisation of the process of unequal development on a planetary scale.
Contrarily, theoriticians are far from having attained scientific consensus comparable
to those which exist at all cost in the natural sciences for modelling this evolution,
anticipating on its trajectory and even less so for proposing models of behaviour that
would tend to get this process under control and to correct the fearsome effects on our
future. The reason for this is that societal practices evolve under the effects of struggles
between the various social groups having more or less antagonistic interests and that
scientific theories are used like ideological arms in these struggles. The outcome is that
the dominant groups tend to favour scientific schools that cater to their interests and
could even go as far as gravely persecuting those that question these interests.
Historical examples of this complex relationship between Science and society are
numerous, from Socrates to Marx, with Gordiano Bruno, Gallilee and Darwin along the
way to mention but the better known of them.
It is therefore necessary to account for the contrast of interests between social groups
and their impact on scientific and technical activities if we want to make relevant
contributions to the debate on the development of human societies. In fact, using the
dynamics of the social forces underlying these contradictions is the only way to bring
about a means of regulating our development that is capable of positive adjustment in a
context of global stability and security in the face of the constraints of our physical
environment.
That means the approach which uses models and theories that attempt to explain the
phenomena of unequal development and go on to propose policies inclined towards
mastering inequality is very delicate: it will always have to be carried out taking into
account both their internal coherence and their various uses, in the ideological and
political domains, which the social forces in question practice. That is why in the
what follows we turn our attention towards the analysis of economic facts and
practices. Another text will be dedicated to analysing the role that scientific theories
and models play in economic practices or rather the role that social actors have them
play.
Economic Practices: A Historical Approach
Societal practices have caracterised the human species since its appearance on earth and amongst
these practices there are those that we now call economic structures and activities, that is to say
those by way of which people organise their lives and act accordingly so as to satisfy their need to
stay alive and reproduce. These economical practices have been extremely varied in the history of
our species and have become more complex over time with the accumulation of technical and
cultural experiences with the countless forms of societies which have been developed throughout
history. The analysis of such diversity allows to make some initial observations which enable us to
pinpoint our concerns:
1/ Overall we must notice that since the day it appeared on earth the human species has
experienced a "sustainable development" because it is still in existence. But this globally
"sustainable development" is in fact the result of an infinity of "non sustainable developments"
spread over the dimensions ofspace and time.
Until recently, humans just like many other animal species have been spread out over the lands and form groups of individuals of varied numbers; these groups had strong internal structures of cultural and socio-economic organisation but were totally -or almost totally- autonomous with respect to one another. Although the overall species has proved capable of reproduction and even proliferationup until nowadays, one cannot say the same for each of the constituant group of humans viewed separately. We have in fact preserved traces or memories of many of these of
groups, even large civilisations, which have totally disappeared either because of natural
disasters(4) or because of a poorly adapted evolution of their structures and societal practices(5). The
goal of anthropological and archeological research is precisely to recover and interpret traces left
by the groups of people and civilisations who have dissappeared, study their societal practices,
especially the economic ones, in order to understand as much as possible the reasons for their
disappearance.
The death of human groups or social organisations having widespread cultural, economic and
political dimensions strongly contrasts with the survival of the whole of the species over millions
of years. Throughout history everything happened as if the preservation of our species had been
the result of an infinite number of cycles of parallel and autonomous development the success or
failures of which allowed the exploration of a large number of possible paths including at each
instant those paths which made possible the perpetuation of the species in all regions of the globe,
with very diversified types of social organisation and economic practices. Accordingly, when
certain forms of organisation proved to be poorly adapted to the situation causing them to
disappear, others showed the ability to participate in the reproduction of the species, at the time
of their existence, in the conditions of their natural midst where their society was established and
the historical period in which they lived.
All these cycles of development, of which unfortunately most have only left a small trace of their
existence or none at all, represent a group of experiences of which today it would be of interest for
humanity to explore the heritage, atleast what is left of it, in order to adapt its practices to the
constraints of our epoch, which tends too much towards underestimating the value of knowledge
acquired in the past.
2/ Second observation: if the notion of "sustainable development" was conceived of in our
epoch, it is for the reason that the survival of the human species, which seemed to be taken for
granted in the past, atleast on a world-wide scale, is now being questioned.
Of course we all know that all the stars and planets are mortal and so consequently the terrestrial
biosphere, and humans with it, will disapear. But that is not the issue here: according to many
scientists, the survival of the human species within the terrestrial biosphere could be questionable
following several qualitative shifts in its ways of integrating the biosphere, but also because of the
fragility of the one and only economic and social system that from this point onward dominates and
reunites all societies, nations and States of the world. According to these analyses, we have entered
a form of more or less long-term "non sustainable development". In the perspective of this
hypothesis, humanity "runs into the wall"... A much different version of "the end of History" that
some American writers alluded to after the falling of the Berlin wall!
What then are these shifts and ruptures with regards to humanity's long past?
-Rupture one: the "scientific and technical revolution" and its consequences.
In the beginning, our species made adjustments in order to survive the evolution of the environment
by transforming biologically, (up-right position, increase in the size of the brain, etc.) At some time
in history, transformation of cultural traits and particularly the technical progress in the ways of
using natural resources and in the fabrication of the corresponding "tools" and "arms" had become
predominant(6). But progress was very slow up until the neolithic period, when agricultural and
breeding practices appeared, which rendered possible the accumulation of food stuffs and
consequently much more complex forms of work specialisation and social organisation. From then on
the rate of technological changes is not counted by millions but thousands, then hundreds of years,
punctuated by spectacular innovations such as the domestication of animals for milk and transport,
irrigation, steel rolling, hydraulic mills, etc.
Over the last century, this rythm became exponential and is provoking changes increasingly
profound in nature in all human domains of activity. These changes are considered a truely
scientific and technical revolution which in our time lead to qualitatively new situation: for the
first time, anthropic activities show the capacity to modify, in a dangerous way for the future of
our species, the characteristics of planet Earth's ecosystem which constitutes our living space
(distribution of the stratospheric ozone, climatic changes, deforestation and ground desertification,
exhaustion of non-renewable resources, degradation of biodiversity, chemical pollutions or ionised
wave spread, etc.). Added to this is the strength of weapons for massive destruction the number of
which has multiplied and which are capable of provoking possibly irreparable dammage to our
civilisation and the biosphere of the earth.
The exponential development of scientific knowledge and technical means available to us which
may be used to transform our physical environment is not dangerous in itself, but in its hidden
possibilities of destruction concerning our ecosystem, especially the vital needs of the whole of
humanity. Today some groups of men hold the power to endanger the living conditions and even
those of survival of all humanity for more or less long term. The problem thus put is social and
political in nature: how are we to organise the collective control of the uses of Science and
technology in order to guarantee the security, in the widest sense of the word, of our civilisation on a
long-term basis and orientate their use and future development to increase and not weaken the
guarantees of this security?
- Rupture two: the demographic expansion of the human species
Progressively, the human species has occupied all the emerged surfaces of the global earth and
proliferated in this space at a rythm of technical development which always allowed the species
to better adapt to the constraints of diverse natural places and always better use his means of
existence. The very abrupt acceleration of this technological development over the last century,
especially in the medical field, has provoked an equally brutal acceleration in the demographic
growth of the human species and for many observers, this growth spurt would carry a heavy
responsability concerning the inequality of development, seeing that it would use resources for
consumption rather than for making investments and thus for economic and social development.
This argument is however refutable and has been refuted: the sudden and rapid growth in the
numbers of humans is certainly a fact the causes of which are well known and well analysed, and it
is generally admitted that this fact weighs especially on the relative educational costs of people
in a society in which the active and productive population has become the minority when compared
to the children and the aged; but it is nevertheless not acceptable in the view of all economists to
put the blame for developmental inequality on demographic growth. Those that refute this thesis
judge that the economic and financial practices of the capitalist system, which give priority to the
consideration of the dominant social group's interests, are the explanatory principles of these
inequalities. Consequently, they feel that better socially mastering the system, a democractic
control of its dysfunctioning, would allow for the stabilisation of its effects on demographical
growth.
Another fact allows one to put into proper perspective the risks of excessive demographic growth:
the processes of economic and social development slow up and stabilize this growth right where
they play their role, both in increasing the cost of children's education, which causes parents to
limit them in number and in increasing the knowledge and responsibility of women, who in this way
acquire the means of controlling their fertility. This observation allows one to think that in finding
the means to guarantee everyone's access to the roads of development it is possible to deactivate
what EINSTEIN called "the demographic bomb".
- Rupture three: the world-wide expansion of the technostructure and rendering socio-
economic systems homogeneous through the dynamism of modern capitalism.
The technical means available to men today allow them to organise their societal practices on a
planetary scale in numerous domains: air transport, meteorological forecasting, the transmission of
information, food supply security, etc. The organisational and business capacities for industrial
production, commerce and above all financial activities have equally attained this planetary level
to the extent that there is a tendancy to create a unique world space which is more and more
homogeneous on a technological level.
These multiple technical systems functioning on a planetary scale of course necessitate the
concentration of intellectual and material resources which were only able to be collected together by
the parallel extension of social and political organisation networks apt to bringing them about and
managing them. The emergence of a world-wide technostructure is in this way associated to another
rupture qualitative in nature, characterised by the homogenisation of social relations and the
dominant ways of thinking within all human societies, under the empire of the capitalist system in
its modern form. One of the essential aspect of the globalisation of the societal practices that are
manifest before our eyes is in fact the very strong tendancy towards marginalisation, if not
disappearance , of all the systems of social organisation squashed by this process, which favours
the dominant system, the modern capitalist system, that reigns with an absolute supremacy since
the collapse of Communist regimes(7), and that seem to be both the matrix of deep change that we
observe and its beneficiary. Recently, we have even seen the appearance of the concept "single
thought" to characterise the ideologies which this system puts forth.
The globalisation process is therefore equally at work, with more or less open gaps, not only in the
fields of Science and techniques but also at the economical, social, financial, cultural and political
levels.
Temporary conclusions:
These decisive ruptures that portray our epoch in relation to the past history of the human species
are making way for a situation never seen before: the disappearance of all societal diversity
within humanity to the benefit of a single mode of organisation and a single sample of this
dominant mode. This process is all but beginning but is picking up steam at all levels of our societal
practices and it is obvious that an integrated world system organising these practices is about to
come into being.
One can think, by analogy with the problematic of biodiversity, that there is an enormous risk
for the future, since facing up to the very great uncertainty of what is to come we find ourselves as
put coarsely, "with all our eggs in the same basket". Who can say for sure that Capitalism, the
cause of this situation, will be adapted for future conditions of reproduction and survival of
humanity? This dominant Capitalism, in spreading the unequal development phenomena, will it
annihilate the "socio-diversity" that has until today been an essential element in the reproduction
of the human race, or will its evolution allow it to maintain this diversity in a world in which the
rate of scientific and technical progress picks up speed with no limit seeming to have to produce a
technically homogeneous economy?
It is still impossible to answer this question. What we can atleast attempt is to very summarily
introduce the tendancies of Capitalism in the field of economy and finance that nowadays stretch
and deepen the phenomena of unequal development on an international scale.
Economic and Financial Practices: A Structural Approach
What are the principle factors that generate unequal development in the
current mode of regulation of the Capitalist system?
The essential characteristics of the capitalist system are known to us since the 19th century: private
appropriation of the means of production; proletarianization of the work force to make possible its
mobility and to form payroll relationships on the "job market"; free trade of marchandises that
allows, thanks to the mechanism of competition in the "free" market place, the realisation of goods
and services produced within enterprise; finally the organisation of a market for capital that
makes way for the concentration of the means of production and increasingly stronger work forces
made possible by monetary and financial intermediations. These characteristics are found at every
step along the way in the development of the system from its beginning which has been situated at
around to 15th and 16th century of our era by specialists in Western Europe.
Let us now emphasise an essential observation: the State structures, through the great diversity of
their functions and their nature, have played a very active role in the evolution of these
characteristics. Monetary and commercial politics, raw materials strategies, energy, communication
links, foreign policy and military confrontations concerning markets, colonial adventures, etc., all
these aspects of Capitalist expansionism have come to pass in parallel with the activities of
enterprises and financial institutions thanks to the State intervention.
In our time, the traits of dominant Capitalism are introduced in specific forms the novelty of which
adheres to the rythm attained by scientific and technical progress as well as to the process of
globalisation evoked previously. They are as usual tightly linked together and it only for analytic
purposes that we have decided to introduce them separately.
- proletarianization of the work force and private appropriation of production
means.
Separating producers from their tools, and in particular farmers from their lands has
always been necessary for capitalism. The goals are to be able to create and widen markets, to
facilitate private appropriation of the results of work organised more and more collectively by
capital holders, as well as the permanent adaptation of the work force to the rythm of technical
progress. This separation, observed in England as soon as the 16th century with the expulsion of the
farmers from communal lands and their brutal pauperisation, next swept over all the countries of
Western Europe, through social and political conflicts that were often dramatic and deathly. It
accompanied the expansion of capitalism accross the entire world, most often by military conquest
and forms of very violent domination to the fact of which history attests in various colonial
conquests in North and South America, Africa, Asia and even Europe.
In our day, the proletarianization movement has come to an end considering there does not any more
exist people on our planet having preserved a system of economic and social organisation that is
different from the Capitalist system, except those that are very isolated and about to dissappear.
The social status of the work force, in its two associated forms of the worker who sells his work
capabilities to an capitalist firm and the unemployed, is dominant in all the countries of the world.
This overall proletarianization is manifest in the most visible way when one looks at the
population mass that agglomerates around the great megapoles of the planet whereas rural
societies and pre-capitalist modes of production and consumption are thinning out or disappearing.(8)
The phenomenon of proletarianization is partially responsible for the problems of unequal
development: first of all because it brings about the underemployment and unemployment within
populations torn from their former modes of production, which means that their productive
capacities are sterilised and their resources become poor (which often goes along with the
disappearence of systems of production ruined through competition); but it is above all because this
consequence of capitalist expansionism destroys all the social structures of the previous system
through the peoples in question were involved in the determination of their destiny. In fact, the
worst off of this phenomenon is the situation of exclusion that is found under various forms in
numerous countries in the North as in the South and the East showing that masses of men and women
are cut off socially, intellectually, culturally and finally politically from the mechanism that
make modern society function as well as from the strategic decisions that will set the agenda for
their future.
It is difficult to tell if the mechanism of exclusion characterizes a long-lasting phase of transition
between pre-capitalist societies and an integrated and stabilised social organisation that will be
capable of emerging from shifts caused by Capitalism, or whether we are talking about a
contradiction that cannot be overcome and that with time will lead to the final collapse of
everything. How will these modern outcasts come to break the mechanism of their exclusion and
play their role in the construction of our future society? This is the first problem - and without a
doubt the most important - brought forth by the economic practices of modern society.
- Market expansion and "free" movement of goods.
What we call a market can be
defined as a set of exchange acts of a category of merchandise for some quantity of money known as
the price for each unit of merchandise. This apparantly simple practice is in fact in many ways at
the heart of the Capitalist system: it is the starting point of all commercial activities, which in
itself made possible the first concentration of capital and the first instances of credit, and then in
connection with the widening of outlets, the organisation of paid work and the development of
techniques for industrial production. The marketplace, protected by the State or conquered and
opened thanks to its aid, is also the stage upon which all the infinitely varied scenarios of
competition between capitalists are played out, through which a kind of natural selection of
entrepreneurs and capitalist themselves is at work: the price level in fact determines those that can
pay for work done and the other expenses that they have paid in advance in order to produce their
merchandise, and those that cannot and because of this dissappear. ,br>
This mechanism is therefore
the beginning of the explosive dynamism of the capitalist system: it is this mechanism in
particular that imposes constraints upon entreprise to increase their productivity, especially by
always investing in more "efficient" technologies and forces industrialised States to devote
constantly increasing means to fundamental and applied research destined to uphold the race to
productivity. In competition, the strongest in terms of the capacity of production and productivity
always wins. This explains the fact that they always demand more "freedom" in the marketplace
(for example, the dropping of customs barriers). These demands for "free trade" and "open
competition", in fact often coercively imposed by dominant States, constitute the beginnings of the
weakening of and the disappearance of all systems of pre-capitalist production, then weakening
and submission of small entreprises that are incapable of holding their own against the emergence
and domination of the big, modern, transnational firms, through a permanent shift of
devalorisation and recompositon of capital structures(9).
The practices of internationally broadening markets and generalised deregulation in the
organisation of exchanges and of competition between producers are just as much a factor of unequal
development, for the conditions of production being very different from one country to another, they
inevitably bring on the destruction of the less favoured production systems or that of producers the
least well equiped or the least well prepared for competition. The consequences of adding in
industrialised farmers to the competition with the lesser equiped and poorly situated farmers in
the most fragile natural places is one of the particularly important examples of negative effects of
unregulated free trade. The effects of competition on rural societies have been such a disaster that
all kinds of compensations had to be dreamt up in order to maintain agricultural activities, as much
in the United States as in Europe and that the necessity of such doings are strongly felt on an
international scale today. Effects analogous to this can be observed in the industrial sector, and the
phenomenon is most often cumulative in nature: the demise of weak productive structures diminishes
the local resources necessary to create the conditions of balanced development, which further
weakens producers who are incapable of acquiring the knowledge and the technological means
needed for their survival in the deregularised transnational marketplace.
- The concentration of capital.
The mechanism of competition on the markets provokes a
permanent movement of concentration concerning the possession of the means of production in order to
increase the productivity of entreprises and their capability to get maximum profit out of the
mechanisms of competition. Historically, this concentration was carried out by various means the
principles of which were the autofinancing of enterprises using their profits to strengthen
themselves and the development of financial techniques and institutions capable of collecting
monetary savings and construct credit mechanisms necessary for the acquisition or the creation of
larger and larger groups of machines and salaried workers. Here once again, the State has often
intervened to facilitate the mobilisation of these savings, either by creating public entreprises
supported on tax resources, or by acting as an increasingly authoritarian intermedium for the
realisation of amalgammation and absorption between competing entreprises, or by promotting
credit policies for these kinds of actions.
The phenomenon of capital concentration itself has also attained a global dimension and it is at the
root of the emergence of great multinational firms. Today these firms are dominant in the
structuring of capitalism on the way to planetary integration. Capital concentration equally
intervenes in a decisive way in the problems of unequal development for the politics of big and
dominant multinational firms reinforces the contradictory structure that puts politically-centred
countries in opposition to countries on the periphery of the world's capitalist system: being founded
in the countries of the centre of the system, these firms not only ruin the productive systems on the
periphery while they are still in existence, but go on to reinforce the domination of those of the
centre of the system by concentrating the majority of their scientific and technical investments in
these latter countries who's States offer them the best conditions for stability and political
security, and by giving structure to the industrial activities that they develop in other parts of the
world by only taking into account their own concerns(10). Thus we notice here the drawing of a vicious
circle that increases the inequality of development therefore rendering the whole system fragile.
- The development of financial activities. Speculation, corruption and extension of the
mafia
Financial activities, having been created to allow the drainage of savings in order to benefit public
and private financing, were also created to organise and bring State and entreprise credit into being;
already having an long history, in the last twenty years they have become the most characteristic
field of modern capitalism, that in which the most efficacious instruments of social power and
domination are concentrated.
The institution of stock exchanges corresponded to the need to facilitate the circulation of capital,
in the form of various letters of credit that appeared at the same time as the history of capitalism:
shares and property deeds for enterprises and merchandise, debts and titles of various credit
(particularly rent debts), monetary signs, etc. are negociated there according to miticulous technical
rules to ease the circulation of social riches between various uses they may fulfill in the context of
capitalist social relationships.
As soon as these very specific markets were created, it appeared
that the variations in price at which the various letters of credit could be bought and sold provided
possibilities of speculation a lot easier to realise than those people in commerce were used to for a
long time: term buying and selling in taking into account these variations had therefore become an
increasingly important aspect in financial activities. On the basis of this, all the manipulative
practices aimed at influencing the variations of rates in order to better maximise profit of the
stakes involved appeared very quickly. As soon as the 19th century, the history of finance holds
examples of great fortunes suddenly built on clever stock exchange manoeuvring, or inversely,
tremendous bankrupcies provoked by such manipulations. History also tells of the revealing role
played by the stock market at the time of the great economic crises of the capitalist system in
expansion: it illustrates them when it blows the shifting of deflation and inflation out of proportion
and actively contributes to the devalorisation and restructuration of capitals. At that stage,
financial activities nevertheless simply reflect movement and tension which constitute the motor of
the system and portray industrial and commercial structures. Except in very particular cases, they
do not have any autonomous role nor are they an important impulsive or orientational source.
This is no longer the case today, because for the last two or three decades financial activities have
gained a lot of weight and quasi-total autonomy within the economy. The qualitative change is due
to the converging of several factors: first of all the accelerated concentration of private capital and
their preference for easily movable investments, as long as profitability is ensured; following this,
the progress of computer technology which has allowed the creation of a kind of world financial
market in which information and monetary indicators themselves can exchanged almost
instantaneously; finally deregulatory politics for the flow of capital that the most powerful States
of the system have been able to force upon the whole of the countries of the world and that have
equally allowed the multiplication of "tax havens" thanks to which a significant portion of
financial transactions escape from State control, and consequently, from citizens too11. The result is
that financial transactions have become a lot more significant that the "real" economy and
dynamism of financial activities, their demands and constraints weigh extremely heavily on all
the aspects of world politics and on the evolution of the system(12). It is to be noticed then that, even
if we could develop this aspect as it should be, the deregulation of financial activities has much
favoured the development of operations linked to the corruption of political staff in all countries
and the flourishing of economic and financial activities in organised crime, which is equally
present in process of globalisation. In this way, corruption and illegal transactions play a role that
cannot be neglected in the mechanisms of unequal development.
One of the highly important consequences of these evolutions is that the centres of power of the
capitalist system no longer need as in the past the launching of dominant States on colonialist
ventures: having destroyed the pre-capitalist systems of production, at their disposal they have
political team-mates everywhere that are sufficiently obliging and interested to put their politics
into action. All they have to do is fiddle with the monetary variables (rate of exchange) and
financial variables (credit and interest rates) in order to reep an economic surplus that in earlier
times could only be attained at the price of very expensive wars aimed at conquering or by way of
heavy colonial domination who's "raison d'être" is questioned constantly. During the 70's and 80's the
huge Third World debt was established in this way, which, coupled with the policies of the IMF's
and the IBRD's Structural Adjustment Programmes(13), have generated a massive transfer of
resources from the countries in the South to the financial centre of those in the North14. Added to
this is another of today's techniques, that of "emerging financial market" which is based on the
manipulation of interest and exchange rates, and provokes even deeper structural effects. The
scenario of the various episodes through which the Mexican economic crisis had to undergo since the
seventies provides the most illustrative example of these domination techniques founded upon
finance (15).
How are Problems of Unequal Development on Economical
and Financial Grounds to be Controlled and Overcome?
As we have already said in this text, it is useless to take on the developmental inequality of
humanity with only economic and financial weapons. Mastering and regulating the phenomenon
demands a global approach and recourse to a diversified panoply of interventionist means adapted
for various levels as well as for the varied nature of determinisms at work in this complex
phenomenon.
Before exploring the economic and financial aspects of such an approach, we therefore have to first
of all attempt recalling some obvious facts:
- It is impossible to go backwards:
radical and deep transformations that capitalism has brought
forth for all peoples of the world does not allow them to have going back to a former state of being
as a goal, even if some feel this is better than the current catastrophes. We cannot do away with
currency and credit, wipe out the development of scientific and technical knowledge, liquidate
industrial products and salarial relations nor give birth again to the tribal mind in order to go
beyond national selfishness.
Recognizing the irreversibility of human history is at same time to leave to the wayside all
solutions based on a return into the past, which naturally does not mean that we are not to reflect
upon this past experience nor what we can learn from it for the construction of the future. We
therefore have to start from where we are, by necessary considering all of humanity's interests
together, and look for modes of action that take into account the problems of the minute, the risks at
stake, goals to be accomplished and the means available to the social actors in question. To do this
it is certain that a lot has to be changed, but it is impossible to backup.
- It is necessarily on political grounds where sufficient social forces may gather together to
bring new behaviour into action:
since at all levels of the social fabric clearer awareness of the problems to be resolved must
become manifest and collective initiative is to be taken to
overcome these problems. Letting people believe that we can progress towards a goal by merely
mobilising financial resources and establishing another international bureaucratic structure, as the
UNDP proposes(16), would be to create illusions and waste resources for it would not modify
behaviour at the grassroots level.
These technocratic propositions are insufficient, and even nearly always inadequate, inasmuch as
they are implicitely aimed at avoiding problems resolution on the political front. Of course
everyone is concerned by unequal development as with other "global" problems, but not all social
agents are concerned in the same manner; those that profit in the short term from the current social,
economic and monetary chaos are not ready to give up, even if they have the feeling their
avantages will not last in the long term; as for the victimes of this "world-wide disorder", their are
most often deprived of means of action and are impeded in taking part in political decision-making
by multiple types of domination and often even repression and dictature.
The search and organisation of sufficient political means to mobilise all energy capable of changing
our behaviour is therefore an essential aim in the actions to be taken. For this reason the defence of
the rights of men, women and children and the struggle for democracy is as important in controlling
developmental inequality as the annullation of illegitimate debts, commerce regulation, education
of youth or a world-wide programme for investment and employment.
- actions against unequal development being politically necessary, they are
developed progressively, by much varied routes and levels and with equally different rythms with
respect to the continent or country.
Therefore we must not seek to define uniformly for all
what steps are to be taken.
At the international level, we must accurately target those objectives which can only be attained by
consensus between States, such as the diminishing of military expenditures, especially weapons for
massive destruction, regulation of commerce and credit as well as the international monetary
system, mechanisms for world-wide cooperation between national social protection systems, etc. At
other levels, we must persue efforts in research, information and concertation between all the
parties involved and look for suitable solutions as soon as any collective will for change appears.
Moreover, we must emphasise that this progressive process towards social and political control has
already been at work for a long time: in countries where capitalism had experienced a profound
development, phenomena of unequal development had been quite bad as soon as the beginning of
this development; French and English, as well as other economic and social history from the 16th to
the 19th century, attest to the fact. In these countries the social movement and the political
struggles resulted in the relativisation of these inequalities, even if they are far from having
dissappeared, and even if significant social conflicts continue to explode because of them. These
contradictions are equally manifest on an international scale: UNDP experts are in opposition to
those of World Bank on the issue of Structural Adjustment Projects; the UNCTAD seeks alternatives
to GATT dead ends, the 77 group is opposed to the OCDE; the function of the ILO, where the States,
heads of business and workers are represented together, constitutes a concertation process on an
international scale, as are the associated world summits of the UN and the forums of the NGOs. But
the means of putting the outcomings of these meetings to work at ground level are not yet up to par
with the real problems and their rate of evolution.
The issue here then is one of multiplying the levels and the forms of action to be taken, reducing
bureaucracy and accelerating the present concertation processes to make them more efficient, and not
one of activating an exhaustive and centralised project against unequal developement.
A Few Propositions for a Plan of Action
on an International
Scale
This said, we can try and introduce a group of guidelines for economic and financial political action,
that are adapted for the aspects of the problem that have to do with international action and that
would enable us to move forward on the road to controlling the inequalities of development.
preliminary remarks:
one has to hold out against the idea that ideological pressure and political
will of the great economic and financial powers of world capitalism are irreversibly attached to
the practices of "transire and laissez-faire policy" so dear to the fanatics of "wild" liberalism
concerning commercial, monetary and financial matters. When confronted with other dangers
threatening their security, stability or disturbing the peace, the same powers did not hesitate
taking the road leading to surveillance, banning or regulation using security or even ethics as they
argument. The forbidding of chemical weapons for example, as well as the Treaty of Non-
proliferation concerning nuclear arms, commercial bans linked to the protection of certain animal
species, decisions to limit the production and commerce of certain drugs, forbidding all industrial
activity on the austral continent, etc., all which go to show that international cooperation can come
up with rules for behaviour an apply them in a collective way to that behaviour in order to face up
to dangers and risks that threaten humanity. Such doings can thus be followed up to guarantee
peace and justice in the international society on the path to integration being established before our
very eyes.
The monetary and financial "laissez-faire" dominant today is not less deadly for millions of men,
women and children than the production, commerce and consumption of heroin or cocaine which
have been declared illegal. For the survival of millions of children and human beings, banning
speculation on exchange rates is as vital as the banning of selling and buying ivory for elephant
survival. If the latter could be obtained, why not the former? Thought and regulation in the area of
bio-ethics is being developed in numerous countries based on the fact that progress in biology
threatens the integrity and dignity of human beings, but is it not the same, on a much more massive
scale, for financial, monetary and economic techniques?
It is therefore necessary and possible to propose a code of economic and financial ethics and a
programme of mesures to have this code respected. Elements of such a code have already been
brought up on various occasions, namely at the world conferences and summits organised by the
United Nations. It is of paramount importance to continue in this direction and it is in the field that
the activities of the INES network can make their contribution to the cause.
In what follows, we shall propose a few orientations for the development of this contribution.
1 - wasting resources in financial speculation has to be fought and reduced to a
minimum
It seems to us that it is necessary to rely on the technical means that exist in order to limit as much
as possible the factors of instability, insecurity and counter-development due to speculation and the
volatility of exchange rates:
- Controlling capital flow must be the first of these means of action to be put to work; along
with it there should be a tax deducted for speculative transactions that generate erratic shifts in
exchange rates, which as early as 1978 had already been proposed by Nobel Prize winner J.TOBIN
{PNUD 94}. Such a measure has the advantage of being able to be applied quickly, if the main
economic and financial powers of the world come to agreement on this matter. Such an agreement
does not seem out of reach, so threatening the current anarchy of capital flow is for the concerns of
all States.
- the creation of a stable international monetary system should be the following priority
goal; this goal equally requires a solid political foundation that cannot be established, as
previously, only upon agreement between the same powers. However, this agreement will
undoubtedly be much more difficult to obtain for the stabilisation of exchange rates requires
discipline on the part of all players for which is not easy to gain respect in several fields of
economic politics, particularly in regards to credit, budgetary policy, revenue policy, etc. Moreover,
fluctuating exchange rates are currently a considerable source of profit for very powerful interests.
This difficulty has already become manifest in the concerns of the European Union States, and thus
constitutes an even larger obstacle on the global scale.
2 - International transfers of unwarranted or fraudulous financial resources must be
stopped and charged illegal.
This objective can be accomplished by the following measures:
- public and private debts that do not correspond with ordinary commercial operations or
fully-individualised productive investments must be voided and control mechanisms for openning
of international credit installed in order to avoid going back to situations of excessive over-
endebtedness with no concrete basis;
- those who are responsible for private capital leakage, illegal or fraudulous in nature, must
be pursued and these resources are to be restituted to the coffers of their State;
- "Tax havens" or zones where illegal, fraudulous or criminal cash savings are hidden must
be relinquished. They represent the spanner in the works causing the current dysfunction of the
system and one of the very efficient means by way of which they are allowed to elude political
powers, and in the end, all social control.
3 - the freedom of commercial exchanges and prices must be regulated, like all
liberties.
Absolute liberty is not conceivable without total anarchy; all public and individual liberties in
existence are guaranteed by very strict rules. This why it is particularly necessary to continuously
upgrade the rules of the GATT agreement (today the WTO since the conference in Marrakech) and
the sector-based agreements concerning customs protection, on the one hand by respecting a kind of
"subsidiary principle" in regards to the productive systems of various countries, in such a way as to
protect the capacities of production that each country is able to run on its own without wasting
resources, and on the other hand, by being careful not to let monopolies, the dangers of which we are
familiar, be created on a world-wide scale.
4 - the means for planning and strategic investment financing have to be created at an
international level.
The issue here is to go about establishing an economic and social "New Deal" on a planetary scale.
Articulated with others at the continental and regional levels, such an investment programme could
help peoples construct the necessary infrastructures for balanced development in all domains where
this is currently at a standstill.
Strategic domains are those of energy, urbanisation, housing, drinking water available for
everyone, basic education and specialised training, and food and public health security. In the
fields of production and consumption technologies, this "New Deal" should allow persuing long-
term goals capable of ensuring the durability of development: the managing of non-renewable
resources with precaution, expanded reproduction of renewable resources, mobilisation of the entire
workforce at their level of qualification within systems production managed at various levels of
organisation (from village through to international level). International investments in productive
sectors can no longer be left totally unchecked in the hands of large mutinational firms; as this is
already the case in the economic spaces of deloped nations, these investments must come under the
international politics of town and country planning as well as those of economic and social
development agreed upon by all nations.
5 - Finally, a plan for managing social problems must be organised on an international
scale.
Seen in the context of globalisation, the national level is no longer sufficient for ensuring that
systems of social protection have atleast a minimum level of efficiency. It would then be
appropriate to organise co-ordination and progressive complementarity between existing systems of
social protection in the different countries. The various systems of social organisation throughout
the history of humanity have always searched for solutions, within the limits of their means, for the protection of pregnant women, the ill, children, weak individuals and the aged. This
protection has always been considered, no matter what its imperfections were in the past, as an
essential factor in the security not only of the individuals directly concerned, but also the entire
social group. It seems that awareness of this necessity has taken hold within the the United
Nations and even the World Bank but practical realisations in this domain are far from sufficient
{UNRISD 94/2}.
Today our economic and financial system is spreading over the entier earth, and we have
technological means and resources more significant than ever before available to us; but we are
faced with risks on a planetary scale. It is therefore necessary that we elaborate a system of social
protection composed of various levels of mutual aid that expresses the down-to-earth, greater than
ever need for solidarity amongst all individuals and peoples of our planet.
CONCLUSION
In the present work, a full analysis of the causes and effects of unequal development could not be
undertaken; its main goal is to propose subjects for reflexion and guidelines for action to the members
of INES network concerning a planetary problem which is increasingly becoming a factor of
instability and insecurity for all the nations of the world.
In order to put these propositions forth in concrete terms, we first of all briefly recalled the
principal elements of the problem in the domain of economic and financial practices, and this from
several viewpoints, namely those of their historical origins, current traits and possible evolution
whilst limiting ourselves to the data provided by international institutions. Starting from this
schematic sketch and relying upon the INES network's orientations and its principles of action, we
established a set of propositions that are forthwith submitted for debate.
To avoid confusion, we have not taken up the problem of economic theories and their effects on
societal practices in this work. Measuring these effects is not easy and they are inextricably
intertwined with strictly ideological and doctrinal issues: for this reason it seemed preferable to us
to save them for a specific study and limit ourselves to concrete economic and financial practices in
the present text.
Marc Ollivier, Grenoble, March 95
NOTES
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