Can Global Capitalism become regulated according to environmental constraints?

Social Sciences Researcher of the CNRS (Centre National de la Recherche Scientifique, France)
ISMEA (Institut des Sciences Mathématiques et Economiques Appliquées, Paris)
Member of INES Executive Committee (International Network of Engineers and Scientists for global responsibility)

Ladies and gentlemen, dear colleagues and friends, the title of my communication is: "Can Global Capitalism become regulated according to environmental constraints ?"
Of course I am not able to answer, and I believe nobody is, but it is not a reason to give up. To ask questions is a standard behaviour of scientists and very often they can't answer, in some cases during a very long time.
Starting from this point of view, I shall focus my speech on two concerns:

The rality of global capitalism

As concerns the reality of global capitalism and the relevance of the regulation concept, I think that we can see the emergence of this new phase of the capitalist system history since 1970, when started the worldwide destructuration/restructuration process after the so called "three glorious decades". The lightning improvement of computer technologies, communication networks and information processing means have paved the way to qualitative jumps in management of production, trade and markets, for industry as well as for the sector of services, which made possible new opportunities of profit. Simultaneously, in order to put in concrete forms these scientific and technological advances, higher levels of capital concentration became necessary and this necessity resulted in liberalizing international trade and financial markets.
The consequences of these changes are now obvious: lifting all national controls of capital flows has blurred the links between national savings, investment and consumption, and generated new patterns of investment localization, labor organisation, and trade flows at the world level. Also large privatization programmes in many countries made easier woldwide capital concentration and have speeded up the rise of Multinational Corporations, which control now two third of the international trade. Last but not least, the increase in number of taxhavens all over the world allows capital holders and hedge funds managers to direct the international capital flows in their own interest, without national control or tax levying.
Thus modern globalization is not only opening the world markets for the products of capitalist countries as it was in the XIXth century. Modern globalization is the birth and the booming expansion of a new and autonomous worldwide stratum of the capitalist system. I suggest to call it "global capitalism" and to characterize this new integrated socio-economic system by the following main features: It seems to me that the fast development and the strengthening of these three features are enough for acknowledging the reality of global capitalism as a new stage of development of capitalism.

What about the regulation of this new stage?

I am often surprised to read in the medias or even in heterodox scientific reviews that the deregulation policy applied by many governments in the field of capital flows and international trade will come to global anarchy and chaos, as a result of the neo-liberal commands: "laissez faire, laissez aller", total freedom fot the production factors movements, no state intervention in the field of economy and finance.
But here we have to be clear: the truth is that neo-liberalism commands have always been used as an ideology, and never as a concrete economic policy. In fact, global capitalism, as capitalism since its beginning, is carefully and efficiently regulated by state institutions and political will. Again I have no time here to develop this point, but I am sure you will agree with me after considering two examples:
- concerning the production factors, transfers of capital have actually been deregulated, but the labor factor is still very strongly controled by the states, and manpower migrations are very far to enjoy the same freedom as capital transfers. On the contrary, the governments which are the most active supporters of free capital transfers are controling very strictly, with specific laws and bureaucratic institutions, the manpower migration flows. This practice is quite contrary to the neo-liberal theories.
- second example: when the mexican financial and monetary crisis exploded in 1995, what happened? Did the mexican and american governments apply the principle of the neo-liberal theory, that is to say no state intervention and complete trust in the so called invisible hand of the market? Not at all: The President of the United States and the Chairman of the International Monetary Fund decided in 24 hours to mobilize 50 billions dollars of public funds as warrant of the mexican public debt. The largest state intervention in history of capitalist monetary and financial crisis. And when a similar crisis broke out in Asia some weeks ago, the IMF ran exactly the same policy of public intervention, liberating 17 billions dollars at this occasion.
Thus it is clear that public regulation of global capitalism is a reality. The problem is that this regulation has nothing to do with environmental constraints. If we go back to both of our examples, it is clear that the regulation means used by IMF and the G7 states only aimed at the protection of capital holders interests and at the stability of the global financial market. Although the mexican crisis, for instance, had been generated by the behaviour of these capital holders and of their associates in the mexican government, they did not have to pay the bill. Thanks to the IMF and G7 states intervention, they could recover their funds and their profits, and the financial equilibrium of the global system was saved. Who paid the losses? The mexican people (except the rich individuals involved in the international financial circuit), with a devastating devaluation, the bankruptcy of numerous national firms, a dramatic rise of unemployment and drop of the general public standard of living. No environmental concerns have been taken into account in that story.
Similar scenarios take place whenever IMF or the World Bank, or both together have to manage situations where capital holders interests could be endangered. Let me also call to mind the project of another gear of this regulation policy, the proposal of a Multilateral Investment Agreement backed by the USA and the EU and presently under consideration at the Organization for Economic Cooperation and Development. Its purpose is to grant transnational investors the unrestricted "right" to buy, sell and move business and other assets whereever they want, whenever they want. If adopted, this agreement will mean forclosure of national development strategies, increased job flight from industrial nations and enormous pressures on countries, rich and poor, to compete for increasingly mobile investment capital by lowering any national environmental and labor standards except profitability.
Not surprising if such a regulation means result in growing social distortions, wealth concentration to one side, growing poverty and exclusion to the other. The UNDP annual report gives a thrilling image of these social distortions. No doubt that our colleague Francis Fukuyama who believed in the end of history will be deeply disappointed, because the two dynamical trends of global capitalism, impetuous profit seeking of multinational corporations and financial capital on the one side, manyfold resistance movements against growing social distortions and exclusion on the other, are generating numerous sources of economic, political and even cultural rapid changes, and consequently will bring about further episodes of the already rich human history.
The problem is that the criteria of this regulation mode are the short range protection of international creditors interests and the reproduction of their political hegemony, and not the long range preservation of the Earth ecosystem, which is a common interest of the whole world population and will not be achieved as long as ecological constraints and sustainable development requirements are not taken into account.

Are there signs of possible improvements?

In the last part of this speech, I would like to focus on the contradictory resistance movements which can be considered as supporters of alternative and more efficient regulation modes, from the point of view of environment preservation.

The reactionnary trends

On the one hand, there are what we can call reactionnary trends whose common proposals are to reject the globalization processes and to re-establish regulation modes of the past. Among these trends we can find all kinds of fundamentalism, but also many popular movements which are just resisting IMF or World Bank policies and progammes because they are usually worsening poverty, exclusion and environmental degradation.
Such trends have to be analysed with a dialectic way of thinking, because they are carrying in the same time very positive as well as very negative potentialities. There is no doubt that some ideological values with strong political impact are useless or even dangerous, like ethnicism, racism, religious fanatism or chauvinism: they can't produce any effective solution able to deal with global problems in people common interest.
But it would be also uneffective to reject the whole heritage of the past, which holds invaluable resources in terms of scientific and techological knowledge, cultural achievements and concrete collective experience. The presently dominant regulation mode of global capitalism works very often as a destructive factor of this heritage and seeking an alternative mode which could deal with ecological constraints and mankind common interests will only be possible by leaning on people resistances to this destructiveness.

Future oriented trends

On the other hand, we find trends which reflect the birth and even the strengthening of new ways of thinking, new institutions and new social and political behaviour, trying to correct the shortcomings and the negative aspects of global capitalism present regulation, or to bring together social and political forces able to lay down, at the world level, another regulation mode, consistent with the common interests of the people and the biosphere stability requirements. Let us quote some of these trends, which have also to be analysed with a dialectic methodology: