임마뉴엘 월러스틴
"칸쿤: 신자유주의 공세의 붕괴" 2003년 10월 1일
"자유무역의 모호성", 2003년 12월 15일

페르낭 브로델 센터 홈페이지에서 퍼온 짧은 논평입니다.
* 홈페이지 http://fbc.binghamton.edu/

앞의 글은 북반구 국가들이 실제로 자유무역의 철칙을 준수하지 않았고,
특히 지적 재산권 문제에 관한 북반구의 태도는 대표적인 "보호주의적" 경
향이다, 하지만 북반구 국가들도 농업과 제조업 시장을 개방하라는 G-21
(브라질, 인도, 중국, 남아공 등)로 조직된 미들파워 국가들의 요구로 칸
쿤 회의가 타결되지 않은 것은 남반구 국가들의 정치적 승리이자 포르투
알레그레로 모인 사회운동의 성과이다, 그러므로 이제 WTO는 실제로 붕괴
하고 있다는 "낙관적인" 주장을 펼치었더군요.
뒤의 글은 자유무역과 보호무역에 관한 논쟁은 500년의 역사를 갖고 있으
나, 역사적으로 볼 때 자유무역의 미덕을 강조하는 국가들도 실상 그것을
완전히 실현하는 것은 아니고, 특히 최근 미국과 유럽연합의 철강 관세에
관한 분쟁은 그 사실을 확인시켜준다는 내용이네요.

* * *

Commentary No. 122, Oct. 1, 2003

"Cancun: The Collapse of the Neo-Liberal Offensive"

Cancun is more than just a passing geopolitical battle. It
represents the interment of a neo-liberal offensive that started in
the 1970s. To understand the importance of the event, we have to go
back to the beginning.

The 1970s marks a turning-point in two cyclical rhythms of the
capitalist world-economy. It was the beginning of a long stagnation
of the world-economy, a Kondratieff-B phase, out of which we have
not yet come. And it marks the moment when the hegemony of the
United States in the world-system began to decline. Stagnations in
the world-economy mean that the rate of profit has gone down to an
important degree, as a result of increased competition in the
leading industries and a consequent overproduction. This leads to
two kinds of geoeconomic battles: a struggle among the centers of
capital accumulation (the United States, western Europe, and
Japan/East Asia) to shift the burden of lowered rates of profit to
each other. I call this "exporting unemployment," and it has been
going on for thirty years, with each of the three centers doing
better at different times (Europe in the 1970s, Japan in the 1980s,
and the U.S. in the late 1990s).

The second geoeconomic battle however is that between the center and
the periphery, the North and the South, in which the North seeks to
take back from the South whatever small gains they made during the
preceding Kondratieff A-period of expansion (ca. 1945-1970). As
everyone knows, Latin America, Africa, eastern Europe, and South
Asia all for the most part did poorly after 1970. The only area in
the South that did relatively well was eastern and southeast Asia,
at least until the financial crisis of the late 1990s. But one area
of the periphery always does well in a downturn, since there has to
be some region into which declining industries move.

In this difficult period when capitalists were scrambling to
maintain their income, partially through relocation of production
but more often through financial speculation, they started what can
only be called a counteroffensive against the gains of the South and
of the working classes in the North in the previous A-period. This
came to be called "neo-liberalism." The political face of this
counteroffensive was to be found first of all in the transformation
of the British Conservative Party and the U.S. Republican Party from
a party of moderate Keynesians to a party of ferocious believers in
the nostrums of Milton Friedman. Mrs. Thatcher's years as Prime
Minister and Ronald Reagan's term as President of the United States
represented a distinct turn to the right in both national and world
policy, but even more importantly a transformation of their own
party structures, as the basis of pushing the balance-point of
internal politics from the center to considerably right of center.
The new conservative policy constituted a pushback on all three
sources of rising cost for producers: wages, the internalization of
costs to reduce ecological damage, and state taxation to finance the
welfare state.

There was an attempt to coordinate this policy throughout the
countries of the North by creating a series of new institutions,
notably the Trilateral Commission, the G-7, and the World Economic
Forum of Davos. The economic policy that was proposed came to called
the Washington Consensus. First of all, we should note the
Washington Consensus replaced something called developmentalism.
Developmentalism had been the reigning world economic policy in the
previous period (in the late 1960s the United Nations had even
proclaimed that the 1970s would be the "Decade of Development"). The
basic premise of developmentalism had been that every country
could "develop," if only its state would implement appropriate
policies, and the end point would be a world of states all looking
more or less the same and all more or less equally wealthy. Of
course, developmentalism did not work, could not work, which sad
reality became clear to everyone in the 1970s.

In its place, the Washington Consensus proclaimed that the world was
in the era of "globalization." Globalization was said to be the
triumph of the free market, the radical reduction of the economic
role of the state, and above all, the elimination of all state-
created barriers to trans-border movements of goods and capital. The
Washington Consensus ordained that the prime role of governments,
especially those in the South, was to end the illusions of
developmentalism, and accept the unrestricted opening of their
frontiers. Mrs. Thatcher trumpeted that they had no choice. She
said: TINA, there is no alternative. TINA meant that any government
that did not conform would be punished, first of all by the world
market and second of all by interstate institutions.

There has been insufficient attention to the fact that it was only
beginning in the 1970s that interstate institutions began to play a
significant role in these geoeconomic struggles. The International
Monetary Fund (IMF) and the World Bank were turned into very active
enforcers of the Washington Consensus. They could play this role
because the states of the South, grievously hurt by the stagnation
of the world-economy, were short on funds and had to turn constantly
to outside lenders to compensate for a negative balance of payments.
The IMF in particular imposed drastic conditions on such loans,
conditions which generally required considerably reduced social
services within the country and gave priority to the repayment of
external debt over anything else.

In the 1980s, it was decided to go further. The World Trade
Organization (WTO) had been an idea first discussed in the 1940s.
But it had foundered on considerable differences among the centers
of capital accumulation. What enabled it to proceed in the 1980s was
the common agreement of the countries of the North that it could be
a very useful tool in furthering the Washington Consensus. In
theory, the WTO stands for the opening of frontiers, the
maximization of a free world market. The major problem is that the
North has never quite meant this. They wanted the countries of the
South to open their frontiers, but they didn't really want to

After the United States succeeded in creating the North American
Free Trade Association (NAFTA) and Europe had proceeded further in
its economic union, the countries of the North decided it was time
to implement their program in the WTO. The moment chosen was the
Seattle meeting of 1999. The North had however waited too long. The
ravages of the Washington Consensus - increasing unemployment,
ecological degradation, destruction of food autonomy - led to an
unexpectedly strong protest movement which managed to bring together
many different kinds of groups from anarchists to environmentalists
to trade-unionists. And their combined protests managed to render
impotent the meeting. In addition to this, at Seattle, the U.S. and
western Europe were at odds with each other because of their
respective protectionist policies against each other. So Seattle
closed without accomplishing anything.

At this point, two major events occurred. The first was the founding
of the World Social Forum (WSF), which held its first three meetings
at Porto Alegre, and which constituted a "movement of movements"
against neo-liberalism, the Washington Consensus, and the forum of
Davos. It has been remarkably successful thus far. The second event
was 9/11, which led to the proclamation of the Bush doctrine of
unilateral preemptive action against anyone the U.S. government
designated as "terrorists."

Initially the effect of 9/11 was that of much worldwide support for
the fight against "terrorism." And it was soon after this that the
next WTO meeting was held in Doha. At that meeting, the North was
able to impose on a momentarily intimidated South the acceptance of
an agreement to discuss new treaties that would open world economic
frontiers considerably further. These treaties were to be
consecrated in 2003 at Cancun.

Once again, Cancun came too late. Between Doha and Cancun came the
invasion of Iraq and its aftermath, which turned world sentiment
strongly against the U.S. and exposed the serious limitations of
U.S. military power. And in the meantime the world peace movement
had considerably strengthened the forces of Porto Alegre, which in
turn were able to place considerable pressure on the countries of
the South to strengthen their backbone.

At Cancun, the more or less united forces of the North pushed their
program of opening the frontiers of the South to their goods and
capital, while protecting the intellectual property of the North
(patents) against dilution or non-respect. The South
counterorganized. Brazil took the lead in creating a Group of 21
(including India, China, and South Africa) who said in essence that
in return the South insisted on an opening of the frontiers of the
North to the South's agriculture and manufactures. In this battle,
the Group of 21, who were "middle powers," obtained the support of
the poorer countries, notably in Africa. Since the North was not
willing, for its internal political reasons, to make any serious
concessions to the South, the South did not budge. The result was

This is seen by everyone as a political victory for the states of
the South. It should be clear that this victory was made possible by
the conjuncture of U.S. geopolitical weakness and the strength of
the forces of Porto Alegre. The WTO is now effectively dead. It will
survive on paper, as do many other interstate institutions, but it
will no longer matter.

The U.S. hopes to recoup the situation by going unilateral. It will
find that it will not be easy to get significant countries in the
South to sign one-sided free trade treaties. The South will now move
on to challenge the IMF and the World Bank. Indeed, this offensive
has already begun, and the strong defiance of Argentina's President
Kirchner has shown that such defiance can work. It will not be long
before the term "neo-liberalism" will represent the almost forgotten
follies of yesteryear.

Immanuel Wallerstein

* * *

Commentary No. 127, Dec. 15, 2003

"The Ambiguities of Free Trade"

The debate about free trade versus protectionism has been going on
for 500 years, all through the history of our modern world-system.
The argument is favor of free trade has always been that it results
in maximum competition, therefore maximum efficiency of production,
therefore reduction of prices, and ultimately benefits to the
consumer. The argument in favor of protectionism has always been
that free trade has very negative consequences for various national
economic situations, both in the short run and the long run. In the
short run, it increases unemployment and causes the failures of
local enterprises. And in the long run, it locks weaker countries
into lower-profit types of economic activities.

Of course, both sides are right up to a point. But the abstract
virtues of free trade versus protectionism never determine what
actually happens. Ultimately, the question is as much political as
it is economic. Those countries who are at a given moment
particularly efficient at productive activities are normally the
ones who proclaim the virtues of free trade. Free trade obviously
serves their national interests. It means they can sell their
products in foreign markets without the penalty of tariffs or other
barriers. It means they can invest surplus capital in other
countries. Those countries who are moderately strong but still
weaker than the strongest are normally the ones who try to be
protectionist. They feel that, if they can protect their internal
markets for a while from the competition of producers in the
strongest countries, they can improve their own efficiencies and
develop a sufficient internal market to withstand open competition.
For them, it is a matter of time. The protection is temporary. Truly
economically weak countries are usually too weak politically to get
away with protectionism.

The ambiguities arise when we look at the strong countries who
proclaim the virtues of free trade. The strong countries are in
favor of free trade only up to a point. For example, in the
seventeenth century, the Dutch (then called the United Provinces),
who were then the most efficient producers (and traders) in Europe,
preached the virtues of free trade to a weaker England and France.
But that didn't mean that the Dutch didn't protect certain markets.
In 1663, Sir George Downing, a British statesman, bitterly noted
about Dutch policy: "It is mare liberum [open seas] in the British
seas but mare clausum [closed seas] on the coast of Africa and the
East Indies." The British had to fight three maritime wars with the
Dutch to even the playing field in world trade for them.

This story is being repeated today. The United States after 1945 was
the most efficient producer, and of course favored free trade.
Still, in order to strengthen politically their alliances against
the Soviet Union, the U.S. allowed western Europe, Japan, Taiwan,
and South Korea to engage in certain protectionist processes. This
strengthened these countries economically up to a point. When, as of
the 1970s they became highly competitive with the United States, the
U.S. began to complain about their protectionist policies. But
precisely because the U.S. had become relatively weaker
economically, it also strengthened its own protectionist policies
amidst a declining manufacturing sector. The U.S. government, like
other governments, was faced with internal political pressure to
preserve jobs and profits for local entrepreneurs.

The United States turned its eyes towards what it called "emerging
markets," which meant some of the larger countries in the world's
South - countries like Malaysia and Indonesia, India and Pakistan,
Egypt and Turkey, South Africa and Nigeria, Brazil and Argentina. It
saw these countries as outlets for U.S. products - manufactures,
information services and biotechnology - as well as for financial
transactions. But these countries had all been devoted to a
developmentalist ideology which led them to engage in certain
protectionist policies. So the U.S. explained to them that in an age
of "globalization" such practices were evil and counterproductive,
The emerging markets had to open themselves to the free market,
meaning to U.S. (and other) investments and activities.

The major tools to obtain compliance with this new regime were the
International Monetary Fund, the U.S. Treasury, and the World Trade
Organization (WTO), which would lay down enforceable rules of free
trade. These rules of course were meant to apply to others, not
really to the United States. The problem with rules, however, is
that others can also use them. When the U.S. (and western Europe)
tried to extend these rules further to the so-called emerging
markets, they found resistance at Cancun, where Brazil led a
coalition of the middle powers insisting that rules worked both
ways - that if the South were to lower barriers to free trade, the
U.S. and the rest of the North must do so as well (see Commentary
122, Oct. 1, 2003). The U.S. refused to go along and hence Cancun
was a failure.

But an even greater problem was lurking for the U.S. Europe (and
others in the North) were very unhappy about U.S. protectionism,
which hurt their own interests directly. When George W. Bush placed
tariffs on steel, to protect U.S. manufactures in states that were
electorally crucial to him (such as West Virginia and Ohio), the
Europeans brought a case in the WTO Tribunal, charging the U.S. with
violating the treaty. They won the case, and obtained the right to
pose countertariffs, which they threatened to do against U.S.
products important in other states electorally important to George
Bush (like Florida and Michigan). As a result, George Bush swallowed
hard, and revoked the steel tariffs. But the Europeans weren't
through. They plan to use the same countertariffs if the U.S. does
not end the tax breaks it gives U.S. corporations for their offshore
operations. It seems these too violate the WTO treaty.

And, if this wasn't enough, when George Bush announced that he
wasn't going to let the French, Germans, Russians, and Canadians bid
on contracts to rebuild Iraq, it was immediately suggested that this
violated the same WTO treaty. All of a sudden, the WTO - virtually a
U.S. invention and cherished achievement - began to seem like an
albatross around the neck of the United States. Free trade is
marvelous of course, at least if one doesn't have to bear its
negative costs oneself.

Immanuel Wallerstein