Global Policy Forum

By Susan George

Corporate-led, finance-driven globalisation has successfully transferred wealth from labour to capital. This has resulted in inequality and exclusion on a massive scale which, combined with the pressure on water and other environmental resources, is likely to fuel new conflicts.

First let me thank IPPNW for this invitation to speak at your 18th World Congress. It's a great honour and I'm very grateful since I have admired your work for many years. I would especially like to thank Doctors Arun Mitra and Christoph Kraemer who went to a great deal of trouble on my behalf. The subject you've asked me to discuss, "Globalisation and War", is vast and we may as well begin by defining terms so that we are all reading from the same page. "Globalisation" is a much abused word, rather like "development", and doesn't mean much unless accompanied by a couple of adjectives and an explanation. My adjectives would be "neo-liberal", "corporate-led", "finance-driven", or whatever else evokes for you the present phase of world capitalism-the kind of capitalism others have called, turbo- or super- or hyper-capitalism.

Globalisation is "corporate-driven"; it's the system which allows transnational business and finance to invest what they want where they want; to produce what they want; and to buy and sell what they want, everywhere, with the fewest restrictions possible coming from labour laws, social conventions or environmental regulations. That definition is not mine, it is that of a prominent European business man. Globalisation is also "finance-driven": we need only look at the vast mess in the financial markets today to see how free to operate they have been. Government officials who are supposed to be regulating these markets no longer have a clue what is going on. Let us recall too the slogan that Klaus Schwab gave to this year's festivities in Davos: "The power of collaborative innovation". Well, the finance people have certainly been innovating like mad and now, after having collected enormous bonuses, they want the taxpayers to bail them out, as usual. The United States Congress is working with their representatives on legislation to do that right now. The corporations and the banks demand deregulation until they get themselves into trouble, but in that case, of course, State intervention is justified.

Since this talk is about globalisation and war, here is an initial opportunity to make the link to war. In a book just launched, The Three Trillion Dollar War, Nobel Prize-winning economist Joseph Stiglitz and his co-author Linda Bilmes, explains how American spending on the war in Iraq actually encouraged Alan Greenspan and the Federal Reserve to flood the American economy with cheap credit, leading to the housing bubble, the consumption boom, and the biggest budget deficit in history. We have an opportunity to learn how the Iraq war indirectly led to hundreds of thousands of US families losing their homes. On its own terms and for those in the forefront driving the process, corporate-led, finance-driven globalisation has been extremely successful. They have accomplished exactly what they set out to do. The whole point of capitalism is to make as large a profit as possible and to increase so-called "shareholder value", so the result, when successful is systematically to transfer wealth from labour to capital. We now live in what John Maynard Keynes called a "rentier economy"; the kind in which you make money while you sleep because you own capital. Measured by its own yardsticks, the system is booming. Profits of transnational corporations have been running at record levels and shareholders have been demanding, and receiving, returns of 10, 15, even 20 percent a year, as, for example, British banks have supplied, at least until this year. Tax havens and offshore companies shelter the wealth of the companies and of rich individuals, as the ongoing scandal in Germany and other European countries is making clearer every day.

The number of millionaires and billionaires, including now four in India, has escalated steadily so that now there are about nine and a half million people, or about one for every 700 people on earth, that the brokerage house Merrill Lynch calls High Net Worth Individuals who together possess, in liquid funds, some 37 trillion dollars-that is 37 followed by 12 zeros. This is about three times the GDP of either the United States or of Europe and more than a dozen times the GDP of India. So globalisation has been extremely good to those at the top of our various societies. We have statistical proof also that the share of added value accruing to capital is swelling as the share of labour declines-in Europe, capital's share has risen to about 40 percent, compared to 25 percent thirty years ago. The benefits of globalisation for ordinary people have been far more problematic, particularly in the mature capitalist countries that I know best. Business quite correctly sees two great obstacles to higher profits which are labour costs and taxes, and it has consequently concentrated on reducing both. Mass layoffs have become common. Workers are placed in competition with each other throughout the world. Within Europe itself, wage differences are already on a scale of one to ten; worldwide, they are at least one to thirty. This means a race to the bottom for working people while wages, benefits and working conditions are pushed downwards. Such competition now affects not just industrial production but any kind of work that can be done on a computer. I would warn even Indians, some of whom have so far profited from these trends, that there is always someone prepared to work for less than you-as the Malaysians and even the Indonesians have discovered. The numbers also show huge and growing inequalities between people, both inside individual countries and between countries. The more neo-liberal, anti-regulation, pro-free trade a country is, the greater the inequalities are. No one disputes these growing disparities: those who defend neo-liberal globalisation argue that it pushes the floor upwards for everyone-a highly disputable proposition in a world where a billion people live with the purchasing power of a dollar a day and half the world with that of less than two dollars.

Furthermore, we know that transnational businesses, finance corporations and wealthy individuals contribute less and less proportionally in taxes to national budgets. This means that ordinary people, consumers and local businesses pay more than their fair share. It means that governments are hard-pressed to provide services to their populations because their revenues are under steady pressure. Internationally speaking, treaties are also designed to be extremely business-friendly. For example in the case of the agreements under the auspices of the World Trade Organisation, the thousands of pages of rules are careful to protect the interests of finance and business but are totally silent on labour, the environment or human rights. The new Lisbon Treaty for Europe, in process of ratification by parliaments, has 410 articles in which the word "market" is used 63 times and "competition" 25 times, but "social progress" gets three mentions, "full employment" one and "unemployment" none. Marxists put exploitation of labour at the centre of their discourse. This may have been the case in the nineteenth century, but I would suggest that they are now missing the point. Today it is almost a privilege to be exploited. The real problem is that globalisation takes the best and leaves the rest. Of course it exploits, but more than that, it excludes. We must face such facts however much we may deplore them. There are huge regions in which the drivers of globalisation take little or no interest. Present day globalisation is not interested either in the hundreds of millions of people who do not produce within the market system and consume so little that they scarcely register. We should above all stop asking the "market" to solve our social problems. Markets can and do perform extremely valuable services in some areas, but social services are not among them.

A quite famous person wrote the following: " 'All for ourselves and nothing for other people' seems, in every age to the world, to have been the vile maxim of the masters of mankind". This observation comes not from Machiavelli or Karl Marx but from Adam Smith. I think we can take this great theoretician of capitalism at his word when he explains to us how the capitalist masters of mankind-today the sort of people who meet in Davos, can be expected to behave. They may be individually kind and generous, but as a class, they will conform to Smith's law. The real globalisation debate is therefore not about whether the phenomenon is "good" or "bad"-because globalisation is a fact, not an option. The real debate in my view should concern what is in the market and what is not; what is a marketable commodity and what is not. Should water be subject to the laws of the market? Health? Education? Public services? Basic foodstuffs? Energy? Before even attempting to attack such questions, please let me stress that the system I have been describing, despite the huge rewards it has provided for some, is in crisis. It got a huge push with the end of the Cold War, which opened up virtually every place on earth to the forces of international capital, but it is now in serious trouble. International financial institutions like the World Bank and the International Monetary Fund that used to smooth the way for mass privatisations and universal market-orientation are much less important than they were even a decade ago. The Fund is sacking staff. The World Trade Organisation has been deadlocked for nearly three years. I've already mentioned the woes of the financial system and the incipient recession, which will spread from its epicentre in the United States to the rest of the world. Oil, mineral and basic food prices have hit all-time highs so that inflation is also a risk. What is the relationship of all these features of the present world economic system to war and violence? Again, please allow me first to define terms: my definition of serious conflict will be the one used by various peace research institutions: a thousand or more deaths due to armed conflict. So we are not just talking about State actors but also about civil wars, terrorist attacks and so on. I want also to argue, perhaps unconventionally, that other, new, determinants of violence are growing more and more common, like environmental stress, and already contribute to increased disruption and death.

IPPNW was founded a quarter century ago in the context of the Cold War and the super-powers' nuclear arms race. So it may seem to many of you a kind of heresy to say that those times, although surely terrifying in their own way, also provided a strange kind of stability. No place on earth could be considered unimportant by the super-powers because any place could become a base, a staging area, a strategic pawn for the other side. Today the situation is radically changed. There are a great many places that are not worth bothering about; they are full of losers, of the excluded, the hundreds of millions seens as rubbish people, both disposable and dispensable. There are quite a few loser States as well. We, on the other side of the fence, instead call them failed or rogue States.

Let me start with the individual losers and their relation to conflict. Such people and groups are much more conscious of their situation than they used to be. Many studies have shown that the sense of injustice relates less to the absolute level of one's purchasing power and status in life than it does to the comparison with others. Inequalities are increasingly visible everywhere. Lots of ordinary people in Europe are witnessing the tax haven scandal; lots of people in the United States are being thrown out of the houses they can no longer afford to pay for-and they can see that there are big winners and big losers. Even in poorer societies, nearly everyone has at least some access to television; half the human race now lives in cities, many of them made up largely of slums. Resentment is growing. People do not ask themselves what they may have done wrong; they ask, rather "Who has done this to us?". Because they cannot usually touch the kinds of people they may see on television, they may take out their grievances on their neighbours of a different ethnic group, as we have recently witnessed in Kenya. You don't need nukes-machetes and matches will do as well to murder thousands, if not hundreds of thousands. All such conflicts can be traced to their economic roots. Free trade, the bedrock of neoliberal globalisation, also takes its toll. One of its consequences, clandestine immigration also results in untold numbers of deaths. The NAFTA, the free trade agreement between the US, Canada and Mexico has caused the ruin of hundreds of thousands of poor, small Mexican farmers, unable to compete with cheap corn now flooding the country from the US. Plenty are trying to get into the United States; just as Africans and North Africans take enormous risks to reach Europe or Bangladeshis to get into India; creating further instability and broader terrains for conflicts. It is often US and European policies that close off all other economic avenues to people, except for immigration. Yet the response is always to use the army, the police and various security measures, not negotiation and policy change. As if all this were not enough, the planet, the environment is also in crisis. We already know that climate change is creating massive flows of refugees. As their numbers continue to swell, what will our governments do? Shoot them? Bomb them? Tell them to commit suicide? I'm not trying to be sarcastic, simply realistic, because I see little planning for the crises that we know loom ahead and mass attempts to emigrate are certainly among them.

The links between conflict and the water crisis are as clear as water itself. Water stress and scarcity is increasing, due to the deadly combination of population growth, increase in human-induced global warming, corporate control and use of water, pollution and so on. In this context, the struggle for control over environmental resources is deadly serious. In 1991, the then Secretary General of the United Nations, Boutros Boutros Ghali, warned that the next wars would be not about oil but about water. In 2008, the present SG, Ban Ki-moon, told first the people in Davos, then the UN General Assembly that water wars already existed. He laid particular stress on the crises in Kenya, Chad and especially Darfur, which some have begun to call the "first climate change war". The Nobel Peace Prize Committee took a quantum leap in recognising the connections between ecological damage and warfare and the risk of environmental war by giving the 2007 prize to Al Gore and the Inter-Governmental Panel on Climate Change. Marc Levy, a scholar at Columbia, is working to establish the water and conflict link scientifically. He works with the International Crisis Group and is combining databases on civil wars and water availability, showing that "when rainfall is significantly below normal, the risk of a low-level conflict escalating to a full-scale civil war approximately doubles the following year". Among other cases, he cites the areas of Nepal where there was heavy fighting during the Maoist insurgency after severe droughts; whereas there was no fighting in other parts of Nepal that had not suffered drought. Levy's case studies also point out that drought causes food shortages and promotes anger against the government. In such cases, "semi-retired" armed groups often re-emerge and start fighting again.

The International Crisis Group has placed 70 conflict hotspots on its "watch list" and Levy is in process of compiling rainfall data for all of them to see if this evidence can help predict increased conflict. His approach will undoubtedly help to flag places where wars are most likely and, although the work is far from finished, the data strongly support the finding that for civil wars, "severe, prolonged droughts are the strongest indicator of high-intensity conflict". "I was surprised", adds Levy, "at how strong the correlation is". Military strategists are also acutely interested in the probability of water wars. A Professor of Political Military Strategy at the US Army War College has published a long scholarly article entitled "The Strategic Importance of Water" in which he points out that of the world's 200 largest river systems, 150 are shared between two nations and the remaining 50 are shared by three to ten nations1. As we all know, the Middle East is especially fragile and three rivers, the Nile, the Tigris-Euphrates and the Jordan are central to present and potential conflict. the former president of Turkey, Mr Demirel said "We do not ask Syria and Iraq to share their oil. Why should they ask us to share our water? We can do anything we like". The Jordan is at the heart of the Israel-Jordan-Syria-Lebanon-Palestine dilemma. Thanks to the territory it captured in the 1967 war, Israel is in control of water to which it simultaneously restricts Palestinian access. As one military observer has noted, "Israeli strategists always name control over water sources as one critical factor making necessary, in their view, retention of at least a part of the occupied Arab territories." As for the Nile, nine States share its waters and Egypt is the last one downstream. Egypt has made quite clear that it is willing to go to war against any of the eight upstream states in order to preserve its access to the Nile, on which it depends for 97 percent of its water.

As this audience will know better than anyone, the Indus is an element of the India-Pakistan conflict and the Ganges plays the same role in India-Bangladesh relations. The combination of water scarcity and nuclear weapons does nothing to ease the minds of military strategists in these regions or elsewhere. And may I add here that one of the best arguments against nuclear reactors, quite apart from their inherent dangers and the insoluble problem of radioactive wastes is the huge amount of water they require in order to remain functional. Nuclear reactors are the biggest industrial user of water and in a water-stressed country like India, it is quite possible that the authorities will be faced with the deadly choice of taking thousands of cubic meters of water from local communities or shutting down the reactors. After the cooling process, the water is re-injected into the environment but at a much higher temperature, so it can do great damage to local ecosystems. Even if we recognise, as we should do, that complex events like conflicts can never be ascribed to a single cause, there seems no doubt that water will remain an exacerbating factor, particularly since it is intimately connected to other vital national needs, like food. Various factors ascribable to globalisation have caused grain prices to escalate dangerously, leaving poor countries especially open to shortages and introducing another common denominator of conflict.

One could elaborate on these crises, but it is important to note that worldwide, these various systemic crises-of the economy, of massive inequality, of the environment, of migration, of resource-shortage, of so-called "failed States" and so on-all these increase the dangers of military response. In the poor world, the poor will mostly fight against the poor as the system of exclusion and environmental disasters create more and more struggles for mere survival. Poor people already live in the most threatened areas; the elites are growing quite good at creating their local enclaves and fortresses, but these may not protect them forever. To prevent their collapse, they will increasingly employ the military to control populations perceived as troublesome, superfluous and irrelevant. One cannot find great cause for optimism at the global level either. As the United States loses influence in other areas and its economy weakens, it will rely increasingly on its unquestioned military dominance, becoming thereby even more dangerous than it is today. The present extension of the network of US foreign military bases is one key to this strategy. Multilateralism will become even more frayed as even some NATO partners, for example, refuse to go along with so-called "coalitions of the willing". Already, these coalitions are being replaced by "coalitions of the coerced" or simply with mercenaries, as in Iraq. The next US elections are crucial: remember that John McCain is the grandson and the son of military commanders, and a Navy man himself. Faced with crisis, his first reflex is not likely to be confined to diplomacy and negotiations.

It is time, perhaps past time, for me to conclude and to ask if and how we can emerge from the present crisis. We face the oldest moral question in the world, whether for religions or for secular political bodies as well as for social movements and civil society organisations. What do the rich owe to the poor, the fortunate to the less fortunate, the educated to the uneducated; the healthy to the ill? Do these obligations, if there are any, apply only to the people in our own societies, to our own countries, or to everyone, everywhere? The kind of globalisation we choose-and I assure you that it is a choice, not a fate to which we must submit-will determine whether there is peace or war. In my mind, there can be no peace without justice. The other big question concerns the laws and regulations we should demand, in our own interests, so as to keep the market under control and to protect the planet from further destruction. How can we make sure such laws are put in place, particularly in the international arena where there is no democratic machinery? If we do not have enforceable laws and binding rules, the vile maxim of "All for ourselves and nothing for other people" will continue to prevail, nationally and internationally. We especially need rules which oblige societies to share because, if we are to believe Adam Smith, this is not going to happen spontaneously. This means that we need taxes, including international taxes, in order to promote individual welfare, social cohesion and-the subject that has brought all of us here to the IPPNW Congress-peace.

Let me say once more now in closing how grateful I am to IPPNW for asking me to speak here-not just for the personal honour, but because I see this invitation as a sign of recognition on the part of your organisation that the peace movement and the movement that has come to be known as the "alter-globalisation" or the "global justice" movement have got to come together and join forces. I see your gesture in inviting someone who has participated in the global justice movement since it began, as visionary. So far, on both sides, we have failed to make the crucial links between peace and global justice movements, either theoretically or practically. The 15th of February 2003 was a magnificent, history-making day, when all over the world millions came out to protest the invasion of Iraq, but we did not then know how to remain allies and struggle together in the longer term. The magnificent momentum of that day was somehow lost. As we approach the fifth anniversary of this terrible war, whose disastrous consequences will continue to reverberate throughout the world for years to come, let us recognise concretely that our movements will either succeed together, or fail separately. Failure is unthinkable, the stakes are too high. We must choose success, we must choose each other.