Global Policy Forum

By Noam Chomsky

At a recent talk Chomsky was asked "What are the motivations of the U.S. push for sustainable development in the developing world?" Here was his answer…

Its the first time I ever heard of that--does the U.S. have a push for sustainable development? As far as I know, the U.S. push is for unsustainable nondevelopment. The programs that are built into U.S policy, take a look at the World Trade Organization rules, like, say, TRIPs and TRIMs--Trade-Related Intellectual Property and Trade-Related Investment Measures are designed to impede development and impede growth. So the intellectual property rights are just protection of monopolistic pricing and control, guaranteeing that corporations, in fact, by now, megacorporations, have the right to charge monopolistic prices, guaranteeing, say, that pharmaceutical production drugs will be priced at a level at which most of the world can't afford them, even people here. For example, drugs in the U.S. are much more expensive than the same drugs as close as Canada, even more expensive than say, Europe, and for the third world this just dooms millions of people to death.

Other countries can produce the drugs. And under earlier patent regimes, you had process patents. I don't even know if those are legitimate, but process patents meant that if some pharmaceutical company figured out a way to produce a drug, somebody smarter could figure out a better way to produce it because all that was patented was the process. So, if the Brazilian pharmaceutical industry figured out a way to make it cheaper and better, fine, they could do it. It wouldn't violate patents. The World Trade Organization regime insists instead on product patents, so you can't figure out a smarter process. Notice that impedes growth, and development and is intended to. It's intended to cut back innovation, growth, and development and to maintain extremely high profits.

Well, the pharmaceutical corporations and others claim they need this so they can recoup the costs of research and development. But have a close look. A very substantial part of the research and development is paid for by the public anyway. In a narrow sense, it's on the order of 40-50%. But that' s an underestimate, because it doesn't count the basic biology and the basic science, which is all publicly funded. So if you get a realistic amount, it' s a very high percentage that's publicly paid anyway. Well, suppose that went to 100%. Then all the motivation for monopolistic pricing would be gone, and there'd be a huge welfare benefit to it. There's no justifiable economic motive for not doing this. There's some economic motive, profit, but it is an effort to impede growth and development.

But what about Trade-Related Investment Measures? What do they do? TRIPS is straight protectionism for the benefit of the rich and powerful, through publicly subsidized corporations. TRIMs are a little more subtle. What they require is that a country cannot impose conditions on what an investor decides to do. Suppose General Motors, let's say, decides to carry out outsourcing, to have parts made in some other country with non-union cheap labor, and then send them back to General Motors. Well, the successful developing countries in Asia, one of the ways they developed is by blocking that sort of thing, by insisting that if there was foreign investment, it had to be done in a way that was productive for the receiving country. So there had to be technology transfer, or you had to invest in places they wanted you to invest in, or some proportion of the investment had to be for export of finished goods that made money. Lots of devices like that. That's part of the way in which the East Asian economic miracle took place. Incidentally, it's the way all the other developing countries developed too, including the United States, with technology transfer from England. Those approaches are blocked by Trade-Related Investment Measures. Superficially they sound like they are increasing free trade, but what they are in fact increasing is the capacity of huge corporations to carry out central management of cross-border transactions, because that's what outsourcing and intrafirm transfers are --centrally managed. It's not trade in any meaningful sense. And they again undermine growth and development.

In fact, if you look across the board, what's being instituted is a regime which will prevent the kind of development that has taken place in the countries that today are rich, industrial countries—not the best kind of development we can imagine, to be sure, but at least development of a sort. If you go back from England to the United States, to Germany, France, Japan, Korea--every one of these countries developed by radically violating the principles that are now being built into the World Trade Organization. These principles are methods of undermining growth and development and ensuring concentration of power. The issue of sustainable development doesn't even arise. That's another question altogether. Sustainable development means, for example, paying attention to what are called externalities, the things businesses don't look at.

So take, say, trade. Trade is supposed to increase wealth. Maybe it does, maybe it doesn't, but you don't know what it does until you count in the costs of trade, including costs which are not counted, like, for example the cost of pollution. When something moves from here to there it's creating pollution. It's called an externality; you don't count it. There's resource depletion, like you deplete the resources of agricultural production. There' s military costs. For example, the price of oil is kept within a certain band, not too high, not too low, by a very substantial part of the Pentagon directed toward the Middle East oil producers, not because the United States likes desert training or something, but because that's where the oil is. You want to make sure it doesn't get too high, doesn't get too low, but stays where you want it. There hasn't been much investigation of this, but one investigation by a consultant for the U.S. energy department estimated that Pentagon expenses alone amount to maybe a 30% subsidy to the price of oil, something in that range.

Well, you look across the board, there's lots of things like this. One of the costs of trade is that it drives people out of their livelihoods. When you export subsidized U.S. agricultural products to Mexico, it drives millions of peasants out of farming. That's a cost. In fact, it's a multiple cost, because those millions of people not only suffer, but they are driven into the cities where they lower wages, so other people suffer--including, incidentally, American workers, who now are competing with even lower paid wages. These are costs. If you take them into account, you get a totally different picture of economic interactions entirely.

Incidentally, that's also true just of something like Gross Domestic Product. You take a look at the measures of Gross Domestic Product, and they 're highly ideological. For example, one of the ways to increase the Gross Domestic Product in the United States is to do what, in fact, it's doing, not repair roads. If you don't repair roads and you have a lot of potholes all over the place, that means when cars drive, they get smashed up. That means you've got to buy a new car. Or you have to go to mechanic and get him to fix it, and so on. All of that increases the Gross Domestic Product. You make people sicker by polluting the atmosphere. That increases the Gross Domestic Product because they have to go to the hospital and they have to pay doctors and they have to have drugs, and so on. In fact, what increases the Gross Domestic Product in societies aas they are now organized is often not a measure of welfare in any meaningful sense.

There have been efforts to construct other measures which do take account of these things and they give you very different stories. For example, the United States is one of the few industrial countries that does not publish regular "social indicators"--measures of social welfare, like child abuse, mortality, all kinds of things. Most countries do it. Every year they have a social indicator measure. The United States doesn't, so it's kind of hard to get a measure of the social health of the country. But there have been efforts to do it.

There's one major project at Fordham University, a Jesuit university in New York. For years they've been trying to construct a social health measure for the United States. They just came out with the last volume a couple months ago. It's interesting stuff. According to their analyses of the kinds of measures of the sort I've mentioned, up until about 1975, that is, through the "golden age," as it's called, social health went up, more or less, with the economy. It kind of tracked the economy. As that got better, social health got better. From 1975 they've diverged. The economy has continued to grow, even though more slowly than before, but social health has declined. And it's continuing to decline. In fact, they conclude that the United States is in a recession, a serious recession, from the point of view of measures that matter. That's when you're beginning to look at questions like sustainable development, meaningful development. But that requires a completely different perspective on all of these issues of economy and consequences, etc., one that definitely should be undertaken. And those are the issues that arise when people are talking about sustainable development, but the U.S. certainly has no such program. It should, but it doesn't.

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