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Extract: Trading in freedom

From the chapter ‘Freedom’

. . . The idea that everything is now subordinate to what ‘capital’ wants to ‘see’ is not merely an idée fixe of paranoid anti-globalisation protesters, but stated clearly in public by those who minister officially to capital’s desires. Back in the US, George W. Bush declared: ‘We need to reform our legal systems so the people, on the one hand, can get justice; on the other hand, the justice system doesn’t affect the flows of capital.’ First a hasty sop to liberals – acknowledging that, sure, people should still be able to ‘get’ justice, just as they pop down to the store to get a can of soda – and then the remarkable notion that justice, on the other hand, should never interfere with the operations of money. So justice is a subeconomy within the larger one (you can ‘get’ justice), but it has no right to interfere with overarching systems of profit. Justice is subordinate to and dependent on capitalism, as is even ‘the strength of our families’, according to Canadian Prime Minister Paul Martin . . .

The order of priorities in western ‘freedom’ and ‘democracy’ was again evident in the spiritually ascendant language of another Bush pronouncement: ‘In every region, free markets and free trade and free societies are proving their power to lift lives.’ It seemed the commercialists had finally got their way: markets were indeed acknowledged to be quasi-divine autonomous systems raising all to heaven. Why, then, if they were so free, could they not be left alone to function in their utopian way? Bush was not just compelled to tell Vladimir Putin how to change his country in order to clear a path for the march of free markets. The mollycoddling was necessary domestically as well: ‘It’s important for the markets to see that we’ve got enough discipline in Washington, D.C. to make hard decisions with the people’s money,’ Bush said in 2004. This speech was reported the next day in the New York Times under the headline ‘Bush Says Social Security Plan Would Reassure Markets’, as though ‘markets’ were frightened children.

How protean, indeed, these markets were. On the one hand, they dispensed God’s justice, free from any interference by merely human justice; yet on the other hand, when the rhetorical occasion demanded, the markets were vulnerable little flowers, in desperate need of ‘reassurance’. It is true that markets, being essentially consensual hallucinations, depend on confidence, but calls to ‘reassure’ them on one point or another are often made for unstated ideological reasons, if not to disguise a simple motive of private profit. Similar kid gloves were apparent in former UK Trade Secretary Margaret Beckett’s announcement that ‘Britain’s businesses need to be able to trade throughout the world’s markets as easily as they can in home markets without facing high tariffs, discriminatory regulations or unnecessarily burdensome procedures.’ Businesses may indeed want these things, but for Beckett to say that they ‘needed’ them, presumably in order to flourish maximally, was to endorse their wants without weighing them against the wants of others.

After her trip to Latin America, Condoleezza Rice had gone on to declare: ‘A region that trades in freedom benefits everyone.’ She did not mean, we can assume, trading in freedom like trading in textiles or precious metals: I will sell you this much freedom for so many bananas. Celebrating the signing of the Central American Free Trade Agreement, Rice was invoking again the concept of ‘free trade’, under the auspices of which, as British chancellor Gordon Brown once explained, poor countries have ‘obligations’ to ‘create the conditions for new investment’.

The freedom granted by ‘free trade’ was not quite symmetrical. Among the ‘obligations’ of poor countries under World Bank and International Monetary Fund deals have been, for example, the obligation to import food from the heavily subsidised US and EU agricultural industries, thereby driving local producers out of business; the rich countries kept high tariffs on imports such as clothing and leather goods, thus preventing the poor countries from competing freely. Meanwhile, ‘creating the conditions for new investment’ meant, for example, allowing western companies to take over indigenous public services and run them for profit. Water privatisation in Manila and electricity privatisation in India have resulted in price increases of up to 80 per cent; in sub-Saharan Africa, according to the Organisation for Economic Co-Operation and Development, ‘profit-maximising behaviour has led privatised companies to keep investments below the necessary levels, with the result that rural communities and the urban poor were further marginalised in terms of access to electric power and water supply’. Tens of millions of pounds of the UK’s aid budget were given to ‘privatisation consultants’ at big accountancy firms, the acceptance of whose advice was made a condition of aid to poor countries.

To render the enlargement of such ‘free trade’ more palatable to an increasingly informed and concerned public, the IMF, in a transparent coup of Unspeak, had simply changed the name of its ‘structural adjustment programmes’ to ‘poverty reduction and growth programmes’. No one would be so churlish as to disagree that ‘poverty reduction’ was a fine idea, yet there was no new evidence that the same old policy, thus relabelled, would actually achieve it.

One meaning of bringing freedom to Iraq, in particular, was clear in George W. Bush’s May 2004 explanation of why things were going so well in that country:

[A] growing private economy is taking shape. A new currency has been introduced. Iraq’s Governing Council approved a new law that opens the country to foreign investment for the first time in decades. Iraq has liberalized its trade policy, and today an Iraqi observer attends meetings of the World Trade Organization.

International lawyer Philippe Sands explains that Coalition Provisional Authority Order Number 39 had ‘opened much of Iraq’s economy to foreign ownership [and] … stretched the limits of what an occupying power was entitled to do under long-established rules of international law.’ Note that what Bush acclaims as ‘foreign investment’, implying generosity, Sands translates bluntly as ‘foreign ownership’. The order, in fact, made possible total foreign ownership of industries in all sectors except that of ‘natural resources’, defined closely as oil and gas; in a subsequent interview, trade minister Ali Allawi did not rule out future foreign ownership in those industries either. Business and income taxes for ‘investors’ would be capped at 15 per cent.

The Iraq economy was thus obliged to be much more ‘free’ than, say, the US itself, which has laws governing foreign ownership of media companies, among others, and whose politicians worked hard in the summer of 2005 to ensure that a Chinese takeover bid for its oil company Unocal would fail. Bush’s implication that the Governing Council was the source of the Iraq ruling, meanwhile, hid the fact that the Council was essentially obliged to rubber-stamp (‘approved’) the US order. Of course, these agreements were not simply a one-way street, and Iraq enjoyed some quid pro quos. In July 2005, for example, it was announced that the US would reduce to zero its import tariffs on Iraqi dates.

The US Congress had voted to spend $18.4 billion of taxpayers’ money to reconstruct post-war Iraq. By the end of June 2004, Paul Bremer’s Coalition Provisional Authority had spent only $300 million of this sum. Instead, up to $20 billion of the Iraqi people’s own money, kept in the Development Fund for Iraq and meant by the UN to be used ‘in a transparent manner to meet the humanitarian needs of the Iraqi people […] and for other purposes benefiting the people of Iraq’, had been handed out, most in no-bid contracts to American corporations such as Halliburton and its subsidiary Kellogg, Brown & Root, and in ways that were poorly accounted for. It was later alleged by Henry Waxman and the House Committee on Government Reform that in one such contract, Restore Iraqi Oil, Halliburton had overbilled by ‘more than $177 million’, charged to the Iraqi people. (In logistical contracts paid by the Defense Department, Halliburton charged $100 to clean a bag of laundry, and hundreds of millions for meals that were never served to troops.) In September 2004, the $18.4 billion of US money meant for reconstruction was reassigned to counter-insurgency warfare. For Iraqis, it seemed, freedom came at a rather hefty price.

Meanwhile, George W. Bush had quietly signed an Executive Order (#13303) granting blanket immunity from criminal prosecution or civil lawsuits in the US to any American company or individual working in any industry related to the Iraqi oil business. Perhaps that was what he meant when he scrawled, on a note from Condoleezza Rice informing him that ‘Iraq is sovereign’ in June 2004, the possibly rehearsed reply: ‘Let freedom reign!’


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