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free-markets in the time of anthrax

Please help make the Manifesto better, or accept it, and propagate it!
In the wake of the anthrax scare in the US, it is
interesting to note the double-standard in the
application of free-market principles:


"... Senator Charles Schumer, a Democrat from New York, on Tuesday
called on his government to increase the supply of the antibiotic Cipro,

the only approved oral treatment for anthrax, by purchasing cheaper
generic versions.

Schumer said U.S. law allows the government to buy drugs from
producers other than the patent holder, ........"

By contrast, about a year ago,  south africa, in the throes of
and AIDS epidemic, considered importing generic aids drugs
from india- a move that would be ~10% of the cost of the drugs
from US drug patent holders. International conventions allow for
countries to manufacture or import critical drugs when facing
national crisis arising from epidemics.Huge pressure was brought
to bear on the s african govt by the US govt trade representatives
to not declare the national emergency that would permit the drug
import, and the s african govt succumbed.

This shows quite transparently that 'free trade' and 'itellectual
are anti-competitive weapons used by the dominant powers over
the rest- to be applied to potential competitors but not to themselves.

For a further exploration of this, the following article discusses
transparent cases of the hypocisy of 'free market' principles as
analogous to the hypocrisy of 'socialists' excoriated in this group.


Collateral Damage: Neo-Liberalism

October 17, 2001 By Jeremy Brecher and Tim Costello

Even as they were planning military action in Afghanistan, US leaders
were struggling with the contradictions of capitalism.  One can almost
hear them sighing, ah, if only we could bomb the recession!
Capitalism is an amazingly dynamic system, but it has some flaws.
We're seeing one of them as millions of people in the US and around
the world lose their jobs as a result of global recession.

In orthodox economic theory, the market automatically assigns human
and material resources to meet human needs.  Unfortunately, the
history of capitalism indicates otherwise.  Capitalism's amazing
growth spurts have been punctuated by recessions, depressions, and
long periods of stagnation.  While every such period has its own
specific causes, underlying them all is the fact that in a capitalist
system production is conducted not to meet human needs but to make
profit for private enterprises.  No matter how great the unmet needs,
people will be laid off and production facilities closed down when
conditions make them unprofitable.

Over the centuries, capitalist societies developed a wide range of
non-market structures that reduced the gyrations of boom and bust.
19th century banking crises led to the development of central banks
like the US Federal Reserve Board to control money and credit.  The
Great Depression led to the use of low interest rates and government
budget deficits to "prime the pump" of stagnating economies --
generally known as "Keynesian" policies after their famous advocate
the British economist John Maynard Keynes.  Even minimum wage laws and
trade unions were seen by progressive economists as non-market means
to correct the downward spiral of capitalist crises.

While conservatives regularly attacked Keynesian policies, in practice
they generally turned to them when economies went south.  Back in the
recession of the early 1970s, President Richard Nixon, a life-long
conservative Republican, astonished many when he declared himself a
Keynesian.  He cut interest rates, let Federal budget deficits soar,
and imposed wage and price controls.  But the notorious "stagflation"
-- a continuation of inflation even in times of recession --
intensified.  Long-term profits fell steeply worldwide.

Enter neo-liberalism, aka the global free market.  Economists,
corporate leaders, pundits, and politicians joined in a soaring chorus
demanding a return to their imagined Victorian capitalism of world
markets unrestricted by social legislation or government regulation.
They called this fast-forward to the past "globalization."

Now, faced with the prospect of a global recession, the whole pack
suddenly turns back to Keynes's classic formula for economic stimulus.
Federal Reserve Chairman Alan Greenspan cuts interest rates to their
lowest levels in 40 years.  Greenspan and former Clinton Treasury
Secretary Robert Rubin meet with leaders of Congress and agree on a
target of $100 billion in deficit spending.  President Bush, no doubt
hoping to preempt Democratic exploitation of "another Bush recession,"
chimes in with tax cuts for the non-wealthy (as well as the wealthy),
extended unemployment compensation, and payments for impacted state
governments. Sometimes the cost of sticking to your principles is just
too high.  Sic transit gloria neoliberalism.

While the forces of global recession have been gathering at least
since the Asian financial crisis of the late 90s, it was masked by the
bubble economy in the US.

But that was punctured well before the September 11 attacks.  The
atmosphere of national crisis that followed September 11 allowed US
political elites to switch from neoliberalism to Keynsianism with a
speed that would otherwise have been unimaginable.

There's a problem: In the era of globalization, traditional Keynesian
stimulus has proved to be of limited value.  Governments abandoned
Keynesianism in the 1970s largely because in the global economy its
policies produced paradoxical effects: Stimulus to the national
economy generated imports instead of jobs.  The same is even more
likely to be true today.  The economic stimulus measures being pursued
so far are likely to have a trivial effect in the face of a global
downturn.  Recession causes vast suffering to people who lose their
jobs.  It also intensifies competition among workers, driving down
wages and conditions.  In a global economy, it does this globally.
Workers around the world are being told that only those who accept
lowest wages and social protections will keep their jobs.
(Increasingly China is setting the standard for to which others must
conform if they wish to retain jobs and investment.)  Recession
intensifies the race to the bottom.

The end of capitalism's period of manic expansion and the coming of
global recession creates a new context for the efforts of workers and
social movements in the U.S. and worldwide.  In the past, periods of
economic downturn have had contradictory effects, promoting both
social reaction and social progress. While it is far too early to
predict the effects of today's global recession, it is by no means too
early to begin trying to discuss constructive responses from social
and labor movements and the left.

While the terrorist attacks of September 11 and the US retaliatory
attacks have left the movement against corporate-sponsored
globalization understandably stunned, the emerging global recession
makes the need for such a movement -- and its potential for worldwide
popular support -- greater than ever.  But the next phase of its
development is less likely to start from a renewal of large protests
at elite international gatherings than from grassroots resistance to a
recession-intensified race to the bottom.  While "the era of 'big
government is over' is over," the new turn toward Keynesianism is not
necessarily progressive.

For decades, the US used Cold War military spending to "prime the
pump."  Bush busts the deficit with spending for the "War on
Terrorism" -- and for Star Wars weapons in space.  But elites embrace
of Keynesianism reframes public debate.  The issue ceases to be
whether government should intervene in the economy, and becomes in
what way and in whose interest it should do so.  Indeed, Keynesianism,
in spite of its benefits for the orderly management of capitalism, is
ideologically dangerous for elites precisely because it poses such

We can begin posing such questions today:

* In a neo-liberal conception, government should tax business and the
wealthy as little as possible so they will invest and accumulate
wealth that then will "trickle down" to the rest of society.  But now
President Bush proposes a tax cut for low-income people who were
neglected in his previous tax cut, partially on the grounds that they
are most likely to spend the money the fastest, thus expanding demand.
If so, shouldn't we address the broader issues of the maldistribution
of income in the US and worldwide?  Underlying the emerging global
recession is the redistribution of income from poor to rich that has
marked the era of globalization.  One reason for global recession is
that most working people around the world are paid too little to
purchase what they produce.  Shouldn't we apply Bush's logic to the
whole global distribution of wealth and income?

* In a neo-liberal conception, social welfare is a tax on enterprise
that should be eliminated, leaving individuals to provide for
themselves through their individual labor and effort.  But now
President Bush and Congress are preparing to extend unemployment
benefits. If that's ok, then isn't time we started talking about
rebuilding welfare, health insurance, and the rest of the social
safety net?

* In a neo-liberal conception, countries that run deficits in their
budgets and pile up foreign debts should be forced to raise interest
rates, balance their budgets, and impose austerity on their people.
But now the US, the world's largest debtor with the world's largest
trade deficit, is deliberately slashing interest rates and expanding
budget deficits in order to stimulate its economy and create
employment.  Why shouldn't Argentina, Mexico, the Philippines, South
Africa, and other countries around the world be allowed to do the
same?  And if the IMF, on US prompting, can provide debt relief to
Pakistan, despite its failure to meet its economic commitments,
because it helps the "war on terrorism," why can't the international
community do the same for poor countries around the world whose people
are starving by the millions due to structural adjustment austerity

* In a neo-liberal conception, the development of industry should be
left to the wisdom of the market.  Nothing is more anathema than the
idea that the government should "pick winners and losers."  Now the US
government is providing tens of billions of dollars for the airline
industry.  Not only that, it is establishing a government board,
headed by until-now ultra-freemarketeer Alan Greenspan, with the power
to decide which airlines it will subsidize and which ones it will
force to merge. (Officials piously chanted that the board will not
pick winners and losers).  If the government can do that to keep
airlines from going bankrupt, why shouldn't it establish public boards
with a few tens of billion dollars to save workers jobs, or to fund
community-based investments, or to rebuild the economy on a low-carbon
basis to reduce global warming, or to develop and supply technology to
provide solar energy and safe water to people around the world?

And one more thing.  Maybe there is a way to bomb the recession.  With
the approach of winter, unemployed Americans are threatening to swamp
soup kitchens and food pantries.  Now that US leaders have decided
it's ok for Afghanistan, maybe we should beg them to begin bombing the
US with food as well.

* Jeremy Brecher and Tim Costello are co-authors with Brendan Smith of
Globalization from Below and the producers of the video documentary
Global Village or Global Pillage? [www.villageorpillage.org].

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