The New Global Aristocracy

Oswaldo de Rivero in The myth of development:

non-viable economies of the 21st century
Prof. J.L. Dreisbach
Understanding Culture, Society, and Politics
The new global aristocracy
• Imperialist era (up to the Cold War) – geopolitical
• Corporations are manifestations of imperialism, states are the main actors in
the international sphere.
• Post-Cold War – geoeconomic (neoliberal globalization)
• Non-state actors (transnational corporations) are the main actors. Corporations
are the embodiment of prosperity and modernity.
• Underdeveloped countries have no choice but to seek transnational investment.
• Transnational corporations are attracted to industrialized countries
• Underdeveloped countries receive less transnational investment, they
lack the conditions corporations want (tech, infrastructure, legal
security, political stability)
The new global aristocracy
• US, EU, and Japan (TRIAD) – main places where transnational
corporations invest
• IMF was converted by G7 as a provider of liquidity so that it can give
austerity on bankrupt Asian countries. (They went bankrupt because of
the bad loans done by transnational banks and investors.)
• Multilateral Agreement in Investment (MAI) – gave the right for
transnational investors to appeal to the courts and demand
compensation from governments for loss of earnings, strengthened
transnational capitalism’s power over states and national industries
The new global aristocracy
• Neoliberal globalization – the purpose of free trade is to find clients
and not to help countries develop
• Economic liberalization, privatization, deregulation
• Transnational corporations have no nationality; they have a national
origin and broad global interests.
• They can change and expand locations to increase profit.
• Global social, economic, and environmental problems pertain exclusively to
the governments, and it should resolve them without interfering the
transnationals’ markets.
• The only responsibility that the transnational corporations recognize is to their
stock holders.
The new global aristocracy
• People no longer their governments as their representatives. The
governments represent the interests of transnational corporations.
• As neolib globalization increases, democratic national control on the
economy diminishes along with the sense of belongingness to a nation.
• The author suggests that transnationals be granted international
representation in WTO-IMF-WB so that they can be held accountable
The supranational clergy
• WTO-IMF-WB
• Imposes policies on governments
• African leaders call it TINA (‘there is no alternative’)
• Transnational made sure that governments can pay their foreign debt
• Reflects erosion of national sovereignty
• They will decide where the money will go
• They are not seeking solutions to the volatile global capital speculation market
• Enforces a ‘single economic creed’ (neoliberal globalization), aiming to turn
developing countries into emerging capitalist markets
The supranational clergy
• Why is it failing?
• Despite having stable economies and low inflation, Latin American, Asian, and
African countries still have a high number of population living in poverty,
unemployment rates are also high.
• Neoliberal economic reforms in countries allow transnationals’ to extract
raw materials, source countries get little to nothing in return
• Again, liberalization, deregulation, privatization
• IMF intervenes with the failures of transnationals (bankruptcy) at the
expense of the people
• Some critics say they are not against capitalism (they think it’s the most
efficient economic system). But they want to resolve the problems of
neoliberal shocks – help countries develop their national industries
Source
• De Rivero, O. (2013). Global Empowerment and National
Impoverishment. In The myth of development : Non-viable economies
of the 21st century. New York, NY: Zed Books.