Culture

We Are Not at the End of History
Thomas Friedman's "The Lexus and the Olive Tree" read in the wake of the bombs in New York and Afghanistan
Review by David Bacon
11/3/01

Friedman has two basic defenses of free-market globalization - that most people benefit from it in the long run, and that the operation of the market brings about a democratization of economic and political life. Much of his book is devoted to anecdotes reinforcing those ideas - as he says at the beginning, he's a reporter and a storyteller, not a statistical analyst. The book is built from extensive conversations gleaned during his peripatetic world travels. And if one accepts (as he does) the worldview of the many bankers, corporate executives and government policy makers he quotes extensively, the benefits of the market are compelling.

The problem is the vacuum. Obvious contradictory information is absent, and the voices of those on the ground whose experience supports alternative views are simply not present. It's an amazing feat for a journalist, especially from the "newspaper of record." That record, at least in terms of the important role Friedman plays at the Times, clearly doesn't include workers, unions, farmers and campesinos, the poor, the unemployed, and those who receive any kind of social benefit other than price supports and government purchase contracts. Not all Times reporters have such a limited class circle on which they draw for interviews, opinions and analysis. But Friedman has become the "voice of record" in the "newspaper of record" defending a certain kind of internationalism - globalization as a worldwide economic and political system, managed for profit by the wealthy and powerful.

That's, of course, not the only kind of globalization going on in the world. Today's internationalists also include workers migrating from country to country for jobs or fleeing warfare and repression. Their experiences testify to the impact of the free-market economics Friedman advocates, both in their countries of origin and in those to which they go for work. These migrants are changing profoundly the culture and social movements of the wealthy countries of the global north. Others with a global vision include unions and environmental activists who have learned to link communities half a world apart. They've found ways to cooperate against economic policies pitting their living standards against each other, and to fight the degradation of their environment in pursuit of profit.

And there are the peace activists, whose global perspective looks aghast at the use of US military power in other countries, and tries to accept responsibility for curbing it. The mainstream media, including the Times, have been trying to get the US public to "recover" from this kind of globalization - the Vietnam syndrome - ever since determined activists helped to end that war a quarter century ago. Many of today's youth, inheriting that movement, still seek to appeal to our national conscience, advocating another form of internationalism - the rule of international law. Globalization, they say, should include a fair system for holding accountable to the same international standard of justice both the authors of the terrorist attacks in New York and Washington, and the sponsors of the Cold War's murderous covert operations in Chile (and yes, Afghanistan.)

So globalization is an inexact term. Its meaning depends on vantage point, and who gets to do the talking.

US workers, had they a presence in Friedman's book, might argue that their quality of life has declined, not improved. The Federal Reserve Bank reports that the median income for California families went from $25,760 a year in 1989 to $24,888 in 1998. When the median drops, it means that the number of poor families, earning less, is growing. Although income at the top has ballooned, the number of people at the bottom has mushroomed too.

Part of the reason for growth at the top is that although the average hourly wage for US manufacturing workers rose from $11.52/hour in 1992 to $14.44/hour in 2000 (25%), inflation rose faster (26.5%). Productivity, on the other hand, jumped 45%. While the productivity of US workers ranks highest in the industrial world, their wages now come in tenth. And Business Week notes that the ratio between the average US worker's paycheck to that of the average CEO, which was 1:42 in 1980, is now 1:531.

The income of working families also requires more hours of work. The average work week is now 43 hours, and rising. Latino workers work an additional 5 hours a week, and African-American workers an additional 9 hours.

Poverty in the US is stratified by race, a concept absent entirely from Friedman's book (race and racism don't even appear in the index). According to a 2000 study by two University of California researchers, employed Latinos were 11 times more likely than whites to live in poverty, and African-Americans 5 times more likely. One reason for both growing poverty and the increasing racial gap is the abandonment by large corporations of permanent jobs. Only a third of white workers now work in traditional jobs - with permanent, fulltime status, working directly for the company rather than a contractor. And only 25% of Latino and African-American workers hold traditional jobs.

Trade clearly has an impact on US jobs and income, but while Friedman notes the greater wealth at the top, he dismisses the cost at the bottom. Since NAFTA went into effect in January of 1995, the Department of Labor has certified over 500,000 US workers for extended unemployment and training benefits because the treaty cost them their jobs. Most sources believe this is a fraction of the true count. For Friedman, it's an invisible statistic: "Virtually every study showed that NAFTA had been a win-win-win arrangement for the United States, Canada and Mexico."

He refers to "the unemployed in welfare states who enjoyed relatively generous benefits and health care no matter what" - this in a country in which unemployment benefits, averaging a quarter or less of the salary they replace, are received by only a fraction of the unemployed, and health insurance is unavailable to a huge percentage of the population. Friedman then quotes Peter Schwartz, chairman of the Global Business Network, who calls laid-off workers misguided defenders of "the notion that modern industrial societies are so wealthy that it is the right of people to receive generous unemployment insurance."

According to Cornell professor Kate Bronfenbrenner, since NAFTA passed the number of times has more than doubled, in which US employers have told unions across the bargaining table that if they didn't agree to give up things like employer-paid healthcare and supplemental unemployment benefits, the companies would move production out of the country.

Friedman writes this off even more quickly, since he views unions in general as enemies of the free-market trading system. Reagan had the right idea, he thinks: "It may turn out that one of the key turning points in American history, going into the millennium, was Ronald Reagan's decision to fire all of the striking air traffic controllers in 1981. No single event did more to alter the balance of power between management and workers, and thereby open the way for American companies to fire workers, absorb the information revolution and be able to hire more workers."

Some argue that although US workers suffered, those in other countries benefited. Friedman uses similar logic. "So while the gap between rich and poor is getting wider…" he admits, "the floor under the poor has been rising steadily in many parts of the world." In fact, "the spread of capitalism has raised living standards higher faster and for more people than at any time in history."

Just a cursory look across the border, however, is enough to see that insecurity for US workers didn't lead to more jobs, and greater security for Mexicans. Over 1,000,000 Mexican jobs were eliminated in 1995 alone (the year NAFTA took effect), by the government's own count. Many worked at state-owned enterprises, privatized and bought by wealthy investors who laid off workers to increase productivity and profits. Another half million jobs have been lost in the current economic downturn, and for the first time, the ubiquitous signs advertising for workers on the plant gates of maquiladoras along the border have disappeared. During the same period Mexico has created an unprecedented number of new billionaires.

Friedman's observation about polarization is correct, but the rise in living standards is only true for those at or near the top. In Tijuana, the maquiladora daily wage averages 50 pesos (a little over $5). A gallon of milk in the supermarket, which sold for 7.5 pesos when NAFTA passed, today costs about 20. It takes half a day's work to earn enough money to buy it.

Well before NAFTA's passage, the disparity between US and Mexican wages was growing. Mexican salaries were a third of those in the US up to the 1970s. They are now less than an eighth, and some have dropped to a 12th or 15th, depending on the industry - even during a period in which US wages have declined in buying power. During the last two decades, the income of Mexican workers has lost 76% of its purchasing power.

Under pressure from foreign lenders, the Mexican government has ended subsidies on the prices of basic necessities, including gasoline, electricity, bus fares, tortillas and milk, which have risen drastically. Conditions imposed by the International Monetary Fund, US bank loans and bailouts enforce privatization and policies designed to encourage foreign investment. One result is that while three-quarters of the workforce in Mexico belonged to unions three decades ago, less than 30% do so today. Together with the moribund state of the country's old official unions, the shrinkage and marginalization of labor has only strengthened the government's ability to impose low-wage policies.

Friedman scorns these as the concerns of "used-to-bees" in the middle and lower-middle classes - unavoidable casualties in the transition to a free-market economy. But if, in fact, the poor are getting poorer and the middle-classes are disappearing, as he concedes, then the only ones left to benefit are those at the top.

The free market is really not so free, and can only be imposed through economic pressure from the IMF and World Bank. Their loan conditions reflect US policies encouraging high unemployment to keep pressure on wages. Loans are not available for social benefits, and instead are made for infrastructure improvements to encourage investment. In 1996, Agriculture Secretary Dan Glickman even coerced the World Food Summit in Rome into adopting a policy calling for "a fair and market-oriented world trade system," despite acknowledging its "short term negative effects" on the world's poorest countries.

The free market is the goal - not feeding the hungry. "The very reason we need to support the United Nations and the IMF, NATO, the World Bank and the various world development banks," says Friedman, "is that they leverage and magnify our power and our aid. When we deposit a dollar in the Asian Development Bank it gets loaned out many times over to promote poverty alleviation and free markets. When we pay our UN dues we fund peace-keeping operations around the world that advance our interests without putting American lives on the line."

Friedman's other line of argument is that globalization is democratic. "Globalization emerges from below, from street level," he asserts, "from people's very souls and from their deepest aspirations. Yes, globalization is the product of the democratizations of finance, technology and information, but what is driving all three of these is the basic human desire for a better life."

The bankers, then, are obeying a mandate from the grassroots. But there's a kernel of truth here. The migration of families from rural Mexico to Los Angeles does indeed reflect daring and courage, and great hopes for a better life. But does this mean that the society in which these families live, either in the US or in Mexico, is becoming more democratic? Obviously not in an economic sense, as Friedman admits. The monopolization of the media and finance industries in the US, the consolidation of monopoly in the high technology industry which Friedman loves so well, and the extraordinary and growing influence of corporate cash over the political process are all hardly democratic trends in US political life. Nor are they the product of some grassroots movement - in fact, they are continually challenged from below by consumers, unions, community groups and even small investors.

But the threat to democracy is even more acute in those countries whose economies are being reordered in the interest of foreign investors. In Tijuana, for instance, the strike of workers at the Han Young maquiladora in 1998 and 99 was suppressed by city and state authorities who feared it would discourage companies from building more maquiladoras. Yet the right to organize an independent union and strike is not only enshrined in Mexico's Constitution and Federal Labor Law, but a Federal judge repeatedly ruled, without effect, that authorities were acting illegally in violating it. This was an extreme case, but in practice, the rule of law is routinely ignored in the maquiladoras when it conflicts with the need to attract investment.

In South Korea, when the government of Kim Dae Jung wanted to rewrite the country's labor laws to eliminate job security, he convened a midnight legislative session, and invited only members of his own party to vote for it. Meanwhile, the challenge by the Korean Confederation of Trade Unions to those economic reforms has been met by a wave of arrests of trade union leaders in greater numbers than those under the old military dictatorship.

In fact, free market reforms are a class-based program, supporting the rule of law only when it benefits investors, as in those cases where adjudicators in NAFTA tribunals have enforced payments by governments to corporations to compensate them for lost profit-making opportunities. When the rule of law and democratic processes threaten those profits by protecting workers' rights, for instance, free market reformers lose their democratic spirit.

The promise of democracy and affluence is one which only a tiny elite can fulfil. Friedman's assumption is that because they benefit, everyone benefits - "what's good for General Motors is good for the country." One can hardly be surprised that people who obviously don't benefit protest over the priorities, however. Friedman makes a laundry list of them all - "the turtles who are left behind by globalization" - from unemployed workers to unions to peasants to state bureaucrats, and sees them all as obstacles or losers to be swept away. But the losers as he lists them are the majority.

Does this world look qualitatively different from that of the Cold War? Only in the ability of people to challenge its class priorities.

After dismissing resistance to free market economic policies in developed countries as the self-interested efforts of losers, Friedman takes on the developing world. Despite widespread protests which have toppled governments in Venezuela and Argentina, brought economies to a halt in South Korea and South Africa, elected powerful opposition movements in Brazil, and provoked unrest in the streets of country after country, he asserts that "what we have been seeing in many countries, instead of popular mass opposition to globalization, is wave after wave of crime."

Later, he claims "Russian miners, Mexican peasants and Indonesian laborers understand at some level that they don't really have any choice but to get up to speed for the Fast World … many of them don't want it any other way." Mentioning these three examples in particular is an extraordinary effort to distort and mischaracterize three of the most important challenges to free market reforms of the last decade. Russian coal miners struck repeatedly and occupied mines, blocked railroad tracks, erected an encampment outside the Kremlin, and threatened the Yeltsin government. The free-market reforms recommended by US economists had led to the non-payment of their wages for months at a time. The Chiapas rebellion of Zapatista peasants, launched deliberately the day NAFTA took effect, has caused a permanent political crisis in Mexico ever since. And the riots by Indonesian workers against IMF reforms in the wake of the Asian meltdown finally toppled the US-supported Suharto dictatorship after 35 years in power.

But, says Friedman (this time taking a slap at Franz Fanon and the anti-colonial movement) "the 'wretched of the earth' want to go to Disney World - not to the barricades." Febe Velasquez, a union leader in Levi's plant in El Salvador, murdered during its civil war, not only could never have come up with the price of a Disney World admission ticket -- she couldn't even afford the pants she sewed on her machine in the factory.

These are the convenient assumptions of a journalist who quotes not a single leader of a union or campesino organization in 479 pages. They all go to support his contention that this is the end of history - there is no legitimate class alternative to capitalism: "I don't believe there is an ideology or program that can remove all of the brutality and destructiveness of capitalism and still produce steadily rising standards of living," he says. Friedman is simply reflecting the approach US mainstream media has taken towards class-based social movements since the consolidation of the media monopolies - ignore them where possible, and treat them as irrelevant when they force their way into the political arena.

But the fact is that people on the bottom end of the capitalist system have been challenging it since its inception, and continue to do so today. That challenge is, and always has been, viewed as a threat by those people whose class interests that system protects.

The Cold War marked a particular period, in which part of that challenge was the withdrawal of entire countries from the global capitalist orbit. That took place in the socialist countries of Eastern Europe, east Asia and Cuba, and in many of the former colonies of the US and Europe, freed by national liberation movements. Capitalist countries, in turn, created a united front to contain and eliminate socialism, and reopen the economies of every country to their profit-making activities.

Throughout the Cold War, in country after country, progressive social movements tried to build nationalist and socialist alternatives to capitalism. Two-thirds of the world's people withdrew from the capitalist world in the post-World War Two decades, and erected barriers against it. Some countries expropriated capitalist property outright. Others limited the powers of private investors, and prohibited foreign exploitation of natural resources. Both relied on the creation of a large, state-controlled section of the economy to provide extensive networks of social benefits, including free education and healthcare, subsidized low prices for food and transportation, guaranteed employment, and rural credit.

These were also generally the goals of organized workers and farmers in most developed capitalist countries. In many of them, these goals were partially realized. From the point of view of workers and those on the bottom, competition on a world scale from alternative systems forced even countries like (then) West Germany, France, Britain and even the US to concede social protections like Social Security and unemployment insurance. In the last two decades, however, as those alternative systems grew weaker and eventually collapsed, the willingness of Maggie Thatcher, Ronald Reagan and their disciples to tolerate those concessions disappeared, and even social democratic governments (and the Clinton administration in the US) began to try to roll them back.

The goal of the corporate and governing elites at the top of US and European societies was reversal - the privatization of public enterprises and the dismantling of the state sector, the elimination of social benefits, and the reintroduction of profit-making opportunities for investors in every aspect of the economy of every country.

And the policy pursued by US administrations, both Republican and Democrat, was the pursuit of that reversal by any means necessary, including military, to eventually roll the barriers back entirely. Afghanistan, an impoverished country halfway around the world from Washington, was one of those battlegrounds after leftwing army officers took power and started to institute social and economic changes in 1978. The very people called terrorists in the US media, including Osama bin Laden, were organized and armed by the CIA, British intelligence and the Pakistani secret service to stop that social transformation.

Writing in the Los Angeles Times, columnist Alexander Cockburn quotes from a 1979 State Department memo: "The United States' larger interest would be served by the demise of the Taraki- (Hafizullah) Amin regime, despite whatever setbacks this might mean for future social and economic reforms in Afghanistan. The overthrow of the (Democratic Republic of Afghanistan) would show the rest of the world, particularly the Third World, that the Soviets' view of the socialist course of history being inevitable is not accurate."

The same murderous calculation led to the death of Patrice Lumumba in the Congo, Allende in Chile, the overthrow of the Sandinistas in Nicaragua, Arbenz in Guatemala, Mossadegh in Iran, and on and on.

In 1989-1991 the barriers in country after country, which kept the free-market economy at bay, began to fall. As Friedman says, the key characteristic of the Cold War period was the division of the world - the existence of those barriers - while the key characteristic of the post-Cold War period is integration - the penetration of capital from developed countries into areas previously off-limits. Friedman even compares the current period to that prior to the 1917 revolution in Russia, when the US and European imperialist powers divided up the entire world into colonies and areas of influence. "It turns out," he says, "that the roughly seventy-five year period from the start of World War 1 to the end of the Cold War was just a long time-out between one era of globalization and another."

Or to put it another way, the Cold War marked a period in which entire countries and societies could choose a course of social and economic development other than capitalism. With the reassertion of free-market reforms in country after country, choosing that alternative has become much more difficult.

However, the economic inequality and social cost of capitalism haven't changed - if anything, they've become even more exaggerated. The class conflict at its root hasn't been eliminated by Friedman's globalization - in fact, it's been extended and deepened in country after country.

The advocates of the reestablishment of the unipolar global market have a coherent ideology - Friedman's claim that we are at the end of history, that no alternative is possible. In contrast, he scorns the anti-globalization movement as a collection of disparate groups with little in common. In the wake of the collapse of the socialist countries, he says, no ideology binds together the opponents of free-market globalization. It's a sign of the times - the old Cold War accusation that capitalism's opponents were dogmatists, blinded by ideology to the virtues of the market, has been stood on its head - not having an ideology, apparently, is just as bad.

After listing globalization's opponents - "protectionist labor unions, environmentalists, anti-sweatshop protestors, save-the-turtles activists, save-the-dolphins activists, anti-genetically altered food activists and even a group called 'Alien Hand Signals'" - he then claims that "when it comes to actually identifying what the real interests of human beings are and how they should be protected, these groups are as different as their costumes ... while all the groups can agree that globalization is hurtful to them, they have no shared agenda, ideology or strategy for making it less so for all."

Again Friedman sees part of the truth.

Those in opposition in Seattle, and the demonstrations which followed, began by coming to the table with the concerns of different sectors - Friedman is right. Each sector carried with it an ideological perspective, a way of looking at the world that sought to define the source of the problems it wanted to address. But the process of coming together caused two important things to happen. First, unions, for instance, recognized the importance of addressing environmental concerns, and environmentalists the issue of labor rights. From sector to sector, the coalition process involved the creation of a list of common issues. Second, the opponents of globalization became exactly that - people who recognized a common threat faced by every sector - the extension of free market global economic relations throughout the world. Behind the attacks on each particular group of people, behind the activities of individual corporations and even governments, lies an international system.

This was the important realization of the anti-globalization movement - the common enemy.

Further, the demonstrations in Seattle included not just the much-noted coalition of workers and environmentalists. Even more important, representatives calling for fundamental changes in the global economic order gathered from around the world. In subsequent demonstrations in Quebec, Washington DC, Prague and Genoa, it became clear that an international opposition movement was growing. Those demonstrations marked a high point after a decade of demoralization in which Friedman seemed right - that challenge was pointless.

Of course, in many developing countries movements of millions of people had been fighting the imposition of neoliberal reforms long before the WTO met in Seattle. Those movements have sometimes succeeded in stopping those reforms, at least partially and for limited periods. The demonstrations in Seattle and afterwards marked the growth of the opposition, not in those developing countries where it already existed, but in the developed heartland of the global north. No wonder Friedman and his fellow advocates felt forced to step up their defense.

In the world following September 11, the continuation of dialogue among globalization's critics has been difficult, at least in the US section of the movement. President George Bush has plunged the country into another war, and as in Korea, Vietnam, and even the Persian Gulf, an effort to discuss the reasons for the conflict are equated, at the very least, with a lack of patriotism. That makes it all the more important to find the Cold War roots of the attacks in New York and Washington, and the historical background to the new war in Afghanistan.

Lack of debate and discussion is not only convenient for the free-marketeers, but necessary and imposed by the concentration of media ownership. They already have a coherent ideology, and of course unlimited access to that media (including the pages of the New York Times) in which they can reiterate their theme over and over. Meanwhile, opposition voices are marginalized, and in the current climate, even equated with terrorism.

This leaves the anti-globalization movement, at least in the US, caught at an important time in its development. Having recognized the common interest of many varied sections of society in opposing globalization, and seeing that those sections, put together, whether in the US or internationally, constitute a majority of the population, the most important question remains.

What is the alternative? Will the different ideological perspectives of the opposition come together to envision an alternative system? Can society be managed on the basis of equality, and can economic development provide a full life for all people, not just more efficient commodity production? What is the vision of the future which can bind together a movement of millions of people, which can produce an alternative culture, and which can last from one generation to the next?

We are not at the end of history. We have to reclaim our history, not discard or forget it. Working people have proposed alternatives to free-market capitalism for over a hundred years - socialism, communism, social democracy, cooperatives, nationalist economic development, and more. We have fought for the ideals of a world with enough for all, for an end to war, for social equality and an end to racism and sex discrimination. This is the history that those who say we've come to the end of time would have us ignore. It is the history of the alternative.

We are told we must allow millions of people to become casualties of the free market, whether as the unemployed, the hungry and powerless, or the victims war and oppression. It is up to those who say there is an alternative not only to proclaim it and advocate for it, but to organize the majority of the world's people to fight for it.

For there's something else that's true about Friedman's assertion that not much has changed in the 85 years since World War One. If there is to be any alternative, it will only exist because those who don't benefit from the current system fight to bring it into being.