Notes from Saturday 13th September

Globalisation

The first presentation for this topic was presented by David Legge.

Detailed notes in Spanish

This term globalisation is used in several different ways:
1. global village: communications, information, transport
2. pattern of global economic activity
3. political system of governance

The elements of governance include:
International institutions: UN, WTO, ONE, WHO, IMF, WB, WTO
Nations: especially, the 'great' powers
Forums: eg the World Economic Forum in Davos
Social movements: this is where we understand the role of PHM. More about the role of social movements

The Debt Trap
In 1973 when OPEC increased the price of oil the countries of the Middle East were enriched and the money was deposited in banks. Banks, in turn, sent salespersons around the world to lend money at very low interest rates, in fact at negative interest rates because the rate of interest was below the rate of inflation. In Africa the money was loaned to governments; in Latin America this money was loaned to companies but under government guarantees so the governments were ultimately responsible.

In 1981 interest rates reached 17% which meant that as these loans became due for repayment, those who could not repay the capital and had to roll them over faced huge interest bills.

To understand why global interest rates increased in the late 1970s and early 1980s we need to go back to some economic theory and to some economic history.

The two decades after the second world war is sometimes called the 'long boom' because of the high rates of economic growth interrupted by relatively minor recessions.

The term 'Fordism' is used to describe the dominant dynamic during this time. Fordism in this instance refers to mass employment with good wages supporting mass consumption and profit and further investment and growth. It is the concept that wages feed sales which defines this idea.

However, from the mid 1970s, the global economy started to slow down. This slow down was initially treated with Keynesian policies on the assumption that it was just the normal business cycle. However, in retrospect it became clear that it was a structural slow down with a growing imbalance between increasingly efficient production and sluggish purchasing power. For a range of reasons aggregate wages were not supporting sales and profits and growth. This pattern has been called post-Fordist.

The initial use of Keynesian policies to combat this 1970s slow down did not restore growth but actually led to very high levels of inflation.

Keynesianism involves 'counter cyclical' economic strategies. Thus when the private sector is booming and investors are expanding their production capacity governments increase taxes, increase interest rates and reduce government spending to try to dampen the economy. But when the business cycle has turned and industry is mothballing production and cutting jobs, then government reduces taxes, reduces interest rates and spends up (borrowing to do so if necessary).

Keynesian policies might have been effective in the 1970s if the slow down had been cyclical in character. However, since (in retrospect) it was a structural slowdown due to the rising significance of the post-Fordist dynamic (also referred to as a crisis of 'over production') Keynesian policies were not effective. Worse, they contributed to rising inflation as governments continued to borrow and spend to maintain their economies. (Inflation means rising prices; goods cost more but money is worth less. If more money is pumped into an economy to match the same volume of goods and services then the value of the money will fall and prices will rise.)

By the early 1980s the doctrine of monetarism had taken over from Keynesianism as the conventional wisdom. Monetarism and neoliberalism say that governments should keep out of the economy, reduce taxes and reduce social spending and not go into debt and that the control of the economy should be solely exercised by central banks' through control of interest rates.

Conventionally interest rates should be raised during booms and cut during slowdowns. However, interest rates are also supposed to be raised to control inflation. The economic conundrum of the early 1980s was whether to lower interest rates to stimulate economic activity or raise interest rates to control inflation (but at the same time exacerbate the slowdown). The conventional wisdom (of Thatcher and Reagan) was to 'fight inflation first'.

The consequence of early 1980s monetarism was a deep global recession associated with very high interest rates. Developing country borrowers were hit with huge debt burdens at a time when economic growth globally was grinding to a halt. No wonder the 1980s has been described as the 'lost decade'.

It is now clear that since the 1980s the dominant economic dynamic has been a crisis of over-production (or post-Fordist crisis). With progress in technology, cheap oil, global sourcing and global markets the number of jobs needed to produce for global markets remains static which means that aggregate employment/wages limit global purchasing power.

This imbalance is perceived by business as sagging profits and the corporate responses include mergers and acquisitions (further reducing the productive base); more and more aggressive globalisation (exacerbating the underlying dynamic); pressure on wages and employment (further exacerbation); pressure on governments to reduce spending (and outsource and privatise) and externalising the cost of production to the environment.

Against these perceptions the dominant principles of global economic management - structural adjustment (driven by the IMF and the World Bank) and 'free' trade (driven through the WTO) - make sense, at least from the point of view of transnational corporations and the rich countries.

Structural adjustment describes a range of policies imposed on highly indebted developing countries to enable them to repay their debts, but often at great cost, including to population health and health services. Structural adjustment policies include: reduced social expenditure, reduced tariffs, export orientation, devaluation, etc. By the early 1990s there was widespread rejection of the brutality of structural adjustment as imposed by the IMF and the World Bank became more involved in framing structural adjustment policies (now reframed as 'poverty reduction' strategies).

Meanwhile the pressures on developing countries to open their markets to rich world manufactures were growing through the WTO (which opened for business in 1995).

Under the slogan of 'free' trade, a fundamentally unfair global trading regime has been crafted. There are many dimensions to this unfairness but the differences in its treatment of agriculture, manufacturing, services and intellectual property are key elements.

These pressures have not gone unopposed. In the biennial ministerial conferences of the WTO the opposition has been growing with strong civil society opposition and the G20 (including Brazil, Argentina, South Africa and India) leading the opposition to the G8. In India there is a great battle to protect the small producer.

Understood in terms of the theory of an impending crisis of over-production the role of structural adjustment and unfair trade in transferring value from the South to the North becomes more apparent. In this light the ideology of neo-liberalism and the projection of military power can both be interpreted as sustaining an unfair and unsustainable global regime.

Meanwhile another dynamic was emerging which helped to defer the impending crisis. This was the growing role of debt in supporting (rich world) consumption, associated with the rapid expansion of the finance industry. A range of channels were emerging through which debt was mobilised to support consumption. The most damaging of these mechanisms has been 'third world debt' which has sustained a continuing flow of funds from the poor to the rich.

However, third world debt is only one of several such channels. Another important channel has been the purchase of US government bonds by China and other developing countries as well as the oil producing countries. From the point of view of the Chinese the purchase of US government bonds (lending US dollars to the US government) has been a strategic way of storing their trading surplus. It has also had the benefit of supporting a strong US dollar so that Chinese goods are relatively cheap and continue to be purchased by the US.

Over the years of the GWBush presidency the US has run 'twin deficits'. The US government has spend more money than it had coming in in taxation and has had to borrow - by issuing US government bonds. The US economy has bought more from the outside world than it has sold but has managed to keep the dollar from falling in value because of the continuing return of US dollars in the form of other countries buying US bonds.

In addition to these two channels, borrowing by the US public, in particular, in the form of home mortgages has also supported continuing consumption.

The global financial crisis of 2008 was inevitable because this debt-fueled consumption was fundamentally unsustainable. The emerging global recession has been precipitated by the sub-prime mortgage crisis but caused by the global crisis of over-production. The present policies of massive spending are not addressing that crisis; rather they represent a new phase of tax funded consumption to make up for the collapse of debt funded consumption. Equally unsustainable.

In the light of the theory of a crisis of over-production the policy strategies to move the global economy to a more sustainable basis are clear. They include regulation of the global finance industry and the reform of global trade (to allow a framework of graded protectionism). On top of these imperatives comes the environmental crisis and the need for major structural changes in the global economy to reduce greenhouse gas production and other forms of environmental despoilation.

The implications of this analysis of globalisation for population health and for health services are easy to see. Likewise this analysis provides new insights into some of the dominant themes of health policy globally, such as the privatisation and safety net policies of the World Bank.

This analysis also highlights the significance of ideology in sustaining this regime. It thus also highlights the significance of delegitimation as a strategy of the people's health movement. The power of this strategy has been seen in a number of key engagements.

Further reading on globalisation

Globalisation Part II

The second presentation on globalisation was presented by Armando de Negri Filho

Neoliberalism is an ideology and an economic doctrine.

We in Latin America and the Caribbean have a long history of enslavement and exploitation. Therefore, we are poor in a political position.

Armando described the origins of the neoliberal hegemony from the second world war to the present, including the development of the IMF, WB and WTO; the rise and fall of the gold standard;

He reviewed the unfolding history of this regime in relation to Chile (1973), Bolivia (1980), Collor elected in Brazil (1989), Fujimoro in Peru (1989), Mexico (1994) and the WSF of 2001.

What happens with health: it was fragmented and privatized. The neo-liberal logic of the market. In Brazil, we have the SUS, but still with the same system at the base.

In the 1980s was a lost decade.

From the point of view of health is a fit with progressive reduction of welfare, health. Increase in privatization. Export of manpower, going to Italy for example. In Peru missing nurses by going to Italy, without any duty. It is a structural impact of the work.

One problem in health or in social movements is the fragmentation of their own movements. We shirk the essence. Disputamos within the movement. We have to articulate.

Utopian Thought
GDP - HDI
NATIONALITY OR LATIN AMERICAN?

Indignation at injustice front-social-cultural environment.
All expressions are property of the movement.

Boanventura speaks of a translation transpolítica:
Tranpolítica:
1. what we are in agreement
2. what we do not agree
3. discuss the essences policies

Spirituality and Meaning and Health Activism

David Legge provided a brief introduction to the Spirit and Meaning Exercise.

The meaning of life is a determinant of health. This was reflected in the Second World Health Assembly of Peoples, developed in Cuenca, in July 2005. Against this background, the working groups developed the following questions:

1. What keeps me engaged in the fight? How do I maintain my commitment and energy despite the disappointments?
2. How can we deal with the materialism, selfishness, individualism and consumerism which destroys the environment, drives conflict and prevents the building of social solidarity?

GROUP 1
- Meet with other people dreamer.
- Sense of joy.
- Listening to oneself and others (evaluation).
- What one brings the growth process.
- The injustices we see.
- Feeling part of the problems of the planet.
- Believing in the cause (belief).
- Exposure to other experiences systematically.
- Together with the local community more.
- Usarnos ourselves as couriers, to share things.
- Communicate and disseminate our experiences.

GROUP 2
- Myth of consumerism (supermarket).
- Knowing the reality of people who work and feel part of the working group.
- One of the problems is the formation of leaders who can absorb.
- Spirituality gives sustenance to life.
- Have a clear goal of the movement.
- Working in solidarity.
- Awareness.
- Keep hope.
- Conviction and political commitment.
- Everything is material. Nothing is sacred.
- We need material things.

GROUP 3
- Training continuing policy.
- Watch and listen to others. Training staff, training of ethical values.
- To give an example.
- Women activists neglect the family. We can not relegate the family, we have to rely on it.
- Be activists do not mean to be leaders.
- Contact continuing with the community.
- Clear objectives.
- Learn new experiences.
- Ties of friendship with the group.
- Conviction.
- Inspiration.
- Remember our history.

GROUP 4
- Exclusion.
- Dehumanization.
- Out of individualism.
- Promoting intersectorial it.
- The union movement is.

GROUP 5
- Selfishness directly affects people's attitude.
- We see ourselves as individuals, not as a community.
- Definition of Integration in the Unified Health System.
- The spiritual meaning is also mercantilizado.
- People have to produce more and that has a strong impact on health.
- Overview of ecosystem health.
- Resignification of life, more cosmic.
- Soledad.
- To defend ourselves from the "capitalists" did not hear anything.
- Every day is different.
- It is difficult to absorb the spirituality (Enrique), because philosophically it is considered a materialist.
- Optimism with the successes and achievements.
- Pressure of time on the activist.
- Experience of Cuenca changed his life.
- Experimenting and respect the difference.

GROUP 6
- Join with people, trying to be consistent, integrated and keep me informed.
- All human beings are complementary.
- Convictions of Christian values community.
- Indignation at injustice.
- Discrimination.
- Conviction that I am part of a whole: ancestry and descent.
- Commitment and identity.
- Dignity of life.
- Outrage face of injustice.
- Commitment.
- Mutual Trust.
- Practice democracy.
- Empathy.
- Harmony with the ecosystem.
- Practicing solidarity.

GROUP 7
- Living and activate in the community.
- Getting in the place of another.
- The example of the leaders.
- The anger against the abuse of power.
- Responsibility with the other.
- Love to the other upon recognition of the other as an individual.
- Do not lose sight of the fact that we are people.
- Sharing.

GROUP 8
- Ownership.
- Respect the diversity. For this reason it is necessary to accept the internal diversities.

Detailed notes of this discussion in Spanish

Thematic Groups

PROJECTS FOR APPLIED IN LATIN AMERICA
Each project will contact

(This page based on notes kept by Eloir Vial (Brazil), Giselle Lamela (Argentina) y Kléver Calle (Ecuador))

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