L'encerclement - La démocratie dans les rets du néolibéralisme (2008) - full transcript

Using the reflections and analysis of many renowned intellectuals, this documentary draws a portrait of neoliberal ideology and examines the various mechanisms used to impose its dictates throughout the world.

Encirclement

Neo-Liberalism Ensnares Democracy

Producer, director, editor

Photography

Sound

Music

In order of appearance

In the '30s,

the term "totalitarian regime"

was applied to single-party regimes

where the party's mandate

was to rule over the totality

of a society's activities-

political, economic, social, cultural.

The state looked after everything.

Unfortunately, we had examples

particularly in Fascism, Nazism...

and Stalinism: totalitarian societies

run by an omnicompetent party.

Today, we live in a democracy,

of course, but we notice that...

single parties have given way

to a single mindset,

and the proponents

of such unilateral thinking

reckon that there is

but one solution -

the one imposed by the market-

to cover all society's activities.

Whatever the activity -

economic, social, cultural, athletic -

the market is mandated

to regulate it.

We see how the market penetrates

all society's interstices,

like a liquid, that leaves nothing

and spares nothing.

This is why we can now talk

about "globalitarian" regimes:

because there's a will to impose

a kind of unique solution

to the plurality of our problems.

I wrote "La Pensée Unique"...

in 1995,

when most of our citizens...

hadn't yet become totally aware

that we had fallen into an ideology

in which we were now immersed.

Today, we'd call this ideology

"Neo-liberal".

Neo-liberalism

is an economic technique,

a certain set

of economic principles,

but in reality, imperceptibly, it's

also a veritable ideological yoke.

This is what I was trying

to point out, primarily,

by saying what it

ultimately consists in:

Neo-Liberalism consists in

a certain number of principles,

notably that

the market's invisible hand

is there to settle problems. People

and States need not get involved,

let the market work.

Establishing principles

like deregulation.

Everything's over-regulated,

the State's been too involved.

We need less government.

Capital must prevail over labour.

We must always favour capital.

And we must privatize.

The State's perimeter must be small,

the private sector's expansive.

Free trade must be promoted

because commerce is development.

We made this kind of equivalency.

I was trying to show how

these principles weren't recent,

but had been developed since '44,

since the Bretton-Woods conference,

which initiated the IMF

and the World Bank.

It arose from all the work the IMF

had done since the '60s and '70s

geared towards southern countries,

called "structural adjustment",

or, in some countries,

"the Washington Consensus",

namely that State budgets

must necessarily be reduced,

no public deficit, no inflation,

bureaucracies must be reduced,

all public services like health...

and education

must be reduced to a minimum.

The State isn't to make

that kind of expenditure, etc.

Many southern countries

suffered greatly, of course.

These were basically my points,

and when we add up these elements,

we're faced with an ideology.

And at the time, France was on

the eve of a presidential election,

which took place

a few months later in May.

So, I was saying that

ultimately, in reality,

we were being proposed this almost

single-party kind of Pensée unique.

Leftist Privatization

Shortly after the Iron Curtain fell,

we witnessed in the West

a reframing rightwards by the

vast majority of left-wing parties.

From the British Labour Party to

Germany's SPD via the Parti Québécois,

they all got into a State "reform",

"reengineering" or "modernization"

that invariably meant

adopting Neo-liberal politics.

From 1997 to 2002 in France,

Lionel Jospin's socialist government

proceeded to privatize about

10 major national corporations -

the same number as the right-wing

governments before and afterwards.

How has Neo-liberalism found its way

into so-called "socialist" parties?

And where is it coming from?

Origins

Winnipeg General Strike, 1919

Neo-liberalism appeared...

under particular intellectual

and institutional configurations.

Generally speaking,

from 1914 to 1945,

capitalism went through

an unprecedented crisis.

The crisis was a material one.

In the '20s,

capitalism had boomed

after Reconstruction,

but the Depression in the '30s

led to unemployment,

bankruptcy, political disorder.

And intellectually,

the liberal credo yielded

to the claims of economic planning,

interventionism, and

general wariness of laissez-faire.

There was widespread demand

for reinforced State intervention,

state-controlled economies.

This turned into concrete projects,

both in "dictatorships"

and in democracies.

We think of the Soviet 5-year plan

and also the New Deal in the U.S.,

under the National Recovery

Administration (NRA)

and other such structures.

In Nazi Germany, it was

the Reich economics ministry.

In Fascist Italy, it was

the corporations ministry.

Even in France, a national

economy ministry was established -

a totally new thing,

under the rising Front Populaire.

Communist Demonstration

Berlin, 1929

Important to establishing

a Neo-liberal network in France

was building a publishing house.

It was called Les Éditions

de la Librairie de Médicis,

founded in 1937.

It was created by a woman,

Marie-Thérèse Génin,

which was rare

in this fairly masculine field.

She was connected to a leader

in French business associations,

Marcel Bourgeois,

who encouraged her to establish

a vehicle for intellectual texts

for a public of intellectuals.

Éditions de Médicis published

Walter Lippmann's La Cité Libre,

the precursor of

the Walter Lippmann colloquium,

as well as texts by Hayek,

Rueff, Ludwig Von Mises.

About 40 works

between 1937 and 1940.

They published the proceedings

of the Lippmann colloquium

at the Institut International

de Coopération Intellectuel,

now defunct,

but the forerunner of UNESCO.

This happened

in a fairly official context.

There were 26 participants, whose

significance is now acknowledged:

Friedrich Hayek, future

Nobel Prize winner for economics,

Robert Marjolin, a pillar

of European construction,

the founders of Germany's

"social market economy",

Alexander Rüstow and Wilhelm Röpke,

de Gaulle's financial advisor,

Jacques Rueff,

the mastermind of Ronald Reagan's

Star Wars, Stefan Possony.

That's all hindsight. At the time,

they were less famous.

The colloquium lasted 4 days,

during which were discussed

the eventual responsibilities

of liberalism in the Depression,

as well as the means

of renewing liberalism

and building worldwide opposition

to interventionism and socialism.

The Walter Lippmann Colloquium

hosted the avant-garde

of the Neo-liberal battle

in preparation.

Among the most ferocious opponents

of collectivism,

Friedrich Von Hayek and

Ludwig Von Mises stood out.

Hayek and Mises represented

a particular trend in Neo-liberalism,

the Austrian School.

They advocated a radical liberalism

that grants the State minimal power.

The minimal State is an expression

used by their disciples.

These two had slightly different

economic ideas.

Liberals often gloss over

their divergent views.

But they also had

certain points in common.

The first is that economic science

was just a fraction of their work.

Mises considered it a branch of the

more general science of human action.

Hayek soon left pure economics

to pursue psychology.

He studied the brain,

political orders, law, etc.

For them, economics...

was their original field, but it

didn't cover all of the humanities.

Secondly, their conception

of economics was fairly particular.

Austrian School economics

were far from concrete:

no statistics,

no mathematical data, etc.

Everything stemmed from axiomatics.

There were "typical" ideal situations

where one observes

how a rational person acts

in negotiating choices

between work and leisure,

sleeping and getting rich, etc.,

supported by metaphors like

Robinson Crusoe on his desert island.

The third thing they had in common,

significant to Neo-liberal history,

is a concept of intellectual work

and its role in socialism.

The thinking of Hayek and Mises

was very elitist and aristocratic:

basically, that the mass

of humanity doesn't think.

Mises book, Socialism, says,

"The masses do not think."

Only a few intellectuals think,

and do so on society's behalf.

So they thought,

intellectuals must think,

and progressively oppose socialism,

which other intellectuals invented

and spread to the masses.

Socialism wasn't spontaneous.

It was propagated by intellectuals.

Hayek and Mises put the intellectual

at the centre of social change,

and political and economic change.

This led to them founding groups

like the Mont Pelerin Society.

War imposed a hiatus on the

Neo-liberals' militant activities.

The CIRL, a French research centre

for the renewal of liberalism

arising from the Lippmann Colloquium,

disappeared after only a year.

As soon as the war ended,

Hayek took up the torch again.

He invited proponents

of liberal reestablishment

to a meeting that would be decisive

to the future of Neo-liberalism.

The Mont Pelerin meeting

took place...

from April 1 to 10, 1947,

in the Hôtel Du PARC,

near Vevey, Switzerland.

It was explicitly meant

to bring together

liberal European and

American intellectuals,

and to found an international

organization for liberal ideas.

Hayek had started making contacts

2 years earlier

with Colloquium participants

and the British and Americans.

He invited this circle

to Mont Pelerin,

whence the society's name.

There were 39 participants

at the first meeting.

Again, there were some major figures:

3 future Nobel winners,

Milton Friedman, George Stigler,

Maurice Allais.

People known for their political

or philosophical essays,

Karl Popper, Bertrand de Jouvenel.

And those with direct political

influence in their country-

the Germans, Wilhelm Röpke

and Walter Eucken,

associated with Germany's

"social market economy".

Discussions revolved around

relatively general subjects

like Christianity and liberalism,

the competitive order,

the possibilities of founding

a European economic federation.

It lasted several days.

Hayek thought they needed

a flexible structure

with invited members only,

no offices,

statutes deposited in Illinois,

that would meet biannually

in different countries-

a fairly nebulous structure for

confirmed intellectuals who thought

liberalism was a doctrine primarily

for intellectuals themselves.

At the core

of the Neo-liberal network

The Mont Pelerin Society

is not a think tank.

It's a kind of liberal academy.

Nevertheless, a kind of

division of labour came about

between the Society, which recruited

only the most renowned liberals,

and its members' national activities,

which could include setting up

associations or think tanks.

This took diverse forms.

In France, they created

the association for economic freedom

and social progress in the '60s,

the French section of Mont Pelerin,

the members of which were recruited

from business or politics.

This broadened recruitment

into milieux other than

intellectual circles.

The other, think-tank model has been

perennial in Mont Pelerin's history.

The most famous are Britain's 1955

Institute of Economic Affairs,

or the Heritage Foundation from 1973,

linked to the U.S. Republican party.

These think tanks

have appointed employees,

people paid to write notes,

produce legislative proposals

that are all laid out

and distributed to politicians

and to journalists with the aim

of creating liberal public opinion.

There are now hundreds of think tanks

that form a veritable cluster

which is fairly disorienting,

to the point where think tanks

like the Atlas Foundation

now have the role

of promoting think tanks

by distributing kits and instructions

on how to form one's own.

They take very different forms.

Groups focused on an author-

the Hayek Center,

the Mises Institute-

that revolve around

a particular person's work.

Groups can have a subject

of particular concern -

the environment,

foreign politics, etc.

The quality and power of these

think tanks are very different.

A think tank's strength comes from

whether it can connect intellectuals,

some businessmen, and a general

trend within conservative parties.

There are think tanks

like the Center for Policy Studies

of Keith Joseph,

which promoted Thatcher

and let her garner...

support to revolutionize

the Conservative Party in the '70s.

That's an organization

at the junction of 3 milieux.

A purely intellectual think tank

with general thoughts on liberalism

would have little influence

on political debate.

A whole part of the career

of Mises, Hayek, etc.

Can be explained by the affinities

they had with business lobby leaders.

Mises was associated with the U.S.

Foundation for Economic Education,

and thus with business associations.

Hayek got to Chicago

financed by tycoons who wanted him

to write another "Road to Serfdom",

but on America, not just England.

These intellectuals got more power

by teaming up with

or befriending powerful people.

Hayek's work may reveal

a utopian quality,

but it's the Utopia of the strongest,

not the most underprivileged.

Financed by corporations

and vast private fortunes,

Neo-liberal think tanks often enjoy

charitable organization status.

Their generous donors thereby

have the right to tax exemptions.

However, the law says

charitable organizations

cannot engage in political acts.

In 1989, Greenpeace was stripped

of its charitable status

by the Canadian government.

The Canada Revenue Agency

concluded that this NGO

did not always act

in the public's interest.

It contributed, for example,

"to propelling people into poverty

by demanding the closure

of polluting industries."

On the other hand, no Neo-liberal

think tank with charitable status

has ever been interfered with.

During their annual declaration

to the Canadian government,

these "non-partisan" research

institutes solemnly state

that they "do not try

to influence public opinion

or obtain the modification

of a law or policy".

How can the market promote

individual choice and freedom?

Student seminar,

The Fraser Institute on public policy,

organized jointly with

l'lnstitut Économique de Montréal...

Saturday, February 10, 2001,

sponsored by Fraser Institute

supporters throughout Québec"

When one grants coercive power,

the monopoly on coercive power,

to an agency,

one we call the government,

there will always be a tendency...

to use it, either ignorantly,

or to abuse this power.

And power has a tendency to grow.

What the Fraser Institute tries

to research and emphasize is,

what the proper limits

of government are,

and what are the limits

of private enterprise,

or of voluntary exchanges

between individuals?

Therein lies the nexus, the division,

between coercion and free will

that will inform my discussion...

my lecture today. And you'll be

seeing lectures by others who came

to participate today.

SPECIAL LUNCHEON PRESENTATION

from the Foundation for

Economic Education in New York.

In his presentation,

'Cleaned by Capitalism',

this expert on liberty will discuss

how our rising standard of living

has allowed us the 'luxury'

of worrying about such things

as global environmental issues."

This seminar's not government funded.

It's financed by private sponsorship.

It's encouraging to see people put

their money where their beliefs are.

I think there are

far too many services

like unemployment insurance,

health, education,

that fall under a monopoly,

that of the government, which is

the sole producer of these services.

Why not open it up

and have competition?

We could have competition

in the production of services,

and perhaps address

our concern for the poor

by giving them grants

so they can buy these services.

So, divide...

Separate production, which I'd like

to see private and competitive,

from funding, which could be

partly governmental.

I don't like talking about markets.

They don't exist without governments.

Every market needs rules.

Every market needs

a certain level of coercion.

And I don't like talking about

freedom as a value in itself.

Many people don't want freedom.

I'd like the freedom

to choose my masters.

What I try to...

discuss in my lectures is,

how can we...

have a system of government

that permits us the choice

of what kind of representatives

and restrictions we'll choose.

We must all live under restrictions,

even the fiercest libertarians.

Brief liberal anthology

libertarianism

and the theory of public choice

Le Québécois Libre

Editorial

What must libertarians do?"

Libertarianism is the descendent

of classic liberal philosophy.

It puts the accent

on individual freedom

and its repercussions. Economically,

it's the free market. Politically,

it's the minimal State

and the least coercion possible.

The least regulation...

It gives individuals as much

leeway as possible to act

and have willing relationships

with others.

Socially speaking as well, it's...

the polar opposite of philosophies

that impose some social, religious...

or cultural order. The idea is,

if we are free in a context where

person and property are protected,

everyone will be able to have

voluntary relationships,

which will lead to harmony.

Libertarianism isn't anarchy,

with individuals fighting,

"wild capitalism", "wild competition".

It's not that at all.

It's giving people enough space for

peaceful, voluntary relationships.

Neo-liberal, anarchist

or libertarian?

Libertarianism is the descendent

of classic liberalism,

a philosophy that was developed

in the 17th and 18th century

in reaction to the authoritarian

monarchies of the period.

Liberalism said,

to match sovereign power,

individuals must have more freedom.

This developed in subsequent

centuries to give us...

our current philosophy,

which embraces the free market...

But 20th-century libertarians

stand apart from liberals. The

definition of "liberal" has changed.

In the U.S. a liberal

is ultimately the reverse:

a social democrat or a leftist.

Europe keeps the French tradition,

where liberal means liberal.

But there's a lot of confusion.

The Americans, the classic liberals,

started calling themselves

"libertarians" in the '20s and '30s

to stand apart from leftist liberals.

And libertarian philosophy

is more coherent and radical

than classic liberalism,

calling for State reduction,

either to its simplest form,

or certain libertarians even favour

eliminating the State altogether,

privatizing even defence,

security and justice.

Redistributing wealth is immoral

Today, in a society

where the State spends...

State expenditures represent

about 45% to 50% of the GDP.

The State controls such sectors

as education, health.

It controls a lot

and regulates other things.

It subsidizes almost everyone.

Much of the population...

lives only off

the redistribution of money.

They don't produce goods demanded

by others on the free market.

They just receive State money

confiscated from other taxpayers.

This means there are many people...

who live at the expense of others.

From a libertarian standpoint,

society can be divided in two,

those who produce and those who live

as the producers' dependents

and are a kind of parasite.

It's a strong word,

but it's appropriate.

You can't favour individual

responsibility and defend that stance.

All who live dependently on others

are really irresponsible.

They don't do anything required

and they live...

on State coercion, which transfers

wealth from one group to the other.

If we want to promote

freedom and responsibility,

we cannot accept the dependency

of much of the population.

The theory of public choice says

the adoption of government policies

is not motivated

by collective interests

but by the particular interests

of various social groups.

In 1986, James M. Buchanan,

originator of this theory,

who denounces State inefficiency and

advocates limited public spending,

won the "Nobel prize" for economics.

Contrary to the perception

being peddled here,

we in Québec live in a State culture.

People don't realize

because we're so inured

to this viewpoint,

that we naturally accept it,

but it's actually a State culture

that naively perceives...

the State as the instrument

to maximize the common good.

As though the inspiration...

But that view or vision

of the State is perfectly...

angelic. It has nothing

to do with real governments.

Why do we believe our governments,

democratic as they are-

which is an advantage-

will maximize the common good?

They won't.

Governments obey

the game rules that rule them.

What game rules?

The electoral process.

That's the virtue of it.

What does this herald?

Primarily that...

we will often witness...

majority dictatorship.

Since the primary, if not sole,

rule in politics is the majority,

a government that can win elections

will first privilege the majority.

The majority's incomes are weak

relative to the average.

So the sole object

of policies will be...

to redistribute wealth in its favour,

not to maximize wealth

or enhance growth.

Efficiency isn't a major issue

for a government.

Its priority is redistributing wealth

to the majority that elects it.

That explains

universal social programs.

That explains...

the majority's predilections

with regard to...

the public health

and education monopolies.

It's not compassion,

nor a concern...

for sharing wealth

that inspires this position.

The majority wants services paid

by a slightly more affluent minority.

That's the sense of it.

So, it's a gigantic lie to say

that compassion inspires...

public health and education

monopolies. That's not the reality.

The second dimension is that people,

i.e., the majority,

is rather apolitical.

In economics, it's what we call

"rational ignorance".

It would be stupid for each of us

to acquire lots of information

on politics,

to get informed on the impact on us

of more than just a few policies.

Because we can't do anything.

We're one voter out of X million.

So, informed or not,

whether we vote wisely or badly,

the result's the same.

So, everyone must aim to minimize

the effort of understanding politics

and political information,

which they do.

People often can't name their MP.

And they'd be incapable...

of explaining a policy.

To them, this is normal

because, again,

it would cost a lot to get informed,

whereas their potential

influence is nil.

So, people are apathetic, apolitical.

They don't participate in politics

because it's not worth it.

This opens the way for intervention

by strategically placed groups.

Interest groups.

That explains their dominance.

Organizations like the CSN or the

Canadian Manufacturers' Association

are already prepared to do politics,

propaganda and lobbying,

at minimal cost because

they're already organized.

So that means political decisions

will be dominated

by strategically placed people,

organized groups.

All the world's great governments -

today's and yesterday's-

have merely been gangs of thieves,

come together to pillage, conquer

and enslave their fellow men.

And their laws, as they call them,

represent only those agreements

they deemed it necessary to enter

in order to keep their organization

and act together in plundering

and enslaving others,

and securing to each

his agreed share of the spoils.

These laws impose no more real

obligation than do the deals

that brigands, bandits and pirates

find it necessary to enter into

with each other."

- Natural Law, or the Science

of Justice, 1882 (paraphrased)

If we look objectively at the facts,

the State is a coercive institution.

The State can only operate

by forcibly imposing things.

For example,

when the State has

a monopoly like Hydro-Québec,

if I decide to produce

and sell electricity

and I'm outside the monopoly,

ultimately,

they won't just slap my wrists for

breaking the rules. I'll go to jail

if I persist in doing something

the State prohibits by regulation.

The State will physically assault me

if I offer a service

that the statesmen

have decided to monopolize.

All the State does

when it steals half our salary-

sorry, but no one asked

my opinion about it,

so half my salary's stolen...

It could be said that,

democratically, we elected people

who decided that for us,

but democracy is

the "peaceful" organization

of the State's thievery.

I didn't vote to have half my salary

lifted, but many are interested -

because they live

at the expense of the State-

in having the State take half

and giving it to them.

So, democracy isn't true freedom.

I'm not anti-democratic in the sense

of being for an authoritarian State,

When you speak against democracy,

you're always seen as favouring

an authoritarian State.

On the contrary, I'm for a State

that's absolutely non-authoritarian,

to the point where

it doesn't even justify its actions

on the basis of democracy.

Individual freedom does not equal

democratic freedom.

Democratically giving people

the power to take and impose things,

contradicts individual freedom.

A true defence of individual freedom

doesn't favour more democracy,

more ways of divvying up

resources that have been

stolen from others.

We're for reducing the State's role

so individuals are altogether free,

not to decide

which fox they'll vote in

to raid the hen house, but to decide

what to do with their property.

The incentives incorporated

into social policies are harmful,

both to the poor,

and to the general population.

What I mean by that is,

we have a public social economy

in parallel with

the capitalist market economy.

One is productive. The other is

based on the former-USSR model

and comprises incentives that

hurt everyone. We reward people...

for not working.

We compensate them

for not having stable families.

Welfare for single mothers...

is a way of multiplying births

outside the family.

And we reward poverty.

It's as radical as that.

Poverty obeys the standard rules:

subsidies make it more prevalent,

because people start liking it.

This has been clear in Ontario

and the U.S. over the past 5 years,

where they really imposed

limits to people's access

to welfare payments,

and the population of poor people

fell by half in a few years!

Because there was no more money,

conditions changed,

work was imposed on them,

whatever the methods were.

So, there are ways

to foster people's reinsertion

into the productive economy.

Instead of piling them

into social housing, ghettos,

where everyone's poor,

if they were given vouchers or stamps

that gave them access to property,

instead of subsidizing unemployment,

as with unemployment insurance.

People are subsidized

to be unemployed.

Otherwise, no subsidy.

We could create

unemployment savings funds,

so people could accumulate a hedge,

sheltered from tax,

even subsidized,

in case they lose their job.

Everyone would then be careful

not to lose their job because

they'd be eating into their own fund,

the beneficiary of their own savings.

Lots of ideas. But our social

policies are really built

to create an industry of poverty,

an industry of dependence,

that benefits all the bureaucrats

who gravitate around it

and encourage dependence

in the population,

as well as political support,

with no long-term effect

across the country.

Social policies

haven't diminished poverty.

That's the final diagnosis

of the matter.

We observe...

that growth...

Historically and from

country to country,

the growth of economies' revenues

is the only means

to help the poor.

We have rigorous data about this.

The only variable that affects...

that reduces poverty

in various countries

is the growth of wealth.

Social policies count for nothing!

So, whoever is concerned

about helping the poor

or underprivileged

must also privilege growth.

Consequently, all those

who oppose free trade

on behalf of poor countries,

or of the poor within countries,

are wrong.

Their observations are mistaken.

The facts contradict their options.

The best help is to open trade

so everyone's income goes up.

Statistically, the income of the poor

increases as fast as anyone's

when revenues go up. To achieve this,

the economy must be opened up.

Beyond that,

beyond helping the poor

with measures that might help,

I don't see any...

basis for redistributing wealth.

The government

redistributes a lot of wealth

in favour of the middle class,

because it's the decisive majority.

But not on any moral basis.

The only social justice, if I may,

is the respect for property rights.

Libertarians believe

public goods don't exist.

The notion's a fallacy

to justify State intervention.

The logic is, there are always

external factors, like pollution.

We cannot produce without making

smoke, which falls on our neighbour,

or residues that will have to...

go into the river.

But the reason this happens is

there's no property right

over water, for example.

Rivers are public.

Hence,

during the entire 19th century,

companies were allowed

to pollute rivers,

and until very recently

this was done because the State

controlled the river. It was

a public State-controlled resource

and the State let private companies

pollute the river.

But if the river had been privatized

and each of its owners

had had to be consulted

for permission for the company

to put effluents into the river,

we can be quite sure

things would've been different.

Or it might've happened,

if the company had paid

the true price for polluting,

i.e., paid the owners

for polluting their resource.

Resource allocation

would've been very different.

There would've been emphasis

on alternative solutions.

Companies would've invested more

in technological solutions,

or arranged to pollute

in very targeted places

owned by someone who would accept

pollution in exchange for payment.

Production priorities would've been

reorganized differently.

So, "public goods" exist

only because the State

distorts production

by nationalizing certain assets,

or the environment itself.

Historically, liberalism

represented a progression.

But classic liberalism

as championed by Adam Smith,

founder of political economics,

has very little to do

with what's presently circulating as

the "liberalism" in Neo-liberalism.

It has almost nothing to do

with classic liberalism.

So, historically liberalism was

a progression, in that it was...

a way of contesting

absolute monarchies,

and giving individuals rights.

Among these rights,

in the liberalism of Locke and Smith,

were private property rights.

That's a progression.

But it's not absurd

to think that even anarchism...

is a child of liberalism. Early

liberalism was somewhat radical,

and today's "liberal" thinkers would

make Adam Smith roll in his grave,

because he wouldn't recognize much

in what's now passing for liberalism.

Take the case of private property.

If it stems from interactions driven

by transnational corporations,

at the core and in the framework

of classic liberalism,

this is unthinkable.

It's a fallacy to think

that private tyrannies like GM

or Bombardier can have rights,

either property rights or rights

that transcend human beings.

On the other hand, the question

of property rights is a hard one.

It's important to ask.

There's no simple answer.

Nevertheless, I'm sure that,

even in the context of liberalism,

one cannot place current practices,

agents such as transnationals,

and their accepted rights,

within a classically liberal model.

Property rights must be reconsidered.

My opinions about it

are those of classic anarchism:

private ownership of means

of production seems aberrant.

But what Proudhon calls "possession"

has a place.

Ownership rights are healthy.

But the current, ersatz"liberal"

or "Neo-liberal" doctrine is absurd.

Let's suppose that, in our world,

someone can appropriate,

by the means one normally acquires

property rights over anything...

Suppose someone like me

appropriates by accepted legal means

elements that are essential

to everyone's life.

People like you could die

or sell out to me.

Current Neo-liberalism would

recognize such a society as just.

It's clearly aberrant. Such questions

can't be answered as simplistically

as our world would have it. But it's

a tough question. I choose to think

production means can't be private but

ownership of things we use is good.

Free trade

is a very beautiful concept,

and, as it was imagined

in the 18th century,

it certainly had merits,

because it's very logical to say

you must produce better

and more cheaply,

and trade with others

who'll do the same.

Instead of making wine in England,

buy it from Portugal.

The Portuguese

will buy your woollens.

That's Riccardo's original example.

But the great 18th-century

theoreticians never imagined

that capital itself would be free

to go where it wanted,

and an American or British company

could go invest in China,

take advantage

of repression in China,

which rejects unions

and so has extremely low wages,

could "externalize"

all the environmental costs,

make society and the whole planet pay

because it pollutes but it's cheaper.

So, instead of having

a "comparative" advantage-

I make wine cheaper than you,

you make woollens cheaper than me-

it becomes an absolute advantage

because...

my capital is free

to roam wherever it finds

the best conditions for profit.

This is what warps trade practices,

and makes the transnationals

naturally want

the greatest possible freedom

for themselves.

But there's no question

of labour circulating,

except for our "contemporary nomads"-

highly qualified personnel,

covered under service agreements,

since they have the right

to circulate freely

and set up where they want,

whereas the common mortal does not.

December 17, 1992.

U.S. president, George H. W. Bush,

signed the North American

Free Trade Agreement (NAFTA)

with Canada and Mexico.

Fourteen years later,

on October 26, 2006,

his son, George W. Bush

promulgated the Secure Fence Act.

This law authorizes

the construction of a double wall,

4.5 meters high and 1,200 km long,

along the Mexican border.

It is also outfitted with

the latest surveillance technology:

watchtowers, cameras,

ground sensors, drones, etc.

The theory of comparative advantage

posits international specialization.

It says nations must specialize

according to comparative advantages.

It's a purely static theory.

Pawns are shifted around a box

without questioning the box's form,

or whether the box evolves

with the pawn configuration.

The theory's purely immediate.

So, why doesn't it work?

Because international trade

isn't just neutral exchange,

where the nice Natives trade

with the charming conquistadors.

It doesn't work like that

and it never did.

The conquistadors kill everyone.

Then trade comes in

as Phase Two of pacification.

But in international trade,

which is the matrix of business...

That's another preconceived notion.

Trade's not intra-village, then city,

region, nation. Then international.

It never worked that way.

Quite the contrary.

International business

follows the military,

it follows predation. Then comes

an inward pacification process.

The "invisible hand" theory

is quite extraordinary.

First, it wagers that men are bad.

It's quite lucid. It says,

we'll work with that.

People are self-centred, greedy,

mean and self-interested.

They dislike collectives.

They're unsupportive,

anti-social, narcissistic.

Let's say this kind of flaw

turns into...

an advantage

for the collective and society.

Let them go. Public happiness will

arise from their egoistic antagonism.

That's the invisible hand.

The idea is that

every time one intervenes,

tries to order this ego antagonism,

the system gets disrupted and worse.

One great reactionary thesis

is the argument of perverse effect.

Hirschmann said it. It's great.

The reactionary rightists

have always accused leftists

of causing evil by doing good.

You want to do good, help the poor,

you'll create a lot of poverty.

The Economist published an amazing

picture after the Seattle summit.

It showed starving Third-World people,

African children, labelled,

Victims of the Seattle failure.

That is vile!

Worse than the Benetton ads.

The message was, you played

around at hindering the WTO.

To what end? You created

poor, unhappy, starving people.

Whereas this system creates

the poor, starving, unhappy.

The invisible hand says, let it be.

You can't fix it. Man is unkind, bad.

Only wickedness can stop wickedness.

Put two bad guys together,

it balances out. Laissez-faire.

Economists have been studying

the invisible hand since 1776.

So they've been studying

this problem for quite a while.

For it to work, men have

to be separate. Autonomous.

No relationships, no collectives.

Only their own rationality,

separate from others', individual.

Absolute individualism.

The second condition

is perfect information.

Omniscience about future events

for centuries to come...

Second condition.

Now, what's the third...

Perfect information...

and thirdly,

no uncertainty, like a storm,

chance, Ariane breaking down

on the 25th flight and not the 3rd.

The world must be hazard-free,

which is corollary to saying

perfect foresight is necessary.

Under these conditions,

the invisible hand might work,

but it's not even sure,

for it's important to know

that liberal economists -

the greatest, most mathematical,

most prestigious, Nobel winners-

have shown for about 25 years,

that the invisible hand theorem

doesn't work. It's bullshit.

They've shown it.

Many suspected as much.

Keynes suspected it for a long time

because he thought

the idea of equilibrium

was inapplicable to economy,

It was more disequilibrium -

economy was fundamentally chaotic.

But the pure, hard, mean, liberal,

most prestigious economists,

draped in the prestige

of the most hard-nose science,

starting with Nobel winner,

Gérard Debreu, 25 years ago,

have said it doesn't work. Markets

don't mean equilibrium or efficiency.

Markets don't mean equilibrium, so

supply-and-demand means nothing.

And they're not efficient, so

laissez-faire is the worst solution.

Thank you, liberal gentlemen. Kind of

you to say so. We thought as much.

So anyone who says "invisible hand",

"supply and demand", "equilibrium"...

is either a crook (not uncommon),

or hides his eyes (also happens),

someone who's willfully blind,

or Sartre's "bastard" -

who knows but stays silent,

or an incompetent. They exist too.

Adam Smith, David Riccardo,

Karl Marx, John Stuart Mill,

Malthus, more or less -

all the classic figures

in the creation of economics

incorporated social thought.

They were social philosophers

more than "pure" economists.

But the Neo-classics -Auguste

and Léon Walras, father and son,

mid-to late-19th century,

inaugurated a kind of economics

that calls itself scientific.

In doing so, it dispenses with

all moral or philosophical thought.

So it evacuates all the concerns

the classics had until Karl Marx,

which were the following:

Who makes money and why?

Has he the right to make so much?

Is this fair? Unfair?

Is it good for the community or bad?

Economics had an ethical dimension.

And this was evacuated

with Neo-classical thought.

This Neo-classicism opened the way

for Neo-liberal thought.

Neo-liberalism then added

to Neo-classicism's kind of...

scientific decree (We are a science,

so we imitate physics.):

We notice money goes

from here to there.

We count, observe, classify.

But we refrain from casting judgment,

because physics, the mother

of all sciences, does not judge."

Economics' strength is that it

comes as obvious, neutral truth -

a neutral discourse

that speaks neither good nor evil,

that is scientific,

with all the neutrality of science,

that comes across as normal.

Putting pressure on wages

to cut inflation is obviously normal.

Obviously we can't have inflation.

No matter if this generated

phenomenal inequality,

led certain peoples into destitution,

created disparities

between north and south,

created a caste of rich people

taking up the foreground,

eradicating State power,

breaking social security.

Despite all this,

there is but one obvious truth:

You can't be pro-inflation!?

But if we look at truth and history,

we see that those rare times

when capital was muzzled,

as in the glorious '30s,

were inflationary periods

when wages could increase,

because people who borrowed

for houses, etc., due to inflation,

managed to pay off debt quickly.

Now, it's an economy of the rich.

One could ask,

"You want the rich to run the world?"

instead of,

"Surely, you're against inflation?"

To impose their ideology,

Neo-liberals have, over the years,

developed a relentless strategy,

thought encirclement.

This strategy rests in large part

on the actions of a global network

of propaganda, intoxication

and indoctrination

that can make its polymorphous voice

heard in all forums.

Largely conceived in think tanks,

Neo-liberal propaganda subsequently

branched out in many ways.

Education became

one of the most important branches.

Propaganda and indoctrination

education

The idea of national education

arose in the 18th century.

In the wake of the French Revolution

and European nation-states,

there arose the idea...

that a public democratic space

implied people who were informed,

and who were skilled

at thinking, discussing,

participating in political discourse.

There were 2 institutions for this

to ensure that people could become

"citizens", as they said at the time:

Education, one important function

of which was to train citizens,

prepare citizens.

And then, the media.

We'll discuss that later.

As for education,

one of its mandates -not that it was

implemented or realized very well-

but a mandate of education

was to train citizens,

empower people to take part

in political debate

and reflect on political questions

beyond their own interests.

That was the main thing.

Not to think about politics,

or economic and social debates,

from a self-serving standpoint,

but from the standpoint of the

public good and collective interests.

Education cultivated this.

But in the so-called "Neo-liberal"

changes of the past 30 years,

the dominant institutions realized

education was an important issue,

and important to appropriate.

Is what I'm saying right?

Are they penetrating education?

Anyone who looks knows it is.

From primary school to university,

it varies according to country.

It's different in the U.S.,

Canada, Québec, France.

It depends on the history

of how each system developed.

But we see massive penetration

on the part of private industry

into the education system. Why?

The answers are quite simple.

Education's a very profitable market.

It's interesting to appropriate this

piece of social and economic activity

because it's profitable. And it lets

children's minds be appropriated.

It's as blunt as that.

Educating is seizing minds.

Being able to take hold of children's

minds is extremely crucial, serious.

It requires a strong justification

and I'm not sure we can give it one.

When companies infiltrate education,

they're aiming for children's minds,

and to transform the subjects taught.

That's when training deviates from

citizenship and sense of common good

towards the interests of the

businesses appropriating education.

Seeing the world through culture,

knowledge, outside of oneself,

is different than from the viewpoint

of what a company gives us.

The latter element's always there.

Appropriation of a market,

of children's minds,

and preparation for labour.

From this perspective,

education will increasingly

lose its other functions -

preparation for civic life,

openness to the world,

the pure pleasure of understanding

and knowledge for its own sake-

to orient towards

market enslavement,

the preparation of subjects

taught for economic functions.

Education will become

a prelude to mercantile life,

and to employment.

That's also very troubling.

We've seen transformations like this

for about 20 years.

With some resistance.

As this phenomenon arises,

so does resistance to it, luckily.

Channel One is an American company,

now listed on the stock market.

It launched a project

where they go into

underfunded schools and say,

Since you have no supplies,

we'll furnish you with TV's, VCR's

in exchange for which,

you'll screen for 20 minutes a day

our educational videos." -

current issues shows for children.

Their interest in this

is the captive clientele.

Throughout the X minutes of

proposed programming, there are ads.

They add a few minutes of publicity

that allows advertisers to address,

in an extremely privileged context,

this captive clientele.

This is strong in the U.S.

Here, it has been tried.

The company in Canada

was called Athena.

It made sustained efforts

for a few years.

By and large,

the school boards refused.

Our public-service funding is not

in the same state as the U.S.'s,

but it's another assault

being conducted against education.

It takes many forms,

according to country and region.

Mobil has shows on energy. Learn

environmental protection from them.

And nutrition from NutraSweet,

which has a kid's show on nutrition.

You'll learn the virtues

of NAFTA with GM,

and about protecting

forests and the environment

from the companies

responsible for deforestation.

This model has repercussions

from primary school to university,

which means, ultimately,

we could have-I'm half joking -

university ecology departments

where pollution will be justified.

That's the troubling thing.

The loss of meaning in certain

intellectual and human activities...

that this implies.

The more efficient we think

we are economically...

Financially is more precise,

since finance is multiplying money.

The more efficiently we make money,

the less sense it makes.

Does it makes sense to say

that GM, for example, is efficient

because it made $23-or 24-billion

net profit in the last decade,

when it created 300,000 unemployed!

Does that make sense?

We say GM is efficient,

but what is this efficiency?

We say the American economy

is more efficient.

It is, in financial indicators,

yield over capital investment, etc.

But the U.S. has never had so many

people living under the poverty line,

the American poverty line,

or so many people

without access to health care-

40% of the American population has

practically no access to health care.

The U.S. has never had

such a low level of education.

50% of Americans

can't locate England on a map.

Today, this is aberrant,

when there are at least

50 TV channels per household.

There's a picture of what

I'm calling lack of meaning.

Materially, economically,

financially, we're more efficient.

But ecologically, socially,

politically, humanly,

we are steadily losing

our values and quality of life.

Senselessness.

To discuss this, we must eschew

the dominant economic discourse.

To start to make sense of this,

the problem must be reformulated...

from scratch. To do this,

we must go back to Aristotle.

He said, "Do not confuse

the economic-

oikos nomia, the norms

of running home and community,

with chrematistic, krema atos,

the accumulation of money."

That brings us to education.

In education today,

to what degree is Aristotle taught?

Who knows Aristotle? Who reads him?

I could say the same

of Victor Hugo, Jean-Paul Sartre,

Archimedes, etc.

So, today,

we say we're in

a knowledge-based economy,

but we've never educated

or taught so little.

Yet we've never put so much emphasis

on so-called training

and educational institutions.

Now for the paradox and nonsensical.

They're in the fact that

just about everywhere,

particularly in North America,

schools are being turned into

the system's servant factories.

In other words, thinking bipeds

must be concerned only about fueling

this free, self-regulating market

and the mechanics

of production and finance.

We call this "employability",

training the employable,

reforming education,

from grade school to university-

training people to find their place

in the labour market.

That's horrible.

Would a Victor Hugo

be employable today?

Would a Socrates be employable?

Would a Paul Verlaine

or a Rimbaud be employable?

No! So, there would be none.

But what would humanity be

without Socrates, Aristotle,

Rimbaud, Verlaine, Hugo?

What would we be without them?

We'd be animals.

Now, on the pretence that they're

unemployable and unwanted,

we no longer train poets, literary

people, pure mathematicians,

or theoretical physicists.

We only train what industry,

financial enterprise, wants

to fuel the money-making machine.

Who is employable?

The people I see in universities

where I teach, around the world.

In other words, at the highest level

- Master's, Ph.D.-

they're what I call "technocrats",

analytical technocrats,

trained to analyze problems.

We tell them they're smart

because they do problem-solving.

Problem-solving is not intelligence.

Problem-formulation is.

The person who formulates

the problem is the smart one.

He articulates it, puts it in terms

of links and combinations

that call for a question.

He's the smart one. The one who

relies on a pre-formulated problem

in order to find the right solution

isn't intelligent.

Despite what they say.

Analytical technocrats

master techniques

of analysis and calculation,

and confuse thinking

with analyzing and calculating.

They make decisions with no qualms,

like laying off 60,000 in a day,

doubling their salary by a million,

and saying "I'm suffering."

I make hard decisions.

These are non-humans!

Someone who openly makes

decisions without soul-searching

is saying, "I'm not a human being."

By what right do we let him make

decisions that affect human beings?

He says, "No soul-searching,

no soul. I'm not human."

These are highly trained technocrats.

At the intermediate level...

are the producer technicians.

These technicians serve machines,

from the computer

to the digital machine

that cranks out parts

in plastic, steel, aluminum.

These people are there

so the automated mechanics

of production never break down.

The only knowledge required of them

is the logic of the machinery

they're overseeing. That's all.

What's more, they're merely required

to understand the machine's demands.

They don't even dominate the machine,

or possess a kind of...

human superiority, additional soul,

knowledge or sense of the machine.

Instead, the machine says,

if you're smart enough,

find the bad chip, change the card.

And if he can't, he's no good.

And on the lower levels,

what do we train? We don't.

45% of the labour of multi-nationals,

American in particular,

are completely illiterate.

The multi-nationals

don't want to change that.

They don't want these illiterates

to be the least bit trained,

because otherwise

they'll start asking questions.

If they read papers and reports,

they'll start asking questions,

unionizing, thinking.

So, no way.

Today, particularly in North America

and even more in the States,

there are primary

and high school graduates...

in fairly staggering proportions-

up to 25% here in Québec,

and if we looked at U.S. figures,

they'd be the same, if not more-

who graduated, yet are illiterate,

who basically can't read or write.

They graduated by seniority.

By attendance and age.

This suits the system fine.

Because when your low-level workers

are lobotomized bipeds,

who haven't even been taught to think

because this would require reading...

If I want to learn to think,

I must read Victor Hugo, poems...

I must read philosophers.

Writers teach me to think.

I can't think without putting words

and their permutations into my head.

If I don't have this, I cannot think.

But I can become an excellent

reproducer of the system,

who doesn't think

and who defends the system.

There are now workers who say -

and this has happened to me

in serious situations where

there are closures, layoffs, etc.

And I ask the workers,

"What do you think?"

They often tell me,

"It's the law of the market.

Competition. We must be more

competitive than the Japanese..."

They defend the very system

that's crushing them.

We began by examining the networks

by which ideas circulate.

Education's the same. We find...

ideological justifications, theorists,

people who conceived education,

advocating its transformation

in a way I'll describe.

There are also

powerful transnational institutions

that entertain the same discourse

and compel agents, governments

and teachers to adopt practices

that conform to these ideals.

Finally, lobby groups, think tanks,

try to accomplish the same thing.

Education is striking.

It has all three.

The most influential education

theorist of the last 50 years

was an economist, not a pedagogue.

The top educational theorist

was probably Gary Becker.

He teaches at

the University of Chicago.

He developed

the theory of human capital.

The idea is...

humans and knowledge

are capital that requires investment

and evaluation from

the standpoint of profitability.

This theory of human capital

allows mathematical economic tools

to be applied to education,

henceforth viewed as a certain order

of capital that can be quantified.

This has been the most influential

theory of the last 50 years,

especially where it counts, in places

where decision-makers are influenced.

Places where States,

education ministers

and education policy-makers

are influenced.

The second theorist who established

the mechanisms that are in play now

is Milton Friedman, the father

of monetary economics,

who proposed a system

of education vouchers,

the idea again being

to inject market mechanisms

into education,

and to make schools compete.

These 2 education theories, never

discussed in education faculties,

are the most influential

recent educational thinking.

These theories circulate to the IMF,

the OECD, the World Bank.

National education systems are

analyzed from their point of view.

Recommendations

are made accordingly.

Think tanks and major media groups

often enjoy privileged connections.

Propaganda naturally circulates

from one group to the other.

Also, it is largely due

to this media transmission

that Neo-liberal ideology

attains the status of accepted fact.

Propaganda and indoctrination

the media

It has traditionally been said

that Hitler invented propaganda.

Journals, etc., describe how Hitler

understood its role in World War II.

It's true, he understood

it's societal importance.

But he didn't invent it.

He learned from us,

the Western democracies,

in particular the English,

and the Americans.

Overall, since the advent

of modern societies,

two trends prevail.

The first calls for participative

democracy with aware people,

who can talk, act

and influence decisions.

The other vision of the world says

some people must be pushed aside.

They must not get involved

in the issues that concern them.

This vision of society,

the world and the economy

also exists in our culture.

It strongly manifested itself

during World War I in the U.S.,

when the government was elected

on a promise

of abstaining from war.

Shortly thereafter, for reasons

pertaining to internal affairs

and the role of the industrialists,

the government decided

to enter into the conflict.

The serious problem it then faced was

confronting an opposed population.

They formed a commission named after

the journalist who presided over it,

Mr Creel.

It was the Creel Commission.

This commission largely invented

modern propaganda techniques,

techniques for shaping

and preparing public opinion.

The Creel Commission magnificently

fulfilled its mandate,

reversing public opinion

in a few months.

The commission engaged very famous

people, renowned intellectuals

and Edward Burnays, founder of

the modern public-relations industry.

These people later

left the commission

and established communication tools

within our societies

that are still present and are among

the propaganda mechanisms.

One very important political aim

is to exclude part of the population,

to shape public opinion

and build consensus within society.

The institutions they invented -

public relations firms -

plus the modern concept of the role

of companies and of P.R. within them,

social communication, media,

the role of the intellectual,

the role of publicity and information

in our society...

This was all set up, and was

the lesson Hitler rightly remembered.

Whence the mechanisms that

led to today's one-track thinking?

They're the descendents of what

I'm describing -the Creel Commission

and, further back in time,

of the conception of politics

that says society must exclude

part of its population to function.

We find this too.

But if the agents I'm describing

are very powerful, strong, numerous,

a counter-discourse arises, as do

sites where other analyses blossom,

alternative media, intellectuals,

social and community groups,

where new thought percolates.

There's a dual phenomenon.

Unfortunately,

Pensée unique predominates.

Propaganda is working.

Through such mechanisms

and institutions,

a world vision, a vocabulary, a way

of thinking and conceiving the world

ensure that certain questions

may be asked,

certain answers given,

certain analyses made,

while others are excluded.

Currently, dominant ideology,

which I call ambient ideology,

has its official face,

the Pensée unique we spoke of,

and its unofficial face, which is...

this ensemble of behaviours

prescribed by the media overall.

This ideology never appears

as an ideology.

It's presented as entirely natural,

something we should obviously do.

Owning a TV must be obvious.

"How can one not own a TV

in the late 20th century?"

Accepting the advertising system

is obvious.

Surely, you won't,

in early 2K, call the advertising

system into question!"

All that is ideological,

all that is choice,

which the system has organized

without consulting us,

is presented to us as self-evident,

given and above discussion.

Interesting. Indeed,

concerning Pensée unique,

which is a uniform,

partial and sectarian way

of interpreting and

conducting economy,

Alain Minc said, "Thought

is not unique, reality is."

From that point on,

forget calling into question

what the liberal or ultra-liberal

economy was doing.

It was given as reality.

Reality had to be followed.

For example,

"Internationalization is a reality."

Of course it is,

but not necessarily a good one.

The ideology says it's a reality,

it's valid, we must go with it.

Globalization, same thing.

Privatization, same thing.

It's being done, so it must be done.

It had to be done, etc.

They present as faits accomplis,

things people must be made to accept,

instead of asking whether they agree.

Naturally, this pertains to

what I was saying in my book

on the sophism of the ineluctable:

most politicians cover up

their actions, their choices,

because these choices and decisions

are being billed as inevitable.

We couldn't do otherwise.

It was decreed.

The Americans are doing this.

Everyone knows what happens in France

happened 10 years earlier in the U.S.

It had to be done in France.

Renault closed a factory in Belgium

in order to restructure...

and create factories elsewhere to do

the same work, with cheaper labour.

That was the result

of an economic calculation.

About this closure, the head of the

French state declared the following:

Alas, factory closures are life.

Trees are born, live and die, as do

plants, animals, men and companies."

That is a good example

of naturalizing

what's happening,

which is depoliticization.

People are obliged

to accept as natural,

as independent

of the will of politicians,

certain decisions

that are in fact contingent.

That's how they manipulate citizens

and dissuade them from believing

in their own vote, ultimately.

Today, the functioning

of the media

fosters the creation of truth.

The truth can only appear

as the confrontation,

the verification of a given version

confirmed by a number of witnesses.

We know truth is hard to establish.

We see it with investigating judges,

with analytical scientists

trying to discover truth.

But today,

the way the media functions,

it's enough that,

in coverage of an event,

all the media-press, radio, TV-

say the same thing

for this to be established as truth,

even if it's false.

We saw it during the Gulf War,

and recent mega-events.

Consequently, in establishing

this kind of false equation,

repetition equals proof.

I was recently rereading...

Brave New World by Aldous Huxley,

and I found a phrase

about hypnopaedia,

the aural hypnosis they subject

infants to when they're born

to persuade them to be happy

to be what they are,

and one of the directors of the

Conditioning Centre, as it's called,

says, "64,000 repetitions

make one truth."

We're now in Huxley's world.

Sustained by incessant

propaganda and proselytizing

that pass repeatedly through

the multiple relays

of a sprawling network

of mind control,

Neo-liberal reforms

gradually impose themselves

in the anaesthetized consciences

of Western democracies.

In these countries, in the name

of a necessary "realism",

all parties, both right and left,

adopt measures

that sap the social State more

every day, to market's benefit.

But elsewhere, where propaganda

doesn't enjoy the same success,

especially in developing countries,

other solutions are imperative.

Drastic solutions.

For behind the ideological

smokescreen,

behind the beautiful concepts

of spontaneous order

and harmonized interests

in a free market,

beyond the panacea

of the invisible hand,

what's really hidden?

What were the true motivations

of the bankers and industrialists

who financed the establishment

of the Neo-liberal network?

Neo-liberalism or Neo-colonialism?

Strong-arm tactics

of the financial markets

Before,

nearly all of banks' operations

until the '70s were monitored.

All these operations passed

via the French central bank

which kept track.

Now the problem is,

banks transact over the counter.

They've taken out just over

half of their business figures-

OTC transactions

outside market control.

It's as though there were

the normal market,

and a black market.

A grocery with posted prices

and a proper cash register.

Then, a mysterious black market.

In its reports,

the Bank of France says,

when it checks bank reports,

about half of bank transactions

are unreported,

beyond the control

of a superior authority,

like a public treasury

or a central bank.

These unreported activities mean that

governments count for nothing.

There must be...

$500 billion minimum

circulating every day

in off-shore funds, etc.

If a government hassles a bank,

it doesn't care. It just stocks up

with one of its foreign counterparts,

another multi-national bank,

an off-shore fund or elsewhere.

No problem. Money's mobile now.

Beyond the control

of any public authority.

OTC transactions

are a very serious problem.

To control the economy,

you must control money.

Over-the-counter operations

are generally effectuated

with relatively new financial

instruments, derivative products:

It's basically insurance contracts.

In other words,

you get insured

against future fluctuations

in interest rates and currency.

You sign a contract

with someone to pay in 6 months.

The contract is in dollars.

If the dollar rises,

you're in trouble. In 6 months,

you'll have to buy dollars at a 10%

premium. So you take out insurance

on the value of the dollar.

A guy takes on the risk. You pay him

3% or 4% extra at the onset.

Whatever the dollar's rise or fall-

the guy wins if it falls -

you don't move. You have insurance.

That's derivative products.

The interesting thing is

it creates a risk economy.

Currency's no longer controlled,

capital flux isn't monitored, etc.

So, it's an economy

where risk is maintained

in order to create

on top of this system,

an insurance system

where risk is covered.

But the difference between this

and risks like car accidents

is that accidents are predictable.

It's the law of probability.

Whereas the risks

in the financial markets...

are rare epiphenomena that

can't be statistically quantified.

Absolute risks,

absolutely unforeseeable.

So these insurance contracts

that crown the normal economy

create a 2nd layer

that's even riskier.

So, sometimes people take out

insurance on their insurance.

It's Escheresque.

You create a risk pyramid.

And people speculate on that.

You create a purely speculative

economy by sustaining risk.

A trait of contemporary capitalism

is this economy where financial risk

is systematically maintained,

and systematically marketed.

In the 1980s, under the sway

of Thatcher and Reagan,

a number of countries adopted reforms

to deregulate financial markets.

By allowing capital to flow freely,

governments considerably increased

the power

of major institutional speculators:

hedge funds, commercial banks,

pension funds, insurance companies...

Now in a position of strength,

these entities would act as a new

purveyor of Neo-liberal ideology,

going so far as to compel

the most recalcitrant States

to accelerate the liberalization

of their economy.

Among the methods used to do this,

speculative attacks proved to be

particularly effective...

and devastating.

Certainly, the emperor's new clothes

are woven of complex mechanisms

that readily deflect

the most curious minds.

But if colonialism has changed

its look, its goal remains the same:

the concentration of capital.

Speculation...

has several instruments.

Without going into technical details,

I'd like to show what happened

in the Asian Financial Crisis of '97,

which led to a currency collapse

in several countries,

countries that had been categorized

as "Asian tigers",

with a successful economy, etc.

There were various factors

in this crisis,

but I think one of

the fundamental elements

was the prior deregulation

of the exchange market.

In certain cases,

this deregulation was imposed,

if not indeed recommended by

the International Monetary Fund.

Now, speculators

got their hands on the reserves

of the central banks

through the following mechanism:

they speculated against

national currencies

by selling short.

Short selling is speculating on

a transferable security's decrease

rather than on its increase,

as is traditionally the case.

If a security is the object

of massive short selling,

it leads to a collapse in demand

and thus of the security's price.

This constitutes speculative attack

for, in wagering massively

on a decrease in value,

the speculators themselves

bring about the decrease.

Say I want to short sell

the Korean won.

I start selling huge quantities

of Korean won,

deliverable at some future date.

The contracts are 3 or 6 months.

When the contract comes to term,

I must deliver huge quantities

of Korean won or Thai baht.

But I don't have them.

I can sell as much as I want,

I can sell billions of dollars' worth

of Korean won.

Who buys up the Korean won?

The central bank of Korea,

which is obliged through accords

with the International Monetary Fund

to stabilize its currency.

Technically, what happened was,

when the Korean currency fell,

a few months later,

the short-selling contracts

came to term

and that's when...

there was an appropriation

of the central bank reserves,

because the won was worthless

and speculators had only to buy

Korean won on the spot market,

and then fulfill the terms

of their contracts.

So the central bank's buying back

its own money-not too profitable.

And in exchange,

its reserves are confiscated

and go into the pockets

of the major Western banks.

That's the mechanism.

Now the reserves have been sacked,

and this means Korea must now

go to the IMF and say,

Our reserves have been sacked.

We can't function without them.

We must reimburse..." (The money

hasn't even gone to creditors yet.)

We must reimburse our creditors

(the speculators).

What's going on?

When the IMF grants a loan

in the order of $56 billion,

there's participation

by a number of countries.

There were 24 countries,

because astronomical sums are needed.

The American and Canadian treasuries,

the main Western governments.

For the American

or Canadian treasury

or another Western country

to help give

a $56-billion loan,

they have to raise

their own debt level,

which means they must start selling

and negotiating their debt

on the stock markets.

So, it's the debt market.

And who controls the debt market

for sovereign Western debt?

The same speculating banks.

There's a vicious circle here.

Attack Korea, come to its rescue,

confiscate its reserves,

lend it money...

from the public funds

of various Western governments,

and increasing the debt

of these Western countries

requires backing from

these private-sector banks,

the underwriters of national debts.

In the end, everyone goes into debt

except the speculators,

who are creditors of both Korea

and the Western governments

who came to Korea's rescue

through the intermediary

of the IMF program.

So, what happens?

The Korean economy

is doomed to bankruptcy.

Its bank shares and high-tech

industry are sold at a discount.

What's in the process of happening

is the transfer of

all this country's industrial wealth

to American foreign investors,

to the point where...

its shares are practically taken over

for an absolute pittance.

I'll give you an example

of one of the primary Korean banks

that was restructured

on the recommendation of the IMF,

following this operation,

because it had conditions.

This bank, Korea First Bank,

was sold for $450 million.

It was sold to Californian and

Texan investors for $450 million.

But a condition of sale was

that the Korean government

finance the bad debts of this bank

with grants,

subsidies that were

35 times the purchase price.

Something in the order

of over $15 billion.

These American investors

arrive in Korea,

and overnight they gain control over

the whole local financial apparatus,

the commercial banks,

and they hold the debt

of major Korean companies

like Hyundai, Daewoo, etc.

And they're in a position to dictate

the break-up of these companies!

Part of Daewoo

has now been sold to GM.

Other Korean companies will be sold.

So, through a mechanism

that was initially based on

manipulating financial markets,

they take possession

of an entire economy.

Korean companies see

credit dried up by bank crisis.

A million people

affected by unemployment

The IMF's 'beggars'"

The most serious social crisis

South Korea has faced

since the war began.

Early March, the number

of unemployed surpasses a million"

The economic liberalization campaign

led by the financial markets

wouldn't have enjoyed

the same success

without the precious collaboration

of the Bretton Woods institutions,

which constitute another major

vehicle of Neo-liberal ideology:

the International Monetary Fund

(IMF),

the World Bank

and the World Trade Organization

(WTO, formerly GATT).

The IMF and World Bank

were established in 1944

to ensure the stability of exchange

rates and support the reconstruction

of countries devastated

by World War II.

Over time, however, the U.S. and

Europe have considerably altered

the mandate of the twin institutions,

based in Washington.

Indeed, shortly after the U.S.'s

unilateral decision in 1971

to put an end to

the International Monetary System,

the IMF and World Bank were invested

with an entirely new mandate:

to impose economic liberalization

upon developing countries,

by fixing as a "conditionality"

to granting any loan

the adoption of a series

of Neo-liberal measures.

Some have described this set of

economic reforms as "shock therapy",

while others ironically call it

"the Washington Consensus".

Neo-liberalism or Neo-colonialism?

Strong-arm tactics

of the Bretton Woods institutions

or

The Washington Consensus

Washington, where the World Bank

and IMF are headquartered,

started dictating

to the rest of the world,

especially the poorest,

almost-bankrupt countries,

how to apply sound economic science.

It was called

"structural adjustment measures".

Or "the structural adjustment plan",

dictated by the IMF,

and bolstered with World Bank loans

to the countries concerned.

Equatorial Guinea, 2006

Many dozens of countries

were thrown into chaos

precisely because of the measures

of the IMF and the World Bank,

of which there are many.

It would take too long to outline

fundamental adjustment measures

vs. short-term cyclical adjustments

but overall,

let's say the 3 or 4 most important

measures can be summed up.

First measure:

reduce State expenditures

The first measure imposed

on countries approaching default,

i.e., poverty-stricken,

was governmental non-deficit

or deficit reduction:

the reduction of State expenditures.

Shrink the government,

shrink its expenditures.

Second measure:

privatization

In privatization, who will buy?

There are no local operators.

If there were enough

local money to buy

entire oil, phosphate

or steel companies,

the country wouldn't be so poor.

The extraversion of these Third-World

impoverished economies gets so bad,

they sell off their last

national economic interests

to foreign interests.

So, multi-nationals start buying

and relocating to these countries,

due to low wages and dollarization.

It gets cheaper for multi-nationals

to produce there than at home.

But these multi-nationals

can also acquire, dirt cheap,

installations and

production capacities,

like sugar production and refining,

oil or gas production

and pre-refining,

gas liquefaction

or mineral transport, etc.

At low prices, which cost these

national economies years and years.

Third measure:

currency devaluation

Devaluing local currency

means, all of a sudden,

for already-poor countries,

anything imported becomes

proportionally more expensive

than the level of devaluation.

When the CFA franc

was suddenly devalued by half

in the early '90s,

well, suddenly about

a third of Africa or more

that was using the CFA franc,

found itself with half its

purchasing power overnight.

So, your wage, that lets you live

at a certain level,

only gives you half of that.

That's an immediate 100% inflation.

Add to that manufactured or

semi-manufactured products,

refined products and

everything you'd expect Africa,

West and Central French Africa,

to import.

Suddenly with the franc cut in half,

these things are twice as expensive.

Combine that with the effects

of local devaluation,

and products and services

suddenly cost you 4, 5, 6 times more,

from one day to the next!

Add time, and see what happens.

Local products

made from imported

semi-raw materials,

or that need imported binders,

glues, solvents, paint, etc.,

over a longer wavelength,

1, 2, 3, 6 months later, they become

2, 3, 4 times more expensive.

Fourth measure: reorient

the national economy around export

If we measure the effects

of making the poorest countries,

where the IMF and

World Bank intervene,

boost the production

of exportable products,

we make them compete

with the same products.

Coffee-producing countries

all start producing more coffee.

Cocoa, petroleum, same thing.

Bauxite...

Whatever it is... Sugar, wheat...

All the base products

suffer falling prices

due to over-production.

Not only do their prices fall,

and countries made to compete,

but added to this is the inflation

effect from currency devaluation

and the automatic increase

in anything the country imports.

We witness a kind of reversal

of the countries' interests -

even as we pretend to defend them -

caused by this initial phenomenon.

All their imports

are increasingly expensive,

while all their exports

bring in less.

They enter a spiral of indebtedness

that means that now, in 2002,

servicing the debt

of most of the poorest countries -

I'm talking about countries like

Bangladesh, Ruanda, Burundi, Togo -

countries like that,

that are already minus 250th...

Their debt servicing alone can be

up to 600 x their export revenues.

Fifth measure:

"getting the prices right"

Getting the prices right

goes like this:

no subsidies for basic necessities,

so no more subsidized housing,

no more subsidies

for health, oil, rice...

transportation...

No more subsidies,

in the name of the right price.

What does this mean?

In terms of dollars, all prices

become equivalent world wide.

If you travel with dollars,

as I, a Canadian citizen, do,

wherever you go, products

and services cost the same.

Whether in Cotonou, Benin,

one of the poorest countries,

or Chicago, New York, Paris,

your Holiday Inn or Sheraton room,

your Holiday Inn meal

cost about the same in dollars

throughout the world. Fine.

But in Cotonou, capital of Benin,

one of the world's poorest countries,

one night at the Sheraton,

where I sleep when I go there,

equals six months' salary

of a Benin public servant.

One meal in the restaurant

of this Cotonou hotel

is a week's work

for a minor Benin official.

Sixth measure: liberalization

of investment and reverse wage parity

Next comes reverse wage parity.

This consists in...

a succinct formula

that slides all wages

down to the lowest, by sector,

and does so in concert with

the "movement" to liberalize trade.

I'll explain.

NAFTA is announced: the Mexico,

U.S., Canada free trade zone.

Wages naturally slide from the

American level to the Mexican level.

That's what happens when Mexican,

Canadian and American labour compete.

Relocation to Mexico means NAFTA

has created employment in Mexico.

But in net terms,

6 or 7 years after NAFTA,

wages in the whole region of Leone,

northern Mexico,

where the American

multi-nationals moved in -

while they shut down

proportionately in the U.S....

There has been

an elimination of jobs

that were high-paying,

compared to Mexico,

to "create" jobs in Mexico

that are infinitely lower-paid.

So, for the past 5 years,

the average wage in the most

active, richest region of Mexico,

where the American

multi-nationals relocated...

Wages dropped in net terms

of purchasing power by 23%.

Five years ago, a General Motors

worker in northern Mexico

could survive and maintain

a family of 1 or 2 kids.

Today, the same worker

can support only his own needs.

Survive alone.

On the eve of the summit

to be held in northern Mexico,

they're building in Monterey

a wall to hide the slums.

Three meters high

and kilometers long,

so summit participants

won't see the poverty there.

That's reverse parity: sliding wages

from highest to lowest by sector.

And now that the most modern sectors

- Like information technology,

electronics, etc. -are increasingly

saleable in the Third World,

you have entire companies-

such as Swissair I think,

and other companies,

the steel industry, whatever -

that do all their accounting,

financial and IT work in Bombay.

A Bombay accountant who does the

same work as a Swiss or Canadian one

costs 100 times less.

A programmer who writes an aviation

program is 200 times cheaper.

And so on.

That's reverse wage parity.

What bothers me is that

when we combine these measures -

devaluation, export, debt servicing,

privatization,

shrinking public budgets,

forced public lay-offs

making more unemployed...

Combine all these

with the prices and wages,

and we come to the situation

we're in today:

rich countries are infinitely richer

and poor countries infinitely poorer.

And I'm alarmed to see

the World Bank and the IMF

trying to repeat in Argentina exactly

what massacred the Argentine economy.

It's like we never learn.

Why not? There's a reason.

It's in their interest that this

ideology that explains the world,

continue to survive,

as long as the planet,

in its entirety,

is exploitable this way.

At the International Monetary Fund,

the right to vote is exercised

within the board of directors.

Now, it's a right based on...

financial participation,

or the financial contribution

of each State.

In fact, it's the IMF shareholders.

Same for the World Bank.

It's not like the U.N.

The main shareholders

of the IMF are, of course,

the U.S., Germany, Japan,

Great Britain, France, etc.

But ultimately, that's just

one aspect, because...

under the political representation

in an intergovernmental organization,

there are other issues.

It's the backroom.

It's influence-peddling between

Wall Street, on one hand,

and Washington. It's the connections

between the IMF and the think tanks:

the Heritage Foundation,

the Brookings Institute.

The American treasury's involved.

The U.S. Federal Reserve.

This all forms what's been called

"the Washington Consensus".

It's a power game.

In 2005, Paul Wolfowitz,

one of the most radical ideologues

of imperialist politics

and President Bush's warmonger,

passed directly

from the U.S. Defense Department

to being head of the World Bank.

This appointment put an end

to any ambiguity about

the World Bank's real goals

and revealed the true face

of the Bretton Woods institutions.

Bretton Woods conference,

Mount Washington Hotel, 1944

After the war,

naturally there was the creation

of the IMF and the World Bank.

In the mind of John Maynard Keynes,

the architect of these institutions,

a third thing was needed.

A third organization,

the International Trade Organization.

This didn't work.

The Americans didn't want it.

So, as a fallback position,

GATT was created.

It was created in '47

and was supposed to take care of

lowering customs duties

on industrial products.

GATT worked fairly well

because during

its 50 years of existence,

there were major reductions

in duties,

which went from

an average of 40% to 50%

down to 4% or 5%.

But that covered only

industrial goods. Products.

So, the need was felt,

primarily by transnational

financial companies

to create an organization

that would cover many more domains

than just industrial products.

That's why,

at the end of the Uruguay Round,

the final GATT negotiation cycle,

the decision was made to create

the World Trade Organization,

which became a reality

on January 1, 1995,

and covers a multitude of agreements.

Not just the perennial GATT

but the agricultural accord,

the TRIPS accord

on intellectual property,

the general accord on the service

trade, a huge thing that covers

11 main areas and 160 sub-areas,

so that all human activities

are found there,

covered by GATT regulations:

education, health, culture,

environment.

There are other technical agreements

that may seem technical,

but that are extremely political:

the accords on

technical trade barriers,

on sanitary and

phytosanitary measures.

These are accords on standards

that various members, i.e., States,

can put in place

and which declare that certain norms

are technical barriers to trade.

Perhaps lesser known,

but the most important of all

is the Dispute Settlement

Understanding,

which is the very powerful

judicial branch

of the World Trade Organization,

which enables it to settle

disputes among members

and exercise jurisprudence.

So, who judges?

We don't really know.

Experts are chosen from lists.

Countries may recommend someone

for these lists.

They're generally private citizens.

Business lawyers or sometimes

former business executives.

But they're unidentified.

They meet in secret,

generally in three's.

They decide fairly quickly.

There's also an appeals process,

but appeals have the same conditions:

a new panel,

and it's done in secret.

What's important to know about the

DSB, the Dispute Settlement Body,

is that it's at once

the legislator, the jurist

and the executive,

because it renders verdicts

and establishes jurisprudence.

It places itself above all the laws

that have been passed

by the countries'

individual legislatures,

but also above international law,

established laboriously over 50 years.

Human rights,

multi-lateral conventions

on the environment,

the basic labour conventions of the

International Labour Organization.

All this is forgotten and verdicts

are rendered at the DSB

that say, "Business trumps all,

and we don't want to hear about

your environmental conventions."

And it's executive because

it has the power to impose sanctions.

When a country disagrees

with its verdict, it's told, "Fine.

Don't make your legislation conform

to our verdict, but you'll pay.

You'll pay annually,

through customs duties that your

adversary in this settlement process

will determine."

So when the U.S. decides

to impose duties on Europe,

for France,

on foie gras, mustard

and Roquefort,

it's perfectly within its rights.

And it's expensive. And few countries

can afford this annual leaching.

At the WTO, various negotiations

go on at the same time.

A country with no ambassador

in Geneva,

or that shares one

with other countries,

as is the case with the Africans

and with many small micro-States...

It's impossible for them

to follow negotiations.

So, the South doesn't know

what's going on in all areas,

and they say so openly.

One Southern ambassador

said, "The WTO

is like a multiplex theatre.

You must pick a film,

you can't see them all."

So they pick only what seems

important to their country.

So who really makes the decisions?

They say it's by consensus.

There's never been a vote.

And the American ambassador said

a vote would be a very bad precedent.

So much for democracy.

In reality, it's the Quad.

The Quad is 4 countries -

Canada, the U.S.,

the European Union and Japan -

that meet all the time

and have numerous staff

at the WTO,

and that come to their own consensus

and come back

before the plenary assembly

and say, "Well, you agree,

don't you?"

And it's very hard for

Southern countries to say no.

It takes courage

and they must be certain,

because pressure tactics

against them exist.

And don't delude yourself.

If you're dependent on the IMF

or have problems with the U.S.,

you know you can't step out of line.

Certainly, the financial markets

and the Bretton Woods institutions

have become privileged instruments

of the Neo-liberal conquest.

But some countries

still obstinately refuse

to join this forced march.

That's when colonialism

sheds its new suit

and comes forth

in its old warrior gear.

From the break-up of Yugoslavia

to the war in Afghanistan via Darfur,

post-Cold War conflicts

hinge on very different issues

than the ones Western propaganda

presents as new "military humanism".

Control over resources,

financial flux and geostrategic space-

like the dictates of the IMF,

the World Bank and the WTO -

ensure the domination of mega-

corporations and giant capitalists

over the entire planet.

Also, the colonial governments

that the conquerors have installed

have soon moved to adopt

the dogma of Neo-liberal ideology.

And the encirclement is complete.

Neo-liberalism or Neo-colonialism?

Strong-arm tactics

of military humanism

or

War is peace

The Dayton Accords were signed in '95

on an American military base.

And if we consult

the text of these accords,

we see the Constitution

of Bosnia-Herzegovina appended

to the Dayton accords.

This constitution was written by

American consultants and lawyers,

who got together and wrote

a fundamental document

without so much

as a constituent assembly

of Bosnia-Herzegovina citizens.

And we can read

in this constitution

prepared by the United States,

Article X:

The central bank

of Bosnia-Herzegovina

shall not function as a central bank.

It must function as a currency board.

In other words, a colonial bank,

with no chance

of creating money.

Meaning, it's completely trapped

by its external creditors.

Well, that's the model that

currently exists in Argentina.

Moreover, in the Bosnia-Herzegovina

Constitution, written in Dayton,

we read that

the IMF will nominate the president

of Bosnia-Herzegovina's central bank,

and this person...

may not be a citizen

of either Bosnia-Herzegovina

or a neighbouring country.

In other words,

we see that this constitution,

which is totally fabricated

and has no citizen base

within Bosnia-Herzegovina,

is installing a colonial government.

We don't call it that. We say

it's the international community...

But ultimately we see that

all the administrative structures

are dominated by foreigners.

Budgets are dominated by foreigners.

Monetary policy is non-existent.

Nevertheless, the Dayton Accords

are now being presented by the

so-called international community

as the answer to the problems

of various countries.

They'd like to establish

the same management model-

colonial administration -

in countries like

Macedonia and Yugoslavia.

Indeed, they talk about a mosaic.

A mosaic of protectorates.

Adaptation: Kathleen Fleming

Anrà Médiatextes, Montréal