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DB: To whom are the World Bank and the IMF accountable?

To the people who put the money in, which means a bunch of rich countries, primarily the United States, which is the dominant element there. It’s mainly funded by the wealthy states, and the U.S. has the largest vote, so that’s who they’re beholden to.

DB: Where does the General Agreement on Tariffs and Trade, GATT, fit into this economic picture? One commentator has called it the “economic teeth of the new world order.”

GATT is the international trading system, also set up in the 1940s. It’s in the news now because for the last several years the Uruguay Round of GATT negotiations has been going on with an effort to achieve some new form of freeing up international trade. Freeing up international trade in itself, in a general sense, is not a bad thing. It’s often a good thing. The point is, nobody goes into that game, if they have the power, without ample protection for their own internal needs. So for example every one of the Western powers, including the United States, is entering the GATT negotiations with a certain agenda, a mixture of liberalization and protectionism geared to the particular strengths and weaknesses of that economy. When we speak of “that economy” we mean the people in the dominant positions in it. So the European Community wants high level protection for the aerospace industry and agricultural production. The United States has a mixture of policies. It’s calling for liberalization and free trade in many areas. On the other hand, it’s also calling for enhanced protection in areas where the U.S. is strong. Take so-called services like banking. The U.S. is calling for a liberalization of services in the Third World, which would have the instantaneous effect of swamping and overwhelming all Third World banks and financial institutions by western ones, since they’re so much richer and more powerful. That would eliminate the possibility of any national industrial development programs within the Third World. That’s the kind of liberalization that the U.S. is in favor of. It means that Third World economies would be managed by western banks and those who run them and the governments that are tied to them.

On the other hand, the U.S. is calling for more protection in other areas, particularly intellectual property rights, which includes anything from pop music to cinema to software to patents. Right now the U.S. is racing ahead in patenting what may turn out to be parts of genes. The idea is to patent the genes of corn, or for that matter humans, so that future biotechnology, which will involve various kinds of genetic engineering, will be in the hands of mainly U.S. private firms. They will control that field, and they want to make sure it’s protected. So they want long patent rights and so on. That means that drugs, software, new technology, new agricultural forms, any form of biotechnology that may involve health will be in the hands of Merck Corporation and others like them who will make tens of billions of dollars in profits. It means that India, which could duplicate a lot of this much cheaper, duplicate Merck drugs at a fraction of the cost, will not be permitted to do it. The U.S. also demands product rather than only process patents, to insure, say, that India’s pharmaceutical industry doesn’t invent a cheaper way to produce some drug — a barrier to efficiency and innovation, but a boon for profits. That’s understandable on the part of the rich. They want to control the future, naturally, and that means control technology. The biotechnology aspect, the patenting of genes, has been causing an international furor in the scientific world. It can have a huge impact in the future. One shouldn’t minimize it.

The U.S. (like others) also insists on a high level of protection for U.S. shipping. Shipping between U.S. ports has to be in U.S. ships. If Alaskan oil comes down to California, it has to be in U.S. ships. The U.S. insists that anything involving U.S. goods be done to a very high percentage in U.S. ships, which benefits the U.S. maritime industry.

Similarly, “defense” expenditures are not considered subsidies under GATT rules. That’s enormously important for the U.S., which spends more on its military system than the rest of the world combined, as has always used that as a cover for massive public subsidy to high-tech industry. The point is that there is a mixture of protectionism and liberalization geared to the interests of those who are designing the policies, which are the powerful economic forces within the state in question. That’s not a great surprise, after all, but that’s what GATT is all about, and that’s what the negotiations are about.

If the current GATT programs succeed, it’s clear that they’re tending towards a world government ruled by a club of rich men who meet in their organizations, like the G-7 meetings, the meetings of the seven richest industrial countries, which have their own institutions, like the IMF and the World Bank, which have a network of arrangements established in GATT and which administer a system of what’s sometimes been called “corporate mercantilism.” Remember that although this is called “liberalization” and “free trade,” there’s a tremendous amount of managed trade internal to it. So huge corporations which are often more powerful than many states carry out controlled, managed trade internally. This means trade across borders, too, because they’re internationalized. They do planning of investments, of production, of

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