Goodbye America! Globalisation, Debt and the Dollar Empire

by Michael Rowbotham

	Reviewed by Alistair McConnachie. Prosperity, June 2000
This book is written in the conviction that the tangled development disaster of Third World debt can be tackled, and that this can be done directly and rapidly. Third World debts, the bulk of which lack both economic and moral validity, could be cancelled at a stroke, but only by breaking with certain aspects of current economic orthodoxy. So begins Michael Rowbotham in this timely new release. Addressing the twin issues of globalisation and debt, Rowbotham explains the problem and advocates solutions....

WHAT IS GLOBALISATION?

Culturally, it is international standardisation, the narrowing of differences and the replacement of national and regional cultures with a bland consumer ethic epitomised by McDonald's, Pepsi and Nike.

As Rowbotham writes, "There is no reason why India should not have fast food. But why McDonald's? Why not an Indian company?"

Politically, it is "unelected, unaccountable, international governance being consolidated and assuming excessive power," driven by corporate influence and the economic ideology of "free trade".

This "globalisation" overrides the interests of individuals, countries, democracy, and small businesses in favour of a global trans-national political and financial system.

In the face of this pervasive power, how do individuals and national governments reclaim control over their own destinies?

Rowbotham looks to a future where "international corporations, the US dollar and powerful multilateral institutions based in America no longer dominate world economic policy. A future where the 'Washington Consensus' has been replaced with a more benign, democratic and accountable economic ethic." (pp.8-9)

To do this we must address the pernicious international debt-based financial system the system whereby virtually all money comes into the world as a debt owed to the banks. It is this system which institutes Third World debt and it is this system which drives the process of globalisation.

Chapter 1 sets the scene. Chapter 2 emphasises that debt relief must be lasting, rather than a temporary sticking plaster, and that such a permanent solution is easily attainable. This is not recognised at the present time because there is a "paucity of critical economic study in the area of debt and money. Although every basic economics textbook carries a chapter on banking and the supply of money via the multiplication of debt, one searches in vain for any recognition that this might have serious macro-economic consequences. Yet it stands to reason that if we continually and almost exclusively create and supply money via a process that automatically generates debt, we cannot express great surprise when debt becomes a problem." (p.14)

Chapter 3 explains why Third World debt is inherently unrepayable. Chapter 4 takes a historical look at the development of the world's financial system over the last century so we may understand past errors, why we are in this situation today, and appreciate that the debt scandal has been with us for decades. Chapter 5 is a critique of the World Bank and the International Monetary Fund. Chapter 6 explains why "free trade" "the key theoretical component of Bank/Fund ideology" really isn't free at all. Chapters 7 and 8 explain how money is created and set out some basic tenets of money reform.

Opponents of debt cancellation often imply that someone will have to suffer a loss. Chapter 9 is a thorough examination of how to cancel the debts with little or no cost to anyone.

Moreover, as Rowbotham points out, it is not only the developing world which suffers under this system: "As corporations seek low-cost opportunities in the debtor nations, the wealthy nations experience a loss of employment abroad and suffer an influx of cheap products that destroy home markets. There is also the need constantly to step in when famine occurs due to over-emphasis on export crops; the obligation to act when, as so often, debt has caused civil or regional wars and cope with immigration in flight from poverty and conflict." (p.6)

Chapter 10 explains how the debt-based financial system which caused the international debt problem is also responsible for the drive behind globalisation. Chapter 11 looks at some of the usual excuses which are used to maintain the present system in operation. Rowbotham argues that corruption, capital flight, military spending and incompetence very often follow debt-induced poverty and do not necessarily cause it. Chapter 12 looks at some further reforms including the regulation of international financial flows. Chapter 13 rounds out this 210 page book with a reminder that "no analysis of Third World debt that fails to take into account the present debt-based financial system can either claim to understand debt, or hope to inform a policy that addresses the problems caused by debt." (p.197)

Goodbye America! explains the problem, develops solutions, and works to promote them. It is a valuable tool in our efforts to reform the existing debt-based financial system.

It needs to get into the hands of as many interested people who can demand action, and as many sincere policy makers who can implement it, as possible. In that regard, it was most satisfying to witness Canon Peter Challen present a copy to Gary Streeter MP, the Shadow Secretary of State for International Development when myself, Michael Rowbotham, Peter Challen, Richard Greaves, Robert Arnold, David Heathfield, Sabine McNeil, Donald Martin and Robert Tait met with him to discuss these issues at the House of Commons on 10th May 2000.

This is one book that Prosperity will be quoting from for a long time to come... if you order a copy through a bookshop, it may then stock up on some more copies in the expectation of further sales. In addition, ask your local library if they have a copy; if not, suggest that they purchase one -- or alternatively, donate a copy.