5 - The Globalists

ucla | HIST 12B | 2023-10-24 22:26

Table of Contents

Bretton Woods System, 1944-1971

  • established IMF - monitor forex rates and loaning to nations with balance-of-payments (import-export imbalance, major inflation) deficits
  • created World Bank - provided funds for reconstruction and economic development of glob south (mostly postwar)
  • Bretton Woods pushed for US dollar for int. curr. -> pegged to gold -> everyone relies on the US economy

    Cold War and US Hegemony

  • after WW2, US is greatest global econ. and military power
  • NATO and Marshall PLan let US invest in foreign markets to increase economic relations and rid communism
  • Obstacles to US corporate interests:
    • communism
    • militant organized working class
    • global south: 4th rupture, wanted to rebuild on social democratic or socialist lines

      Fourth Rupture: Revolt of Global South

  • background: chinese rev., cuban rev., decolonization, eurocommunism, struggle for welfare state
  • goal to transform state into tools for redistribution, justice, worker power, against militarism
  • decisions on how to spend global southern countries’ money to build their own economies/societies
  • glob south defeated -> extractive industries, suppression of unions and democracy -> global market integration and free trade

    The globalists: Neoliberalists

    Central Players

  • Ludwig von Mises (1881-1973) Founder of Austrian school of Economics; emigrates to U.S. 1940
  • Friederich A. von Hayek (1899-1992) Student of Mises at Univ of Vienna; taught at London School of Economics (1929) Univ of Chicago (1950 - 62), Univ of Freiburg, West Germany (1962 - 68), UCLA (1968 – 69), Austria to 1992
  • Wilhelm Röpke (1899 – 1966) German, ordoliberal, founder of Geneva School (Institute of International and Development Studies)
  • Lionel Robbins (1898 – 1984) British, London School of Economics
  • Michael Heilperin (1909 – 1971) Polish-American, Geneva School economist didn’t believe in invisible hand, self-regulating market -> world economy needs protection -> global institutions to protect from glob. south and revolutionists

    Rupture I: WW1 & End of Empire

  • war, fall of empires, and war-time measures of control (rationing, price control, seizing land) -> blurred political and economic domains
  • von Mises: role of the govt: to moderate labor not economy - cutdown strikes
  • neolibs feared:
    • democratic control of econ. policy
    • self-determination (sovereignty) over economies
    • socialist revolutions (Russia 1917)

      “Solutions”

  • ICC (1920) and League of Nations (didnt end up favoring neolibs bc. of support for self-determination of states) to protect capital rights
  • league and ICC organized World Econ. Conference 1927 -> tariffs, national sovereignty, and trade unions were barriers to global free trade
  • ICC proposes lower wages, cut corporate taxes, suppress labor unions (Mises support of anti-terror laws on labor strikes)

    Birth of Neoliberalism

  • Walter Lippmann Colloquium 1938 - book to renovate liberalism
  • a hybrid of progressivism and what becomes neoliberalism - still a welfare state for education, public works

    War on Planning

  • neolibs called it collectivism like National Socialism (Nazi) - Hayek
  • ww2 and fear of germany/socialists -> more nationalist countries across the world
  • Hayek’s “Road to Serfdom” - argues US and countries planning is them moving to socialism (govt spending is govt plannning)
  • Hayek believes inequality is natural, equality emerges from privatization and incentivizes production while welfare state creates dependency
  • suggests social mobility is possible under free market - “work harder”

    Neolibs on Decolonization

  • promoted decolonization without move to economic nationalism
  • against idea that every nation will go down the path of economic development - instead believed the world economy is tied in such a way that corporations have a natural role to privatize and grow: natural division of labor
  • absolutely against economic domain subject to democratic rule - suggests democracy prevents free markets

    Killing International Trade Organization

  • onme part of Bretton Woods plan that wouldve strenghtened global south
  • est. by US in Havana Charter 1948, but global south rejected free trade orthodoxy
  • ITO supported this decision to allow new soverignties to impose their own tariffs and regulate their economy for their economic pruposes
  • Heilperin and others pushed US to kill ITO through:
    • “International Convention for the Mutual Protection of Private Property Rights in Foreign Countries” (1957) the so- called “Capitalist Magna Carta” – drafted by Hermann Josef Abs, head of Deutche Bank. Required signatory nations to refrain from “direct or indirect illegal interference” with “foreign capital”
  • the argument of self-determination, sovereignty’s control over economy led to US and other countries use of subversive tactics to protect economy:
    • Iran 1953 overthrow of Mohammed Mosaddegh - for exclusive rights oil fields
    • Guatemala 1954 overthrow Pres Jacobo Arbenz - prmoted labor rights and nationalized agri land -> United Fruit company owned most of this agri land, Pres offered to buy land for listed vbalue, but United Fruit’s attorney and connections to CIA led to overthrow
    • Congo 1961 assassination of Patrice Lumumba - Katanga province rich of minerals secedes with US backing, split in leadership -> coup under CIA payroll
    • Brazil 1964 overthrow pres Joao Goulart - for nationaliozing subsidize oil, industry, etc. -> overthrow