A Critical Review of Alternative Debates on the International Control over
the Capital(May, 1999)
1. Catastrophe of globalization and the necessity of international
control
Under the axiom of 'freedom of markets', the globalization of the capital
has imposed such an undefiable 'categorical imperative' as liberalization,
open trade and deregulation.
So miserable was the result that nation-states were, in the era of
globalization, nearly deprived of every device for economic regulation: job
deprival, economic concentration, expansion of poverty, demolition of the
public sector, intensification of social exclusion, destruction of cultural
autonomy and the crisis of ecosystem. People all over the world are shocked
by the fact that their destinies are unknowingly determined beyond their
grasp.
The sole task of national governments is to draw capitals into their
territories and to endeavor to preserve domestic capitals; the freer the
capital flows, the severer national competitions become. Every nation-state
forces herself to seek for new methods to
render her attractive to the capital, and the fact that most investments are
short-termed indicates that nations are put under permanent pressure "to
preserve the condition to hold the capital in their territories". Labor
markets are made "flexible" and core public
corporations should be exposed to private investors. No limitation may be put
on the transfer of investment profits into the homelands. Only remain the
nominal indices indicating economic recovery and the statistical numbers
celebrating the explosive augmentation of foreign direct investments.
Where and how should "limitless races to the bottom" be cut off? Is there
any transnational means to terminate the coercive "unlimited competition
system" that is globally operating? The "international control over the
capital" has fairly broad connotations; it comprises every means possible to
limit the operation of the global deregulation system that drives people all
over the world into the "limitless races to the bottom". It comprises every
action and means to cut the chain of imperialism in the local, national and
international level: KCTU's anti-layoff struggle, Han Young strikes in
Mexico, ecologist warriors' struggle against nuclear power and taxation on
financial transactions. Various debates on "transnational financial capitals
and controls over foreign direct investment" ascribed to present
globalization, therefore, should be reviewed
in the light of its suggestion to Korean people.
2. What happened from 1997 to 1999
The crisis of finance and foreign exchanges in East Asia, generated from
the devaluation of Thai bart in 1997, has spread to Indonesia, Korea, Russia
and Brazil.
Capitalists and their patronized intellectuals, who eschew any action
scarring 'freedom of markets', commenced to make flippant remarks. With the
expression of the 'volatility of world financial markets', 'hedge funds' and
'herd instinct', however, some started to
carefully maintain that short-term speculative capital should be regulated.
The bankruptcy of a representative hedge fund named LTCM (Long-Term Capital
Management) initiated by famous Nobel prizers, aroused the necessity of the
regulation of hedge funds even in the United States, the kingdom of financial
capitals. The key proposal for the regulation of the short-term speculative
capital may be categorized into three: First, guarantee of the transparency
of international financial flux and the fortification of control to
efficiently supervise the indiscriminate activities of hedge funds.
Secondly, consolidation of the role of international lenders of last resort
to prevent fluidity crisis. Thirdly, debates on the reforms of global
financial rules. Even among them the necessity of the regulation of financial
markets is considerably agreed, though
the debate is confined within short-term speculative capitals. Such reactions
of capitalists indicate that even they are afraid of the speculative
accumulation system and the instability of the financial system.
Another remarkable issue is the citizens' and people's struggle as regards
MAI(the Multilateral Agreement on Investment). MAI had been negotiated in
OECD since 1995, and was expected to get signed in 1998. On January in 1997,
when the MAI negotiating text was exposed through Internet, it aroused
enormous struggles of citizens, workers
and social activists all over the world, and at last the negotiation was
suspended due to the withdrawal of France on October in 1998.
We, nevertheless, should not overlook what MAI means in terms of class
struggle, for MAI has clearly exposed the phase of globalization as
imperialist nations and transnational capitals are seeking it, and showed how
worldwide people and workers can struggle against capitalists' international
treaties. Reviewing MAI in comparison with other free trade agreements and
free investment agreements, we can clearly understand what imperialist
nations and transnational capitals call globalization. To begin with, MAI
makes a really broad definition of the 'investment'[1], thus even short-term
speculations are also considered to be a kind of 'investment' protected by
MAI. Additionally, clauses on the liberalization & protection of the
investment were much fortified.
While most investment treaties protect only post-establishment processes, MAI
liberates and protects pre-establishment processes; even American investors'
speculation in Korean stock markets through computer terminals is considered
to be a "just investment" and should be sufficiently protected. What is
worse, the duty of investment liberalization[2], which is not regulated in
most BITs and OECD regulations, is additionally regulated. Finally, very
restrictive procedure of dispute resolution is compelling each country to
perform the duty of the liberalization & protection of investment. Such
procedure of dispute resolution is also applied even to the pre-establishment
processes. In addition, it not only rules dispute resolution procedures among
nations but also grants investors the right to directly claim the nation. In
short, MAI is nothing other than the 'Bill of Rights for transnational
capitals'.
**Next contexts are following... If you want to read full text, please click
an attached file.
3. The debate on global financial crisis, struggle against MAI and their
significance in the context of class struggle
4. Alternative debates for the control over finance markets and transnational
financial capitals
4-1/ The case of Malaysia and Chile
4-2/ The Global Financial Crisis, the IMF and Strategies Towards
Resolving the Crisis(John Dillon)
4-3/ Third World Network
4-4/ Campaign for Labor Rights
4-5/ Citizens & People Agreement on Investments and Wealth (CPAIW)
5. A concise review on alternative debates
6. How Korean People Intervene
by Changgeun Lee(International Coordinator of KoPA)
