Chomsky comments on Third World debt

Noted political analyst and MIT linguistics professor, Noam Chomsky recently spoke to Z magazine about his views on the debt of the Third World. The following is an excerpt from that conversation:

"What do you say to the argument that the countries who borrowed from the WB/IMF have no right to ask for debt forgiveness (nor should anyone ask on their behalf) and should be held responsible for their debts like you or anyone else would? … And to what extent is the first world responsible for the debt crisis? … I guess, in a nutshell, I would like to better understand where the culpability of my own government lies (US), and where that stops and the culpability of third world governments start."

Chomsky's Reply:

The simplest answer to the argument that countries who borrowed from the WB/IMF have no right to ask for debt forgiveness is that the presupposition is false, so the argument is vacuous. E.g., the "country" of Indonesia didn't borrow; it's US-backed rulers did. The debt, which is huge, is held by about 200 people (probably less), the dictator's family and their cronies. So those people have no right to ask for debt forgiveness --and in fact, don't have to. Their wealth (much of it in Western banks) probably suffices to cover the debt, and more.

Of course, this response assumes the capitalist principle. According to this principle, if I borrow money from you, use it to buy a Mercedes and a mansion, and send most of the money to a bank in Zurich, and then you come and ask me to repay the loan, I'm not supposed to be able to say: "Sorry, I don't want to pay you back, take it from the folks in the downtown slums." And you're not supposed to say: "I got the high yields from this risky investment, but now that the borrower doesn't want to pay it back, the risk should be transferred to other folks in my country through socialization of the debt. That's the capitalist principle. It would suffice to largely eliminate the debt. Of course, that principle is unacceptable to the rich and powerful, who prefer the operative "capitalist" principle of socializing risk and cost. So the risk is shifted to northern taxpayers (via the IMF) and the costs are transferred to poor peasants in Indonesia, who never borrowed the money.

The argument that "their country" borrowed the money so that they are responsible surpasses cynicism, and need not be considered. In fact, it doesn't even stand up under international law. When the US conquered Cuba in 1898 to prevent it from liberating itself from Spain (what is called "the liberation of Cuba from Spanish rule"), it canceled Cuba's debt to Spain on the reasonable grounds that the debt had been forced on the people of Cuba without their consent. That doctrine, called "odious debt," was later upheld in international arbitration, with US initiative. The current US executive-director at the IMF, international economist Karen Lissakers, pointed out in a book a few years ago that if this principle were applied to third world debt, it would mostly disappear. But that would mean that the capitalist principle would have to be observed: borrowers have the responsibility, lenders take the risk. And that plainly won't do, when the concentration of power makes it possible to socialize cost and risk.

On first-world responsibility for the debt crisis, it is huge --and in this case, the responsibility extends to citizens, insofar as their countries make possible some degree of participation in policy formation, and they do. The current debt crisis can be traced back to policies of the IMF and World Bank encouraging lending/borrowing to recycle petrodollars in the 1970s. Their very confident recommendations that this was just great for all concerned continued up to the moment of the Mexican default in 1982, when the system threatened to crash, and the same institutions stepped in to socialize cost and debt. Another factor was the sharp rise in interest rates in the US under the late-Carter/Reaganite policies of a form of "structural adjustment" here, undertaken with no concern, of course, for the fact that this would impose a crushing burden on third world debtors, as it did. Another factor, of course, is Western support for the murderers, gangsters, and robbers who borrowed the money for themselves and, naturally, don't want to pay it back, when they can get the burden shifted to the poor by the same institutions that created the debt in the first place.

First world responsibility is enormous, so much so that if honesty were conceivable, those who supported folks like Suharto in Indonesia, drove the lending-borrowing craze (then bailing out the banks), and sharply increased interest rates as part of the further shift of power to the rich and privileged in the US (and that's not all), should be paying the debt themselves.

The culpability of third world governments --say, Suharto in Indonesia-- is enormous, but remember that these governments are western clients, outposts virtually, whose task is to open their countries to foreign plunder, repress the population (by huge massacres if necessary), and enrich themselves if they feel like it (that's not a responsibility, just an incidental benefit accorded them). Suharto was "our kind of guy," as the Clinton administration put it, as long as he fulfilled this role. Much the same hold for other third world governments. Those that try to follow another course typically get smashed. E.g., Nicaragua has one of the highest debts in the world. The Sandinistas were doubtless corrupt, though not by preferred US standards, but that's not the reason for the debt: rather, the fact that the US waged a brutal and murderous war to get them back into line.
Note again that culpability of our governments (and their institutions, like the IMF-WB) are also our culpability, to the extent that we have the capacity to influence policy, and don't.

Source: Znet: <www.zmag.org>

Plan for recreating the sustainability of the Asheville area

By Adam Baylus

Heartfelt conversations with members of our community confirm that a critical mass of people recognize our needs to let go of our oil-based economy and create a locally sustained economy. Many share this vision of sustainability, yet lack clarity about the specific steps to facilitate this transformation. The question looms, "How do we get there?" Once we bring existing efforts together and determine how we’re going to proceed, the "getting there" becomes the fun part.

The transformation -- or the paradigm shift -- will ultimately reestablish food and shelter as a right of life -- not a commodity to be produced for maximum profit. To get there, people need to reclaim the responsibility for food production and distribution. Community supported Organic Agriculture and a cooperative buying network are ideal models to implement.

Beyond food, Asheville community members have the creative skill to create all that we need. The resources are here to offset globalism and multinational corporate power. Sovereign consumers, those who make conscious, collective choices with their shopping dollars, have the ultimate power and responsibility to create sustainability. Local artists and craftspeople can provide everything we need.

To effectively cooperate, communication is essential. The power to define the conversation through information sharing is the essence of free press, which belongs in the hands of the public. Community media -- newspaper, television, and radio -- are the essential links for facilitating these shifts in actions.

Federal currency, void of the gold standard, threatens community stability. Local currency and bartering networks provide models for strengthening the local economy. Perhaps the ideal standard for Mountain Money, our local currency, is organic food or farmland.
Ride sharing, equipment sharing, cooperative schooling and cooperative preventative healthcare are just a few more of the many essential elements of this transformation.

The ideas are numerous, and the questions and lacking details are seemingly infinite. The will is certainly prevalent to undertake this Great Work. Perhaps what we need is a planning meeting with a specific action oriented agenda. Using all available means of communication, we could begin this work by choosing a meeting day and defining key elements of the community conversation, so that creative processes may start flowing immediately.

We invite everyone willing and ready to create a new reality to the second everything local community gathering the Saturday after Earth Day, April 29th, from 10 a.m. to 6 p.m. The gathering, at 727 and 733 Haywood Road in West Asheville, is a full day of local artists, craftspeople, demonstrations, healers, children’s activities, entertainment and food. The community-planning meeting begins at 4, with the live auction of local arts and crafts following the meeting at 5:15.

Our intention is clarity about logistics – the steps we will cooperatively take to create sustainability, which insures the continuance of all life on Earth.

Hiett case a wake-up call

The former commander of US anti-drug operations in Colombia, Colonel James C. Hiett, has agreed to plead guilty to a drug-related charge of misprision of a felony-failing to report his wife's laundering of the proceeds of her drug smuggling activities, which were carried out through the US Embassy in Bogota. If what has been alleged by prosecutors and reported in the Washington Post is accurate, Hiett was an active party to the more serious offense of money laundering and is pleading to a lesser crime. Mrs. Hiett has already pleaded guilty to drug smuggling charges and awaits sentencing.

This is a tragedy for two human beings who, like all of us, have proven fallible. However, let us not hear this argument from the politicians who in any other drug smuggling case-especially those involving Latin American defendants-advocate life imprisonment, or even the death penalty.

Let us also not give any credit to the Pentagon in this affair. After his wife's arrest, the US Army conducted a perfunctory sham "investigation" and "cleared" Colonel Hiett. That's a far more serious matter than the underlying drug scandal.

What it tells us is that the lure of drug money has directly corrupted an important military leader and the brass is in a state of denial about it. Pentagon spokesmen who knew better, or should have known better, assured the public that Colonel Hiett wasn't involved in his wife's activities. Once again, the military honor code-"I will not lie, cheat or steal, or tolerate those who do"-has been tossed aside for bureaucratic expediency.

In light of the Pentagon's public relations performance, there is no reason to believe anything that they say about the War on Drugs. In light of the Hietts' performance-and the realities that can be readily observed in every North American city-there is no reason to believe that US military intervention can stem the flow of narcotics from Colombia to the United States.

Many people who hold the US Armed Forces in high regard consider it a cheap shot to raise this issue. The fear of being called a demagogue, or an enemy in the War on Drugs, also affects the news media-notice how Yahoo suppressed the AP story from their online headlines, and even buried it in their War on Drugs "complete coverage."

Yet people who support American military institutions would be well advised to treat this matter with the utmost gravity, and demand that the politicians call off this impossible mission to win a war that was lost long ago. Military force, especially when it's injected into Colombia's never-ending civil conflict under an anti-drug pretext, can't cure North America's-or Panama's-drug habits. The militarization of drug policy harms the armed forces more than it does the drug lords.

Source: The Panama News: <pmanews@panama.c-com.net>