GLOBAL BIOGEOCHEMICAL CYCLES

May 19, 2012 on 3:27 pm | In Globalization, History, Research, Science & Technology | Comments Off on GLOBAL BIOGEOCHEMICAL CYCLES

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Global Biogeochemical Cycles – Alert 19 May 2012‏

AGU E-Alert (alerts@agu.org)

Sat 5/19/12

Global Biogeochemical Cycles

New articles published in Global Biogeochemical Cycles
are available online. http://www.agu.org/journals/gb/published.shtml

PAPERS IN PRESS: access accepted manuscripts within days of acceptance.
Visit http://www.agu.org/pubs/journals/pip.shtml (subscription required)

Top downloads: http://www.agu.org/topdownloads/topdownloads.shtml

Journal subscriptions: http://www.agu.org/membership/subscriptions.shtml

Global Biogeochemical Cycles – Published Past 7 Days

Lenton, Andrew; Metzl, Nicolas; Takahashi, Taro; Kuchinke, Mareva; Matear, Richard J.; Roy, Tilla; Sutherland, Stewart C.; Sweeney, Colm; Tilbrook, Bronte
The observed evolution of oceanic pCO[2] and its drivers over the last two decades
Global Biogeochem. Cycles, Vol. 26, No. 2, GB2021
http://dx.doi.org/10.1029/2011GB004095
19 May 2012

Shelley, R. U.; Sedwick, P. N.; Bibby, T. S.; Cabedo-Sanz, P.; Church, T. M.; Johnson, R. J.; Macey, A. I.; Marsay, C. M.; Sholkovitz, E. R.; Ussher, S. J.; Worsfold, P. J.; Lohan, M. C.
Controls on dissolved cobalt in surface waters of the Sargasso Sea: Comparisons with iron and aluminum
Global Biogeochem. Cycles, Vol. 26, No. 2, GB2020
http://dx.doi.org/10.1029/2011GB004155
19 May 2012

Cusack, Daniela F.; Chadwick, Oliver A.; Hockaday, William C.; Vitousek, Peter M.
Mineralogical controls on soil black carbon preservation
Global Biogeochem. Cycles, Vol. 26, No. 2, GB2019
http://dx.doi.org/10.1029/2011GB004109
19 May 2012

Dutta, Koushik; Bhushan, Ravi
Radiocarbon in the Northern Indian Ocean two decades after GEOSECS
Global Biogeochem. Cycles, Vol. 26, No. 2, GB2018
http://dx.doi.org/10.1029/2010GB004027
18 May 2012

Luna, G. M.; Bianchelli, S.; Decembrini, F.; De Domenico, E.; Danovaro, R.; Dell’Anno, A.
The dark portion of the Mediterranean Sea is a bioreactor of organic matter cycling
Global Biogeochem. Cycles, Vol. 26, No. 2, GB2017
http://dx.doi.org/10.1029/2011GB004168
17 May 2012

Teodoru, Cristian R.; Bastien, Julie; Bonneville, Marie-Claude; del Giorgio, Paul A.; Demarty, Maud; Garneau, Michelle; Hélie, Jean-Francois; Pelletier, Luc; Prairie, Yves T.; Roulet, Nigel T.; Strachan, Ian B.; Tremblay, Alain
The net carbon footprint of a newly created boreal hydroelectric reservoir
Global Biogeochem. Cycles, Vol. 26, No. 2, GB2016
http://dx.doi.org/10.1029/2011GB004187
17 May 2012

Global Biogeochemical Cycles – Alert 19 May 2012‏

AGU E-Alert (alerts@agu.org)

Sat 5/19/12
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CAMBRIDGE FORECAST GROUP: HOW TO ORIENT YOURSELF VIA THE CFG BOOK “THE REAGAN REVOLUTION AND THE DEVELOPING COUNTRIES”

March 29, 2012 on 3:16 pm | In Books, CFG, Development, Economics, Financial, Globalization, History, Research, Science & Technology, Third World, USA, World-System | Comments Off on CAMBRIDGE FORECAST GROUP: HOW TO ORIENT YOURSELF VIA THE CFG BOOK “THE REAGAN REVOLUTION AND THE DEVELOPING COUNTRIES”

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Readers want to know:

1.         what’s really happening?

2.         where am I in all this?

 Read:

The Reagan Revolution and the Developing Countries

Cambridge Forecast Group Book

This is a book about the Reagan revolution and the developing countries.  It shows why the years (1980-1990) were critical in determining the global economic future. The first chapter is how to think about the future. The second chapter is about growth economic and human capital. The third chapter is about development economic the forth chapter is about the world economy from Charlemagne to the present. The fifth chapter is about the Reagan revolution.

Our book is unique because no other book in our opinion has accurately described just how important the developing world was in Reagan administration policy in our 1979 Japanese book ”world economy/big prediction” the book upon which this book was based, we predicted that in the early 21th century the developing countries would be growing rapidly even as the developed countries stagnated.

About the Authors:

Lawrence Feiner is currently retired. he has a B.S. in math from The Massachusetts Institute of Technology and a Phd in math from M.I.T.. He has previously co-authored numerous Japanese books that were favorably reviewed. He was a principal of the Cambridge Forecast Group specializing in economic forecasting.

Richard Melson is currently retired after working for an investment advisory firm. He got a masters degree in Asian regional economics from Harvard. He has previously co-authored numerous Japanese books that were favorably reviewed. He was a principal of the Cambridge Forecast Group specializing in economic forecasting.

Again:

This is a book about the Reagan revolution and the developing countries. It shows why the years (1980-1990) were critical in determining the global economic future. The first chapter is how to think about the future. The second chapter is about growth economic and human capital. The third chapter is about development economic the fourth chapter is about the world economy from Charlemagne to the present. The fifth chapter is about the Reagan revolution.

Our book is unique because no other book in our opinion has accurately described just how important the developing world was in Reagan administration policy in our 1979 Japanese book ”world economy/big prediction” the book upon which this book was based, we predicted that in the early 21th century the developing countries would be growing rapidly even as the developed countries stagnated.

Click on:

“THE REAGAN REVOLUTION AND THE DEVELOPING COUNTRIES”: NEW CAMBRIDGE FORECAST GROUP BOOK

November 29, 2011 at 7:24 pm | Posted in BooksDevelopmentEconomicsFinancialGlobalizationHistoryResearchThird WorldUSAWorld-system 

http://cambridgeforecast.wordpress.com/2011/11/

CAMBRIDGE FORECAST GROUP: “WORLD ECONOMY BIG PREDICTION” BOOK

February 7, 2008 at 4:24 am | Posted in BooksFinancialGlobalizationHistoryResearchScience & Technology,Third World

http://cambridgeforecast.wordpress.com/2008/02/07/cambridge-forecast-group-book-world-economy/

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“HOW ECONOMICS SHAPES SCIENCE”: PAULA STEPHAN BOOK

October 29, 2011 on 9:20 pm | In Books, Economics, Financial, History, Research, Science & Technology | Comments Off on “HOW ECONOMICS SHAPES SCIENCE”: PAULA STEPHAN BOOK

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How Economics Shapes Science

Paula Stephan (Author)

Review

This is a marvelous book—lucid, cogent, and lively, full of fascinating anecdotes and news about what university science costs, who pays for it, and who benefits. Paula Stephan saw science as an economic enterprise long before other economists did, and she’s written what will be the definitive book for years to come.
–Richard Freeman, Herbert Ascherman Chair in Economics, Harvard University

Paula Stephan is the undisputed authority on the economics of science and her book is a delight. Laced with dozens of revealing anecdotes about everything from transgenic mice to the competition for high h-indexes and the Nobel Prize, How Economics Shapes Science reveals the economic logic behind the workings of modern science and makes a compelling case for using incentives to rationalize our use of scarce resources.
–Charles Clotfelter, Z. Smith Reynolds Professor of Public Policy and Professor of Economics and Law, Duke University

How do economic considerations shape what scientists do? How do scientific developments affect economic progress? In a world facing challenges like global warming and threats of economic stagnation, these are critical questions. Paula Stephan’s treatment is masterful—and readable outside the ranks of economists, too.
–Richard R. Nelson, George Blumenthal Professor Emeritus of International and Public Affairs, Business, and Law, Columbia University

Scientific research and professional training are now inextricably linked. At the same time the perceived costs and benefits of science have skyrocketed, with governments and universities setting economic incentives in the race for productivity and prestige. Stephan’s groundbreaking economic analysis shows the complex results of these policies.
–Mara Prentiss, Mallinckrodt Professor of Physics, Harvard University

This fascinating book makes senior scientists like me keenly aware of the travails that await our students and post-docs as they pursue the many years of scientific training that lead to a very uncertain career. As Paula Stephan shows, from the point of view of income and stability, our students might be better off getting MBAs. All senior scientists should read this book. It gives a sobering dose of reality to our love of science.
–Kathleen Giacomini, Professor of Bioengineering and Therapeutic Sciences, University of California San Francisco

Paula Stephan is one of the world’s leading scholars of the economics of science. Her comprehensive analysis—as readable as it is timely—is a must read for anyone worrying about the future of science policy or the economics of universities.
–Ronald G. Ehrenberg, Irving M. Ives Professor of Industrial and Labor Relations and Economics, Cornell University

We in Europe often invoke the US science system as the frontier for us, but most of us don’t know in detail how it actually operates. With its wealth of facts and stories, and its rich multidisciplinary perspective, Paula Stephan’s book can teach us. It will help scientists understand their environment and help policy makers see what levers they have (or do not have) to direct science. No one other than Paula Stephan could write with such insight and depth.
–Reinhilde Veugelers, Professor of Managerial Economics, Strategy and Innovation, Katholieke Universiteit Leuven

About the Author

Paula Stephan is Professor of Economics at Georgia State University and Research Associate at the National Bureau of Economic Research. She has served on the Board on Higher Education and Workforce at the NRC, the National Institute of General Medical Sciences Council, and the Social, Behavioral, and Economics Advisory Committee at the NSF.

Product Details:

  • Hardcover: 384 pages
  • Publisher: Harvard University Press
  • January 9, 2012
  • Language: English
  • ISBN-10: 0674049713
  • ISBN-13: 978-0674049710

Book Description

Publication Date: January 9, 2012

The beauty of science may be pure and eternal, but the practice of science costs money. And scientists, being human, respond to incentives and costs, in money and glory. Choosing a research topic, deciding what papers to write and where to publish them, sticking with a familiar area or going into something new—the payoff may be tenure or a job at a highly ranked university or a prestigious award or a bump in salary. The risk may be not getting any of that.

At a time when science is seen as an engine of economic growth, Paula Stephan brings a keen understanding of the ongoing cost-benefit calculations made by individuals and institutions as they compete for resources and reputation. She shows how universities offload risks by increasing the percentage of non-tenure-track faculty, requiring tenured faculty to pay salaries from outside grants, and staffing labs with foreign workers on temporary visas. With funding tight, investigators pursue safe projects rather than less fundable ones with uncertain but potentially path-breaking outcomes. Career prospects in science are increasingly dismal for the young because of ever-lengthening apprenticeships, scarcity of permanent academic positions, and the difficulty of getting funded.

Vivid, thorough, and bold, How Economics Shapes Science highlights the growing gap between the haves and have-nots—especially the vast imbalance between the biomedical sciences and physics/engineering—and offers a persuasive vision of a more productive, more creative research system that would lead and benefit the world.

How Economics Shapes Science

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DEVELOPMENT ISSUES: GLOBAL

June 22, 2011 on 2:27 pm | In Development, Economics, Financial, Globalization, History, Research, Science & Technology | Comments Off on DEVELOPMENT ISSUES: GLOBAL

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SOCIAL INVESTMENTS DESERVE PRIORITY IN ECONOMIC

RECOVERY SCHEMES – UN REPORT

UNNews (UNNews@un.org)

New York, Jun 22 2011

A new United Nations reporthttp://social.un.org/index/ReportontheWorldSocialSituation/2011.aspx“finds that many governments did not pay enough attention to the social implications of the recent global financial crisis and urges that social investments be given priority in recovery programmes.

http://social.un.org/index/LinkClick.aspx?fileticket=v0LQqd2FT3k%3d&tabid=1561 “The Report on the World Social Situation 2011: The Global Social Crisis, published today by the UN Department of Economic and Social Affairs (DESA), explores the ongoing adverse social consequences of the 2008-2009 financial and economic crisis – the worst since the Great Depression of the 1930s.

One consequence of the crisis is that unemployment rose sharply to 205 million people in 2009 from 178 million in 2007. The loss of jobs means not only a loss of incomes but also an increase in vulnerability, especially in developing countries without comprehensive social protection, notes the report.

It adds that various estimates suggest that between 47 million and 84 million more people fell into, or were trapped in, extreme poverty because of the global crisis, which occurred immediately after food and fuel prices had risen sharply. As a result, the number of people living in hunger in the world rose to over a billion in 2009, the highest on record.

The report states that the global economic downturn has had wide-ranging negative social outcomes for individuals, families, communities and societies, and its impact on social progress in areas such as education and health will only become fully evident over time.

“However, initial estimates show that the effects have been sharp, widespread and deep. Given the fragility of the economic recovery and uneven progress in major economies, social conditions are only expected to recover slowly.

“The increased levels of poverty, hunger and unemployment due to the global crisis will continue to affect billions of people in many developed and developing countries for years to come,” the report says.

It is essential, it adds, that governments take into account the likely social implications of their economic policies. Further, economic policies considered in isolation from their social outcomes can have dire consequences for poverty, employment, nutrition, health and education, which, in turn, adversely affect long-term sustainable development.

“There is renewed realization that social policy considerations, especially productive employment, must be given greater importance within economic policy,” said Jomo Kwame Sundaram, Assistant Secretary-General for Economic Development. “The disconnect between economic policies and their social consequences can create a vicious cycle of slow growth and poor social progress.”

The economic crisis is a reminder, he said, that it is essential for people to be healthy, educated, adequately housed and well fed to be more productive and better able to contribute to society.
Jun 22 2011

UN News Centre at http://www.un.org/news

UN OFFICIAL CAUTIONS AGAINST REDUCING ASSISTANCE TO SMALLHOLDER FARMERS

New York, Jun 21 2011

The head of the United Nations agency tasked with combatting rural poverty today cautioned developed countries against cutting assistance to smallholder farmers in poorer nations, saying most food producers across the world were small-scale growers.

“When people cannot afford to eat because they cannot make a decent living, they become desperate, which led to riots during the 2008 food crisis,” “http://www.ifad.org/media/press/2011/39.htm” said Kanayo Nwanze, the President of the UN International Fund for Agriculture Development (IFAD), speaking ahead of the two-day Group of 20 (G20) agriculture ministers’ meeting, which opens in Paris tomorrow.

“The current food price increase has pushed an estimated 44 million people into poverty, creating once again a volatile mix. During the last price increase, when smallholders were assisted in accessing markets for finance, seeds and fertilizers, they were able to benefit from higher prices and both poor producers and consumers were better off,” added Mr. Nwanze, who will address the meeting.

France holds the presidency of the G20, which is made up of the world’s largest economies.

The G20 agriculture ministers are tasked with developing an action plan to address price volatility in food and agricultural markets and its impact on the poor. Studies have shown that the gross domestic product (GDP) growth generated by agriculture is more than twice as effective in reducing poverty as expansion in other sectors.

Mr. Nwanze is expected to tell the ministers that the G20 has a comparative advantage in promoting the sharing of experiences of countries that have made significant progress in boosting agricultural production, and which have created an enabling environment for investment in agriculture, including Brazil and China.

In addition, the G20 can strengthen policy coherence and coordination, which is essential in dealing with sensitive issues in trade, biofuels and responsible investment in agriculture, he said.

“I take this message to the ministers on behalf of the smallholder farmers around the world: the development of rural areas is central to overcoming hunger and poverty, mitigating climate change, achieving energy security and protecting the environment, and it is the smallholder farmer that holds the key. But we must seriously start investing in their potential to support them to deliver.”
Jun 21 2011

UN News Centre at http://www.un.org/news

UN OFFICIAL STRESSES NEED FOR UNIVERSAL ACCESS TO ENERGY TO BOOST DEVELOPMENT

New York, Jun 21 2011

The lack of access to affordable and reliable energy is a major hindrance to human, social, and economic development, a senior United Nations official told delegates attending an “http://www.unis.unvienna.org/unis/pressrels/2011/unisous089.html” international forum that got under way in Austria today to discuss ways of ensuring universal access to energy.

“Without access to modern forms of energy it is highly unlikely that any of the objectives of the Millennium Development Goals will be achieved,” said Kandeh K. Yumkella, the Director General of the UN Industrial Development Organization (UNIDO).

Participants in the three-day Vienna Energy Forum – organized by UNIDO, the Austrian Government and the International Institute for Applied Systems Analysis (IIASA) – highlighted the wide inequality in energy access between rich and poor societies, pointing out that the poorer three quarters of the world’s population use only 10 per cent of global energy.

An estimated 1.5 billion people still do not have access to electricity, and around 3 billion people rely on traditional biomass and coal as their primary source of energy.

Demand for energy in developing countries is expected to grow dramatically, and the increases in population and improvements in living standards are adding to the scale of the challenges, according to delegates at the forum.

Mr. Yumkella noted that China, Peru and Viet Nam have significantly improved their citizens’ access to energy in recent decades, but across sub-Saharan Africa, and in parts of Asia, people still live without basic energy services.

Last year, the UN Secretary-General’s Advisory Group on Energy and Climate Change (AGECC), which is chaired by Mr. Yumkella, called for the adoption of a target to achieve universal access to modern energy services, and for a 40 per cent reduction in energy intensity by 2030.

The forum coincides with the pre-launch of the Global Energy Assessment (GEA), the most comprehensive analysis of the global energy system ever undertaken.

The GEA estimates that the global investments required to achieve the goal of universal access to energy are about $40 billion annually, a small fraction of the total energy infrastructure investment required by 2030.

Jun 21 2011

UN News Centre at http://www.un.org/news

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SOLAR PANELS CHINA: SUNTECH

April 21, 2011 on 9:05 pm | In China, Earth, Ecology, Economics, Financial, Research, Science & Technology | Comments Off on SOLAR PANELS CHINA: SUNTECH

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Suntech Power Holdings Co., Ltd.

Suntech Power Holdings Co., Ltd. (Chinese: pinyin: Shàngdé) (NYSE: STP) is the world’s largest producer of solar panels, with 1,800MW of annual production capacity by the end of 2010. With offices or production facilities in every major market, Suntech has delivered more than 13,000,000 solar panels to thousands of companies in more than 80 countries around the world [3]. As the center for the company’s global operations, Suntech Headquarters, in Wuxi, China, features the world’s largest building integrated solar facade[4].

Installations

Suntech Power has supplied or installed solar modules for numerous solar power plants and systems around the world. Notable installations include:

The company’s Suntech Energy Solutions division completed Google‘s 1.6 MW solar installation in June 2007.[5]

Suntech Power joined with Israeli company Solarit Doral to build Israel’s largest solar power station, a 50 kW rooftop project in the Israeli settlement of Katzrin in the Golan Heights, which was connected to the electricity grid in December 2008.[6][7]

Global Operations

Suntech Power has representative offices in China, Australia, the United States, Switzerland, Spain, Italy, Germany, Japan, and Dubai, as well as production facilities in Wuxi, Luoyang, Qinghai, Shanghai, Germany, Japan, and Goodyear, Arizona.

Suntech America is based in San Francisco, California, and the company has plans to start a production facility in Phoenix, Arizona in 2010.[8] Suntech also has executives of their US operations in top posts in American solar panel industry groups.[9]

Awards

Suntech Power was recognized as the 2008 Frost & Sullivan Solar Energy Development Company of the Year. Frost & Sullivan Research Analyst Mary John commented on the recognition, “The company’s pioneering success in developing energy-efficient, cost-effective and customizable building integrated photovoltaic (BIPV) systems and crystalline PV cells, and modules for solar energy conversion into electricity are highly commendable. It has gone beyond just meeting global energy needs to anticipating them as well and highly satisfied customers testify that the BIPV systems and other energy-efficient products are customized precisely to their needs.”[10]

The Andalay AC Solar PV Panel was awarded one on MSN’s most brilliant products of 2009 because of innovations that advanced their ease of installation and use.[11] Suntech Power is one of the main manufacturers of components for the Andalay Solar Panel sold by Akeena Solar (AKNS).[12]

Founder

Dr Shi Zhengrong (born c. 1963[13]) is the founder [14], chairman and chief executive officer of Suntech Power.

He is a graduate of the University of NSW‘s School of Photovoltaic and Renewable Energy Engineering.[15][16] At UNSW, Dr. Shi studied under Professor Martin Green and met Stuart Wenham, now Suntech’s Chief Technology Officer.

Dr. Zhengrong Shi was honored in January 2010 as a finalist for the Zayed Future Energy Prize. In 2007, Dr. Shi was named one of Time Magazine’s Heros of the Environment.He is often referred to as the world’s first ‘green billionaire’.[17]

Investors

Before going public on the NYSE in 2005, Suntech was funded by a consortium of private equity firms, including Actis Capital and Goldman Sachs. The consolidated private equity investment into Suntech is generally considered to be one of China’s most profitable private equity investments ever, as each firm is thought to have made gains well over 10x on their original investments.

See also

References

  1. 1. a b c Suntech’s annual income statement via Wikinvest
  2. 2. a b Suntech’s annual balance sheet via Wikinvest
  3. 3. http://ir.suntech-power.com/phoenix.zhtml?c=192654&p=irol-newsArticle&ID=1533389&hilight=
  4. 4. http://www.green-energy-news.com/nwslnks/clips109/jan09010.html
  5. 5. Google Solar Panel Project
  6. 6. Israel opens largest solar plant with Chinese help, December 10, 2008.
  7. 7. Chinese PV pioneer helps build Israel’s biggest solar power station, Xinhua, December 9, 2008.
  8. 8. http://phx.corporate-ir.net/phoenix.zhtml?c=192654&p=irol-newsArticle&ID=1355511&highlight=
  9. 9. Retrieved November 12, 2009, from Solar Energy Industries Association: About: SEIA Board website: http://www.seia.org/cs/seia_board
  10. 10. http://www.redorbit.com/news/business/1342480/frost__sullivan_recognizes_suntech_power_for_its_technical_expertise/index.html
  11. 11. MSN Tech and Gadgets. 10 Most Brilliant Products of 2009. Retrieved November 12, 2009, from MSN website: http://tech.msn.com/products/slideshow.aspx?cp-documentid=22104619&imageindex=6
  12. 12. Google Finance. Akeena Solar, Inc. (Public, NASDAQ:AKNS). Retrieved November 12, 2009, from Akeena Solar Inc. company profile website: http://www.google.com/finance?q=NASDAQ:AKNS
  13. 13. The alternative rich list. September 22, 2006. Accessed May 7, 2007.
  14. 14. [1]
  15. 15. School of Photovoltaic and Renewable Energy Engineering
  16. 16. Dr. Zhengrong Shi
  17. 17. http://www.time.com/time/specials/2007/article/0,28804,1663317_1663322_1669932,00.html

Suntech Power Holdings Co., Ltd. Type Public (NYSE: STP)

Industry Photovoltaics

Founded September 2001

Founder(s) Shi Zhengrong

Headquarters Wuxi, Jiangsu province, People’s Republic of China Number of locations United States, Germany, Switzerland, Japan, Australia, Italy, Spain

Revenue US$1.92 Billion (FY 2008)[1] Operating income US$215 Million (FY 2008)[1] Net income US$87.9 Million (FY 2008)[1] Total assets US$3.22 Billion (FY 2008) [2] Total equity US$1.07 Billion (FY 2008)[2] Website www.suntech-power.com/

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CREATING A PRIVATE SCIENCE AND TECHNOLOGY “SKUNKWORKS”: “TUXEDO PARK” BY JENNET CONANT

April 18, 2011 on 8:44 pm | In Books, History, Research, Science & Technology, USA | Comments Off on CREATING A PRIVATE SCIENCE AND TECHNOLOGY “SKUNKWORKS”: “TUXEDO PARK” BY JENNET CONANT

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Alfred Lee Loomis

(November 4, 1887 – August 11, 1975)

and private science

Alfred Lee Loomis (November 4, 1887 – August 11, 1975) was an American attorney, investment banker, physicist, philanthropist, and patron of scientific research. He established the Loomis Laboratory in Tuxedo Park, New York, and his role in the development of radar is considered instrumental in the Allied victory in World War II. He invented the Aberdeen Chronograph for measuring muzzle velocities, proposed the LORAN navigational system, contributed significantly (perhaps critically, according to Luis Alvarez [1]) to the development of a ground-controlled approach technology for aircraft, and participated in preliminary meetings of the Manhattan Project. Loomis also made contributions to biological instrumentation—working with Edmund Newton Harvey, he co-invented the microscope centrifuge,[2] and pioneered techniques for electroencephalography.[3] In 1937 he discovered the sleep K-complex brainwave.[4][5]

Early years

Born in Manhattan, Loomis was the son of Julia Stimson and Henry Patterson Loomis. There were prominent members of society on both sides of his family; primarily these were physicians. Alfred’s parents separated when he was very young, and his father died when Alfred was in college. His first cousin was Henry Stimson, who held cabinet-level positions in the administrations of William Howard Taft, Herbert Hoover, Franklin Roosevelt, and Harry S. Truman. From the boy’s early years, Stimson exerted considerable influence on Loomis.

Loomis completed undergraduate studies in mathematics and science at Yale University and was graduated cum laude from Harvard Law School in 1912. Immediately following his graduation, Loomis married and began practicing corporate law in the firm of Winthrop and Stimson, where he was very successful.

His wife was Elizabeth Ellen Farnsworth of Dedham, Massachusetts, from a prominent Boston society family, whom he wed on June 22, 1912. They had three sons, Alfred Lee Jr., William Farnsworth, and Henry.

In 1917 Alfred Loomis and Landon K. Thorne, the wealthy husband of Loomis’s sister Julia, purchased 17,000 acres (69 km2) of Hilton Head Island, which they established as a private preserve for riding, boating, fishing, and hunting. The centerpiece of the property was the old Honey Horn Plantation. Loomis’s hobbies included automobiles and yachting, including the racing of America’s Cup yachts against the Vanderbilts and Astors.

Military service and a new career in finance

After the United States entered World War I, in 1917 Loomis volunteered for military service. He was commissioned as a captain, and rose to the rank of lieutenant colonel. He worked in ballistics at the Aberdeen Proving Ground in Maryland, where he invented the Aberdeen Chronograph, the first portable instrument capable of measuring muzzle velocity and the striking force of bullets. At Aberdeen he met and worked with a Johns Hopkins physicist, Robert W. Wood, under whose influence Loomis’s long-standing interest in inventing and gadgetry evolved into the serious pursuit of experimental and practical physics.

In the 1920s, Loomis collaborated with his brother-in-law, Landon K. Thorne, rather than returning to the practice of law. They acquired Bonbright and Company and brought it from the verge of bankruptcy to becoming a preeminent U. S. investment banking-house specializing in public utilities. They became very wealthy by financing electric companies as these began to establish the electrical infrastructure of rural America, and Loomis sat on the boards of several banks and electric utilities. Loomis and Thorne pioneered the concept of the holding company, consolidating many of the electric companies that operated on the East Coast of the United States. Loomis further increased his fortune via insider trading practices that now are illegal.

In anticipation of the Wall Street Crash of 1929, he had converted most of his investments into cash after the market had risen so dramatically that he and his partner decided it was unsustainable. Once the stock market crash had bankrupted the majority of speculators, while Wall Street floundered, he became even wealthier as a result of purchasing stocks cheaply after they had plummeted in value and few people had the cash to reinvest.

Loomis Laboratory at Tuxedo Park

Taking advantage of his considerable wealth, Loomis increasingly indulged his interest in science. He established a personal laboratory near his mansion within the exclusive enclave of Tuxedo Park, New York. He and his small staff conducted pioneering studies in spectrometry, high-intensity sound waves, electro-encephalography, and the precise measurement of time, chronometry.

Eventually Loomis was elected to the National Academy of Sciences for his work in physics.

His laboratory was the best of its kind, containing equipment that few universities could afford. His reputation spread quickly, particularly in Europe, where money for science was scarce. Loomis often sent first-class tickets to famous European scientists so that they could travel to the United States to meet with their peers and collaborate on projects. They would be picked up at the airport or train station and brought to Tuxedo Park in his limousine. At first, some in the scientific community called him an “eccentric dabbler,” but soon his laboratory became the meeting place for some of the most accomplished scientists of the time, such as Albert Einstein, Werner Heisenberg, Niels Bohr, James Franck, and Enrico Fermi. Scientists who worked personally with him were convinced of his capability and industry. His wealth, connections, and charm all made him highly persuasive.

He was awarded the Franklin Institute‘s John Price Wetherill Medal in 1934 along with E. Newton Harvey.

In 1939, Loomis began a collaboration with Ernest Lawrence, and was instrumental in financing Lawrence’s project to construct a 184-inch (4.7 m) cyclotron. By this time Loomis had become a prominent figure in experimental physics and had moved his Tuxedo Park operations to Cambridge, Massachusetts, where he established a joint operation with the Massachusetts Institute of Technology (MIT).

Additionally, Loomis’ 1937 house in Tuxedo Park by architect William Lescaze is regarded as an early experiment in double-skin facade construction. This house included “an elaborate double envelope” with a 2-foot-deep air space conditioned by a separate system from the house itself. The object was to maintain high humidity levels inside.[6]

Loomis in World War Two

A March 1940 meeting at the University of California at Berkeley concerned the planned 184-inch cyclotron: This involved Ernest O. Lawrence, Arthur H. Compton, Vannevar Bush, James B. Conant, Karl T. Compton and Loomis.

In the late 1930s Loomis’s scientific team turned their attention to radio detection studies, building a crude microwave radar which they deployed in the back of a van. They drove it to a golf course and aimed it at the neighboring highway in order to track automobiles, then took it to the local airport, where they tracked small aircraft.

Loomis had visited the United Kingdom and knew many of the British scientists who were working on radar. Britain, at war with Germany, was being bombed nightly by the German Luftwaffe, while America was trying to stay out of the war. In 1940 the British Tizard Mission visited the United States, desperately seeking help to develop their concepts further and construct the technology they had invented. British scientists had developed the cavity magnetron, which allowed their radar to be made small enough for installation in aircraft.

On hearing that the British magnetron had a thousand times the output of the best American transmitter, Loomis invited its developers to Tuxedo Park. Because he had performed more work in this area than anyone else in the country, Loomis was appointed by Vannevar Bush to the National Defense Research Committee as chairman of the Microwave Committee and vice-chairman of Division D (Detection, Controls, Instruments). Within a month he had selected a building on the MIT campus in which to equip a laboratory, dubbing it the MIT Radiation Laboratory, usually referred to as the Radiation Laboratory and later known simply as the Rad Lab. He pressed for the development of radar in spite of the Army’s initial skepticism, and arranged funding for the Rad Lab until federal money was allocated.

The MIT Rad Lab was managed by its director, Lee DuBridge. Meanwhile, Loomis assumed his customary function of eliminating the obstacles to research and providing the encouragement that was needed at a time when success still remained elusive. The resulting 10 cm radar was a key technology that enabled the sinking of U-boats, spotted incoming German bombers for the British, and provided cover for the D-Day landing. Loomis took advantage of all his business acumen and industry contacts to ensure that no time was wasted in its development. DuBridge later commented, “Radar won the war; the atom bomb ended it.”

Originally known as “LRN” for Loomis Radio Navigation, LORAN was invented by Loomis. It was the most widely used long-range navigation system until the advent of GPS (which was developed from it and only became available to the public in 2000) and LORAN is being enhanced and retained as a land-based alternative to the satellite-based system. The system was developed at the laboratory and is based on a pulsed hyperbolic system using a master and two slave stations. A world network of stations exists.

Loomis also made a significant contribution to the development of ground-controlled approach technology, a precursor of today’s instrument-landing systems that used radar to enable ground controllers to “talk down” aircraft pilots and help them to land safely when poor visibility made visual landings difficult or impossible. Even untrained persons forced into the unexpected position of having to pilot an aircraft in an emergency, have been guided to land safely using this technology.

Legacy and later years

President Roosevelt lauded the value of Loomis’s work, describing him as being the civilian who was second perhaps only to Churchill, in facilitating the Allied victory in World War II.

Loomis was elected to the National Academy of Sciences in 1940, and received several honorary degrees: from Wesleyan University he received a D.Sc. in 1932, from Yale University an M.Sc. in 1933, and from the University of California an LL.D. in 1941.

Loomis was married to Ellen Farnsworth for over thirty years; she was beautiful, delicate, and often suffered from debilitating depression, eventually developing dementia. They had three children, Alfred, Jr., a pioneering investor, two-time winner of the Bermuda Race and head of the winning America’s Cup syndicate in 1977; Henry, head of the Corporation for Public Broadcasting and Farnsworth, a physician and professor at Brandeis. He had an affair with a colleague’s wife, Manette Hobart, and in 1945 he divorced Ellen and immediately married Manette, scandalizing New York society. At this point he completely changed his lifestyle, eschewing his multiple residences and numerous servants, and settling into a single household in which he and his wife shared a relationship that was characterized by its domesticity. They remained married until Alfred Loomis died more than thirty years later.

Loomis, always a very private person who avoided publicity, retreated from public life entirely after closing the Rad Lab and finishing his related obligations in 1947. He retired to East Hampton with Manette, and never granted another interview.

References

  1. 1. Alvarez, Luis W. (1980). “Alfred Lee Loomis”. National Academy of Sciences. Biographical memoirs. 51. Washington D.C.: National Academies Press. pp. 308 – 341.
  2. 2. “Patent Number 1,907,803”. Retrieved 2008-09-15.
  3. 3. “Harvey, Edmund Newton”. Retrieved 2008-09-15.
  4. 4. Loomis AL, Harvey EN, Hobart GA. Cerebral states during sleep as studies by human brain potentials. J Exp Psychol 1937;21:127–44.abstract
  5. 5. Colrain IM. (2005). The K-complex: a 7-decade history. Sleep. 28(2):255-73. PMID 16171251
  6. 6. Braham, William (2005). “Active Glass Walls: A Typological and Historical Account”.
  7. 7. [1]

Further reading

Tuxedo Park: A Wall Street Tycoon and the Secret Palace of

Science That Changed the Course of World War II

Product Details:

  • Pub. Date: May 2003
  • Publisher: Simon & Schuster Adult Publishing Group
  • Format: Paperback , 352pp
  • Sales Rank: 120,307
  • ISBN-13: 9780684872889
  • ISBN: 0684872889
  • Edition Description: Reprint

Synopsis

The Untold Story of the American Entrepreneur Who Helped Build the Atomic Bomb and Defeat the Nazis.

Legendary financier, philanthropist, and society figure Alfred Lee Loomis gathered the most visionary scientific minds of the twentieth century — Albert Einstein, Werner Heisenberg, Niels Bohr, Enrico Fermi, and others — at his state-of-the-art laboratory in Tuxedo Park, New York, in the late 1930s. He established a top-secret defense laboratory at MIT and personally bankrolled pioneering research into new, high-powered radar detection systems that helped defeat the German Air Force and U-boats. With Ernest Lawrence, the Nobel Prize-winning physicist, he pushed Franklin Delano Roosevelt to fund research in nuclear fission, which led to the development of the atomic bomb.

Jennet Conant, the granddaughter of James Bryant Conant, one of the leading scientific advisers of World War II, enjoyed unprecedented access to Loomis’ papers, as well as to people intimately involved in his life and work. She pierces through Loomis’ obsessive secrecy and illuminates his role in assuring the Allied victory.

New Yorker

In the prewar years, Alfred Lee Loomis was one of the most powerful men on Wall Street.

But he was also a crucial, if heretofore unsung, figure in the evolution of experimental physics in America. In this brisk, entertaining biography, Loomis emerges as “the last of the great amateurs,” a gentleman scientist in the mold of Benjamin Franklin, with a quintessentially American interest in practical, rather than merely theoretical, work. Both patron and player, he turned his massive Tuxedo Park home into a kind of Yaddo for scientists, while also helping to develop a host of inventions, including the atom-smashing cyclotron. Once the Second World War began, he became a central figure, along with his friends Vannevar Bush and Ernest Lawrence, in the orchestration of American science’s contribution to the war effort. Conant shows how Loomis, as the head of the M.I.T. Radiation Laboratory, dexterously governed “a scientific republic” of physicists who ended up making major contributions to anti-submarine warfare, radar, and the accuracy of night bombing. Her group portrait offers a healthy reminder of how much good science depends on community and collaboration, not solitary genius.

Biography

Jennet Conant is the author of the New York Times bestsellers The Irregulars: Roald Dahl and the British Spy Ring in Wartime Washington and Tuxedo Park: A Wall Street Tycoon and the Secret Palace of Science That Changed the Course of World War II. A former journalist, she has written for Vanity Fair, Esquire, GQ, Newsweek, and The New York Times. She lives in New York City and Sag Harbor, New York.

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NATHANIEL HAWTHORNE’S 1851 INTUITIONS ON THE GLOBE AS BRAIN

March 18, 2011 on 12:34 pm | In Art, Books, Globalization, History, Philosophy, Research, Science & Technology | Comments Off on NATHANIEL HAWTHORNE’S 1851 INTUITIONS ON THE GLOBE AS BRAIN

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The House of the Seven Gables, 1851

By Nathaniel Hawthorne, 1804-1864

Chapter 17

The Flight of Two Owls

“Then there is electricity!–the demon, the angel, the mighty physical power, the all-pervading intelligence!” exclaimed Clifford. “Is that a humbug, too? Is it a fact–or have I dreamt it–that, by means of electricity, the world of matter has become a great nerve, vibrating thousands of miles in a breathless point of time? Rather, the round globe is a vast head, a brain, instinct with intelligence! Or, shall we say, it is itself a thought, nothing but thought, and no longer the substance which we deemed it!”

“If you mean the telegraph,” said the old gentleman, glancing his eye toward its wire, alongside the rail-track, “it is an excellent thing;–that is, of course, if the speculators in cotton and politics don’t get possession of it. A great thing, indeed, sir; particularly as regards the detection of bank-robbers and murderers.”

SUMMER AS IT WAS, the east wind set poor Hepzibah’s few remaining teeth chattering in her head, as she and Clifford faced it, on their way up Pyncheon-street, and towards the centre of the town. Not merely was it the shiver which this pitiless blast brought to her frame (although her feet and hands, especially, had never seemed so death-a-cold as now), but there was a moral sensation, mingling itself with the physical chill, and causing her to shake more in spirit than in body. The world’s broad, bleak atmosphere was all so comfortless! Such, indeed, is the impression which it makes on every new adventurer, even if he plunge into it while the warmest tide of life is bubbling through his veins. What, then, must it have been to Hepzibah and Clifford,–so time-stricken as they were, yet so like children in their inexperience,–as they left the door-step, and passed from beneath the wide shelter of the Pyncheon-elm! They were wandering all abroad, on precisely such a pilgrimage as a child often meditates, to the world’s end, with perhaps a sixpence and a biscuit in his pocket. In Hepzibah’s mind, there was the wretched consciousness of being adrift. She had lost the faculty of self-guidance; but, in view of the difficulties around her, felt it hardly worth an effort to regain it, and was, moreover, incapable of making one.

As they proceeded on their strange expedition, she now and then cast a look sidelong at Clifford, and could not but observe that he was possessed and swayed by a powerful excitement. It was this, indeed, that gave him the control which he had at once, and so irresistibly, established over his movements. It not a little resembled the exhilaration of wine. Or, it might more fancifully be compared to a joyous piece of music, played with wild vivacity, but upon a disordered instrument. As the cracked jarring note might always be heard, and as it jarred loudest amid the loftiest exultation of the melody, so was there a continual quake through Clifford, causing him most to quiver while he wore a triumphant smile, and seemed almost under a necessity to skip in his gait.

They met few people abroad, even on passing from the retired neighborhood of the House of the Seven Gables into what was ordinarily the more thronged and busier portion of the town. Glistening sidewalks, with little pools of rain, here and there, along their unequal surface; umbrellas displayed ostentatiously in the shop-windows, as if the life of trade had concentred itself in that one article; wet leaves of the horse-chestnut or elm trees, torn off untimely by the blast, and scattered along the public way; an unsightly accumulation of mud in the middle of the street, which perversely grew the more unclean for its long and laborious washing;–these were the more definable points of a very sombre picture. In the way of movement, and human life, there was the hasty rattle of a cab or coach, its driver protected by a water-proof cap over his head and shoulders; the forlorn figure of an old man, who seemed to have crept out of some subterranean sewer, and was stooping along the kennel, and poking the wet rubbish with a stick, in quest of rusty nails; a merchant or two, at the door of the post-office, together with an editor, and a miscellaneous politician, awaiting a dilatory mail; a few visages of retired sea-captains at the window of an insurance office, looking out vacantly at the vacant street, blaspheming at the weather, and fretting at the dearth as well of public news as local gossip. What a treasure-trove to these venerable quidnuncs, could they have guessed the secret which Hepzibah and Clifford were carrying along with them! But their two figures attracted hardly so much notice as that of a young girl, who passed at the same instant, and happened to raise her skirt a trifle too high above her ankles. Had it been a sunny and cheerful day, they could hardly have gone through the streets without making themselves obnoxious to remark. Now, probably, they were felt to be in keeping with the dismal and bitter weather, and therefore did not stand out in strong relief, as if the sun were shining on them, but melted into the gray gloom, and were forgotten as soon as gone.

Poor Hepzibah! Could she have understood this fact, it would have brought her some little comfort; for, to all her other troubles–strange to say!–there was added the womanish and old-maiden-like misery arising from a sense of unseemliness in her attire. Thus, she was fain to shrink deeper into herself, as it were, as if in the hope of making people suppose that here was only a cloak and hood, threadbare and wofully faded, taking an airing in the midst of the storm, without any wearer!

As they went on, the feeling of indistinctness and unreality kept dimly hovering round about her, and so diffusing itself into her system that one of her hands was hardly palpable to the touch of the other. Any certainty would have been preferable to this. She whispered to herself, again and again,–“Am I awake?–Am I awake?”–and sometimes exposed her face to the chill spatter of the wind, for the sake of its rude assurance that she was. Whether it was Clifford’s purpose, or only chance, had led them thither, they now found themselves passing beneath the arched entrance of a large structure of gray stone. Within, there was a spacious breadth, and an airy height from floor to roof, now partially filled with smoke and steam, which eddied voluminously upward, and formed a mimic cloud-region over their heads. A train of cars was a steed impatient for a headlong rush; and the bell rang out its hasty peal, so well expressing the brief summons which life vouchsafes to us, in its hurried career. Without question or delay,–with the irresistible decision, if not rather to be called recklessness, which had so strangely taken possession of him, and through him of Hepzibah,–Clifford impelled her towards the cars, and assisted her to enter. The signal was given; the engine puffed forth its short, quick breaths; the train began its movement; and, along with a hundred other passengers, these two unwonted travellers sped onward like the wind.

At last, therefore, and after so long estrangement from everything that the world acted or enjoyed, they had been drawn into the great current of human life and were swept away with it, as by the suction of fate itself.

Still haunted with the idea that not one of the past incidents, inclusive of Judge Pyncheon’s visit, could be real, the recluse of the seven gables murmured in her brother’s ear,–

“Clifford! Clifford! Is not this a dream?”

“A dream, Hepzibah!” repeated he, almost laughing in her face. “On the contrary, I have never been awake before!”

Meanwhile, looking from the window, they could see the world racing past them. At one moment, they were rattling through a solitude; the next, a village had grown up around them; a few breaths more, and it had vanished, as if swallowed by an earthquake. The spires of meeting-houses seemed set adrift from their foundations; the broad-based hills glided away. Everything was unfixed from its age-long rest, and moving at whirlwind speed in a direction opposite to their own.

Within the car, there was the usual interior life of the railroad, offering little to the observation of other passengers, but full of novelty for this pair of strangely enfranchised prisoners. It was novelty enough, indeed, that there were fifty human beings in close relation with them, under one long and narrow roof, and drawn onward by the same mighty influence that had taken their two selves into its grasp. It seemed marvellous how all these people could remain so quietly in their seats, while so much noisy strength was at work in their behalf. Some, with tickets in their hats (long travellers these, before whom lay a hundred miles of railroad), had plunged into the English scenery and adventures of pamphlet novels, and were keeping company with dukes and earls. Others, whose briefer span forbade their devoting themselves to studies so abstruse, beguiled the little tedium of the way with penny papers. A party of girls, and one young man, on opposite sides of the car, found huge amusement in a game of ball. They tossed it to and fro, with peals of laughter that might be measured by mile-lengths; for, faster than the nimble ball could fly, the merry players fled unconsciously along, leaving the trail of their mirth afar behind, and ending their game under another sky than had witnessed its commencement. Boys, with apples, cakes, candy, and rolls of variously tinctured lozenges,–merchandise that reminded Hepzibah of her deserted shop,–appeared at each momentary stopping-place, doing up their business in a hurry, or breaking it short off, lest the market should ravish them away with it. New people continually entered. Old acquaintances–for such they soon grew to be, in this rapid current of affairs–continually departed. Here and there, amid the rumble and the tumult, sat one asleep. Sleep; sport; business; graver or lighter study; and the common and inevitable movement onward! It was life itself!

Clifford’s naturally poignant sympathies were all aroused. He caught the color of what was passing about him, and threw it back more vividly than he received it, but mixed, nevertheless, with a lurid and portentous hue. Hepzibah, on the other hand, felt herself more apart from humankind than even in the seclusion which she had just quitted.

“You are not happy, Hepzibah!” said Clifford, apart, in a tone of reproach. “You are thinking of that dismal old house, and of Cousin Jaffrey,”–here came the quake through him,–“and of Cousin Jaffrey sitting there, all by himself! Take my advice,–follow my example,–and let such things slip aside. Here we are, in the world, Hepzibah!–in the midst of life!–in the throng of our fellow-beings! Let you and I be happy! As happy as that youth, and those pretty girls, at their game of ball!”

“Happy!” thought Hepzibah, bitterly conscious, at the word, of her dull and heavy heart, with the frozen pain in it. “Happy! He is mad already; and, if I could once feel myself broad awake, I should go mad too!”

If a fixed idea be madness, she was perhaps not remote from it. Fast and far as they had rattled and clattered along the iron track, they might just as well, as regarded Hepzibah’s mental images, have been passing up and down Pyncheon-street. With miles and miles of varied scenery between, there was no scene for her, save the seven old gable-peaks, with their moss, and the tuft of weeds in one of the angles, and the shop-window, and a customer shaking the door, and compelling the little bell to jingle fiercely, but without disturbing Judge Pyncheon! This one old house was everywhere! It transported its great, lumbering bulk, with more than railroad speed, and set itself phlegmatically down on whatever spot she glanced at. The quality of Hepzibah’s mind was too unmalleable to take new impressions so readily as Clifford’s. He had a winged nature; she was rather of the vegetable kind, and could hardly be kept long alive, if drawn up by the roots. Thus it happened that the relation heretofore existing between her brother and herself was changed. At home, she was his guardian; here, Clifford had become hers, and seemed to comprehend whatever belonged to their new position with a singular rapidity of intelligence. He had been startled into manhood and intellectual vigor; or, at least, into a condition that resembled them, though it might be both diseased and transitory.

The conductor now applied for their tickets; and Clifford, who had made himself the purse-bearer, put a bank-note into his hand, as he had observed others do.

“For the lady and yourself?” asked the conductor. “And how far?”

“As far as that will carry us,” said Clifford. “It is no great matter. We are riding for pleasure, merely!”

“You choose a strange day for it, sir!” remarked a gimlet-eyed old gentleman, on the other side of the car, looking at Clifford and his companion, as if curious to make them out. “The best chance of pleasure, in an easterly rain, I take it, is in a man’s own house, with a nice little fire in the chimney.”

“I cannot precisely agree with you,” said Clifford, courteously bowing to the old gentleman, and at once taking up the clew of conversation which the latter had proffered. “It had just occurred to me, on the contrary, that this admirable invention of the railroad–with the vast and inevitable improvements to be looked for, both as to speed and convenience–is destined to do away with those stale ideas of home and fireside, and substitute something better.”

“In the name of common sense,” asked the old gentleman, rather testily, “what can be better for a man than his own parlor and chimney-corner?”

“These things have not the merit which many good people attribute to them,” replied Clifford. “They may be said, in few and pithy words, to have ill-served a poor purpose. My impression is, that our wonderfully increased and still increasing facilities of locomotion are destined to bring us round again to the nomadic state. You are aware, my dear sir,–you must have observed it, in your own experience,–that all human progress is in a circle; or, to use a more accurate and beautiful figure, in an ascending spiral curve. While we fancy ourselves going straight forward, and attaining, at every step, an entirely new position of affairs, we do actually return to something long ago tried and abandoned, but which we now find etherealized, refined, and perfected to its ideal. The past is but a coarse and sensual prophecy of the present and the future. To apply this truth to the topic now under discussion.–In the early epochs of our race, men dwelt in temporary huts, of bowers of branches, as easily constructed as a bird’s nest, and which they built,–if it should be called building, when such sweet homes of a summer solstice rather grew than were made with hands,–which Nature, we will say, assisted them to rear, where fruit abounded, where fish and game were plentiful, or, most especially, where the sense of beauty was to be gratified by a lovelier shade than elsewhere, and a more exquisite arrangement of lake, wood, and hill. This life possessed a charm, which, ever since man quitted it, has vanished from existence. And it typified something better than itself. It had its drawbacks; such as hunger and thirst, inclement weather, hot sunshine, and weary and foot-blistering marches over barren and ugly tracts, that lay between the sites desirable for their fertility and beauty. But, in our ascending spiral, we escape all this. These railroads–could but the whistle be made musical, and the rumble and the jar got rid of–are positively the greatest blessing that the ages have wrought out for us. They give us wings; they annihilate the toil and dust of pilgrimage; they spiritualize travel! Transition being so facile, what can be any man’s inducement to tarry in one spot? Why, therefore, should he build a more cumbrous habitation than can readily be carried off with him? Why should he make himself a prisoner for life in brick, and stone, and old worm-eaten timber, when he may just as easily dwell, in one sense, nowhere,–in a better sense, wherever the fit and beautiful shall offer him a home?”

Clifford’s countenance glowed as he divulged this theory; a youthful character shone out from within, converting the wrinkles and pallid duskiness of age into an almost transparent mask. The merry girls let their ball drop upon the floor, and gazed at him. They said to themselves, perhaps, that, before his hair was gray and the crow’s feet tracked his temples, this now decaying man must have stamped the impress of his features on many a woman’s heart. But, alas! no woman’s eye had seen his face while it was beautiful!

“I should scarcely call it an improved state of things,” observed Clifford’s new acquaintance, “to live everywhere and nowhere!”

“Would you not?” exclaimed Clifford, with singular energy. “It is as clear to me as sunshine,–were there any in the sky,–that the greatest possible stumbling-blocks in the path of human happiness and improvement are these heaps of bricks and stones, consolidated with mortar, or hewn timber, fastened together with spike-nails, which men painfully contrive for their own torment, and call them house and home! The soul needs air; a wide sweep and frequent change of it. Morbid influences, in a thousand-fold variety, gather about hearths, and pollute the life of households. There is no such unwholesome atmosphere as that of an old home, rendered poisonous by one’s defunct forefathers and relatives. I speak of what I know. There is a certain house within my familiar recollection,–one of those peaked-gable (there are seven of them) projecting-storied edifices, such as you occasionally see, in our elder towns,–a rusty, crazy, creaky, dry-rotted, damp-rotted, dingy, dark, and miserable old dungeon, with an arched window over the porch, and a little shop-door on one side, and a great, melancholy elm before it! Now, sir, whenever my thoughts recur to this seven-gabled mansion–(the fact is so very curious that I must needs mention it)–immediately I have a vision or image of an elderly man, of remarkably stern countenance, sitting in an oaken elbow-chair, dead, stone-dead, with an ugly flow of blood upon his shirt-bosom! Dead, but with open eyes! He taints the whole house, as I remember it. I could never flourish there, nor be happy, nor do nor enjoy what God meant me to do and enjoy!”

His face darkened, and seemed to contract, and shrivel itself up, and wither into age.

“Never, sir!” repeated. “I could never draw cheerful breath there!”

“I should think not,” said the old gentleman, eyeing Clifford earnestly, and rather apprehensively. “I should conceive not, sir, with that notion in your head!”

“Surely not,” continued Clifford; “and it were a relief to me if that house could be torn down, or burnt up, and so the earth be rid of it, and grass be sown abundantly over its foundation. Not that I should ever visit its site again! For, sir, the further I get away from it, the more does the joy, the lightsome freshness, the heart-leap, the intellectual dance, the youth, in short,–yes, my youth, my youth!–the more does it come back to me. No longer ago than this morning, I was old. I remember looking in the glass, and wondering at my own gray hair, and the wrinkles, many and deep, right across my brow, and the furrows down my cheeks, and the prodigious trampling of crow’s feet about my temples! It was too soon! I could not bear it! Age had no right to come! I had not lived! But now do I look old? If so, my aspect belies me strangely; for–a great weight being off my mind–I feel in the very hey-day of my youth, with the world and my best days before me!”

“I trust you may find it so,” said the old gentleman, who seemed rather embarrassed, and desirous of avoiding the observation which Clifford’s wild talk drew on them both. “You have my best wishes for it.”

“For Heaven’s sake, dear Clifford, be quiet!” whispered his sister. “They think you mad.”

“Be quiet yourself, Hepzibah!” returned her brother. “No matter what they think! I am not mad. For the first time in thirty years, my thoughts gush up and find words ready for them. I must talk, and I will!”

He turned again towards the old gentleman, and renewed the conversation.

“Yes, my dear sir,” said he, “it is my firm belief and hope, that these terms of roof and hearth-stone, which have so long been held to embody something sacred, are soon to pass out of men’s daily use, and be forgotten. Just imagine, for a moment, how much of human evil will crumble away, with this one change! What we call real estate–the solid ground to build a house on–is the broad foundation on which nearly all the guilt of this world rests. A man will commit almost any wrong,–he will heap up an immense pile of wickedness, as hard as granite, and which will weigh as heavily upon his soul, to eternal ages,–only to build a great, gloomy, dark-chambered mansion, for himself to die in, and for his posterity to be miserable in. He lays his own dead corpse beneath the underpinning, as one may say, and hangs his frowning picture on the wall, and, after thus converting himself into an evil destiny, expects his remotest great-grandchildren to be happy there! I do not speak wildly. I have just such a house in my mind’s eye!”

“Then, sir,” said the old gentleman, getting anxious to drop the subject, “you are not to blame for leaving it.”

“Within the lifetime of the child already born,” Clifford went on, “all this will be done away. The world is growing too ethereal and spiritual to bear these enormities a great while longer. To me,–though, for a considerable period of time, I have lived chiefly in retirement, and know less of such things than most men,–even to me, the harbingers of a better era are unmistakable. Mesmerism, now! Will that effect nothing, think you, towards purging away the grossness out of human life?”

“All a humbug!” growled the old gentleman.

“These rapping spirits, that little Phoebe told us of, the other day,” said Clifford,–“what are these but the messengers of the spiritual world, knocking at the door of substance? And it shall be flung wide open!”

“A humbug, again!” cried the old gentleman, growing more and more testy at these glimpses of Clifford’s metaphysics. “I should like to rap with a good stick on the empty pates of the dolts who circulate such nonsense!”

“Then there is electricity!–the demon, the angel, the mighty physical power, the all-pervading intelligence!” exclaimed Clifford. “Is that a humbug, too? Is it a fact–or have I dreamt it–that, by means of electricity, the world of matter has become a great nerve, vibrating thousands of miles in a breathless point of time? Rather, the round globe is a vast head, a brain, instinct with intelligence! Or, shall we say, it is itself a thought, nothing but thought, and no longer the substance which we deemed it!”

“If you mean the telegraph,” said the old gentleman, glancing his eye toward its wire, alongside the rail-track, “it is an excellent thing;–that is, of course, if the speculators in cotton and politics don’t get possession of it. A great thing, indeed, sir; particularly as regards the detection of bank-robbers and murderers.”

“I don’t quite like it, in that point of view,” replied Clifford. “A bank-robber, and what you call a murderer, likewise, has his rights, which men of enlightened humanity and conscience should regard in so much the more liberal spirit, because the bulk of society is prone to controvert their existence. An almost spiritual medium, like the electric telegraph, should be consecrated to high, deep, joyful, and holy missions. Lovers, day by day,–hour by hour if so often moved to do it,–might send their heart-throbs from Maine to Florida, with some such words as these,–‘I love you for ever!–My heart runs over with love!’–‘I love you more than I can!’–and, again, at the next message,–‘I have lived an hour longer, and love you twice as much!’ Or, when a good man has departed, his distant friend should be conscious of an electric thrill, as from the world of happy spirits, telling him,–‘Your dear friend is in bliss!’ Or, to an absent husband, should come tidings thus,–‘An immortal being, of whom you are the father, has this moment come from God!’–and immediately its little voice would seem to have reached so far, and to be echoing in his heart. But for these poor rogues, the bank-robbers,–who, after all, are about as honest as nine people in ten, except that they disregard certain formalities, and prefer to transact business at midnight, rather than ‘Change-hours,–and for these murderers, as you phrase it, who are often excusable in the motives of their deed, and deserve to be ranked among public benefactors, if we consider only its result,–for unfortunate individuals like these, I really cannot applaud the enlistment of an immaterial and miraculous power in the universal world-hunt at their heels!”

“You can’t, hey?” cried the old gentleman, with a hard look.

“Positively, no!” answered Clifford. “It puts them too miserably at disadvantage. For example, sir, in a dark, low, cross-beamed, panelled room of an old house, let us suppose a dead man, sitting in an armchair, with a blood-stain on his shirt-bosom,–and let us add to our hypothesis another man, issuing from the house, which he feels to be over-filled with the dead man’s presence,–and let us lastly imagine him fleeing, Heaven knows whither, at the speed of a hurricane, by railroad! Now, sir, if the fugitive alight in some distant town, and find all the people babbling about that self-same dead man, whom he has fled so far to avoid the sight and thought of, will you not allow that his natural rights have been infringed? He has been deprived of his city of refuge, and, in my humble opinion, has suffered infinite wrong!”

“You are a strange man, sir!” said the old gentleman, bringing his gimlet-eye to a point on Clifford, as if determined to bore right into him. “I can’t see through you!”

“No, I’ll be bound you can’t!” cried Clifford, laughing. “And yet, my dear sir, I am as transparent as the water of Maule’s well! But come, Hepzibah! We have flown far enough for once. Let us alight, as the birds do, and perch ourselves on the nearest twig, and consult whither we shall fly next!”

Just then, as it happened, the train reached a solitary way-station. Taking advantage of the brief pause, Clifford left the car, and drew Hepzibah along with him. A moment afterwards, the train–with all the life of its interior, amid which Clifford had made himself so conspicuous an object–was gliding away in the distance, and rapidly lessening to a point, which, in another moment, vanished. The world had fled away from these two wanderers. They gazed drearily about them. At a little distance stood a wooden church, black with age, and in a dismal state of ruin and decay, with broken windows, a great rift through the main body of the edifice, and a rafter dangling from the top of the square tower. Further off was a farmhouse, in the old style, as venerably black as the church, with a roof sloping downward from the three-story peak, to within a man’s height of the ground. It seemed uninhabited. There were the relics of a woodpile, indeed, near the door, but with grass sprouting up among the chips and scattered logs. The small raindrops came down aslant; the wind was not turbulent, but sullen, and full of chilly moisture.

Clifford shivered from head to foot. The wild effervescence of his mood–which had so readily supplied thoughts, fantasies, and a strange aptitude of words, and impelled him to talk from the mere necessity of giving vent to this bubbling-up gush of ideas–had entirely subsided. A powerful excitement had given him energy and vivacity. Its operation over, he forthwith began to sink.

“You must take the lead now, Hepzibah!” murmured he, with a torpid and reluctant utterance. “Do with me as you will!”

She knelt down upon the platform where they were standing, and lifted her clasped hands to the sky. The dull, gray weight of clouds made it invisible; but it was no hour for disbelief;–no juncture this, to question that there was a sky above, and an Almighty Father looking down from it!

“O God!”–ejaculated poor, gaunt Hepzibah,–then paused a moment, to consider what her prayer should be,–“O God,–our Father,–are we not thy children? Have mercy on us!”

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CAMBRIDGE FORECAST GROUP ESSAY: GLOBALIZATION PAST AND PRESENT BY L. FEINER AND R. MELSON

December 1, 2010 on 9:09 am | In Books, CFG, Development, Economics, Financial, Globalization, History, Research, Science & Technology | No Comments

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GLOBALIZATION AND THE CURRENT CRISIS

A Handbook for Policy Makers

(By the Green Policy Group of The Other Economic Summit)

CONTENTS

Introduction

A Brief, Long-Term History of Globalization

Globalization Since 1945

Neoliberalism

The Third World

The American Economy, What Went Wrong Since 1965

The Role of The Transnational Corporations

Cuts in U.S. Social Entitlements And Globalization

Economic Growth And Sustainable Development

Anti-Third World Populism in The West

Circumventing Anti-Third World Populism, How Not To Do It

A Twenty Six Year History of Global “Quick Fixes”

Advice for Policy Makers

Conclusions

Overview:

In 1985, Grosvenor International Publishers, London, published a three-volume set of books on North/South commercial relations called Third World Development edited by Ronald Reagan. In it, several members of the Reagan cabinet wrote articles stressing the importance of agrarian reform. In 1991, in contrast, the World Bank Development Report devoted one sentence to agrarian reform, saying that it might be helpful to economic development in some instances.

Third World Development, 3 Volumes.

Author: Carim, Enver (editor).

GLOBALIZATION AND SUSTAINABLE ECONOMIC

GROWTH

Introduction

This handbook presents a brief geographical and historical overview of the various financial/ political crises, which have been taking place in the world lately. If you’ve been feeling confused by them, the following material might be helpful

A Brief, Long-Term History of Globalization

“Globalization” is not an entirely new phenomenon. Defined broadly, globalization, for better or worse, is simply the recurrence (this time on a global scale) of a process of political /cultural/economic consolidation, that has occurred many times in the past, on a very large regional scale. (i.e. the sinification of the Chinese subcontinent, the Aryanization of the Indian subcontinent, and the Hellenization of the Near East and the Mediterranean world.) “Globalization” is simply the 500-year period of Europeanization (and later Americanization) of the rest of the world.

European civilization’s five hundred year period of technological progress and geographical expansion has often been called unique, unparalleled in human history, completely different from anything in pre-European or non-European societies. This is not quite true however. Chinese civilization did undergo a similar process some 2000 years earlier, during its so-called “period of warring states” (500-250 B.C.). Competition between the “warring states” led to rapid technological and economic advance. It also led to massive geographical expansion via colonization (because of an outflow of refugees from the wars). Europe’s period of state formation, on the other hand, occurred 2,000 years later than China’s. Europe was thus heir to an additional 2,000 years of global technological and social advance. Because of advances in naval technology, and because of global linkages created by Arab and Mongol conquests, Europe’s expansion took place on a global rather than on a regional scale. Thus, whereas China’s “late start” (its iron age began in 500 B.C.) enabled it to develop a particularly successful and durable form of the “tributary mode”

1 Agricultural universal empire. See Samir Amin, Eurocentrism, Monthly Review Press, 1989.

Europe’s “late start”, 2,000 years later, enabled it to transcend the “tributary mode” altogether, and progress to industrial capitalism.

In other words, “Globalization” is nothing more than the five hundred year period of “Europeanization” (and, more recently, ”Americanization that the world has been subject to.)

2In his book The World’s First Universal Nation, Ben Wattenberg makes the point that (in some respects), America is the industrial world’s first “universal empire”, more akin, in some ways, to ancient Persia or imperial Rome, than to a European “nation state”. America is, in effect, a “global empire” which, it must be added, is governing the world in a more and more chaotic and capricious manner, because many of America’s politicians and their constituents don’t even want to admit that there is an outside world.

The globalization process was accelerated dramatically during the industrial revolution. By the beginning of this century, it had evolved into a system of global capitalism, linking together armed, mutually hostile industrial states and moribund empires (which were themselves rapidly industrializing even as they disintegrated). The globalization process collapsed temporarily during the catastrophes of the 1914 – 1945 period. It resumed again in 1945, under American hegemony, and was again dramatically accelerated by the post-war “technological revolution” (computers, transistors, containerization, the “green revolution”, communications satellites and the integrated circuit).

Globalization Since 1945

Contemporary critics of globalization usually do not begin with a 500-year history of the West’s rise to global dominance. Wolfgang Sachs, for example, (The Dictionary of Sustainable Development, Zed Books, 1992) concentrates his attention on the consequences of the ideology of “developmentalism” promulgated by Truman in the 1940’s and adopted by the Third World elites

3 “Developmentalism” is the idea that the Third World equals the pre-industrial West, and, therefore, it can(and should) “catch up with the West” by the use of the science and technology discovered by the West. However, to paraphrase Samir Amin, (Re-reading Postwar History, Monthly Review Press, 1994) the point is not to “catch up” with the West, but to “do something different”.

David C. Korten, on the other hand, (When Corporations Rule The World, Kumarian Publishers, 1995) discusses the derangements brought about by the last twenty years of globalization.

4 The global economic consequences of the integrated circuit, i.e. the global financial revolution and the spread of the “global factory”.

Neoliberalism

When most people use the term “globalization”, they really mean “neoliberalism”. Neoliberalism (or “globalization” if you will) has attracted widespread criticism in recent years from such diverse sources as Pope John Paul.

Various places are witnessing the resurgence of a certain capitalist neo-liberalism that subordinates the human person to blind market forces and conditions the development of peoples on those forces. In the international community, we thus see a small number of countries growing exceedingly rich at the cost of the increasing impoverishment of a great number of other countries; as a result the wealthy grow wealthier, with the poor grow ever poorer. For many of the political and economic systems operative today the greatest challenge is still that of combining freedom and social justice..” Pope John Paul, NYT 1/26/98

Ralph Nader, and (believe it or not) financier George Soros. The thrust of this criticism is that neoliberalism puts all of global society and all of global ecology onto a roulette wheel known as the “global capital markets”, and spins this roulette wheel, with God knows what consequences to the human future.

However, the point here is not to criticize neoliberalism, whose failings by now should be apparent to everyone, but rather to describe what it is, how it came about, and how it is likely to change.

First of all, the “liberalism” in neoliberalism does not mean “New Deal/Great Society” liberalism. It means “19th century British liberalism”; the policy of laissez-faire economics within nations, and the free, unfettered flow of commodities and capital between nations. “Neo”-”liberalism”, thus, means the late 20th century version of 19th century British liberalism; the privatization of the economies within nations, and the free, unfettered flow of commodities and capital between nations. Neoliberalism is usually portrayed as an inevitable consequence of changes in communications technology, the inevitable yielding of governments to the unstoppable “global marketplace”. Neoliberalism, however, is actually a global political construct, whose purpose was to regulate the process of globalization to (short term) U.S. advantage. It has far more to do with the U.S. political process, than with some Svengali-like takeover of national governments by multinational corporations.

Here is how it came about. At the 1979 economic summit in Belgrade, an elaborate scheme of Western/OPEC financial coordination was worked out to end global inflation and refinance Third World debt, without at the same time, collapsing global economic demand. Although this scheme involved a certain loss of US financial hegemony, it was reluctantly accepted by the Carter administration in the summer of 1980

5The hangup was Saudi insistence on PLO observer status at the IMF. In much of the non-Western world, however, the prospect of a Western/OPEC recycling agreement to bail out ThirdWorld debt and tame global inflation, presented “a window of opportunity” to both create astable, commodity-based, global monetary system (based in fact on oil), and also to resolve theIsraeli/Palestinian dispute, (the PLO, at that point, had a least the vestiges of a workinggovernment and also a sizable amount of cash to finance such a government).

There was much discussion of this plan in the mainstream business press. For example, a New York Times article (June 23, 1980) discussed how European heads of state voiced support for Western/OPEC cooperation to address world economic problems and in light of that, also for a timely resolution of the Israeli-Palestinian crisis. By the end of 1980, however, this scheme was increasingly thrown into doubt by the outbreak of the Iraq/Iran war. In 1982, it was finished off entirely by Israel’s invasion of Lebanon.

After two years of blundering, the Reagan administration patched together an alternative to Western/OPEC financial coordination. Interest rates were kept very high, but were no longer increasing exponentially. A massive tax cut was accompanied by a massive increase in military spending, keeping U.S. consumer demand high. The American market was thrown open to all comers. In addition, foreign exporters were given a competitive advantage by the high dollar.

America, thus, became the world’s “lender and importer of last resort”. Third World debt continued to grow, but was increasingly being dwarfed by U.S. debt. In essence, Reagan “bribed” large parts of the American middle class and large parts of the Third World bourgeoisie, and did so “on tick” (by borrowing from countries with trade surpluses). In this way, he established a sort of “global consensus” for his policies.

The Reagan administration set to work on a long term approach to North/South economic relations, an approach that was later to become known as “neoliberalism”, or the “NAFTA/GATT” approach to North/South economic relations. Under neoliberalism, the rich countries agree to open their markets to labor intensive Third World manufactured exports, in return for which Third World countries agree to remove restrictions on private outside capital placements. Markets are also opened for high-tech products and services. (The winners the U.S., the losers potentially everyone else .

The factors that enabled the NIC’s to succeed, agrarian reform, protection of infant industries, massive amounts of non-private economic stimulus (through US Cold War spending in those areas), tight control of cross-border capital flows, are either prohibited or discouraged under neoliberalism. China, for example, has grown exceptionally rapidly precisely because it did not play by the rules of neoliberalism. Close ).

Neoliberalism was conceived by the Reagan administration, pushed forward by the Bush administration, and brought to completion by the Clinton administration, by the passage of NAFTA and then the Uruguay Round of GATT. Neither Reagan nor Bush were terribly anxious to talk about neoliberalism while it was still a “work in progress”. Reagan relied heavily on theatrics and distractions (i.e. blowing out of proportion issues such as abortion and church-state relations). Bush, on the other hand, relied on secrecy (the stealth presidency) and later on military triumphalism (the Gulf War and the glorification of the U.S. army). It was left to Clinton, to openly and directly adopt neoliberalism as one the leading policies of his administration

Here is a brief discussion of the world monetary system from the 1945 to the present. Political, social and economic factors will be brought in when necessary. The Bretton Woods monetary system was developed by the U.S. and Britain during the closing years of the second world war. The international reserve currency was to be U.S. dollars, and dollars were to be convertible to gold bullion at a fixed rate. If a country (other than the U.S.) lacked the dollars necessary to support its currency, it might be forced to devalue its currency (as Britain did in the mid-1960’s). The IMF was an international lending institution that extended temporary loans to countries in order to enable them to support their currencies. The Bretton Woods system was known as the “dollar-gold” exchange standard. It’s purpose was avoid the competitive devaluations between nations that contributed to the global depression of the 1930’s. However, in the later half of the 1960’s, the U.S. financed both the Vietnam War and a massive increase in social spending largely by means of monetary creation. The number of dollars in global circulation increased enormously. By 1969, it had become apparent that the U.S. could not possible honor the gold backing of the dollar. In 1971, Nixon acknowledged that fact by devaluing the dollar, By 1973, the dollar was no longer backed by gold and the currencies of the G7 industrial countries were “floating” that is trading openly with each other according to supply and demand. Meanwhile the industrial world had become more and more dependent on the oil exports of Third World nations. Since the war, these countries had been pumping out more and more oil (which was priced naturally in dollars) at a dollar price which did not reflect the massive post-WWII, Korean and Vietnam war dollar inflations. These countries found themselves selling more and more of a depletable resource at a lower and lower real price. At the end of 1973, these countries met to raise the oil dollar price in order to compensate for the drop in real oil price that had occurred since 1945. At this point, the dollar rose against other currencies, since oil was priced in dollars. In short, the early 1970’s were a period of extreme price and monetary instability. Many observers, in the belief that global trade and production could not possibly be carried out amid such price volatility, predicted a global depression. How, they asked, could businesses possibly make production and investment decisions amid such price uncertainty? There was a spate of popular books about the upcoming world depression and how to protect oneself against it. Most of these books advocated a return to the gold standard. And, indeed the world banking system suffered enormous foreign exchange loses, and Japan, heavily dependent on cheap oil, was thrown into a deep recession. And yet the dire predictions of these books turned out to be wrong (or at least several decades ahead of their time). Why? The reason for this was another development that had occurred in 1971, a development that attracted far less attention than the dollar devaluation, and yet an event that was to be just as significant, namely the invention of the integrated circuit, the so-called computer on a chip. This dramatic advance in computer technology allowed companies and banks to operate in the face of price and monetary instability, by vastly expanded data collection, and the use of financial hedging instruments. In fact, the climate of monetary and price instability, together with the recently developed computer technology, touched off a “financial and information revolution”. An enormous global financial and speculative economy blossomed. The volume of global monetary and financial transaction began to vastly exceed that which would be needed to finance physical global trade and investment. All this spawned new financial instruments, which, in turn stimulated computer technological advance, which in turn led to more financial instability, etc. in a self-perpetuating cycle. Computer manufacture soared, with the labor intensive parts of such manufactured increasingly being farmed out to Third World countries. A whole new area of Third World exports was created.

In short, the collapse of the Bretton Woods system did not, as was predicted, lead to a “global depression”, but rather it led to a long and complex period of “global stagnation”, with volatile and rapid bursts of economic growth distributed very unevenly distributed across regions, sectors and times.

The oil price rise of 1973 touched off a short sharp American recession in late 1974/early 1975.This recession brought dollar inflation down dramatically. Meanwhile, dollars began to pour into the oil producing countries, who then deposited these dollars into short term U.S. bank account. Under the encouragement of the Carter administration, U.S. banks began to use this money to make short-term loans to Latin Countries, which allowed these countries to keep up their imports of U.S. products. In many cases, this short term Latin debt rapidly became “flight capital” which then poured back into the U.S. economy. In other cases, this debt went into financial speculation. Borrowed dollars were converted to, say, Chilean currency which carried a higher rate of interest than the dollar, and then reconverted to dollars in order to repay the loan (the so-called “Chilean bicycle”) The global supply of dollars once again began to soar, the dollar exchange rate to fall, and the real price of oil to drop. As Carter economist Lawrence Klein put “we can print dollars faster than the Arabs can raise the oil price”. Japan and Europe, keeping their own currencies high to lower the real price of oil, responded by exporting to the U.S., OPEC and other Third World countries. Meanwhile dollars continued to pour into OPEC countries.The surge of dollars into the populous country of Iran, eventually caused such inflationary derangements to the local economy that people in the countryside began to suffer from hunger and malnutrition even as the Shah pocketed billions.. This combined with the Shah’s ill conceived and catastrophic land reform led to the Iranian revolution in late 1978, the collapse of Iran into political chaos and a drastic reduction in its oil output. Once again, in 1979, the price of oil was sharply increased. Dollar inflation in the United States rose into the double-digits, and the amount and velocity of global dollar circulation increased astronomically. A double digit inflation in what was still the world’s main reserve currency was considered by most leader in the industrial countries as intolerable, something that could lead to “global hyperinflation”, a flight from all currencies into oil, gold, and commodities, something beyond the capacity of the global financial and trading system to cope with..

The U.S. faced a dilemma. If the U.S. Federal Reserve took action to reign in the world oversupply of dollars, the world economy would go into slump, dollar interest rates would soar to God knows what levels, and Third World short term debt would begin to grow exponentially as short-term loans had to be constantly refinanced at higher and higher interest rates. How could the Third World possibly export its way out of this debt with the with the world economy in recession?. Unilateral U.S. tightening would lead inevitably to a steep global slump and a severe solvency crisis in the U.S. money center banks which were heavily exposed to Third World debt. The world economy stood poised between hyperinflation and global credit collapse. The only way out of the dilemma seemed to be a deal between OPEC, the United States and the Third World debtor countries, in which OPEC would use its “petrodollar surplus” in order to refinance Third World debt into manageable, long-term Third World debt. This would “sop up” the world’s excess supply of dollars and tame global hyperinflation. Third World import markets would shrink but not collapse. OPEC would be guaranteed a long-term flow of “hard currency” and would be coaxed into world finance as a diversification away from exports of depletable oil. Along with this plan (broached at the IMF meeting of 1979) various forms of official North-South capital transfer were discussed in order to keep up global demand. In short, International monetary and financial negotiations seemed to be headed towards a sort of “social democracy” on a global scale.

It certainly doesn’t take a political genius to see the political obstacles to these developments The Carter administration vacillated. It flirted with OPEC/Western financial coordination, tried to pressure the Begin government toward a settlement with Palestinians, advocated a 100 billion dollar synthetic fuels program, talked about “energy shortages” (which didn’t exist), and finally lost the election to a figure that was considered a “right wing” extremist by most Americans.

The incoming Reagan administration ( a coalition of global business interests and right wing populists of all stripes) understood immediately that there was no “energy problem”, but a monetary problem; a “flight from dollars into oil.” Oil was playing the role of an “international reserve currency”.The goal of the administration was not to formalize this role, but to end it. But how? A conflict about this question broke out between the various factions in the Reagan coalition, corporate budget-balances,monetarists, gold bugs, supply siders, cold war “Arabists”, cold war “Zionists” (neocons), etc. The infighting became extremely chaotic. Reagan quipped that, in his administration, ”the right hand often doesn’t know what the far-right hand is doing”. A huge “supply-tax cut”, was accompanied by a huge rise in military spending. The Federal Reserve slammed on the monetary breaks to stem inflation. Social spending was cut for the lower classes, but left intact for the middle class. Federal debt began to balloon. All this financial volatility and uncertainty continued to stimulate the U.S. information and service economy. The American business press talked about the “segmented economy.” A new “age of information” was proclaimed with the implication that the U.S. could be carried along by the growth of the computerized service economy, whatever happened in the rest of the world. Meanwhile liquidity was being sucked out of the world economy, as administration officials continued to bicker about approaches to this crisis. the CIA and Pentagon advocated U.S. recognition of the PLO to facilitate U.S./Saudi financial coordination, while figures in the National Security Council advocated an Israeli invasion of Lebanon to destroy the PLO. Hardline monetarists, such as Beryl Sprinkel (or, as he later came to be known, “Beryl the peril”) advocated a drastically tight monetary policy, come what may.

Finally, in the summer of 1982, an Israeli invasion of Lebanon in June was followed by the outbreak of the Third World debt crisis in August. Leaving aside the question of whether this debt crisis was a “liquidity crisis” or a “solvency crisis”, it clearly posed a threat to the world financial system The administration, together with the Federal Reserve, was now forced to find a solution. The solution was to use the ballooning U.S. deficit as a “Keynesian engine of growth” for the world economy. However, this time, the deficit was not to be financed by monetary creation, but rather by Federal borrowing. The collapse of the Latin economies, the intensification of the cold war, the Iraq-Iran war, and the Israeli invasion of Lebanon, left world politics in such an unsettled state, that U.S. debt became a “safe haven”for investors all over the world. Enormous amounts of U.S. debt now could be marketed without constantly raising interest rates. The “recovery of 1982″ began. A gigantic U.S. directed global financial manipulation was hailed as a “spontaneous recovery”..The official ideology of the Reagan administration was now to be “recovery-ism”. “It’s morning in America.” “America is back.” “America is number one again.,” (As it had been since 1945 and will be for the foreseeable future). Reagan’s popularity soared, even as administration infighting continued.

In the summer and fall of 1982, an important change took place in the Reagan administration. It began to recognize the overwhelming importance of “North-South” issues. (Peter Peterson, then head of Lehman Brothers and an important Reagan business advisor, had co-authored the Willy Brandt Report in 1980, a report which advocated greater North/South equity). It then set to work on a long-term approach to North/South economic issues, an approach that was later to evolve into “neoliberalism”. Meanwhile,other countries in the IMF put forth various suggestions to partially internationalize the process of monetary creation. Some of these proposals involved the creation of so-called “SDR’s” or “Special Drawing Rights”, to provide the liquidity for Third World development. Special Drawing Rights were “baskets” of currencies of major industrial powers that would protect Third World countries from rapid fluctuation in the exchange rates of these currencies. However, the U.S. (and Germany) was very reluctant to give Third World countries any power whatsoever to influence the world monetary system. The dollar continued to remain the world’s reserve currency.

In 1984, the ballooning U.S. trade deficit began to drag down U.S. economic growth. The value of the dollar continued to soar, making U.S. goods less and less competitive. Reagan’s public image as an“America firster” and a “Third World basher” was beginning to fray. Why was “Ronnie”, who was elected to “put the Third World in its place”, allowing “our recovery” to be “stolen” by the Third World once again. Had Reagan put OPEC in its place, only to allow us to be humiliated by Asia?.

In the fall of 1985, then Treasury Secretary James Baker responded to this dilemma by pressuring Europe and Japan to stimulate their economics, and thus become “engines of growth” for the world economy, taking some of the pressure off the U.S. There was a coordinated agreement to lower the value of the dollar, the so called “Plaza agreement”, probably aided by some U.S. monetary easing (although Fed Chairman Volcker denied this). The value of the dollar dropped. Japan was pressured to liberalize its monetary and financial systems in order to let the Yen supplement the dollar as a global reserve currency. In the late 1980’s European economic growth increased, and Japanese growth soared (along with the Yen, the Japanese stock market and real estate market). There were predictions that Japan would soon overtake the U.S. as the world’s leading economic power. As the dollar dropped, outside capital poured into the U.S. stock and real estate markets. The junk ”bond market” flourished, along with a rapid rise in real estate prices, ( a rise which dramatically exacerbated the American problem of homelessness).

In 1990, along with the collapse of communism, European and Japanese economic bubbles burst. German chancellor Helmut Kohl financed German reunification by huge amounts of government borrowing in marks, even as Europe was trying to unify its various currencies. The exchange rate of the Mark soared as German borrowing jacked up demand for marks. Other European countries, trying to keep their currencies on a parity with the mark, had to bring their economies to a halt by raising interest rates. Europe is still trying to construct a united currency, the Euro, to supplement the dollar as an international reserve and invoicing currency. The liberalized Japanese financial system was simply overwhelmed by the enormous volume of financial activity that was taking place during the “Japanese bubble”. There is not enough space here (or anywhere else for that matter) to describe all the differences between the Asian and American financial systems. Japanese banks, historically controlled by networks of people from large corporations, the finance ministry and organized crime, were set up to take in low interest deposits from Japanese savers (Japan has always had a high savings rate) and use these deposits to make long term low interest loans to large Japanese companies. Large Japanese companies, in turn, farmed out much of their production to small “captive suppliers” who bore the brunt of downturns in the business cycles. Large Japanese companies were thus “buffered” from economic downswings, and the stock of companies could form part of the reserves of the Japanese banks. Japanese bank reserves could also consist of the stock of other banks. Unlike American banks, Japanese banks had few “disclosure requirements”. The Finance Ministry kept track of their activity. During the Japanese boom of the late 80’s, both the Japanese stock and real estate markets rose to unsustainable heights. It became apparent that a sharp market “correction” which could easily be tolerated in the US, or Europe could play havoc with the Japanese banking system, causing a chain reaction of disappearing bank reserves. For a while, large Japanese insurance companies tried to prop up the stock market, to “let the air out of the bubble slowly”, but to no avail. Eventually a sharp drop in the stock market threw the Japanese banking system into a crisis from which it has yet to emerge. Nobody knew which banks were solvent and which banks weren’t. Throughout the 90’s, the Finance Ministry tried to sort things out, but its efforts were impeded by the swings in the dollar. This is because after the U.S. recession of 1990, the Federal Reserve was pumping out large amounts of dollars to finance Third World privatizations. Much of the Russian and Third World economies had become essentially dollarized. The large increase in the supply of dollars, together with the Mexican bailout of late 1994, and the 1994 U.S. Congress’s plans for a massive tax cut, caused a “flight from the dollar into the Yen”. The Yen rose sharply. The “real value” of Japan’s massive Yen debt was growing each day, making Japan’s financial problems more and more difficult to stabilize. In mid-1995, a plan was worked out between the U.S. and Japan to raise the dollar. The U.S. government agreed on a plan of drastic spending cuts and the tax cut was put on the back burner. The dollar rose. Japanese financial institutions could now increase their reserves by borrowing Yen at Japan’s extremely low interest rates and exchanging them for dollars to be put into U.S. government debt carrying a much large interest rate. As long as the dollar/Yen exchange rate remained high this would pump profits into the Japanese financial system. However, the currencies of the Third World Asian countries were pegged to the dollar, and as the dollar rose, these countries became more and more uncompetitive. Nonetheless, dollars continued to pour into these countries on the belief that Asia with its huge, educated and hard-working populations was bound to be a very long term source of rapid and profitable economic growth. So sure were dollar borrowers of the continued dollar inflow, that many of them failed to hedge their borrowing against a devaluation of the local currency. Since the Asian boom was neither economically nor environmentally sustainable, it had to end sometime. Because of the differences between the Asian and American financial systems, when the boom ended, it resulted in an area-wide financial and monetary crisis. When Thailand was forced to devalue its currency, global investors became nervous about all Asian currencies. There was a “flight” from Asian currencies, which were forced to devalue, one after the other. Many Asian borrowers of dollars, who had been cycling between dollars and local currency, found themselves stuck with devalued local currency, and unable to repay the dollar loans. This only intensified the crisis. To make a long story short, the very financial and monetary volatility which had stimulated the American financial and service sectors, brought the Asian financial system to a halt.

American officials are attributing Asia’s problems to vestiges of (gasp) socialism in its economic structures. According to Federal Reserve Chairman Alan Greenspan:

(Globalization) has also exposed more quickly and harshly the underlying rigidities of economic systems in which government – or governments working with large industrial groups – exercise substantial influence over resource allocation…. Such systems can produce vigorous growth when the gap between indigenous applied technology and world standards is large such as the Soviet Union in the 1960’s and 1970’s and Southeast Asia in the 1980’s and 1990’s. But as the gap narrows the ability of these systems to handle their increasingly sophisticated systems declines markedly’” Alan Greenspan as quoted in NYT 12/3/97

As of this writing, Japan is being urged to undergo a “Reagan revolution” in order to stimulate its economy and become a “locomotive of growth” for Asia. (Business Week, 1/12/98, Prof. RudigerDornbusch of MIT). However, the Reagan revolution was financed by enormous amounts of external U.S. government borrowing, at a time when the U.S. dollar was seen as a “safe refuge” in an uncertain world. Japan, on the other hand, is still funding our national debt ($300 billion dollars worth). If it even sells this money to raise financing for its “Reagan revolution”, it will slow down the American economy (the only economic “locomotive” that the world has left). Furthermore, Japan already has an enormous government budget deficit, and its banks are carrying non-performing loans comprising 15% of its GNP. It’s population is concentrated in the small non-mountainous parts of its small land mass. It has few natural resources. It lacks the geographic areas for expansion and development. It falls short of America’s technological and scientific research capabilities. What does its wealth consist of really? A lot of well-run, efficient, world-class factories designed to manufacture high-quality products for theAmerican economy. In fact, America’s Reagan revolution was able to act as a regional and global“engine of growth” only because of America’s status as the world’s economic colossus,.and its willingness to farm out part of its manufacturing capacity to Japan, (in order to give Japan the dollars for America to borrow) Japan’s current problems are often compared to America’s problems in the 1930’s, a deflation caused by deficiencies in the banking system (the usual right-wing monetarist explanation).However, (leaving right-wing monetarism aside) what were America’s problems in the 30’s?. These problems were (1) wide-spread poverty, and (2) the lack of non-private stimulus to economic growth. These problems were remedied by World War II (or by Japan if you want to look at it that way)

We are now in a world economy. What are the world’s economic problems? They are (1) wide-spread global poverty, and (2) lack of non-private global economic stimulus. In other words, without a global economic fiscal system, (that takes the needs of the world’s poor into account), no global monetary system will work..

Was it the Reagan administration then that established the atmosphere of “free market fundamentalism”, that so pervades (and obstructs)

. It has become very difficult to discuss social, environmental and human rights problems in developing countries, for fear of panicking investors and disrupting the private North-South capital flows on which Neoliberalism depends..

Close discussion of global economic and social problems? The answer is “not entirely”. Part of this atmosphere was created by the collapse of the Communist block in the early 90’s. For example, in 1985, Grosvenor International Publishers, published a three volume set of books on North/South commercial relations called Third World Development edited by Ronald Reagan. In it, several members of the Reagan cabinet wrote articles stressing the importance of agrarian reform. In 1991, in contrast, the World Bank Development Report devoted one sentence to agrarian reform, saying that it might be helpful to economic development in some instances.

The Third World

The Third World today is a different universe from the Third World in 1950. Most of the increase in human population has occurred since 1950, and most of that in the Third World. In addition:

“From 1950 to 1985, the overall GDP of the Third World has increased some six times and per capital GDP 2.5 times..It’s industrial output is now 11 times higher than in 1950…Annual real gross capital formation is now 15 times higher. …Enrollment in higher education has risen nearly 25 fold. …Infant mortality rates fell from 200 per thousand to between 30 and 70… Life expectancy rose from below 40 years to about 65…The share of agricultural output in GDP has fallen from about 1/3 to 1/6 and the share of industry has risen from about 1/6 to 1/3. …Annual rates of the growth in the Third World sustained from 1950…were 5.5. percent for GDP, 7.5 percent for industrial output, 8.4 percent for capital formation and 10 percent for third level education.” (From Technological Transformation in The Third World, by Surendra J. Patel, Avebury Press, 1991).

In fact, the Third World is where post-1950 world history was made, the de-colonization, the demographic explosion, the violent Western crusade against “Red revolution”, including death squads, napalm, cluster bombs, the mass deaths and upheavals, the military capitalist defeats and the overwhelming technological, economic and cultural capitalist triumphs (the green revolution, the spread of “neoliberal” democratization and privatizations)

What about the changes in the “first” world since 1950? Well, the advances in basic science, particularly in biology and astronomy have been spectacular, unimaginable even in the science fiction of 1950. And yet none of these advances has had the growth inducing impact of a steam engine, an internal combustion engine, electricity, etc. The really significant commercial technological advances in the post war era have been the digital computer (1944), the transistor (1948) and the integrated circuit (1971). In the financial and service sectors of the economy these technologies have indeed produced economic growth (just ask Newt Gingrich). However, their primary impact has been to facilitate the spread of industrialism from the first to the Third World by means of better communication and the use of robotization in the “de-skilling” of industrial production. They have been technologies of “globalization” rather than technologies of post-war “American dream” style economic growth.

So we are now in a position to state the basic problem afflicting the American economy. The problem, in short, is, despite the spectacular advances in basic science and digital technology, the growth inducing technologies that propelled America’s “Golden Age” post-war growth have played themselves out (and have, in many cases, been too environmentally destructive). This (and not some nefarious alliance between “first” world plutocrats and “Third World elites”) is the problem, a problem which began in 1965..

America’s Economic Problems, What Went Wrong Since 1965

In his article, “Soviet Economic Growth: 1928 – 1985″, in The Journal of Economic Literature, (Vol XXV, 1987) the economist Gur Ofer made a very interesting series of observations. From 1945 to 1965, both the Western and Soviet economies grew rapidly. In fact, prior to 1965, the Soviet economy outperformed the Western countries (and was looked upon by many Third World countries as the model to follow). Clearly, 1965 was a pivotal year both for the West and the Soviet Union. It was the year in which both blocs began to experience a “crisis of stagnation”. Could it be, asked Prof. Ofer, that some common factor was operating both in the West and in the Soviet Union, something that had nothing to do with capitalism, nothing to do with socialism, and nothing to do with globalization? In his article “What We Can Learn From The Soviet Collapse”, in Finance and Development (IMF, November, 1995) , the economist Stanley Fischer offered a guess. He postulated that, by the mid-sixties, the growth inducing technologies that been developed prior to and during World War II (automobilization, capital intensive agriculture, petrochemicals, civilian air transport, etc.) had partially played themselves out both in the West and in the Soviet Union. Prior to 1965, the Soviet Union grew more rapidly than the West because it had a greater number of primitive areas in its economy to which it could apply the range of technologies mentioned above. After 1965, on the other hand, the West grew more rapidly,. because it had a greater range of growth inducing technologies (particularly in the areas of digitalization, computerization and communication), and also because it had more commercial links to the developing countries, which were beginning to reap the effects of the green revolution, containerization and robotization (which allowed “industrialization without infrastructure”). This growth, while environmentally destructive and detrimental to many of the world’s poor, nonetheless stimulated Western economic growth, and made the Western “crisis of stagnation” much less severe than it otherwise would have been. Thus, while the West went on to slower growth (very unevenly distributed across sectors), greater income inequality, and all the headaches of globalization, the Soviet Union went on to complete economic collapse.

To explain the above in more detail, let us examine the standard theory of economic growth devised by Robert Solow in 1954. (See Growth Theory, An Exposition, by Robert Solow, Oxford University Press, 1969). According to this theory of growth .

To oversimplify enormously:

(barring a massive population increase in the developed world), there are two sources of economic growth: (1) The spread of investment capital to areas of the world which don’t have it (globalization), (2) Technological innovations which allow the same amount of capital and labor to produce more output and a rising standard of living (“the American Dream”). It is the second type of economic growth which burgeoned from 1945 to 1965, and the first type which has become more and more prevalent since then. However, and this is a very important point, (2) did not slow down because (1) speeded up. In fact, (2) slowed down less than it would have, had (1) not speeded up.

Looking toward the future, there is always the possibility, of course, that some radically new technology will materialize which could produce rapid economic growth and a rising standard of living in the West, even in the absence of a massive population growth in the West. Everybody could see, for example, how “cold fusion” in 1989 could have achieved such a result. (This is why so many Americans wanted to believe it, and why it was accepted by so many people on the flimsiest of evidence). Barring such a development, however, what is “on the agenda” for the world economy is the spread of industrialization from the developed world to the underdeveloped world. Such a spread is not the cause of America’s problems. It is, if properly managed

As it has not been under neoliberalism. the only solution to them.

In other words, given that the world economy is shifting from a phase of Western-led growth to a phase of Third World-led growth . This point was proclaimed very loudly in 1993, when it was necessary to alleviate protectionism in Congress, and then toned down recently in order to calm the stock market.

The solution to America’s economic problems is the promotion of environmentally friendly, sustainable growth in the Third World, which, in turn, will generate widespread, long-term growth and employment in the West, which, in turn, will provide the tax base to solve America’s budget and social problems. Make no mistake about it, the growth patterns which have taken place in the Third World recently, environmentally destructive, unsustainable, inequitable and misguided as they have been, have, nonetheless, produced seven years of non-inflationary growth in the U.S., a growth which benefitted the vast majority of Americans (however unequally) Conversely, looking toward the future, if the Third World economies were to go into a deep, protracted slump, they would inevitably drag down the U.S. economy with them.

The Third World economist, Samir Amin, in his 1989 book, Maldevelopment, A Study of A Global Failure, Zed Press, gives the solution to this dilemma.

“For more than 15 years the world economic system has been in an enduring structural crisis. This is a world crisis marked by the collapse of growth in productive investment, a notable fall in profitability (very unequally distributed in sectors and companies) and persistent disorder in international relations…. The current crisis is therefore most apparent in the field of world relations. North/South relations and the conflicts around them constitute the central axis of the current crisis…… In..circumstances (such as the 1930’s) the Keynesian policies of redistribution of income might have been a solution to the crisis. By contrast, (the present crisis) comes after a long period of full employment, the rule of the welfare state, etc. Today’s deficient demand is essentially deficient demand in the periphery ……. In other words, only a redistribution at the international level in favor of the South would permit a fresh start for the world. The obvious question is ‘under whose aegis’ will …this be carried out?”

The recent NAFTA and GATT agreements answer this question. Under the aegis of private capital and under the aegis of the United States and its “instruments”, the IMF and the World Bank. (Wrong answer!) The NAFTA/GATT approach to global development is known as “neoliberalism”.

To over simplify enormously, the rationale behind the neoliberal model of development is as follows: the scale of economic production has grown so large that it has transcended national boundaries, it has even transcended the boundaries of large countries such as the United States and Japan. To subject such an economy to national restrictions on the flow of commodities and capital is like trying to raise cattle in one’s living room. There’s not enough room. Therefore, countries should not restrict the flow of commodities and capital across their borders. Moreover, if nations agree to reduce interference with the flow of commodity and capital to a minimum, capital will flow from capital surplus countries to capital deficient countries in the same way that water flows from a higher level to a lower level, and economic development will spread across the globe. Samir Amin has called this approach to global development “reactionary utopianism”.

This “reactionary utopianism” came into being partly as a result of the last 25 years of deliberate U.S. government policy, partly as a result as a result of the collapse of the socialist bloc, partly as a result of changes in technology, and partly as a result of the horrors of Cambodia’s and North Korea’s attempt to promote total economic self-sufficiency

The Role of The Transnational Corporations.

It has become the conventional wisdom among many environmentalists that there has been some takeover of Western national governments by multinationals following the dictates of the World Trade Organization

11When the globalization process reached a certain point and when the Third World economies reached a certain level of importance to the global economy, there emerged a sort of global economic “power vacuum,” owing to the fact that the economy had become global, whereas most economic regulatory agencies remained national. This”power vacuum” was naturally filled (in a very undemocratic way) by those institutions most well-positioned to fill it, namely the GATT, the World Bank, the IMF and the transnationals (which had historically dominated North/South trade).

Close . In fact, many of the top executives of multinationals are far more progressive in their personal views than are national politicians, and far more aware of the difficulties in basing everything on free markets and private capital placements.

The 1996 cuts in U.S. social entitlements and global economics

MIT economist Paul Krugman points out that “economic globalization” (neoliberalism) does not require the U.S. to cut the social safety net, in order to remain competitive internationally. It is important to stress this point. Yet, the cutbacks in social entitlements such as Medicaid and welfare are not entirely unrelated to neoliberalism. Here is what happened. After the passage of NAFTA, in 1993, Mexico with U.S. connivance, kept the Peso artificially high to suck in U.S. exports and to enable Clinton to show how beneficial NAFTA-type agreements were to the U.S. trade deficit. After GATT was passed, Mexico attempted to lower the Peso, a policy which started a massive flight of capital from Mexico. The Clinton administration responded with an emergency bailout in early 1995. At this point, global investors became aware that much of the world’s economy had become “dollarized”, that many of the private capital placements were being made in dollars. There was a perception that the Federal Reserve could not possibly act to reduce the supply of dollars in global circulation (in order to raise the value of the dollar relative to the yen), without, at the same time, risking a massive capital flight from the Third World. Thus, there was a “flight from the dollar” into the Japanese yen. The dollar dropped precipitously. Such a drop did not hurt the U.S. economy, because a large part of the Fed’s huge output of dollars was being used to finance Third World manufacturing capacity, which, in turn, was flooding the U.S. market with cheap products and keeping inflation in check.

Meanwhile, the low dollar was benefiting U.S. exports. Japan, on the other hand, was being pushed to the brink of a financial “meltdown”. Japan had trillions of dollars in outstanding yen debt. The drop in the dollar was increasing the “real value” of Japan’s debt daily and pushing Japan into a deflation. The U.S. obviously could not let the Japanese financial system go into a tailspin. The dollar had to be brought up .

The resulting rise in the dollar, contributed, in turn, to the current Asian financial crises. The Southeast Asian currencies which had been pegged to the dollar had to devalue in order to remain competitive. This, in turn, precipitated a chain of competitive devaluations, speculative attacks on currencies, and massive capital flights from Asian markets generally. Japan, which had lent billions of dollars in dollar-denominated debt to Third World Asian countries, is once again experiencing a financial crisis. The result of the U.S. government’s 1995- 1996 maneuvers has, thus, been to take Japan out of and into a financial crisis, trashing the U.S. social safety net in the process..but not by monetary tightening. The only way to accomplish this was by implementing Republican-style budget cuts, but avoiding Republican style tax cuts. Clinton simply had to reach budget agreements with the Republicans in Congress, many of whom were determined to “wage class warfare from the top down”, and many of whom were simply ignorant about global financial problems, and, thus, in a far better position to “play chicken”. The upshot? Republicans lost their massive tax cuts, but got their welfare cuts. Clinton, whatever his feelings on entitlements and welfare, simply had no choice. A different Congress would have reached a different resolution to the budget crisis, globalization or no globalization. Thus, globalization is not an excuse for supporters of the social safety net to “throw in the towel”.

Four fifths of the world’s population lives in the Third World. Thus, sustainable (ecological) economic growth to address basic and mounting social needs simply cannot be avoided. It is imperative to develop a global alternative to neoliberalism. In a paper presented at the alternative summit “T.O.E.S. 1990,” we outlined some elements of this alternative.

13 This paper, “Thoughts for T.O.E.S. 1990,” is still available from us, the Green Policy Group, P.O. Box 3134, New York, NY 10185 (U.S.A.), 212-606-3887.

Close Working alternatives at the local level are very good, but some discussion must be devoted to how well these alternatives will “scale up”.

Economic growth is simply an increase in the volume and/ or size of economic transactions, as measured in monetary terms adjusted for inflation. There are billions of people in the world. Their educational and psychological problems cannot be addressed without first addressing their basic material needs (i.e. access to clean water, health care, adequate diet, shelter, etc.). Neoliberalism is only a stop-gap measure to the recent dilemmas of the world economic system — primarily Third World debt which in the 1980’s threatened the world financial system, and the lack of growth in Western capitalist countries). However, many corporate leaders, World Bank officials and the U.S. administrations, from Reagan to Clinton, know that it ultimately cannot work as a long-term global development strategy..

On the other hand, the “no-growth”….

14

As no-growth advocate, David Korten, points out, “It becomes abundantly clear that if the earth’s present sustainable output were shared equally among the earth’s present population, the needs of all could be met”.(When Corporations Rule The World, Kumarian Press, 1995) However, in our view, the amount of market-mediated exchanges that would be necessary to bring about this sharing would show up as “economic growth.” Thus, there is no need to frighten people with talk of “no growth” which invariably conjures up images of a depression..

Perspectives of environmentalists will only continue to marginalize and isolate them from public economic debates, preventing them from addressing social issues such as “corporate downsizing” and “unemployment” — the results of economic stagnation in the U.S. and other advanced industrialized nations. Addressing the material and social needs of people North and South is inevitably going to involve an increase in the number and/ or size of economic transactions, i.e. economic growth. Thus, “steady state economics” is a term borrowed from natural systems, and doesn’t, in our opinion, really apply to human historical and social development.

Economic Growth and Sustainable Development

The definition of “sustainable development”, by its very nature, has to be open-ended.

Not enough is really known about the earth’s ecology to accurately predict the sustainability of any development strategy whatsoever. The earth’s ecology is a highly complex non-linear system, and the possibility of sudden, massive environmental surprises cannot be ruled out..

For example, no one predicted the hole in the ozone layer until it was actually observed, whereas the evidence for global warming accumulated over a long period. Also unknown is the environmental impact of radically new technologies, since obviously no one can predict the effect of technologies which have yet to be invented

The current mode of global economic growth (neoliberalism) shows us what sustainable development is not. Neoliberalism has clearly led to the rapid growth in industrial capacity and the rapid expansions of the middle class populations in many parts of the Third World, particularly in Asia. It has led to a considerable amount of environmental investment, albeit of the “clean up after the fact’ nature, in many parts of the Third World. 15The environmental clean-up business is a 400-billion dollar global business. Many defense companies are switching to environmental exports. Japan is funding some of these exports to Asia, because it is afraid of being drenched by acid rain from China.

However, it is still “economic growth for the hundreds of millions”, whereas the world’s population numbers in the billions. Environmentally and economically sustainable development requires a basic change in production methods and not simply “cleaning up after the fact.”

Several things, in our view, can be said about sustainable development. First of all, it has to involve the material betterment of the majority of the world’s population, not simply a numerically large minority. It has to involve non-market means to eliminate global poverty directly and not simply “global trickle down economics” . It has to involve production technologies which are themselves nonpolluting and not simply clean-up after the fact. It has to involve, reforestation, non-polluting solar energy, environmentally viable modernization of subsistence agriculture, rural and urban land reform, and large scale recycling of effluent and waste products. In our opinion, it will turn out to be most economically viable, precisely in those areas of the world that are now the least developed and, thus, not locked into the infrastructures of non-sustainable development. It will have to involve non-private global monetary/fiscal institutions which are accountable and globally democratic.

Anti-Third World Populist Hostility in The West

The problems of global development will not be resolved simply by having rich countries impose environmental, social and human rights conditions on the exports of poor countries. There is simply too much populist anti-Third World hostility in the rich countries. Many Americans, in particular, see the populations of the Third World as a mass of starving wretches who want to “take what we have”, either by violence, such as terrorism, or by unfair, predatory trade practices. To take an example, in early 1993, the historian Paul Kennedy published a book entitled Preparing for the 21th Century. The major premise of the book was that if the West did not help the Third World achieve sustainable development, the West itself would be overwhelmed by the Third World’s problems. In response to this appeal, Robert Kaplan wrote an article in the Atlantic Monthly entitled “The Coming Anarchy”, in which he predicted the social, economic and environmental collapse of the Third World, but asserted that the West could protect itself from this collapse by adopting the “fortress strategy” suggested by the right-wing Israeli military analyst, Martin Van Creveldt. .

Unfortunately, Mr. Kaplan’s scenarios of collapse and chaos in large parts of the non-Western world cannot entirely be ruled out. However, his predictions that such catastrophes will not endanger the West are, not only crazy, but actually dangerous. Why? Because there are all too many Americans who, equally threatened by Third World poverty and Third World prosperity (non-whites with money), would love to see the entire Third World collapse into Rwandan-style chaos. Mr. Kaplan ( like the American isolationists in the 30’s) assures them that they will not be personally endangered by such a catastrophe…

Therefore, decisions which put environmental, human and labor rights into trade agreements cannot possibly be left to the dictates of the populations of the developed world. International, democratic, and globally democratic, economic and financial institutions are an absolute necessity to any rational discussion of human rights, labor rights, social rights, environmental issues and economic justice

Misguided Attempts to Circumvent Anti-Third World Populism

Early in 1983, Reagan’s secretary of agriculture, Bill Brock, said, “There’s a lot of Third World out there, and we are just beginning to discover how important it is to our own well being.” The Reagan administration, while it agreed privately with this insight, was not terribly anxious to share it with the American public, (which was still in a Third World bashing mood after the oil price hikes and Iranian hostage taking of the late 70’s.)

During the Reagan and Bush period, therefore, Americans were given the impression that, aside from oil, the developing world was sort of “marginal” to American well being. It was assumed that the “rich man’s club” (America, Europe and Japan) was the global “engine of growth”, which could, in turn, “pull up” the non-Western world. The non-Western world, for its part, had to “behave itself”, open its markets, privatize its economy, welcome Western capital investments, tone down its “Third World rhetoric” and make nice with Israel. And, if it didn’t, well then, who cared, “we” didn’t need “them” anyway.

In 1990, however (fearful of competition from a newly capitalist Eastern-bloc), the Third World began to “behave itself”. At that point, the official American line on the Third World, did a complete about-face. The Third World went from being a “problem”, a “mess”, a “threat”, a “side issue”, to being “the future”, to being an unstoppable locomotive of economic growth that the U.S. had to board or be left behind. Clinton “talked up” Third World growth and played down problems and barriers to Third World development

According to the New York Times (12/12/97), “In some ways, the United States may even have contributed to undermining the discipline of the international financial institutions that poured money into South Korea. Washington promoted the admission of South Korea in 1996 into the Organization for Cooperation and Economic Development, the elite club of industrial nations. Membership is largely symbolic, but it carries with it certain perks, among them an assumption, under rules developed by the Bank for International Settlements committtee, that bank loans to members carry no risk of default. —(therefore this gave) the marketplace a false sense of confidence about South Korea…Between 1994when South Korea received its first green light for membership, and 1996 when it officially joined, foreignbanks more than doubled their lending to South Korea from 52 billion to South Korea from 52 billion to108 billion, according to the Bank for International Settlement Reports.”

An officially sanctioned “love affair” began between international capital and large sectors of the developing world, a love affair between the strong and the weak, fraught with anxiety and abuse. As an Argentinian director of tourism, Hector Sabato, put it. “The old theme of the invading Yankees gave way to the wonderful Yankees driving the global train that you’d better board immediately or your finished.” (NYT 2/7/98). Or as William Greider (author of One World Ready or Not) put it, even many of the exploited in the developing world were “seduced’ by the “Faustian bargain” of capitalist development through globalization.

In any case, the “child” of this love affair is the current international political and economic crisis, in which much of the world economy is turned into a giant “global distress sale”, the proceeds of which go to finance America’s own rapid economic growth.

A Twenty Six Year History of Global “Quick Fixes”

To review the above history in more detail, American global economic policy from 1982 to the present can be divided into three periods; (1) a period of debt-led growth from 1982 to 1985, in which the U.S. deliberately ran large trade and budget deficits in order to stabilize the world economy by becoming what David Hale of Kemper Financial Services called “a consumer and borrower of last resort”; (2) a period from 1985 to 1990, in which the U.S. pressured other industrialized countries to liberalize their financial systems and stimulate their economies in order to help the U.S. work off the trade deficit caused by the first period above. This period ended with a Japanese financial collapse and a deep European recession. (3)The period from 1991 characterized by the US promotion of the neoliberal model of growth in which the developing world underwent a rapid process of financial liberalization and economic privatization, attracting large amounts of private capital, enabling it to become a growing market for American exports even as it kept American inflation down by low-wage exports to the American economy. This period produced seven years of non-inflationary growth for the US economy which allowed it to work down its trade and budget deficits.(at everyone else’s expense).

More precisely, from 1985 to the present, the US has been imposing a series of unsustainable economic and financial bubbles on various regions of the world successively (first Japan and Europe, then Asia, then Latin America, then China, etc.) in order to satisfy its insatiable demand for exports. Countries and regions have been overwhelmed by floods of outside capital, which they had neither the social nor economic institutions to deal with

A deficiency they are now being castigated for, even though it was official U.S. policy to “talk up” massive capital flows into those regions.

A more viable policy would be the promotion of economic growth in more areas of the world simultaneously, but at a slower and more sustainable pace. Africa and the Arab world should not be written off as “basket cases” to be left to the dictates of a fickle global financial market.

As of this writing, policy makers are urging Japan to become the “locomotive” for Asia. Poor people in Asia are being asked to reduce their consumption, even as rich people in Japan are being asked to increase theirs. It seems that we’re back to ”Western-led growth” again. However, the only real “locomotive” for global and American economic growth, the only “locomotive” that doesn’t turn out to be a “bubble” is the alleviation of Third World poverty and the promotion of Third World sustainable development.

Advice to Policy Makers

Therefore, it is extremely important for progressives, such as yourself, whose “heart is in the right place”, to articulate the following points loudly and clearly:

Successful Third World development is vital not only to the economic well being, but also to the national security of America;

Insertion of environmental, labor and human rights conditions into trade agreements has to be accompanied by direct, massive Western assistance to eliminate global poverty. A transfer of wealth from “Third World elites” to “Third World masses” (however necessary) is, by itself, not going to do the job;

Western assistance is a necessity, but is, by no means, sufficient. It also has to be accompanied by Third World reforms at both the national and local levels. Thus, the future well being of the Western populations is not entirely in the hands of the West;

The “right to development and subsistence” is also a basic human right, in addition to the rights of free speech, gender equality, etc.

It is the lack of recognition this right which prevents Americans from acknowledging that the economic strangulation of the Iraqi population is also a “weapon of mass destruction”

Conclusions

An American egalitarianism, which stops at the water’s edge, is as meaningless as it is regressive. Statements such as “we must solve our problems, before we solve their problems”, or “we must solve problems here, before solving them there” are childish nonsense. In today’s world, everyone is “we”, and everywhere is ‘here”.

The belief that “de-globalization” and return to “national economies” will solve our economic problems, and be “good for the Third World too”, is pious wishful thinking.

Here are some of the arguments supporting this “pious wishful thinking”: The nearer production decisions are made to local communities, the more the needs of local consumers, workers and natural environment are taken into account. Decisions taken by investors in distant capitals cannot possibly serve the needs of the people in local communities.. Local production and investment mean local accountability, “local capital is good, global capital is bad” and, so on and so forth.

The problem with these arguments is this: It would take the power of a “global government” to turn “global capital” into “local capital”. Why? Because cross border flows of capital and goods would have to be continuously and minutely monitored and suppressed, and such activities could only be carried out by a global government.

Now, observe how difficult it is to do such things with illegal drugs and illegal drug capital. Imagine how difficult it would be to do them with all goods and all capital. It would take the powers of an immensely powerful world government. Peoples lives would no longer be determined by distant global corporations, but by distant global bureaucracies, and the problems of globalization would remain. And if global capital were to be abolished by a massive breakdown in the global capitalist system, as in the 1914-1945 period, well then look at what happened in the 1914 – 1945 period, and imagine what would happen now.

All too much of the debate about trade policy on the part of liberals and labor seems to reflect a desire to “make the rest of the world go away”. However, the problems of the rest of the world have to be solved, if America’s problems are to be solved, and this is going to require (among other things) global markets, global business, and (yes) global regulation and governance (including global fiscal stimulus and global North-South redistribution). To be sure, global solutions risk global screw-ups, markets can crash, markets can breach global environmental limits, markets are unfair. Governments, on the other hand, can oppress, they can ossify, they can make mistakes (and global governments can make them on a global scale), they can become ineffectual, they lack “feed back” mechanisms, and so on.

But the fact is that human beings, who are, after all, not social insects and thus have no instinct for collective organization, have nonetheless organized themselves into ever more complex, and ever more populous societies, at an ever increasing rate. The nature of this organization, the way it takes place, is very complicated, very convoluted, and ultimately very mysterious. It is certainly not any of that “elaborate, self-adaptive complexity arising from simple market laws” nonsense you might read about in some business magazine or other. It is, in fact, the central dilemma of human existence, a dilemma which is not about to go away now. And the world’s problems, if they are solved at all, are not going to be solved by making them out to be simpler than they are.

It is imperative that progressives and labor frame global alternatives to neoliberalism, global alternatives which stress the needs of the world’s poor. Otherwise, when neoliberalism really gets into trouble, as it will, the field will be left open to right wing extremists of all types; paramilitary groups, white separatists, right wing religious zealots, neo-fascists, hate-mongers like David Duke and chaos-mongers like Robert Kaplan. At that point, the stability of the United States itself might be thrown into question.

It might seem paradoxical that those Americans who are themselves struggling to make a living should be called upon to advance the cause of North-South equity, sustainable development, and global poverty alleviation. But if they don’t do it, then who will? Rich business executives? Academics with cushy tenured positions? Employees of prestigious well-heeled foundations? Such people, no matter how knowledgeable they are, are too comfortable and complacent to understand the main problem with the world economy (global poverty).

People on top can rarely diagnose adequately the flaws of a system which put them on top. As economist Albert Fishlow says, “the old rules (of the global capitalist system) don’t work and the new ones haven’t been written yet.” (New York Times, 1/15/98).

It’s up to progressives in all countries to write those rules.. .

NOTES

Comment: For example, in 1985, Grosvenor International Publishers, published a three volume set of books on North/South commercial relations called Third World Development edited by Ronald Reagan. In it, several members of the Reagan cabinet wrote articles stressing the importance of agrarian reform. In 1991, in contrast, the World Bank Development Report devoted one sentence to agrarian reform, saying that it might be helpful to economic development in some instances.

Third World Development, 3 Volumes.

Author: Carim, Enver editor.

Publisher: London: Grosvenor Press International, 1985.

ISBN: 094602765x 4to. 676 pp., 217 pp., 248 pp.

3 Volumes:

Industrial Development and Agriculture

Health and Education

High Technology and Communications

Proponents of free trade outline its benefits.

Articles by authorities in developing countries and in the West.

With illustrations and numerous ads. Hardcover

Third World Development

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GREENHOUSE GASES

November 26, 2010 on 2:36 am | In Earth, Ecology, Globalization, History, Research, Science & Technology | Comments Off on GREENHOUSE GASES

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GREENHOUSE GASES REACH RECORD LEVELS, COULD RISE

FURTHER, WARNS UN AGENCY

New York, Nov 24 2010

GREENHOUSE GASES REACH RECORD LEVELS, COULD RISE

FURTHER, WARNS UN AGENCY

UNNews UNNews@un.org

Wed, 24 Nov 2010

The main greenhouse gases have reached their highest concentration levels since pre-industrial times, a United Nations climate research body said today.

The World Meteorological Organization’s (WMO) 2009 Greenhouse Gas Bulletin warns that carbon dioxide, methane and nitrous oxide have all increased their presence, increasing their burden on the earths atmosphere.

Greenhouse gas concentrations have reached record levels despite the economic slowdown. They would have been even higher without the international action taken to reduce them,

http://www.wmo.int/pages/mediacentre/press_releases/pr_903_en.html said WMO Secretary-General Michel Jarraud.

According to the Bulletin, the prevalence of all major greenhouse gases increased by 27.5 per cent from 1990 to 2009 and by a further 1.0 per cent from 2008 to 2009.

Since 1750, carbon dioxide’s presence in the atmosphere has increased by 38 per cent, primarily because of emissions from fossil fuels combustion, deforestation and changes in land-use. Methane’s prevalence has increased over the same period by 158 per cent. Sixty per cent of methane emissions are caused by human activity.

The report highlights concerns that global warming may lead to even greater natural emissions of methane from Arctic areas.

Potential methane release from northern permafrost, and wetlands, under future climate change is of great concern and is becoming a focus of intensive research and observations, Mr. Jarraud said.

The WMO is the UN systems authoritative voice on weather, climate and water. It coordinates the UNs observations of greenhouse gases in the atmosphere. Every year since 2004, the body has produced a Greenhouse Gas Bulletin, which reports on the latest status and changes in atmospheric burdens of the main greenhouse gases.
Nov 24 2010

For more details go to UN News Centre at http://www.un.org/news

GREENHOUSE GASES REACH RECORD LEVELS, COULD RISE

FURTHER, WARNS UN AGENCY

New York, Nov 24 2010

GREENHOUSE GASES REACH RECORD LEVELS, COULD RISE

FURTHER, WARNS UN AGENCY

UN News Centre at http://www.un.org/news

UNNews UNNews@un.org

Wed, 24 Nov 2010

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MODELS OF CLIMATE CHANGE

November 1, 2010 on 5:21 pm | In Development, Earth, Ecology, Economics, Financial, Globalization, India, Research, Science & Technology | Comments Off on MODELS OF CLIMATE CHANGE

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MODELS OF CLIMATE ACTION TO BE

SHOWCASED DAILY BY UN AGENCY

AHEAD OF CANCUN PARLAY

New York, Nov 1 2010

MODELS OF CLIMATE ACTION TO BE SHOWCASED DAILY BY UN AGENCY, AHEAD OF CANCUN PARLAY

UNNews UNNews@un.org

Mon, 1 Nov 2010

A project to light up the Indian countryside with the power of the sun is one of 30 solutions to climate change to be showcased each day, starting today, in the month leading up to the next major meeting on the topic, according to the United Nations Evironmental Programme (UNEP).

The “30 ways in 30 days” initiative, launched one month before the start of the next conference of parties to the United Nations Framework Convention on Climate Change (http://unfccc.int/2860.php UNFCCC) scheduled from 29 November to 10 December in Cancun, Mexico, will release case studies of successful climate schemes that can be copied and scaled up around the world.

Across the world, in myriad ways, from community-based programmes to entrepreneurial endeavours, solutions are available to help confront the challenges of climate change and to help countries, communities and businesses move towards low-emission climate-resilient growth, UNEP said in a http://www.unep.org/Documents.Multilingual/Default.asp?DocumentID=651&ArticleID=6812&l=en press release today.
More could be done if Governments, corporations and communities scaled up this work, it added.

One of the case studies featured is UNEPs “Solar Loans for Solar Homes” in India where more than 60 per cent of Indian households have no access to reliable electricity supplies and depend on kerosene for light and on burning dung and wood for heat.

The solar loan programme, a partnership involving the UN Foundation, Shell Foundation and two of India’s largest banking groups accelerated market penetration of solar lights in the Indian countryside and inspired several similar initiatives in India and elsewhere, the agency said.

Other projects to be featured include Green Passports for sustainable tourism, the greening of East African tea plantations, the massive potential of carbon financing in Africa and successful reforestation in Panama, UNEP said.
Nov 1 2010

For more details go to UN News Centre at http://www.un.org/news

MODELS OF CLIMATE ACTION TO BE SHOWCASED

DAILY BY UN AGENCY, AHEAD OF CANCUN PARLAY

New York, Nov 1 2010

MODELS OF CLIMATE ACTION TO BE SHOWCASED DAILY BY UN AGENCY, AHEAD OF CANCUN PARLAY

UNNews UNNews@un.org

Mon, 1 Nov 2010

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