The Multidimensional Crisis and Inclusive Democracy, Takis Fotopoulos (2005)
The Internationalisation of the market economy
The combined effect of the above “objective” (economic and technological) changes was that the internationalisation of the market economy has accelerated sharply since the 1970s. Thus, the growth rate of world exports increased by almost 73 percent in the period of neoliberal modernity up to now. As a result, the ratio of world exports to GDP increased from 14 percent in 1970 to 22 percent in 1999 while the corresponding ratio of government spending has declined from 16 percent to 15 percent in the same period. The obvious implication is that government spending, which played a crucial role with respect to growth in the statist period has, been replaced in the present neoliberal period by export demand.
Growing internationalisation therefore implied that the growth of the market economy has been increasingly relying on the expansion of the world market rather than on that of the domestic market, as before. This had very significant consequences with regard to the state’s economic role. During the period of social-democratic consensus, economic growth rested mainly on the growth of domestic demand which accounted for almost 90 percent of total demand in advanced capitalist countries. In this framework, the state sector played an important part in controlling the size of the market through the manipulation of aggregate demand. The means used for this purpose were government spending and public investment, as well as the economic activity of nationalised enterprises. The necessary condition, however, for the economic system’s efficient functioning was the relatively low degree of internationalisation, that is, a degree which was compatible with an institutional framework relatively protective of the domestic market for commodities, capital and labour. It was precisely the negation of this condition, as internationalisation of the market economy grew, that made the continuation of the social-democratic consensus impossible.
Thus, under conditions of growing internationalisation, the size of the growth economy increasingly depends on supply conditions, which in turn determine trade performance, rather than on direct expansion of domestic demand. Supply conditions play an important role with respect to accumulation and economic growth, since it is international trade that determines the size of each national growth economy, either positively (through an export-led growth) or negatively (through an import-led de-industrialisation). Therefore, competitiveness, under conditions of free trade, becomes even more crucial, not only with respect to an increasingly export-led growth, but also with respect to import penetration that ultimately leads to domestic business closures and unemployment.
To put it schematically, the market economy, as internationalisation intensifies, moves from a “domestic market”-led growth economy to an “external market”-led one, i.e. a trade-led growth, in the framework of which the prevailing conditions on the production side of the economy (particularly those relating to the cost of production) become crucial. Squeezing the cost of production, both in terms of labour cost and in terms of employers’ taxes and insurance contributions, becomes very important. But squeezing the cost of production necessitated a drastic reduction in statism, since statism was responsible for a significant rise in the cost of production during the period of the social-democratic consensus, both directly and indirectly: directly, because the expansion of the welfare state meant a growing burden on employers’ contributions and taxes; indirectly, because, under the conditions of near-full employment which prevailed during the statist phase of the marketisation process, organised labour could press successfully for wage rises that exceeded significantly the increase in productivity.
The system that has been established in the last quarter of a century or so already functions as a self-regulating market. The latest GATT round in the 1990s and the establishment of the World Trade Organisation have in effect created a huge “free trade zone” which, together with the opening of capital markets, have led to a self-regulating system in which the interests of the elites that control it are satisfied to the full, almost “automatically,” through the mere functioning of the market forces. Thus, free trade among unequal partners is bound to lead to the domination of the more powerful partner (in terms of productivity, competitiveness etc) which in the present case is the transnational corporations—a fact well known to the present advanced market economies which went to great lengths to protect their own industries before they began preaching free trade. Free trade is the best means to destroy the self-reliance of local economies and effect their integration into the internationalised market economy. In fact, the first attempt for an internationalisation of the market economy early in the 19th century failed exactly because the advanced market economies had not at the time as yet reached a similar level of “maturity” in their economic development –an event that ultimately was the cause for two world wars and the great depression of the interwar period.
At the same time, the peripheral countries in the South were forced by the newly formed transnational elite of the North, through a “stick and carrot” policy, to abandon any idea of planning development and, instead, open their markets to foreign capital and commodities. The carrot was a series of “structural adjustment” economic programs that those countries had to accept in order to be eligible for much needed loans and aid from the North. The stick was the US threat of sanctions against the exports of any country that continued to protect its local production (e.g. the 1988 US Trade Act). This way, not only the markets have been opened but also any effective subsidisation of local production has been abolished creating a huge comparative advantage for the products of TNCs and squeezing the prices of primary products on which the livelihood of millions of people in the South depended. The inevitable result has been the huge concentration of income and wealth that characterises the present internationalisation.
Thus, the evidence of the past twenty-five years or so shows that the more open and flexible the markets become the greater the degree of concentration of income and wealth in a few hands. According to official UN data, the income gap between the fifth of the world’s people living in the richest countries and the fifth in the poorest, which was 30 to 1 in 1960, before the present globalisation began, doubled to 60 to 1 by 1990, and by 1997 it was 74 to 1. As a result of these trends, by the late 1990s, the richest 20 percent of the world’s population had 86 percent of world GDP versus 1 percent of the poorest 20 percent! Of course, such concentration means a corresponding concentration of economic power, something that is confirmed by the fact that the same fifth of rich people control today 82 percent of world export markets and 68 percent of foreign direct investment. No wonder that the world’s richest people more than doubled their net worth within just five years, from 1994 to 1999 and, as a result, the combined wealth of 200 billionaires amounted in 1999 to $1 trillion 135 billion while the total income of the 582m people in all the “developing” countries together was only $146bn, i.e. about 10 percent of this.
It is therefore clear, and it can also be shown theoretically using radical economic theory or even parts of orthodox theory, that the concentration of income, wealth and economic power was the inevitable outcome of the opening and liberalisation of markets, which constitute the essence of neoliberal globalisation. Furthermore, it does not require a significant amount of imagination to assume the existence of a strong correlation between the acceleration of globalisation in the last decade and the increase in the concentration of economic and, consequently, of political power.
As a result of these changes, by the early 1990s, an almost fully liberal order has been created across the OECD region, giving market actors a degree of freedom that they had not held since the 1920s. Furthermore, although the effect of the technological changes was that the nature of the production process has changed and is characterised today by “de-massification” and diversification, in place of the mass production that was particularly dominant in the era of statist modernity, neither “de-massification”, nor the growing diversification of production has affected the degree of concentration of economic power at the company level, which has continued growing over the entire period since the emergence of neoliberal modernity.
This new form of modernity is in a much better position to succeed in creating a lasting self-regulating economy than the previous forms of modernity since the basic factor that led to the collapse of the latter has been eliminated, that is, the controls on the markets for commodities, labour and capital that have introduced various degrees of “inflexibility” into them. Such controls represented society’s self-protection mechanisms against its marketisation but, as such, were incompatible with the “efficient” functioning of the market economy. Since the present neoliberal consensus (adopted by both conservative and social-liberal parties in government) has undermined most of these controls, a historic opportunity has been created for the marketisation process to be completed. Therefore, the crucial issue today is not whether the present neoliberal internationalised economy is more open and integrated than the old liberal one but whether it has better chances of success in creating a self-regulating internationalised market economy than the first unsuccessful attempt at the end of the 19th century-beginning of 20th. In my opinion, the chances are much better today for the new attempt to create a self-regulating internationalised market economy to be successful. This is for several reasons having to do with the basic fact that the four major institutions on which, according to Polanyi, a self-regulating market relies, have, for the first time in History, been established. These institutions are:
a self-regulating market (“market economy”), an institution which ―subject to the above qualifications about the role of the state today― is more advanced than ever before in History, as a result of the present degree of freedom that capital and commodity markets enjoy, the retreat of statism everywhere and the universal enhancement of flexible markets for commodities, labour and capital;
the liberal (representative) “democracy”, an institution that is intrinsically connected to a self-regulated market and in a sense constitutes its complement, which today is universal;
the balance-of-power system that today, after the collapse of “existing socialism” and the internationalisation of the market economy, has taken the form of a New World Order controlled by the transnational elite and
the new international monetary system, which has been established with the launching of Euro at the beginning of the new millennium, and parallel movements in North and South America to create a pan-American dollar. One could reasonably expect that such movements are bound to get momentum and lead to fixed parities between the three major currencies (US dollar, Euro, yen) and eventually to a new world currency and a new planetary international monetary system that would secure a stable financial environment for the interlinked economic space, which is being created by globalisation.
In this sense and with hindsight, it is now obvious that Polanyi was wrong in thinking that the statist form of modernity was evidence of the utopian character of the self-regulating market and of the existence of an “underlying social process” which leads societies to take control of their market economies. In fact, the statist form of modernity proved to be a relatively brief interlude in the marketisation process and merely a transitional phenomenon, mainly due to the failure of the liberal form of modernity to create a system based on an internationalised self-regulating market economy, and, of course, to the parallel rise of the socialist movement.
It is therefore clear that although the creation of a self-regulating market system in the 19th century was impossible without crucial state support in creating national markets, still, once this system was set up, it created its own irreversible dynamic, which led to today’s internationalised market economy. However, the present neoliberal form of modernity should not simply be seen as completing the cycle that started with the emergence of liberal modernity. In fact, it represents a new synthesis, which avoids the extremes of pure liberalism, by combining the essentially self-regulating markets of liberal modernity with various elements of a “mild” statism: safety nets and various controls in place of the welfare state, “new protectionist” non-tariff barriers (NTBs), such as export restraints and orderly marketing arrangements, direct or indirect subsidies to export industries, and so on. So, the present internationalisation of the market economy does not imply the elimination of the role of the state in supporting business through direct or indirect state subsidisation, for instance, through research & development funding, bailout aid, debt financing, loan guarantees, export subsidies, tax credits, infrastructure works etc ―i.e. all those policies usually mistaken by the Left for a kind of statism “by the back door” in favour of big business. Nor does it imply the phasing out of the state in its political/military role. What it does imply is the loss of the state’s economic sovereignty not just in terms of the disappearance of major state controls over markets ―let alone over production, i.e. the control it used to exercise through nationalised enterprises― but also in terms of important social controls, which are ruled out by today’s institutional framework of free commodity and capital markets. Furthermore, the internationalisation of the market economy does not mean that its intra-state regulation is redundant. Companies which are active in the internationalised market economy need a degree of stability in financial markets, a secure framework of free trade and the protection of commercial rights.
The State in neoliberal modernity
The role of the state with respect to the market today is therefore very different from both that of the liberal phase, when it restricted itself mainly to the role of the night-watchman, as well as that of the statist phase, when it played the role of the guardian angel of society over the markets. In the new synthesis, the state has to secure the stability of the market environment, the enhancement of the “supply side” of the economy (so that competitiveness and “efficiency” ―i.e. profits― improve) and the survival and control of the marginalized part of the population. All this involves an obvious loss of economic sovereignty that is also reflected in the creation of huge economic blocks, within the context of which the economic role of the individual nation-state is being progressively downgraded in favour of supra-national institutions.
This applies, in particular, with respect to the EU, where the relevant process has already begun. Thus, the liberalisation of the commodities, labour and money markets within the EU block creates a vast economic area where a fixed exchange rates system, similar to the Gold Standard system of the earlier internationalisation, has just began functioning. If we substitute the Euro for gold, Europe operates today under a contemporary Gold Standard system which will have a much better chance than the earlier system, given that the basic factor that led to the collapse of the Gold Standard system has been eliminated, that is, the various restrictions on the markets for goods, labour and capital that represented not only the interest of the national economic elites but also society’s self-protection mechanisms against its marketisation.
Therefore, the neoliberal elimination of many of these restrictions has created the economic conditions for the marketisation process to be completed and for the present neoliberal form of internationalisation to be more successful than the earlier liberal attempt. At the same time, the breakdown of “actually existing socialism” in the East and the collapse of social democracy in the West have created the political conditions for the completion of the marketisation process. So, the fact that neoliberal policies are supported today, with minor variations, by both centre-right and centre-left parties, in government or in opposition, and that the basic elements of neoliberalism have been incorporated into the strategies of the international institutions, through which the transnational elite controls the world economy (IMF, World Bank, WTO, EU, NAFTA etc), makes it plainly evident that the new consensus accurately reflects the radical structural changes brought about by the emergence of the internationalised market economy.
To conclude, neoliberalism reflects the structural changes of the market economy and the corresponding business requirements of late modernity, i.e. the growing internationalisation of the market economy that has made statism increasingly incompatible with it. In this sense, neoliberal policies are “systemic” policies necessitated by the dynamics of the market economy. It is therefore clear that the changes in the policies of the major international institutions and the corresponding changes in national policies, which aimed at opening and liberalising markets, were “endogenous”, reflecting and institutionalising existing trends of the market economy.
In fact, the neoliberal policies initiated by the economic elites of late modernity to liberalise the newly opened international markets simply repeated a similar process that was initiated by the economic elites of early modernity, at the beginning of the 19th century, to liberalise the “national” markets, which had emerged at the end of the 18th century. So, the rise of neoliberalism shows that the marketisation process was merely interrupted by the rise of statism in the 1930s, which did not manage to last for more than forty years or so. Still, for the reformist Left, neoliberalism as well as globalisation, are simply “utopias” that the economic elites attempt to impose, in the context of a “project” that “aims to create the conditions under which the neoliberal «theory» can be realised!”
But, it is clear that the form the market economy has taken today, what we may call “neoliberal internationalisation”, is basically the outcome of a dynamic process and not the result of conspiracies, or of the policies of evil neoliberal parties and/or degraded socialdemocratic parties, as most in the Left assert. The emergence of neoliberal internationalisation was a monumental event which implied the end of the social democratic consensus that marked the early post war period –i.e. the consensus involving both conservative and socialdemocratic parties which were committed to active state intervention with the aim of determining the overall level of economic activity, so that a number of socialdemocratic objectives could be achieved (full employment, welfare state, better distribution of income etc).
Therefore, the neoliberal liberalisation of the market economy and the associated internationalisation of it do not simply represent a change of policy brought about by some cultural decadence but in fact express a significant structural change (although not a break with the past) which marks the entry into a new form of modernity. This is also illustrated by the fact that the basic elements of neoliberalism have already been incorporated into the strategies of the international institutions which control the world economy (IMF, World Bank), as well as in the treaties that have recently reformed the EU (Single Market Act, Maastricht Treaty, Amsterdam Treaty). It is for this reason that once the internationalised neoliberal market economy was institutionalised, the political parties in government, either conservative or “socialist”, had to follow the same policies in order to protect the competitive position of the economic elites, on which further growth (and their own political survival) depends.
Still, the current recession created a new mythology among social democrats about a possible return to Keynesianism. But, it is obvious that the fundamentals of the neoliberal modernity (open and flexible markets, safety nets, minimisation of state sector etc) are not going to be affected by the current “rethinking” with respect to government spending, despite the pious hopes of Keynesian social democrats. The state simply attempts at present to bail out firms under threat of bankruptcy, sticking, as it has always done since the emergence of neoliberal modernity, to a very narrow economic role aiming to influence the supply side of the economy (through tax cuts etc) rather than the demand side (through a significant expansion of government spending and, particularly, badly needed social spending).
It is clear that the Left, and particularly the Marxist version of it, never grasped the significance of the rise of neoliberalism in the mid 1970s, which, to my mind, marked the start of a shift towards a new form of modernity and not just a change in policy, as Marxists of various persuasions maintain: from Alex Callinicos, the theoretical guru of British Trotskyites, to Eric Hobsbawm, the doyen of Marxist historians, who, together with other equally perceptive former Marxism Today writers, as late as 1998, were still proclaiming the end of neo-liberalism! In fact, recent developments in the internationalised market economy fulfilled the prediction made in TID that, in the competition between the Anglo-American model of capitalism and the European “social market” model, the latter had no chance to survive because, as I put it at the time of writing (1995-1996), “it is not a model for future capitalism but a remnant of the statist phase of marketisation which obviously cannot survive the present internationalisation of the market economy”. However, the Marxist Left still seems very surprised by the final predominance of the Anglo-American version of neoliberalism over the European “social democratic model”, and the fact that the latter not only did not attempt to undermine the former but also effectively has copied it, to the dismay of the ex “New Left”! In fact, one may argue that it was this profound failure of the Left to grasp the fact that neoliberalism represents not just a policy change but a structural change marking the shift to a new form of modernity, and the parallel confusion of modernity with industrialism, that have led to the myth about a new era of postmodernity.
Finally, the creation of an internationalised market economy obviously necessitates some sort of international economic and political “regulation”. Therefore, if in the first phase of marketisation, when the market economy was basically national, the role of enforcing the market rules was assigned to the nation-state (through its monopoly of violence), who plays the same role today? It is clear that an internationalised market economy, i.e. a transnational economy, needs its own transnational elite. Does such an elite exist today?
The new Transnational Elite
As I will try to show in this section, the existence of such an elite not only has already been theorised both from the Marxist and the Inclusive Democracy (ID) viewpoints but also has been increasingly substantiated by the emerging evidence on the matter. We may define the “transnational elite” as the elite which draws its power (economic, political or generally social power) by operating at the transnational level ―a fact which implies that it does not express, solely or even primarily, the interests of a particular nation-state. The transnational elite consists of:
the transnational economic elites (TNC executives and their local affiliates), which play the dominant role within the ruling elite of the internationalised market economy given the predominance of the economic element in it,
the transnational political elites, i.e. the globalising bureaucrats and politicians, who may be based either in major international organisations or in the state machines of the main market economies, and
the transnational professional elites, whose members play a dominant role in the various international foundations, think tanks, research departments of major international universities, the mass media etc.
The ID approach refers to a transnational “elite” rather than a transnational “class” because the Marxist class concept is both narrower than the elite concept and outdated as it only partially expresses the reality of “class” divisions in neoliberal modernity. It is an elite, because its members possess a dominant position within society as a result of their economic, political or broader social power. It is a transnational elite, because its members, unlike the national elites, see that the best way to secure their privileged position in society is not by ensuring the reproduction of any real or imagined nation-state but, instead, by securing the worldwide reproduction of the system of market economy and representative “democracy” (rather than simply to promote the interests of global capital as the TCC approach maintains). This is because this new transnational elite sees its interests in terms of the international markets rather than the national markets.
It is therefore clear that the transnational elite does not establish any territorial centre of power, as it is a decentred apparatus of rule. This means that this elite is not based on one particular nation-state, not even the USA, although of course it does not hesitate to utilise the power of particular states to achieve its aims ―even more so when this state happens to be today’s leading military power.
The existence of such a transnational elite is not simply theorised. In fact, the evidence is growing about the existence of an elite which expedites the globalisation process by facilitating the institutional arrangements required for its smooth functioning. Few, for instance, are aware of the European Round Table of industrialists (ERT), an alliance of the chief executives of Europe’s largest companies, whose purpose is to formulate policies for adoption by the European Commission. Thus, the Single European Act, which opened and liberalised markets in the European Union, was framed not by the EU but by Wisse Dekker (the president of Philips and subsequently chairman of the ERT) whose proposal became the basis of the EU’s 1985 white paper. Also, the EU enlargement plan (approved by the European heads of government in Helsinki at the end of 1999), which required new entrants to deregulate and privatise their economies and invest massively in infrastructure designed for long-distance freight, was mapped out by Percy Barnevik, head of the Swedish company “Investor AB” and chairman of an ERT working group.
Furthermore, it seems that the moves of ERT and other trade bodies on both sides of the Atlantic are parts of a master plan to create a legally harmonised neoliberal world order. As it is well known, the FTAA process aims to extend the North American Free Trade Agreement (NAFTA) to the entire hemisphere. This process has already led to the Declaration of Quebec (April 2001) that envisages the creation of the world’s largest free trade zone by 2005. Thus, as George Monbiot informs us:
Since 1995, the EC, pressed by the ERT and other trade bodies, has quietly been preparing for a single market with the US. The Transatlantic Economic Partnership is a slower and subtler creature than the World Trade Organisation or the MAI. One by one it aims to pull down the “regulatory barriers” impeding the free exchange of goods and services between Europe and America. (…) The master plan is now falling into place. A greatly expanded Europe will form part of a single trading bloc with the US, Canada and Mexico, whose markets have already been integrated by means of the North American Free Trade Agreement, or Nafta. Nafta will grow to engulf all the Americas and the Caribbean. The senate has already passed a bill (the Africa Growth and Opportunity Act) forcing African countries to accept Nafta terms of trade. Russia and most of Asia are being dragged into line by the International Monetary Fund. (…) By the time the world trade agreement is ready to be re-negotiated, it will be irrelevant, for the WTO’s job will already have been done. The world will consist of a single deregulated market, controlled by multinational companies, in which no robust law intended to protect the environment or human rights will be allowed to survive.
Finally, the GATS process (which aims to extend the General Agreement on Trade in Services), provides another opportunity for the transnational elite to institutionalise its role and it has had already repercussions within the EU, Thus, the “Bolkestein directive” aimed at radically reducing the powers of national government over multinationals is presently under discussion, provoking mass protests and debate in France, Belgium, Sweden and Denmark. The directive’s main aims are, first, to erase any national laws and standards that make it difficult for European companies to enter the markets of other member states, and, second, to allow European companies to run businesses anywhere in the EU according to the rules of their “country of origin”. The directive applies the same rules to healthcare and social services as it does to estate agents, fairground providers, advertising companies and private security firms. This means that the commission no longer sees the services provided by doctors to patients as a special public good to be enjoyed by all citizens, but as an “economic activity”, a commodity to be traded across the EU much like any other, placing the interests of business, as David Rowland, a research fellow at University College London points out, above the protection of workers and consumers.
Clearly, whereas in the (national) market economy the role of enforcing the rules of the market was assigned to the nation-state, in today’s internationalised market economy the corresponding role of enforcing the rules of the internationalised market is assigned not to the state, but to international organisations like NATO and/or a capitalist-controlled UN. It is not therefore surprising that it has become part of the State Department’s job and, indirectly, of the US-controlled NATO, to push deregulation and the dismantling of all barriers to trade and finance both with individual governments and in international negotiations on economic matters (WTO).
It is therefore obvious that the transnational elite is already in the process of taking the necessary steps to institutionalise its transnational role. The immediate aim is to pull down the “regulatory barriers” impeding the free exchange of goods and services, initially between Europe and America, and then between this huge trading block and the rest of the world, which will be forced to accept the terms of trade of the former. The ultimate aim is the formation of a vast single deregulated market, controlled by multinational companies, in which social controls over markets to protect labour or the environment will be minimised.
So, although it is true that no formal arrangements have yet been set in place to institutionalise political globalisation, it could be argued that an informal form of political globalisation has already been initiated by the “transnational elite”, a globalisation which is implemented at present through international economic institutions (e.g. WTO) and political/military ones (e.g. NATO). The cases I mentioned above, as regards the former, and the two wars which were induced by the new transnational elite in the 1990s (i.e. the Gulf war and the war in Kosovo) as regards the latter, are obvious examples. In this problematique, it is not accidental that despite the clear divisions between the elites of the advanced market economies as regards these two wars, they eventually stood by the American elite, which presently plays the role of the political/military arm of the transnational elite, for the common good of the “international community” ―as they euphemistically call the transnational elite. In other words, the US military machine in effect plays the role of the agent of globalisation and, contrary to what some analysts recently argued, the Bush administration’s policies (National Missile Defence system-NMD, challenging the anti-ballistic and Kyoto treaties etc) do not indicate “the return in force of the national security state”. What such policies do indicate is that certain parts of the transnational elite, like the military-industrial complex and the oil industry which are predominantly based in the US, are presently in a stronger position to impose their will on the rest of this elite because of their recent capture ―through their protégé George Bush― of the highest echelon of the transnational elites’ political/military power.
It seems therefore that the transnational elite, for various reasons, relies at present on this informal system of political globalisation. Such reasons could include: the persistent importance of national identities, despite (or because) of the cultural homogenisation forced by globalisation; the need to keep the façade of a well functioning representative “democracy” in which local elites are still supposed to take the important decisions; the need to provide local safety nets for the provision of minimal social services to the destitute; and last, but not least, the need to delegate to the nation-states a significant amount of the monopoly of violence so that they are capable of controlling the movement of labour and generally controlling the population, in a way that would facilitate the free flow of capital and commodities.
The main aim of the transnational elite, which today controls the internationalised market economy, is the maximisation of the role of the market and the minimisation of any effective social controls over it for the protection of labour or the environment, so that maximum “efficiency” (defined in narrow techno-economic terms) and profitability may be secured. Of course, this has always been the aim of the national elites controlling the market economy of each nation-state but in today’s era of open markets this aim refers to the internationalised market economy rather than to the market economy of each nation-state, in the framework of the new synthesis I mentioned in the last section.
However, although the policies promoted by the transnational elite express its “general interest”, this does not mean that there are no significant divisions within it as regards the way to tackle the effects of globalisation with respect to the worsening economic and ecological crises. This division is reflected by the clash of views between, on the one hand, its “conservative” elements (expressed mainly by the US economic elite and its representatives in the administration) and, on the other, its “enlightened” elements expressed by the European economic and political elites.
The former wish to vigorously pursue an agenda based on the philosophy that all state activity diminishes the liberty of the individual, on the assumption that all wealth is the result of individual effort. In this view, taxation is pernicious as it confiscates wealth that properly belongs to individuals and it intrudes into our financial privacy to calculate what is due, only to finance state action that diminishes liberty and, if spent on welfare, education or health, to undermine the incentive to take responsibility for ourselves. This economic philosophy finds its counterpart in the US withdrawal from the minimal restrictions imposed by the Kyoto treaty and, as we have seen above, in an aggressive political and military strategy. Thus, despite the moderate and, in fact, utterly insufficient targets of the Kyoto treaty, the balance in it favoured those members of the transnational elite which express the interests of the insurance, tourist and agricultural industries (which, for obvious reasons, are particularly concerned about the effects of the greenhouse effect), at the expense of the oil industry members. It was this imbalance that prompted the Bush administration (induced by the oil industries which sponsored his election to Presidency) to attempt to restore the balance, despite the obvious adverse effects on world environment.
On the other hand, the European economic elites, having to face stronger reactions against this sort of philosophy than their American counterparts (due to the stronger socialist/social-democratic tradition in Europe) although they adopt all the basic elements of the internationalised market economy, also suggest various measures to reduce extreme poverty, (but not inequality!), accept the minimal restrictions of the Kyoto treaty, and pursue a policy of fully integrating China, Russia and the “rogue” states into the internationalised market economy rather than alienating them through aggressive political and military strategies. In other words, the aim of the latter is to create a “globalisation with a human face” which does not affect it at all in its essentials. As regards the ecological crisis in particular, the European elements of the transnational elite, recognising the enormous significance of this crisis but at the same time not wishing to antagonise those parts of it which thrive in eco-destructive activities (e.g. the oil industry) attempt to find a compromise in terms of a strategy for a “sustainable development” (see ch. 3).
Still, given the present unrivalled political, economic and military power at the disposal of the American elements within the transnational elite, one may expect that the consensus to be reached out of the clash between these two trends will mainly express the interests of the former. Particularly so today when the American elements within the economic elite have established a long-term superiority over the rest, not only at the military level, where the events of September 2001 gave them the opportunity to function formally as the policeman of the New World Order, but also at the economic level, given their unchallenged position in the information revolution that puts them well ahead of their rivals in the Far East and Europe, as well as the long-term decline of the Japanese elite. A clear indication of the American predominance within the transnational elite is the fact that whereas at the end of the 1980s eight of the 10 biggest multinationals in the world were Japanese, now they are all American.
 World exports which were rising by an average of 4 percent in the 1970s, 5.2 percent in the 1980s and 6.9 percent in the 1990s, World Development Report 1994 (Table 13) and 2000/2001 (Table 11).
 World Bank, World Development Report 1994 (Table 9) and 2000/2001 (Table 13).
 UN, Human Development Report 1999 (NY: Oxford University Press, 1999).
 UN, Human Development Report 2000.
 Eric Helleiner, “From Bretton Woods to Global finance: a world turned upside down” in Richard Stubbs and Geoffrey R.D. Underhill, Political Economy and the Changing Global Order (London: Macmillan, 1994).
 TID, pp. 67-73.
 Polanyi, The Great Transformation, Ch. 1.
 See T. Fotopoulos, “The New World Order, the Transnational Elite and the dismantling of Yugoslavia” in New Political Science (under publication)
 Polanyi, The Great Transformation, p. 29.
 See e.g. Pierre Bourdieu, “The essence of neoliberalism: utopia of endless exploitation”, Le Monde Diplomatique (December 1998).
 Alex Callinicos, Against Postmodernism (Oxford: Polity Press, 1990).
 Perry Anderson, New Left Review, No. 1 [new period] (Jan./Feb. 2000), p. 10.
 Fotopoulos, TID, pp. 97-98.
 Anderson, New Left Review, pp. 10-11.
 Leslie Sklair, The Transnational Capitalist Class (Oxford: Blackwell, 2001).
 Takis Fotopoulos, “Globalisation, the reformist Left and the Anti-Globalisation «Movement»”, Democracy & Nature, Vol. 7, No. 2 (July 2001).
 See Fotopoulos, “Class Divisions Today: The Inclusive Democracy approach”, Democracy & Nature, Vol. 6, No. 2 (July 2000).
 George Monbiot, “Still bent on world conquest”, The Guardian (16/12/1999).
 David Rowland, “In the health trade”, The Guardian (20/1/2005).
 See e.g. the series of articles by a team of reporters led by Nicholas Kristof in the New York Times (International Herald Tribune) (February 16-19, 1999).
 See T. Fotopoulos, The Gulf War, (Athens: Exantas, 1991) ― in Greek.
 See T. Fotopoulos, “The First War of the Internationalised Market Economy” Democracy & Nature, Vol. 5, No. 2 (July 1999), pp. 357-382.
 Philip S. Golub, “Cold war government with no war to fight: America’s imperial longings”, Le Monde Diplomatique (July 2001).
 Will Hutton, “Death is now the only certainty”, The Observer (May 6, 2001).
 See, e.g. Ed Vulliamy, “The President who bought power and sold the world”, The Observer (April 1, 2001).
 See for example an expression of this trend in a recent Observer leader under the eloquent title “The US is not fit to run the world-We must help Europe take on the job”, The Observer (April 1, 2001).
 Madeleine Bunting, “Smash and grab inc.: The US ruled the last century and it will rule the next. What will it do with its power?,” The Guardian (August 24, 1999).