Speech delivered by Dr. Osvaldo Martinez Martinez, member of the National Assembly of People's Power and Director of the Center for Research on the World Economy, at the International Meeting of Workers Against Neoliberalism and Globalization.

Havana Convention Center, Cuba

August 6, 1997

Comrades of the presidium, comrades participating in the International Meeting of Workers against Neoliberalism and Globalization:

I would like to share with you some brief reflections about globalization and neoliberalism that might serve as an introduction to the debates that will follow in the committees.

In talking about globalization and neoliberalism, we are told over and over that we live on a globalized planet, in a world economy, in which national states have been virtually dissolved and national sovereignty has lost its meaning. According to this view, this is the only possible world that can witness the end of history, which is understood as something different from capitalism and in which social classes, imperialism and ideologies come to an end, and in which certain existing remnants of the past are doomed to disappearance, such as trade unions.

In talking about neoliberalism, we are repeatedly told that the market can solve everything in the best possible way, that the state is, has been and will always be inherently inept and inefficient, that everything should be privatized to attain the supreme goal of efficiency.

Perhaps it would be useful to make some precise definitions regarding these two concepts: globalization and neoliberalism.

Globalization is, without a doubt, an objective phenomenon, but it is absolutely not true that it is a totally new process, nor that it can be equated with the universal and definitive victory of capitalism, or with the cancellation of revolutionary transformations and of the contradictions between social classes or between countries.

Globalization is certainly an objective process, a new stage in the old process or capital internationalization which was already detected, exposed and analyzed in the past century in the classics of Marxism, as far back as in 1848 with the Communist Manifesto, and even by non-Marxist authors, and which is now assisted by technological breakthroughs in communications, transportation and data transmission media.

Fax, email, jet-propelled aviation, giant communications, transportation and data transmission media are the present icons of this globalization process which are accepted as an objective phenomenon. The process is based on profound technological changes, and gives rise to the existence of more interconnected economies that have better communications and are integrated into a transnational financial and trade network, set up by the transnational corporations with their colossal might.

We recognize the objective nature of globalization; the technological changes that are taking place, and even that it would be senseless to oppose globalization per se. we cannot ignore the fact that globalization exists and is presently making headway. It is developing under the prevalence of the neoliberal policy, so that now we talk, not simply of globalization as an objective process, based on international capitalism and on technological transformations, but of the neoliberal globalization, which is the ideological and practical model, the dominating form of ideological manipulation that generates those serious consequences, which have brought us together in this meeting.

This neoliberal globalization has been and continues to be like a storm that is sweeping over the planet, affecting all countries to a greater or lesser extent, creating economies and societies increasingly exclusive and polarized.

We would do well to examine some of the economic and social traits of this neoliberal globalization, taken as an illustration from among many others.

Firstly, it should be pointed out that at the same time a predominantly neoliberal globalization has expanded, the world economy has grown more sluggishly. Consequently economic growth, or the bigger slice of the pie, promised by the neoliberal ideology is, in actual practice, shrinking. While between 1950 and 1973, the world product grew at an almost 5 percent rate, between 1974 and 1980, it dropped down to 3.5 percent; between 1981 and 1989, the growth rate was only 3.3 percent and in more recent years, between 1990 and 1996, the rate was extremely low - only 1.4 percent.

Together with this ever slower economic growth, deregulation has increased, that is, no control or restriction is exerted on market forces. And this deregulation operates in the monetary, financial, trade and, by the way, the labor spheres. Along with these two phenomena - slower growth and greater deregulation - there is increased speculation in the world economy.

Those trends favor an ever-more parasitical world economy, in which the generation of new wealth by means of economic growth gives way to the so-called "financial bubble" or disproportionate growth of speculative capital that tends to turn the world economy into a sort of "casino" economy, wherein speculation turns on the enormous roulette that world economy seems to have become.

Present estimates have it that for every dollar produced by the real economy - the productive economy - there are 30-50 dollars that emerge from the financial market turning around in the roulette of the "casino" economy.

What are the dangers we should worry about, over and beyond the technical aspects of the issue? First, this slow growth whets financial speculation which, in turn, fosters the aggressiveness of capital, while deregulation worsens the volatility of this contradiction.

Quite a few authors and analysts now consider that the world economy is in serious danger of an eruption, because of the prevalence of this neoliberal policy. This eruption would consist in an adjustment between the real economy - increasingly diminished and waning and the "financial bubble" or "casino" economy. This adjustment process would appear as a great world economic crisis, even more tremendous than the crisis of the 30s and which would be but another manifestation of that peculiar capitalist practice of recovering the lost economic balance through a process of the destruction of the productive forces, that is, an economic crisis.

In the conditions of ever slower growth, neoliberalism proposes a war to monopolize an increasingly larger share of the existing wealth, rather than generating wealth through productive investments in new areas.

It is this wild speculation, compounded by the reverence for competitiveness in the market - based, in its turn, on technological development - that leads to technological innovations at the expense of employment, social security, income, social improvements, the rights of women, etc.

This neoliberal prevalence has provoked and is still provoking a number of important effects, all of which, in one way or another, will be discussed in the debates we are about to hold.

The neoliberal economic discourse and policy has become globalized, to such an extent, that the debate on different development concepts and models has been eradicated, a debate that was so rich in the 60s and 70s. Now, all we hear is practically a monologue based on a single thought. And in quite a number of cases, even the victims have been led to think along the same lines as their aggressors.

We have come to a point when the concept of sound economy has been divorced from that of the population's welfare.

In the present-day world, well-established principles of sound economy and expert management of economic policy have led to countries where a small number of rich people rise above the disappearing middle strata, who ultimately join the growing ranks of the poor.

Something that has come to be accepted as normal, and even necessary and encouraging, is an unemployment rate that would have shocked the organic economists of the system - such as Adam Smith, David Ricardo and Keynes himself, among others. They saw full employment as the fulfillment of the progressive mission of capitalism- but now this very system considers these actually staggering rates - 8, 9, 10 percent and even higher - normal and even stimulating.

Things have gone so far as to classifying countries as being either fast and slow. The latter are those that are unable to become inserted in the world market and, consequently, in terms of the orthodox neoliberal theory, are considered redundant to the system.

This is the first time in history of economic and social thinking that millions of people - for example, Sub-Saharan Africa - are openly proclaimed redundant, meaningless and without a future or a space in today's globalized economy.

The advance of neoliberal globalization goes hand in hand with the growth of poverty and social polarization.

The 80s and the 90s have witnessed the broadening of the yawning abyss between riches and poverty, not only between the developed and the underdeveloped countries, but also in those pockets of the Third World that sprout within the developed economies. These Third World pockets development with the incorporation of the newly poor, and from the flow of the migrant poor, which the the developed countries are attempting to stop by fueling the fire with racism, xenophobia and repression.

The great distance that separates neoliberal theory from reality is particularly significant in the case of the labor market, including the setting of wages and the existence and role of trade unions.

What does the neoliberal discourse have to say about the labor market? It propounds that, like any other market, a balanced price is to be created for wages, and that this price is the highest the buyers are able to pay and sellers are able to collect, with everyone satisfied with the result.

Workers go to the market to offer a service, labor, in exchange for wages, which according to this concept, is the price of labor.

Workers would be force to choose between idleness and work. Wages would be the price for which workers would be willing to give up idleness and, allegedly, a break even point, or wage level, would be reached where everyone would be satisfied.

This being the scheme, a question comes to mind: Will there be any unemployment in this idyllic theoretical construct? The neoliberal answer to this question is really delicious. The answer is: At a sufficiently low wage level, everyone should be able to find employment, although it could happen that, if wages are too low, some would opt for idleness." This option would be a sovereign decision adopted by the workers who go to the labor market as free and equal economic agents.

A comparison between this theoretical construct and the actual situation of the working class, of the workers, the situation of the world economy today is really pathetic.

As to the role of trade unions in this neoliberal scheme, it is to be deduced that in this perfect balance in the labor market, no forces outside the market should intervene in the free individual decision of the worker to opt for work or idleness. Trade unions would then become a distorting, anti-natural factor in their efforts to establish wages that do not respond to free market actions.

Neither should there be minimum wages, fixed by legislative action, since this would also impinge on the infallible dictates of the market.

How is this perfect abstract and theoretical neoliberal balance reflected, in real terms, in present-day neoliberal globalization? Reality lacks such finesse. Of the 5.6 billion people that inhabit the planet, some 2.8 billion make up the economically active population, that is, people of working age. Of them, 1.14 billion (41 percent of the economically active population) are unemployed or underemployed throughout the world.

What more conclusive expression of the bankruptcy and the profound anti-progress and anti-human contents of present neoliberal globalization than these figures, which reflect the fact that the system keeps 40 percent of the world economically active population subjected to unemployment and underemployment?

In addition, other data shows that some 300 million people, among them, a great many women, depend on the informal sector, with no social security, with no unemployment insurance, with no labor rights in the event of illness, disability or diminished working capacity.

One out of every ten persons in the major developed countries is unemployed. In the trend that prevails in these countries, unemployment and underemployment spiral in the context of the so-called growth without jobs.

In the major developed countries taken as a whole, more than 30 million people are jobless.

At least 80 million children are forced to work and, in some countries, 25 percent of the children under 15 are economically active, that is, they have to work merely to subsist.

Of the 5.6 billion inhabitants on the planet, 1.5 billion live in extreme poverty, and there are 800 million hungry people in the world.

In Africa, half the population lives in extreme poverty. But poverty also continues to grow under the prevalence of neoliberal policies in the United States and Europe, where approximately 15 percent of the population live below the poverty line.

Cutbacks in state budgets at the expense of unemployment insurance and social benefits have fostered an increase in poverty, particularly among women, youth, the elderly, the handicapped and ethnic minorities.

Some 250,000 people living in New York have had to remain in shelters during the past five years, while in London, 400,000 persons are recorded as homeless.

Another trait I would simply like to mention in connection with neoliberal globalization is environmental deterioration, a worldwide problem of top importance. Neoliberal globalization today, with its vast possibilities of action on a world scale, has the means to devastate the environment anywhere in the world, by universalizing technologies or exporting pollution.

Briefly speaking, neoliberal globalization has globalized exclusion, exploitation and social malaise.

We must globalize resistance against it. The system operates at a higher level of internationalization and even transnationalization. Therefore, our response requires a high level of coordination and international unity around a minimum program of action against neoliberal globalization.

Let us wield our unity of action to end the system that provides opulence to ten percent of humanity, while degrading and dooming the remaining 90 percent; which prioritizes goods over people; which mistakes quality of life for the quantity of things, and which considers worthless everything that is priceless.