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Lawrence Summers, Goodbye & Good Riddance: Obama's Winter of Neo -Liberal Discontent

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This is largely what the US/NATO bombardment of Yugoslavia was about, along with the wars against Iraq and Afghanistan -- the reassertion of capitalist hegemony over the region. The U.S. and NATO forced Yugoslavia, under a newly reluctant Milosevic, back into the arms of its masters. xxxi In his last act as Commerce Secretary, Ron Brown led a coterie of corporate executives, military personnel and defense contractors whose companies had contributed generously to the Democratic Party and the Clinton campaign, to Yugoslavia, in search of corporate gain and expansion of their markets that the break up of that beleaguered country made possible.

When Brown's plane went down over Yugoslavia fourteen years ago with dozens of corporate moguls aboard, it exposed the "intervention" as an attempt "to bring the region firmly into the American sphere of military and commercial interest."xxxii

At stake, at the time, in addition to cheap labor, military parts, future oil rights and a vast assortment of natural resources in already-developed mines, was $5.1 billion in reconstruction funds (that figure tripled, and by now has doubled again, to more than an estimated $32 billion), with the World Bank set to dispense $1.8 billion for the region in corporate giveaways each year. As Alexander Cockburn rightly put it, "[Brown's] was the tour to cash in the investment and bring home the trophies."

The Infamous Memo

DATE: December 12, 1991

TO: Distribution

FR: Lawrence H. Summers

Subject: GEP

"Dirty' Industries: Just between you and me, shouldn't the World Bank be encouraging MORE migration of the dirty industries to the LDCs [Least Developed Countries]? I can think of three reasons:

1) The measurements of the costs of health impairing pollution depends on the foregone earnings from increased morbidity and mortality. From this point of view a given amount of health impairing pollution should be done in the country with the lowest cost, which will be the country with the lowest wages. I think the economic logic behind dumping a load of toxic waste in the lowest wage country is impeccable and we should face up to that.

2) The costs of pollution are likely to be non-linear as the initial increments of pollution probably have very low cost. I've always thought that under-populated countries in Africa are vastly UNDER-polluted, their air quality is probably vastly inefficiently low compared to Los Angeles or Mexico City. Only the lamentable facts that so much pollution is generated by non-tradable industries (transport, electrical generation) and that the unit transport costs of solid waste are so high prevent world welfare enhancing trade in air pollution and waste.

3) The demand for a clean environment for aesthetic and health reasons is likely to have very high income elasticity. The concern over an agent that causes a one in a million change in the odds of prostate cancer is obviously going to be much higher in a country where people survive to get prostate cancer than in a country where under 5 mortality is 200 per thousand. Also, much of the concern over industrial atmosphere discharge is about visibility impairing particulates. These discharges may have very little direct health impact. Clearly trade in goods that embody aesthetic pollution concerns could be welfare enhancing. While production is mobile the consumption of pretty air is a non-tradable.

The problem with the arguments against all of these proposals for more pollution in LDCs (intrinsic rights to certain goods, moral reasons, social concerns, lack of adequate markets, etc.) could be turned around and used more or less effectively against every Bank proposal for liberalization.


NOTES

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Author of "The Fight Against Monsanto's Roundup: The Politics of Pesticides" (SkyHorse, 2019). Member of the Brooklyn Greens / Green Party, and coordinator of the No Spray Coalition, which has been fighting against the indiscriminate spraying of (more...)
 

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