1 00:00:13,960 --> 00:00:15,439 Encirclement 2 00:00:21,680 --> 00:00:31,320 Neo-Liberalism Ensnares Democracy 3 00:00:31,320 --> 00:00:37,080 Producer, director, editor 4 00:00:37,080 --> 00:00:42,840 Photography 5 00:00:42,840 --> 00:00:48,680 Sound 6 00:00:48,680 --> 00:00:54,480 Music 7 00:00:54,480 --> 00:01:17,474 In order of appearance 8 00:01:30,600 --> 00:01:33,831 In the ’30s, the term “totalitarian regime” 9 00:01:34,200 --> 00:01:37,158 was applied to single-party regimes 10 00:01:39,240 --> 00:01:41,470 where the party’s mandate 11 00:01:42,800 --> 00:01:46,270 was to rule over the totality of a society’s activities - 12 00:01:47,800 --> 00:01:52,794 political, economic, social, cultural. The state looked after everything. 13 00:01:53,000 --> 00:01:58,632 Unfortunately, we had examples particularly in Fascism, Nazism … 14 00:01:58,920 --> 00:02:03,357 and Stalinism: totalitarian societies run by an omnicompetent party. 15 00:02:03,760 --> 00:02:09,392 Today, we live in a democracy, of course, but we notice that … 16 00:02:09,639 --> 00:02:12,438 single parties have given way to a single mindset, 17 00:02:13,080 --> 00:02:17,073 and the proponents of such unilateral thinking 18 00:02:17,320 --> 00:02:21,552 reckon that there is but one solution - 19 00:02:21,800 --> 00:02:27,238 the one imposed by the market - to cover all society’s activities. 20 00:02:27,440 --> 00:02:34,278 Whatever the activity - economic, social, cultural, athletic - 21 00:02:35,880 --> 00:02:38,792 the market is mandated to regulate it. 22 00:02:39,920 --> 00:02:45,153 We see how the market penetrates all society’s interstices, 23 00:02:45,360 --> 00:02:50,957 like a liquid, that leaves nothing and spares nothing. 24 00:02:51,240 --> 00:02:55,199 This is why we can now talk about “globalitarian” regimes: 25 00:02:55,440 --> 00:02:59,069 because there’s a will to impose 26 00:02:59,320 --> 00:03:03,199 a kind of unique solution to the plurality of our problems. 27 00:03:05,600 --> 00:03:07,750 I wrote “La Pensée Unique” … 28 00:03:08,920 --> 00:03:11,229 in 1995, 29 00:03:11,640 --> 00:03:14,313 when most of our citizens … 30 00:03:14,600 --> 00:03:17,273 hadn’t yet become totally aware 31 00:03:18,200 --> 00:03:24,070 that we had fallen into an ideology in which we were now immersed. 32 00:03:25,840 --> 00:03:29,674 Today, we’d call this ideology “neo-liberal”. 33 00:03:30,960 --> 00:03:34,077 Neo-liberalism is an economic technique, 34 00:03:35,880 --> 00:03:38,758 a certain set of economic principles, 35 00:03:39,000 --> 00:03:43,551 but in reality, imperceptibly, it’s also a veritable ideological yoke. 36 00:03:44,000 --> 00:03:48,391 This is what I was trying to point out, primarily, 37 00:03:48,920 --> 00:03:52,037 by saying what it ultimately consists in: 38 00:03:52,920 --> 00:03:56,959 Neo-Liberalism consists in a certain number of principles, 39 00:03:57,200 --> 00:04:00,351 notably that the market’s invisible hand 40 00:04:00,600 --> 00:04:05,116 is there to settle problems. People and States need not get involved, 41 00:04:05,240 --> 00:04:07,231 let the market work. 42 00:04:08,480 --> 00:04:11,313 Establishing principles like deregulation. 43 00:04:11,560 --> 00:04:14,996 Everything’s over-regulated, the State’s been too involved. 44 00:04:15,200 --> 00:04:16,791 We need less government. 45 00:04:17,920 --> 00:04:23,313 Capital must prevail over labour. We must always favour capital. 46 00:04:23,800 --> 00:04:26,360 And we must privatize. 47 00:04:27,720 --> 00:04:32,635 The State’s perimeter must be small, the private sector’s expansive. 48 00:04:33,240 --> 00:04:38,314 Free trade must be promoted because commerce is development. 49 00:04:38,560 --> 00:04:41,996 We made this kind of equivalency. 50 00:04:42,520 --> 00:04:48,709 I was trying to show how these principles weren’t recent, 51 00:04:48,920 --> 00:04:53,550 but had been developed since ’44, since the Bretton-Woods conference, 52 00:04:53,800 --> 00:04:56,633 which initiated the IMF and the World Bank. 53 00:04:56,880 --> 00:05:01,510 It arose from all the work the IMF had done since the ’60s and ’70s 54 00:05:01,760 --> 00:05:05,150 geared towards southern countries, called “structural adjustment”, 55 00:05:05,400 --> 00:05:09,188 or, in some countries, “the Washington Consensus”, 56 00:05:09,440 --> 00:05:13,911 namely that State budgets must necessarily be reduced, 57 00:05:14,160 --> 00:05:17,630 no public deficit, no inflation, 58 00:05:17,920 --> 00:05:23,597 bureaucracies must be reduced, all public services like health … 59 00:05:23,880 --> 00:05:27,077 and education must be reduced to a minimum. 60 00:05:27,320 --> 00:05:30,995 The State isn’t to make that kind of expenditure, etc. 61 00:05:31,800 --> 00:05:34,917 Many southern countries suffered greatly, of course. 62 00:05:36,040 --> 00:05:40,397 These were basically my points, and when we add up these elements, 63 00:05:40,600 --> 00:05:43,194 we’re faced with an ideology. 64 00:05:43,400 --> 00:05:48,030 And at the time, France was on the eve of a presidential election, 65 00:05:48,280 --> 00:05:51,033 which took place a few months later in May. 66 00:05:51,280 --> 00:05:54,590 So, I was saying that ultimately, in reality, 67 00:05:54,840 --> 00:06:00,710 we were being proposed this almost single-party kind of pensée unique. 68 00:06:02,640 --> 00:06:04,232 Leftist Privatization 69 00:06:11,760 --> 00:06:17,200 Shortly after the Iron Curtain fell, we witnessed in the West 70 00:06:17,200 --> 00:06:22,760 a reframing rightwards by the vast majority of left-wing parties. 71 00:06:22,760 --> 00:06:31,640 From the British Labour Party to Germany’s SPD via the Parti Québécois, 72 00:06:31,640 --> 00:06:39,440 they all got into a State “reform”, “reengineering” or “modernization” 73 00:06:39,440 --> 00:06:45,080 that invariably meant adopting neo-liberal politics. 74 00:06:45,080 --> 00:06:52,120 From 1997 to 2002 in France, Lionel Jospin’s socialist government 75 00:06:52,120 --> 00:06:57,880 proceeded to privatize about 10 major national corporations - 76 00:06:57,880 --> 00:07:08,120 the same number as the right-wing governments before and afterwards. 77 00:07:08,120 --> 00:07:16,760 How has neo-liberalism found its way into so-called “socialist” parties? 78 00:07:16,760 --> 00:07:21,515 And where is it coming from? 79 00:07:22,520 --> 00:07:30,108 origins 80 00:07:32,800 --> 00:07:35,473 Winnipeg General Strike, 1919 81 00:07:35,720 --> 00:07:38,553 Neo-liberalism appeared … 82 00:07:38,800 --> 00:07:41,519 under particular intellectual and institutional configurations. 83 00:07:41,800 --> 00:07:44,360 Generally speaking, from 1914 to 1945, 84 00:07:44,600 --> 00:07:47,910 capitalism went through an unprecedented crisis. 85 00:07:48,200 --> 00:07:52,318 The crisis was a material one. In the ’20s, 86 00:07:52,520 --> 00:07:55,512 capitalism had boomed after Reconstruction, 87 00:07:55,600 --> 00:07:57,750 but the Depression in the ’30s 88 00:07:58,000 --> 00:08:01,151 led to unemployment, bankruptcy, political disorder. 89 00:08:01,320 --> 00:08:02,958 And intellectually, 90 00:08:03,240 --> 00:08:07,552 the liberal credo yielded to the claims of economic planning, 91 00:08:07,800 --> 00:08:11,873 interventionism, and general wariness of laissez-faire. 92 00:08:12,880 --> 00:08:16,714 There was widespread demand for reinforced State intervention, 93 00:08:16,920 --> 00:08:18,876 state-controlled economies. 94 00:08:19,120 --> 00:08:23,557 This turned into concrete projects, both in “dictatorships” 95 00:08:23,800 --> 00:08:25,279 and in democracies. 96 00:08:25,400 --> 00:08:29,188 We think of the Soviet 5-year plan 97 00:08:29,480 --> 00:08:32,039 and also the New Deal in the U.S., 98 00:08:32,240 --> 00:08:35,596 under the National Recovery Administration (NRA) 99 00:08:36,120 --> 00:08:37,837 and other such structures. 100 00:08:38,120 --> 00:08:41,317 In Nazi Germany, it was the Reich economics ministry. 101 00:08:41,559 --> 00:08:44,198 In Fascist Italy, it was the corporations ministry. 102 00:08:44,440 --> 00:08:47,910 Even in France, a national economy ministry was established - 103 00:08:48,200 --> 00:08:51,397 a totally new thing, under the rising Front Populaire. 104 00:08:52,440 --> 00:08:56,194 Communist Demonstration Berlin, 1929 105 00:09:22,360 --> 00:09:25,750 Important to establishing a neo-liberal network in France 106 00:09:25,880 --> 00:09:27,791 was building a publishing house. 107 00:09:28,040 --> 00:09:31,271 It was called Les Éditions de la Librairie de Médicis, 108 00:09:31,560 --> 00:09:33,471 founded in 1937. 109 00:09:33,680 --> 00:09:37,832 It was created by a woman, Marie-Thérése Génin, 110 00:09:38,080 --> 00:09:41,152 which was rare in this fairly masculine field. 111 00:09:41,400 --> 00:09:45,837 She was connected to a leader in French business associations, 112 00:09:45,960 --> 00:09:47,075 Marcel Bourgeois, 113 00:09:47,320 --> 00:09:51,916 who encouraged her to establish a vehicle for intellectual texts 114 00:09:52,160 --> 00:09:54,833 for a public of intellectuals. 115 00:09:55,080 --> 00:09:58,914 Éditions de Médicis published Walter Lippmann’s La Cité Libre, 116 00:09:59,160 --> 00:10:01,435 the precursor of the Walter Lippmann colloquium, 117 00:10:01,680 --> 00:10:06,390 as well as texts by Hayek, Rueff, Ludwig von Mises. 118 00:10:06,800 --> 00:10:10,634 About 40 works between 1937 and 1940. 119 00:10:10,920 --> 00:10:14,390 They published the proceedings of the Lippmann colloquium 120 00:10:14,640 --> 00:10:17,916 at the Institut International de Coopération Intellectuel, 121 00:10:18,160 --> 00:10:21,789 now defunct, but the forerunner of UNESCO. 122 00:10:22,000 --> 00:10:24,958 This happened in a fairly official context. 123 00:10:26,440 --> 00:10:32,709 There were 26 participants, whose significance is now acknowledged: 124 00:10:33,080 --> 00:10:36,868 Friedrich Hayek, future Nobel Prize winner for economics, 125 00:10:37,120 --> 00:10:41,159 Robert Marjolin, a pillar of European construction, 126 00:10:43,240 --> 00:10:46,073 the founders of Germany’s “social market economy”, 127 00:10:46,320 --> 00:10:48,515 Alexander Rüstow and Wilhelm Röpke, 128 00:10:48,760 --> 00:10:51,194 de Gaulle’s financial advisor, Jacques Rueff, 129 00:10:51,360 --> 00:10:55,592 the mastermind of Ronald Reagan’s Star Wars, Stefan Possony. 130 00:10:56,400 --> 00:11:00,712 That’s all hindsight. At the time, they were less famous. 131 00:11:01,400 --> 00:11:05,188 The colloquium lasted 4 days, during which were discussed 132 00:11:05,440 --> 00:11:09,672 the eventual responsibilities of liberalism in the Depression, 133 00:11:09,920 --> 00:11:12,480 as well as the means of renewing liberalism 134 00:11:12,720 --> 00:11:17,191 and building worldwide opposition to interventionism and socialism. 135 00:11:17,880 --> 00:11:22,360 The Walter Lippmann Colloquium hosted the avant-garde 136 00:11:22,360 --> 00:11:26,520 of the neo-liberal battle in preparation. 137 00:11:26,520 --> 00:11:30,920 Among the most ferocious opponents of collectivism, 138 00:11:30,920 --> 00:11:36,552 Friedrich von Hayek and Ludwig von Mises stood out. 139 00:11:37,120 --> 00:11:41,989 Hayek and Mises represented a particular trend in neo-liberalism, 140 00:11:42,200 --> 00:11:44,236 the Austrian School. 141 00:11:44,520 --> 00:11:49,389 They advocated a radical liberalism that grants the State minimal power. 142 00:11:49,640 --> 00:11:54,077 The minimal State is an expression used by their disciples. 143 00:11:54,840 --> 00:11:57,593 These two had slightly different economic ideas. 144 00:11:57,840 --> 00:12:01,594 Liberals often gloss over their divergent views. 145 00:12:01,800 --> 00:12:04,189 But they also had certain points in common. 146 00:12:04,400 --> 00:12:08,951 The first is that economic science was just a fraction of their work. 147 00:12:09,120 --> 00:12:13,750 Mises considered it a branch of the more general science of human action. 148 00:12:13,880 --> 00:12:17,236 Hayek soon left pure economics 149 00:12:17,520 --> 00:12:20,159 to pursue psychology. He studied the brain, 150 00:12:20,360 --> 00:12:25,309 political orders, law, etc. For them, economics … 151 00:12:25,520 --> 00:12:30,150 was their original field, but it didn’t cover all of the humanities. 152 00:12:30,440 --> 00:12:35,070 Secondly, their conception of economics was fairly particular. 153 00:12:35,320 --> 00:12:38,232 Austrian School economics were far from concrete: 154 00:12:38,480 --> 00:12:41,677 no statistics, no mathematical data, etc. 155 00:12:41,880 --> 00:12:47,113 Everything stemmed from axiomatics. There were “typical” ideal situations 156 00:12:47,360 --> 00:12:51,194 where one observes how a rational person acts 157 00:12:51,400 --> 00:12:54,472 in negotiating choices between work and leisure, 158 00:12:55,920 --> 00:12:57,911 sleeping and getting rich, etc., 159 00:12:58,160 --> 00:13:01,835 supported by metaphors like Robinson Crusoe on his desert island. 160 00:13:02,600 --> 00:13:07,958 The third thing they had in common, significant to neo-liberal history, 161 00:13:08,200 --> 00:13:12,398 is a concept of intellectual work and its role in socialism. 162 00:13:12,800 --> 00:13:17,191 The thinking of Hayek and Mises was very elitist and aristocratic: 163 00:13:17,440 --> 00:13:20,193 basically, that the mass of humanity doesn’t think. 164 00:13:20,400 --> 00:13:24,518 Mises book, Socialism, says, “The masses do not think.” 165 00:13:24,760 --> 00:13:28,196 Only a few intellectuals think, and do so on society’s behalf. 166 00:13:28,440 --> 00:13:32,069 So they thought, intellectuals must think, 167 00:13:32,360 --> 00:13:37,957 and progressively oppose socialism, which other intellectuals invented 168 00:13:38,160 --> 00:13:41,470 and spread to the masses. Socialism wasn’t spontaneous. 169 00:13:41,720 --> 00:13:43,915 It was propagated by intellectuals. 170 00:13:44,040 --> 00:13:48,192 Hayek and Mises put the intellectual at the centre of social change, 171 00:13:48,400 --> 00:13:51,710 and political and economic change. 172 00:13:52,400 --> 00:13:56,393 This led to them founding groups like the Mont Pelerin Society. 173 00:13:58,000 --> 00:14:04,360 War imposed a hiatus on the neo-liberals’ militant activities. 174 00:14:04,360 --> 00:14:10,920 The CIRL, a French research centre for the renewal of liberalism 175 00:14:10,920 --> 00:14:16,836 arising from the Lippmann Colloquium, disappeared after only a year. 176 00:14:37,640 --> 00:14:42,440 As soon as the war ended, Hayek took up the torch again. 177 00:14:42,440 --> 00:14:46,040 He invited proponents of liberal reestablishment 178 00:14:46,040 --> 00:14:53,913 to a meeting that would be decisive to the future of neo-liberalism. 179 00:14:54,440 --> 00:14:58,911 The Mont Pelerin meeting took place … 180 00:14:59,160 --> 00:15:02,550 from April 1 to 10, 1947, 181 00:15:02,960 --> 00:15:06,589 in the Hôtel du Parc, near Vevey, Switzerland. 182 00:15:08,440 --> 00:15:12,353 It was explicitly meant to bring together 183 00:15:12,600 --> 00:15:15,319 liberal European and American intellectuals, 184 00:15:15,560 --> 00:15:20,190 and to found an international organization for liberal ideas. 185 00:15:21,200 --> 00:15:25,159 Hayek had started making contacts 2 years earlier 186 00:15:25,400 --> 00:15:29,757 with Colloquium participants and the British and Americans. 187 00:15:30,000 --> 00:15:33,436 He invited this circle to Mont Pelerin, 188 00:15:33,520 --> 00:15:36,557 whence the society’s name. 189 00:15:36,800 --> 00:15:41,191 There were 39 participants at the first meeting. 190 00:15:41,480 --> 00:15:46,554 Again, there were some major figures: 3 future Nobel winners, 191 00:15:46,800 --> 00:15:50,156 Milton Friedman, George Stigler, Maurice Allais. 192 00:15:50,440 --> 00:15:54,115 People known for their political or philosophical essays, 193 00:15:54,360 --> 00:15:56,590 Karl Popper, Bertrand de Jouvenel. 194 00:15:56,840 --> 00:16:00,310 And those with direct political influence in their country - 195 00:16:00,400 --> 00:16:04,109 the Germans, Wilhelm Röpke and Walter Eucken, 196 00:16:04,200 --> 00:16:07,590 associated with Germany’s “social market economy”. 197 00:16:08,400 --> 00:16:12,439 Discussions revolved around relatively general subjects 198 00:16:12,880 --> 00:16:17,192 like Christianity and liberalism, the competitive order, 199 00:16:17,400 --> 00:16:21,837 the possibilities of founding a European economic federation. 200 00:16:22,040 --> 00:16:23,712 It lasted several days. 201 00:16:24,440 --> 00:16:27,671 Hayek thought they needed a flexible structure 202 00:16:28,280 --> 00:16:30,953 with invited members only, 203 00:16:31,320 --> 00:16:34,915 no offices, statutes deposited in Illinois, 204 00:16:35,120 --> 00:16:38,271 that would meet biannually in different countries - 205 00:16:38,600 --> 00:16:43,071 a fairly nebulous structure for confirmed intellectuals who thought 206 00:16:43,320 --> 00:16:47,233 liberalism was a doctrine primarily for intellectuals themselves. 207 00:16:49,920 --> 00:16:57,508 at the core of the neo-liberal network 208 00:17:05,240 --> 00:17:08,630 The Mont Pelerin Society is not a think tank. 209 00:17:08,839 --> 00:17:11,400 It’s a kind of liberal academy. 210 00:17:11,920 --> 00:17:15,833 Nevertheless, a kind of division of labour came about 211 00:17:16,079 --> 00:17:21,108 between the Society, which recruited only the most renowned liberals, 212 00:17:21,359 --> 00:17:24,954 and its members’ national activities, 213 00:17:25,200 --> 00:17:30,593 which could include setting up associations or think tanks. 214 00:17:31,080 --> 00:17:34,390 This took diverse forms. In France, they created 215 00:17:34,520 --> 00:17:38,308 the association for economic freedom and social progress in the ’60s, 216 00:17:38,560 --> 00:17:41,677 the French section of Mont Pelerin, 217 00:17:41,960 --> 00:17:46,909 the members of which were recruited from business or politics. 218 00:17:47,160 --> 00:17:49,196 This broadened recruitment 219 00:17:50,760 --> 00:17:54,150 into milieux other than intellectual circles. 220 00:17:54,720 --> 00:17:59,316 The other, think-tank model has been perennial in Mont Pelerin’s history. 221 00:17:59,760 --> 00:18:05,312 The most famous are Britain’s 1955 Institute of Economic Affairs, 222 00:18:05,560 --> 00:18:11,317 or the Heritage Foundation from 1973, linked to the U.S. Republican party. 223 00:18:11,920 --> 00:18:16,630 These think tanks have appointed employees, 224 00:18:16,720 --> 00:18:20,679 people paid to write notes, produce legislative proposals 225 00:18:20,920 --> 00:18:24,435 that are all laid out and distributed to politicians 226 00:18:24,680 --> 00:18:30,277 and to journalists with the aim of creating liberal public opinion. 227 00:18:31,040 --> 00:18:33,474 There are now hundreds of think tanks 228 00:18:34,200 --> 00:18:37,431 that form a veritable cluster which is fairly disorienting, 229 00:18:37,680 --> 00:18:41,593 to the point where think tanks like the Atlas Foundation 230 00:18:41,840 --> 00:18:44,991 now have the role of promoting think tanks 231 00:18:45,240 --> 00:18:49,518 by distributing kits and instructions on how to form one’s own. 232 00:18:49,760 --> 00:18:52,957 They take very different forms. 233 00:18:53,400 --> 00:18:56,949 Groups focused on an author - the Hayek Center, 234 00:18:57,080 --> 00:18:59,594 the Mises Institute - 235 00:18:59,880 --> 00:19:02,474 that revolve around a particular person’s work. 236 00:19:02,760 --> 00:19:07,038 Groups can have a subject of particular concern - 237 00:19:07,280 --> 00:19:10,556 the environment, foreign politics, etc. 238 00:19:10,800 --> 00:19:16,511 The quality and power of these think tanks are very different. 239 00:19:17,040 --> 00:19:22,433 A think tank’s strength comes from whether it can connect intellectuals, 240 00:19:22,680 --> 00:19:27,231 some businessmen, and a general trend within conservative parties. 241 00:19:27,440 --> 00:19:31,228 There are think tanks like the Center for Policy Studies 242 00:19:31,480 --> 00:19:33,152 of Keith Joseph, 243 00:19:33,400 --> 00:19:36,710 which promoted Thatcher and let her garner … 244 00:19:36,920 --> 00:19:41,152 support to revolutionize the Conservative Party in the ’70s. 245 00:19:41,320 --> 00:19:45,871 That’s an organization at the junction of 3 milieux. 246 00:19:46,160 --> 00:19:51,712 A purely intellectual think tank with general thoughts on liberalism 247 00:19:51,880 --> 00:19:54,952 would have little influence on political debate. 248 00:20:01,320 --> 00:20:04,949 A whole part of the career of Mises, Hayek, etc. 249 00:20:05,160 --> 00:20:10,553 can be explained by the affinities they had with business lobby leaders. 250 00:20:10,800 --> 00:20:15,999 Mises was associated with the U.S. Foundation for Economic Education, 251 00:20:16,200 --> 00:20:20,512 and thus with business associations. Hayek got to Chicago 252 00:20:20,760 --> 00:20:27,233 financed by tycoons who wanted him to write another “Road to Serfdom”, 253 00:20:27,360 --> 00:20:29,635 but on America, not just England. 254 00:20:29,880 --> 00:20:32,952 These intellectuals got more power 255 00:20:33,080 --> 00:20:37,596 by teaming up with or befriending powerful people. 256 00:20:37,800 --> 00:20:41,839 Hayek’s work may reveal a utopian quality, 257 00:20:42,080 --> 00:20:46,039 but it’s the Utopia of the strongest, not the most underprivileged. 258 00:20:48,720 --> 00:20:54,160 Financed by corporations and vast private fortunes, 259 00:20:54,160 --> 00:21:01,160 neo-liberal think tanks often enjoy charitable organization status. 260 00:21:01,160 --> 00:21:06,960 Their generous donors thereby have the right to tax exemptions. 261 00:21:06,960 --> 00:21:11,400 However, the law says charitable organizations 262 00:21:11,400 --> 00:21:15,120 cannot engage in political acts. 263 00:21:15,120 --> 00:21:20,877 In 1989, Greenpeace was stripped of its charitable status 264 00:21:21,000 --> 00:21:23,720 by the Canadian government. 265 00:21:23,720 --> 00:21:27,280 The Canada Revenue Agency concluded that this NGO 266 00:21:27,280 --> 00:21:30,960 did not always act in the public’s interest. 267 00:21:30,960 --> 00:21:36,360 It contributed, for example, “to propelling people into poverty 268 00:21:36,360 --> 00:21:40,520 by demanding the closure of polluting industries.” 269 00:21:40,520 --> 00:21:46,640 On the other hand, no neo-liberal think tank with charitable status 270 00:21:46,640 --> 00:21:49,200 has ever been interfered with. 271 00:21:49,200 --> 00:21:54,760 During their annual declaration to the Canadian government, 272 00:21:54,760 --> 00:21:59,760 these “non-partisan” research institutes solemnly state 273 00:21:59,760 --> 00:22:04,200 that they “do not try to influence public opinion 274 00:22:04,200 --> 00:22:08,352 or obtain the modification of a law or policy”. 275 00:25:13,560 --> 00:25:22,150 How can the market promote individual choice and freedom? 276 00:25:22,400 --> 00:25:26,234 Student seminar, The Fraser Institute on public policy, 277 00:25:26,480 --> 00:25:29,711 organized jointly with l’Institut Économique de Montréal … 278 00:25:29,960 --> 00:25:31,837 Saturday, February 10, 2001 , 279 00:25:32,080 --> 00:25:35,550 sponsored by Fraser Institute supporters throughout Québec” 280 00:25:37,120 --> 00:25:39,350 When one grants coercive power, 281 00:25:39,600 --> 00:25:41,989 the monopoly on coercive power, 282 00:25:42,120 --> 00:25:45,476 to an agency, one we call the government, 283 00:25:46,200 --> 00:25:49,431 there will always be a tendency … 284 00:25:49,640 --> 00:25:54,998 to use it, either ignorantly, or to abuse this power. 285 00:25:55,480 --> 00:25:59,029 And power has a tendency to grow. 286 00:25:59,800 --> 00:26:04,794 What the Fraser Institute tries to research and emphasize is, 287 00:26:05,360 --> 00:26:08,989 what the proper limits of government are, 288 00:26:09,200 --> 00:26:13,113 and what are the limits of private enterprise, 289 00:26:13,360 --> 00:26:16,318 or of voluntary exchanges between individuals? 290 00:26:17,080 --> 00:26:22,393 Therein lies the nexus, the division, 291 00:26:22,600 --> 00:26:28,516 between coercion and free will that will inform my discussion … 292 00:26:28,760 --> 00:26:33,595 my lecture today. And you’ll be seeing lectures by others who came 293 00:26:33,840 --> 00:26:35,831 to participate today. 294 00:26:36,040 --> 00:26:37,268 SPECIAL LUNCHEON PRESENTATION 295 00:26:37,480 --> 00:26:41,109 … from the Foundation for Economic Education in New York. 296 00:26:41,360 --> 00:26:43,635 In his presentation, ’Cleaned by Capitalism’, 297 00:26:43,880 --> 00:26:48,715 this expert on liberty will discuss how our rising standard of living 298 00:26:49,000 --> 00:26:53,073 has allowed us the ‘luxury’ of worrying about such things 299 00:26:53,160 --> 00:26:55,037 as global environmental issues.” 300 00:28:51,800 --> 00:28:56,874 This seminar’s not government funded. It’s financed by private sponsorship. 301 00:28:58,760 --> 00:29:04,118 It’s encouraging to see people put their money where their beliefs are. 302 00:29:05,200 --> 00:29:08,510 I think there are far too many services 303 00:29:08,760 --> 00:29:13,470 like unemployment insurance, health, education, 304 00:29:13,720 --> 00:29:16,154 that fall under a monopoly, 305 00:29:16,280 --> 00:29:20,876 that of the government, which is the sole producer of these services. 306 00:29:21,320 --> 00:29:24,153 Why not open it up and have competition? 307 00:29:26,440 --> 00:29:31,309 We could have competition in the production of services, 308 00:29:31,520 --> 00:29:34,751 and perhaps address our concern for the poor 309 00:29:35,000 --> 00:29:38,549 by giving them grants so they can buy these services. 310 00:29:38,800 --> 00:29:40,199 So, divide … 311 00:29:40,880 --> 00:29:45,192 Separate production, which I’d like to see private and competitive, 312 00:29:45,440 --> 00:29:49,672 from funding, which could be partly governmental. 313 00:29:56,360 --> 00:30:01,912 I don’t like talking about markets. They don’t exist without governments. 314 00:30:02,320 --> 00:30:04,231 Every market needs rules. 315 00:30:04,520 --> 00:30:08,399 Every market needs a certain level of coercion. 316 00:30:10,120 --> 00:30:14,636 And I don’t like talking about freedom as a value in itself. 317 00:30:14,760 --> 00:30:17,354 Many people don’t want freedom. 318 00:30:20,360 --> 00:30:23,079 l’d like the freedom to choose my masters. 319 00:30:24,680 --> 00:30:25,908 What I try to … 320 00:30:27,760 --> 00:30:29,990 discuss in my lectures is, 321 00:30:30,680 --> 00:30:32,352 how can we … 322 00:30:34,440 --> 00:30:38,911 have a system of government that permits us the choice 323 00:30:39,560 --> 00:30:42,757 of what kind of representatives and restrictions we’ll choose. 324 00:30:43,000 --> 00:30:47,551 We must all live under restrictions, even the fiercest libertarians. 325 00:30:50,360 --> 00:30:58,040 brief liberal anthology 326 00:30:58,040 --> 00:31:05,674 libertarianism and the theory of public choice 327 00:31:07,640 --> 00:31:10,108 Le Québécois Libre Editorial 328 00:31:10,360 --> 00:31:12,590 What must libertarians do?” 329 00:31:12,840 --> 00:31:15,195 Libertarianism is the descendent 330 00:31:15,440 --> 00:31:18,113 of classic liberal philosophy. 331 00:31:18,320 --> 00:31:21,118 It puts the accent on individual freedom 332 00:31:21,640 --> 00:31:25,918 and its repercussions. Economically, it’s the free market. Politically, 333 00:31:26,160 --> 00:31:30,119 it’s the minimal State and the least coercion possible. 334 00:31:30,360 --> 00:31:32,157 The least regulation … 335 00:31:33,720 --> 00:31:37,759 It gives individuals as much leeway as possible to act 336 00:31:37,960 --> 00:31:40,793 and have willing relationships with others. 337 00:31:41,040 --> 00:31:43,554 Socially speaking as well, it’s … 338 00:31:44,120 --> 00:31:50,150 the polar opposite of philosophies that impose some social, religious … 339 00:31:50,960 --> 00:31:53,520 or cultural order. The idea is, 340 00:31:53,760 --> 00:31:59,517 if we are free in a context where person and property are protected, 341 00:32:00,680 --> 00:32:05,674 everyone will be able to have voluntary relationships, 342 00:32:05,920 --> 00:32:09,595 which will lead to harmony. Libertarianism isn’t anarchy, 343 00:32:09,800 --> 00:32:14,749 with individuals fighting, “wild capitalism”, “wild competition”. 344 00:32:14,920 --> 00:32:16,239 It’s not that at all. 345 00:32:16,440 --> 00:32:22,231 It’s giving people enough space for peaceful, voluntary relationships. 346 00:32:23,080 --> 00:32:30,430 Neo-liberal, anarchist or libertarian? 347 00:32:30,800 --> 00:32:34,031 Libertarianism is the descendent of classic liberalism, 348 00:32:34,280 --> 00:32:39,274 a philosophy that was developed in the 17th and 18th century 349 00:32:41,440 --> 00:32:46,195 in reaction to the authoritarian monarchies of the period. 350 00:32:46,440 --> 00:32:49,000 Liberalism said, 351 00:32:49,200 --> 00:32:53,193 to match sovereign power, individuals must have more freedom. 352 00:32:53,480 --> 00:32:57,314 This developed in subsequent centuries to give us … 353 00:32:58,200 --> 00:33:02,079 our current philosophy, which embraces the free market … 354 00:33:02,680 --> 00:33:05,672 But 20th-century libertarians 355 00:33:06,360 --> 00:33:10,717 stand apart from liberals. The definition of “liberal” has changed. 356 00:33:10,960 --> 00:33:15,431 In the U.S. a liberal is ultimately the reverse: 357 00:33:15,720 --> 00:33:18,154 a social democrat or a leftist. 358 00:33:19,640 --> 00:33:24,475 Europe keeps the French tradition, where liberal means liberal. 359 00:33:24,720 --> 00:33:29,032 But there’s a lot of confusion. The Americans, the classic liberals, 360 00:33:29,320 --> 00:33:33,438 started calling themselves “libertarians” in the ’20s and ’30s 361 00:33:33,520 --> 00:33:36,193 to stand apart from leftist liberals. 362 00:33:36,360 --> 00:33:39,875 And libertarian philosophy is more coherent and radical 363 00:33:40,120 --> 00:33:41,838 than classic liberalism, 364 00:33:42,960 --> 00:33:46,999 calling for State reduction, either to its simplest form, 365 00:33:47,200 --> 00:33:52,194 or certain libertarians even favour eliminating the State altogether, 366 00:33:52,440 --> 00:33:56,399 privatizing even defence, security and justice. 367 00:33:56,840 --> 00:34:04,394 Redistributing wealth is immoral 368 00:34:05,720 --> 00:34:09,507 Today, in a society where the State spends … 369 00:34:11,159 --> 00:34:16,188 State expenditures represent about 45% to 50% of the GDP. 370 00:34:16,400 --> 00:34:19,551 The State controls such sectors as education, health. 371 00:34:19,760 --> 00:34:22,717 It controls a lot and regulates other things. 372 00:34:22,920 --> 00:34:26,435 It subsidizes almost everyone. Much of the population … 373 00:34:28,159 --> 00:34:31,596 lives only off the redistribution of money. 374 00:34:31,880 --> 00:34:37,159 They don’t produce goods demanded by others on the free market. 375 00:34:37,400 --> 00:34:41,996 They just receive State money confiscated from other taxpayers. 376 00:34:42,760 --> 00:34:45,274 This means there are many people … 377 00:34:46,800 --> 00:34:51,271 who live at the expense of others. From a libertarian standpoint, 378 00:34:52,040 --> 00:34:56,636 society can be divided in two, those who produce and those who live 379 00:34:56,880 --> 00:35:01,032 as the producers’ dependents and are a kind of parasite. 380 00:35:01,240 --> 00:35:03,800 It’s a strong word, but it’s appropriate. 381 00:35:04,880 --> 00:35:09,476 You can’t favour individual responsibility and defend that stance. 382 00:35:09,680 --> 00:35:15,437 All who live dependently on others are really irresponsible. 383 00:35:16,000 --> 00:35:19,390 They don’t do anything required and they live … 384 00:35:20,400 --> 00:35:26,475 on State coercion, which transfers wealth from one group to the other. 385 00:35:27,400 --> 00:35:31,359 If we want to promote freedom and responsibility, 386 00:35:32,440 --> 00:35:36,956 we cannot accept the dependency of much of the population. 387 00:35:39,000 --> 00:35:45,320 The theory of public choice says the adoption of government policies 388 00:35:45,320 --> 00:35:48,880 is not motivated by collective interests 389 00:35:48,880 --> 00:35:54,400 but by the particular interests of various social groups. 390 00:35:54,400 --> 00:35:59,600 In 1986, James M. Buchanan, originator of this theory, 391 00:35:59,600 --> 00:36:05,040 who denounces State inefficiency and advocates limited public spending, 392 00:36:05,040 --> 00:36:08,635 won the “Nobel prize” for economics. 393 00:36:19,080 --> 00:36:22,709 Contrary to the perception being peddled here, 394 00:36:24,040 --> 00:36:27,874 we in Québec live in a State culture. People don’t realize 395 00:36:28,120 --> 00:36:31,032 because we’re so inured to this viewpoint, 396 00:36:31,240 --> 00:36:34,869 that we naturally accept it, but it’s actually a State culture 397 00:36:35,000 --> 00:36:36,991 that naively perceives … 398 00:36:39,160 --> 00:36:42,994 the State as the instrument to maximize the common good. 399 00:36:44,120 --> 00:36:46,395 As though the inspiration … 400 00:36:46,480 --> 00:36:50,632 But that view or vision of the State is perfectly … 401 00:36:53,800 --> 00:36:57,509 angelic. It has nothing to do with real governments. 402 00:36:58,960 --> 00:37:02,919 Why do we believe our governments, democratic as they are - 403 00:37:03,160 --> 00:37:04,957 which is an advantage - 404 00:37:05,720 --> 00:37:08,553 will maximize the common good? They won’t. 405 00:37:08,760 --> 00:37:12,355 Governments obey the game rules that rule them. 406 00:37:13,320 --> 00:37:16,551 What game rules? The electoral process. 407 00:37:16,840 --> 00:37:18,751 That’s the virtue of it. 408 00:37:19,240 --> 00:37:22,357 What does this herald? 409 00:37:23,160 --> 00:37:25,196 Primarily that … 410 00:37:25,560 --> 00:37:28,074 we will often witness … 411 00:37:29,920 --> 00:37:32,036 majority dictatorship. 412 00:37:32,880 --> 00:37:38,591 Since the primary, if not sole, rule in politics is the majority, 413 00:37:39,000 --> 00:37:44,028 a government that can win elections will first privilege the majority. 414 00:37:44,240 --> 00:37:48,995 The majority’s incomes are weak relative to the average. 415 00:37:50,560 --> 00:37:53,836 So the sole object of policies will be … 416 00:37:54,120 --> 00:37:56,634 to redistribute wealth in its favour, 417 00:37:56,880 --> 00:38:00,714 not to maximize wealth or enhance growth. 418 00:38:01,400 --> 00:38:04,676 Efficiency isn’t a major issue for a government. 419 00:38:05,960 --> 00:38:11,830 Its priority is redistributing wealth to the majority that elects it. 420 00:38:11,920 --> 00:38:14,912 That explains universal social programs. 421 00:38:15,120 --> 00:38:17,475 That explains … 422 00:38:19,400 --> 00:38:22,756 the majority’s predilections with regard to … 423 00:38:24,240 --> 00:38:29,314 the public health and education monopolies. 424 00:38:29,560 --> 00:38:32,199 It’s not compassion, nor a concern … 425 00:38:34,320 --> 00:38:37,756 for sharing wealth that inspires this position. 426 00:38:37,840 --> 00:38:43,915 The majority wants services paid by a slightly more affluent minority. 427 00:38:44,120 --> 00:38:45,439 That’s the sense of it. 428 00:38:45,520 --> 00:38:49,354 So, it’s a gigantic lie to say 429 00:38:50,640 --> 00:38:53,996 that compassion inspires … 430 00:38:54,840 --> 00:38:59,595 public health and education monopolies. That’s not the reality. 431 00:38:59,880 --> 00:39:04,476 The second dimension is that people, i.e., the majority, 432 00:39:06,000 --> 00:39:08,070 is rather apolitical. 433 00:39:09,160 --> 00:39:12,311 In economics, it’s what we call “rational ignorance”. 434 00:39:14,120 --> 00:39:16,554 It would be stupid for each of us 435 00:39:17,400 --> 00:39:20,790 to acquire lots of information on politics, 436 00:39:21,000 --> 00:39:26,120 to get informed on the impact on us of more than just a few policies. 437 00:39:26,320 --> 00:39:31,030 Because we can’t do anything. We’re one voter out of X million. 438 00:39:31,280 --> 00:39:35,114 So, informed or not, whether we vote wisely or badly, 439 00:39:36,320 --> 00:39:37,594 the result’s the same. 440 00:39:37,840 --> 00:39:43,949 So, everyone must aim to minimize the effort of understanding politics 441 00:39:44,040 --> 00:39:46,793 and political information, which they do. 442 00:39:46,920 --> 00:39:49,593 People often can’t name their MP. 443 00:39:50,600 --> 00:39:52,830 And they’d be incapable … 444 00:39:54,800 --> 00:39:56,836 of explaining a policy. 445 00:39:57,240 --> 00:40:00,391 To them, this is normal because, again, 446 00:40:00,760 --> 00:40:03,354 it would cost a lot to get informed, 447 00:40:03,600 --> 00:40:07,559 whereas their potential influence is nil. 448 00:40:07,960 --> 00:40:12,988 So, people are apathetic, apolitical. They don’t participate in politics 449 00:40:13,200 --> 00:40:16,033 because it’s not worth it. 450 00:40:16,280 --> 00:40:21,798 This opens the way for intervention by strategically placed groups. 451 00:40:22,040 --> 00:40:25,157 Interest groups. That explains their dominance. 452 00:40:27,880 --> 00:40:33,113 Organizations like the CSN or the Canadian Manufacturers’ Association 453 00:40:33,360 --> 00:40:38,275 are already prepared to do politics, propaganda and lobbying, 454 00:40:38,680 --> 00:40:43,037 at minimal cost because they’re already organized. 455 00:40:43,280 --> 00:40:48,035 So that means political decisions will be dominated 456 00:40:48,280 --> 00:40:51,716 by strategically placed people, organized groups. 457 00:40:53,000 --> 00:40:58,280 All the world’s great governments - today’s and yesterday’s - 458 00:40:58,280 --> 00:41:05,640 have merely been gangs of thieves, come together to pillage, conquer 459 00:41:05,640 --> 00:41:09,280 and enslave their fellow men. 460 00:41:09,280 --> 00:41:14,920 And their laws, as they call them, represent only those agreements 461 00:41:14,920 --> 00:41:21,160 they deemed it necessary to enter in order to keep their organization 462 00:41:21,160 --> 00:41:25,720 and act together in plundering and enslaving others, 463 00:41:25,720 --> 00:41:31,400 and securing to each his agreed share of the spoils. 464 00:41:31,400 --> 00:41:37,320 These laws impose no more real obligation than do the deals 465 00:41:37,320 --> 00:41:43,160 that brigands, bandits and pirates find it necessary to enter into 466 00:41:43,160 --> 00:41:45,000 with each other.” 467 00:41:45,000 --> 00:41:50,552 - Natural Law, or the Science of Justice, 1882 (paraphrased) 468 00:41:52,600 --> 00:41:58,630 lf we look objectively at the facts, the State is a coercive institution. 469 00:41:58,880 --> 00:42:02,555 The State can only operate by forcibly imposing things. 470 00:42:02,760 --> 00:42:03,715 For example, 471 00:42:05,360 --> 00:42:08,511 when the State has a monopoly like Hydro-Québec, 472 00:42:08,760 --> 00:42:12,878 if I decide to produce and sell electricity 473 00:42:14,320 --> 00:42:17,312 and I’m outside the monopoly, ultimately, 474 00:42:17,840 --> 00:42:22,914 they won’t just slap my wrists for breaking the rules. I’ll go to jail 475 00:42:23,160 --> 00:42:27,597 if I persist in doing something the State prohibits by regulation. 476 00:42:27,840 --> 00:42:31,833 The State will physically assault me if I offer a service 477 00:42:33,400 --> 00:42:38,428 that the statesmen have decided to monopolize. 478 00:42:38,680 --> 00:42:42,070 All the State does when it steals half our salary - 479 00:42:42,320 --> 00:42:44,709 sorry, but no one asked my opinion about it, 480 00:42:45,000 --> 00:42:48,356 so half my salary’s stolen … It could be said that, 481 00:42:48,560 --> 00:42:54,112 democratically, we elected people who decided that for us, 482 00:42:55,080 --> 00:42:59,596 but democracy is the “peaceful” organization 483 00:42:59,800 --> 00:43:01,756 of the State’s thievery. 484 00:43:02,520 --> 00:43:07,548 I didn’t vote to have half my salary lifted, but many are interested - 485 00:43:07,760 --> 00:43:11,435 because they live at the expense of the State - 486 00:43:11,680 --> 00:43:15,070 in having the State take half and giving it to them. 487 00:43:15,240 --> 00:43:18,550 So, democracy isn’t true freedom. 488 00:43:19,360 --> 00:43:23,831 I’m not anti-democratic in the sense of being for an authoritarian State, 489 00:43:23,920 --> 00:43:27,993 When you speak against democracy, you’re always seen as favouring 490 00:43:28,240 --> 00:43:32,472 an authoritarian State. On the contrary, I’m for a State 491 00:43:32,600 --> 00:43:35,512 that’s absolutely non-authoritarian, to the point where 492 00:43:35,760 --> 00:43:40,356 it doesn’t even justify its actions on the basis of democracy. 493 00:43:40,600 --> 00:43:44,036 Individual freedom does not equal democratic freedom. 494 00:43:44,240 --> 00:43:49,678 Democratically giving people the power to take and impose things, 495 00:43:50,800 --> 00:43:52,870 contradicts individual freedom. 496 00:43:53,520 --> 00:43:58,719 A true defence of individual freedom doesn’t favour more democracy, 497 00:43:58,960 --> 00:44:01,838 more ways of divvying up 498 00:44:02,760 --> 00:44:05,194 resources that have been stolen from others. 499 00:44:05,400 --> 00:44:11,430 We’re for reducing the State’s role so individuals are altogether free, 500 00:44:11,880 --> 00:44:17,318 not to decide which fox they’ll vote in 501 00:44:17,520 --> 00:44:21,479 to raid the hen house, but to decide what to do with their property. 502 00:44:25,000 --> 00:44:29,039 The incentives incorporated into social policies are harmful, 503 00:44:29,160 --> 00:44:31,993 both to the poor, and to the general population. 504 00:44:32,120 --> 00:44:37,672 What I mean by that is, we have a public social economy 505 00:44:38,520 --> 00:44:41,717 in parallel with the capitalist market economy. 506 00:44:41,960 --> 00:44:46,590 One is productive. The other is based on the former-USSR model 507 00:44:47,760 --> 00:44:52,993 and comprises incentives that hurt everyone. We reward people … 508 00:44:53,120 --> 00:44:56,635 for not working. We compensate them 509 00:44:56,840 --> 00:44:59,434 for not having stable families. 510 00:45:01,440 --> 00:45:04,193 Welfare for single mothers … 511 00:45:04,400 --> 00:45:07,597 is a way of multiplying births outside the family. 512 00:45:07,840 --> 00:45:12,311 And we reward poverty. It’s as radical as that. 513 00:45:12,440 --> 00:45:18,709 Poverty obeys the standard rules: subsidies make it more prevalent, 514 00:45:18,960 --> 00:45:21,758 because people start liking it. 515 00:45:22,680 --> 00:45:27,629 This has been clear in Ontario and the U.S. over the past 5 years, 516 00:45:27,800 --> 00:45:29,756 where they really imposed 517 00:45:30,280 --> 00:45:32,669 limits to people’s access 518 00:45:33,520 --> 00:45:35,875 to welfare payments, 519 00:45:36,120 --> 00:45:40,955 and the population of poor people fell by half in a few years! 520 00:45:41,600 --> 00:45:44,956 Because there was no more money, conditions changed, 521 00:45:45,080 --> 00:45:48,868 work was imposed on them, whatever the methods were. 522 00:45:55,680 --> 00:46:00,390 So, there are ways to foster people’s reinsertion 523 00:46:00,600 --> 00:46:03,068 into the productive economy. 524 00:46:03,560 --> 00:46:07,838 Instead of piling them into social housing, ghettos, 525 00:46:08,560 --> 00:46:10,118 where everyone’s poor, 526 00:46:10,360 --> 00:46:15,354 if they were given vouchers or stamps that gave them access to property, 527 00:46:16,120 --> 00:46:19,829 instead of subsidizing unemployment, 528 00:46:21,320 --> 00:46:24,949 as with unemployment insurance. People are subsidized 529 00:46:25,200 --> 00:46:28,829 to be unemployed. Otherwise, no subsidy. 530 00:46:30,600 --> 00:46:33,592 We could create unemployment savings funds, 531 00:46:33,840 --> 00:46:37,469 so people could accumulate a hedge, 532 00:46:38,120 --> 00:46:40,680 sheltered from tax, even subsidized, 533 00:46:41,200 --> 00:46:45,239 in case they lose their job. Everyone would then be careful 534 00:46:46,280 --> 00:46:51,593 not to lose their job because they’d be eating into their own fund, 535 00:46:51,840 --> 00:46:55,080 the beneficiary of their own savings. 536 00:46:55,080 --> 00:46:59,676 Lots of ideas. But our social policies are really built 537 00:47:00,400 --> 00:47:05,520 to create an industry of poverty, an industry of dependence, 538 00:47:05,640 --> 00:47:09,315 that benefits all the bureaucrats who gravitate around it 539 00:47:09,480 --> 00:47:13,359 and encourage dependence in the population, 540 00:47:13,560 --> 00:47:15,437 as well as political support, 541 00:47:18,080 --> 00:47:21,470 with no long-term effect across the country. 542 00:47:21,720 --> 00:47:24,188 Social policies haven’t diminished poverty. 543 00:47:24,920 --> 00:47:29,391 That’s the final diagnosis of the matter. 544 00:47:42,560 --> 00:47:44,232 We observe … 545 00:47:45,080 --> 00:47:46,308 that growth … 546 00:47:49,400 --> 00:47:52,870 Historically and from country to country, 547 00:47:53,080 --> 00:47:57,198 the growth of economies’ revenues is the only means 548 00:47:58,200 --> 00:47:59,553 to help the poor. 549 00:48:01,680 --> 00:48:04,717 We have rigorous data about this. 550 00:48:05,080 --> 00:48:07,913 The only variable that affects … 551 00:48:09,520 --> 00:48:12,034 that reduces poverty 552 00:48:12,480 --> 00:48:14,914 in various countries 553 00:48:15,160 --> 00:48:17,276 is the growth of wealth. 554 00:48:17,520 --> 00:48:20,318 Social policies count for nothing! 555 00:48:21,800 --> 00:48:24,394 So, whoever is concerned 556 00:48:26,200 --> 00:48:29,317 about helping the poor or underprivileged 557 00:48:29,520 --> 00:48:32,193 must also privilege growth. 558 00:48:33,800 --> 00:48:37,190 Consequently, all those who oppose free trade 559 00:48:37,680 --> 00:48:42,231 on behalf of poor countries, or of the poor within countries, 560 00:48:42,480 --> 00:48:45,790 are wrong. Their observations are mistaken. 561 00:48:47,440 --> 00:48:49,590 The facts contradict their options. 562 00:48:49,840 --> 00:48:54,550 The best help is to open trade so everyone’s income goes up. 563 00:48:54,760 --> 00:48:59,151 Statistically, the income of the poor increases as fast as anyone’s 564 00:48:59,400 --> 00:49:03,712 when revenues go up. To achieve this, the economy must be opened up. 565 00:49:04,280 --> 00:49:06,236 Beyond that, 566 00:49:07,280 --> 00:49:11,239 beyond helping the poor with measures that might help, 567 00:49:11,920 --> 00:49:15,230 I don’t see any … 568 00:49:15,360 --> 00:49:18,158 basis for redistributing wealth. 569 00:49:20,400 --> 00:49:23,676 The government redistributes a lot of wealth 570 00:49:24,720 --> 00:49:29,430 in favour of the middle class, because it’s the decisive majority. 571 00:49:29,680 --> 00:49:34,879 But not on any moral basis. The only social justice, if I may, 572 00:49:35,080 --> 00:49:37,196 is the respect for property rights. 573 00:49:38,600 --> 00:49:41,194 Libertarians believe public goods don’t exist. 574 00:49:42,240 --> 00:49:46,597 The notion’s a fallacy to justify State intervention. 575 00:49:46,840 --> 00:49:51,994 The logic is, there are always external factors, like pollution. 576 00:49:52,240 --> 00:49:56,153 We cannot produce without making smoke, which falls on our neighbour, 577 00:49:57,560 --> 00:50:00,074 or residues that will have to … 578 00:50:00,280 --> 00:50:04,751 go into the river. But the reason this happens is 579 00:50:05,520 --> 00:50:09,593 there’s no property right over water, for example. 580 00:50:10,360 --> 00:50:12,032 Rivers are public. 581 00:50:14,520 --> 00:50:17,990 Hence, during the entire 19th century, 582 00:50:19,320 --> 00:50:22,118 companies were allowed to pollute rivers, 583 00:50:22,360 --> 00:50:26,717 and until very recently this was done because the State 584 00:50:27,080 --> 00:50:31,676 controlled the river. It was a public State-controlled resource 585 00:50:31,920 --> 00:50:36,357 and the State let private companies pollute the river. 586 00:50:37,000 --> 00:50:41,994 But if the river had been privatized and each of its owners 587 00:50:43,240 --> 00:50:47,438 had had to be consulted for permission for the company 588 00:50:48,280 --> 00:50:51,238 to put effluents into the river, we can be quite sure 589 00:50:51,440 --> 00:50:54,716 things would’ve been different. Or it might’ve happened, 590 00:50:54,960 --> 00:50:59,351 if the company had paid the true price for polluting, 591 00:51:01,160 --> 00:51:04,197 i.e., paid the owners for polluting their resource. 592 00:51:04,440 --> 00:51:07,910 Resource allocation would’ve been very different. 593 00:51:08,200 --> 00:51:10,350 There would’ve been emphasis 594 00:51:11,960 --> 00:51:14,394 on alternative solutions. 595 00:51:14,640 --> 00:51:18,679 Companies would’ve invested more in technological solutions, 596 00:51:18,920 --> 00:51:22,799 or arranged to pollute in very targeted places 597 00:51:23,120 --> 00:51:27,716 owned by someone who would accept pollution in exchange for payment. 598 00:51:27,920 --> 00:51:31,708 Production priorities would’ve been reorganized differently. 599 00:51:33,560 --> 00:51:38,350 So, “public goods” exist only because the State 600 00:51:39,600 --> 00:51:41,830 distorts production 601 00:51:42,840 --> 00:51:46,230 by nationalizing certain assets, or the environment itself. 602 00:52:01,520 --> 00:52:05,149 Historically, liberalism represented a progression. 603 00:52:05,400 --> 00:52:08,551 But classic liberalism as championed by Adam Smith, 604 00:52:08,760 --> 00:52:13,436 founder of political economics, has very little to do 605 00:52:13,680 --> 00:52:18,595 with what’s presently circulating as the “liberalism” in neo-liberalism. 606 00:52:18,840 --> 00:52:21,434 It has almost nothing to do with classic liberalism. 607 00:52:21,600 --> 00:52:25,673 So, historically liberalism was a progression, in that it was … 608 00:52:25,960 --> 00:52:29,111 a way of contesting absolute monarchies, 609 00:52:29,240 --> 00:52:31,959 and giving individuals rights. 610 00:52:32,120 --> 00:52:36,352 Among these rights, in the liberalism of Locke and Smith, 611 00:52:36,600 --> 00:52:41,355 were private property rights. That’s a progression. 612 00:52:41,640 --> 00:52:44,518 But it’s not absurd to think that even anarchism … 613 00:52:44,760 --> 00:52:50,630 is a child of liberalism. Early liberalism was somewhat radical, 614 00:52:50,840 --> 00:52:57,029 and today’s “liberal” thinkers would make Adam Smith roll in his grave, 615 00:52:57,280 --> 00:53:02,229 because he wouldn’t recognize much in what’s now passing for liberalism. 616 00:53:02,480 --> 00:53:04,675 Take the case of private property. 617 00:53:04,840 --> 00:53:11,518 lf it stems from interactions driven by transnational corporations, 618 00:53:11,760 --> 00:53:15,912 at the core and in the framework of classic liberalism, 619 00:53:16,120 --> 00:53:19,396 this is unthinkable. It’s a fallacy to think 620 00:53:19,640 --> 00:53:25,351 that private tyrannies like GM or Bombardier can have rights, 621 00:53:26,040 --> 00:53:29,919 either property rights or rights that transcend human beings. 622 00:53:30,200 --> 00:53:35,479 On the other hand, the question of property rights is a hard one. 623 00:53:35,680 --> 00:53:38,513 It’s important to ask. There’s no simple answer. 624 00:53:38,800 --> 00:53:42,236 Nevertheless, I’m sure that, even in the context of liberalism, 625 00:53:42,800 --> 00:53:47,590 one cannot place current practices, agents such as transnationals, 626 00:53:47,840 --> 00:53:52,038 and their accepted rights, within a classically liberal model. 627 00:53:52,280 --> 00:53:54,316 Property rights must be reconsidered. 628 00:53:54,520 --> 00:53:59,071 My opinions about it are those of classic anarchism: 629 00:53:59,280 --> 00:54:03,193 private ownership of means of production seems aberrant. 630 00:54:03,280 --> 00:54:06,113 But what Proudhon calls “possession” has a place. 631 00:54:06,320 --> 00:54:07,719 Ownership rights are healthy. 632 00:54:07,960 --> 00:54:13,956 But the current, ersatz “liberal” or “neo-liberal” doctrine is absurd. 633 00:54:14,160 --> 00:54:16,754 Let’s suppose that, in our world, 634 00:54:16,960 --> 00:54:19,633 someone can appropriate, 635 00:54:20,120 --> 00:54:25,353 by the means one normally acquires property rights over anything … 636 00:54:25,640 --> 00:54:30,475 Suppose someone like me appropriates by accepted legal means 637 00:54:31,240 --> 00:54:35,552 elements that are essential to everyone’s life. 638 00:54:35,760 --> 00:54:38,957 People like you could die or sell out to me. 639 00:54:39,200 --> 00:54:42,954 Current neo-liberalism would recognize such a society as just. 640 00:54:43,160 --> 00:54:47,676 It’s clearly aberrant. Such questions can’t be answered as simplistically 641 00:54:47,880 --> 00:54:52,829 as our world would have it. But it’s a tough question. I choose to think 642 00:54:53,080 --> 00:54:58,438 production means can’t be private but ownership of things we use is good. 643 00:58:21,160 --> 00:58:25,676 Free trade is a very beautiful concept, 644 00:58:27,280 --> 00:58:30,670 and, as it was imagined in the 18th century, 645 00:58:30,920 --> 00:58:35,596 it certainly had merits, because it’s very logical to say 646 00:58:36,080 --> 00:58:39,072 you must produce better and more cheaply, 647 00:58:39,280 --> 00:58:41,748 and trade with others who’ll do the same. 648 00:58:41,960 --> 00:58:46,158 Instead of making wine in England, buy it from Portugal. 649 00:58:46,400 --> 00:58:49,915 The Portuguese will buy your woollens. 650 00:58:50,160 --> 00:58:52,913 That’s Riccardo’s original example. 651 00:58:54,880 --> 00:58:58,873 But the great 18th-century theoreticians never imagined 652 00:58:59,320 --> 00:59:03,074 that capital itself would be free to go where it wanted, 653 00:59:03,640 --> 00:59:09,033 and an American or British company could go invest in China, 654 00:59:10,320 --> 00:59:13,790 take advantage of repression in China, 655 00:59:15,800 --> 00:59:20,316 which rejects unions and so has extremely low wages, 656 00:59:20,520 --> 00:59:24,559 could “externalize” all the environmental costs, 657 00:59:24,800 --> 00:59:30,318 make society and the whole planet pay because it pollutes but it’s cheaper. 658 00:59:31,240 --> 00:59:34,471 So, instead of having a “comparative” advantage - 659 00:59:34,760 --> 00:59:39,197 I make wine cheaper than you, you make woollens cheaper than me - 660 00:59:39,440 --> 00:59:42,557 it becomes an absolute advantage because … 661 00:59:43,160 --> 00:59:46,869 my capital is free to roam wherever it finds 662 00:59:46,960 --> 00:59:50,635 the best conditions for profit. 663 00:59:51,480 --> 00:59:54,597 This is what warps trade practices, 664 00:59:54,840 --> 00:59:59,038 and makes the transnationals naturally want 665 00:59:59,440 --> 01:00:03,513 the greatest possible freedom for themselves. 666 01:00:03,960 --> 01:00:06,918 But there’s no question of labour circulating, 667 01:00:07,160 --> 01:00:10,470 except for our “contemporary nomads”- 668 01:00:10,720 --> 01:00:13,678 highly qualified personnel, 669 01:00:13,880 --> 01:00:18,476 covered under service agreements, since they have the right 670 01:00:18,640 --> 01:00:22,076 to circulate freely and set up where they want, 671 01:00:22,160 --> 01:00:24,879 whereas the common mortal does not. 672 01:00:25,920 --> 01:00:31,120 December 17, 1992. U.S. president, George H. W. Bush, 673 01:00:31,120 --> 01:00:35,880 signed the North American Free Trade Agreement (NAFTA) 674 01:00:35,880 --> 01:00:38,314 with Canada and Mexico. 675 01:00:44,120 --> 01:00:47,440 Fourteen years later, on October 26, 2006, 676 01:00:47,440 --> 01:00:52,280 his son, George W. Bush promulgated the Secure Fence Act. 677 01:00:52,280 --> 01:00:56,280 This law authorizes the construction of a double wall, 678 01:00:56,280 --> 01:01:01,280 4.5 meters high and 1,200 km long, along the Mexican border. 679 01:01:01,280 --> 01:01:08,120 It is also outfitted with the latest surveillance technology: 680 01:01:08,120 --> 01:01:12,716 watchtowers, cameras, ground sensors, drones, etc. 681 01:01:25,240 --> 01:01:31,315 The theory of comparative advantage posits international specialization. 682 01:01:32,400 --> 01:01:37,269 It says nations must specialize according to comparative advantages. 683 01:01:37,680 --> 01:01:39,830 It’s a purely static theory. 684 01:01:40,080 --> 01:01:43,993 Pawns are shifted around a box without questioning the box’s form, 685 01:01:44,080 --> 01:01:48,471 or whether the box evolves with the pawn configuration. 686 01:01:49,040 --> 01:01:53,511 The theory’s purely immediate. So, why doesn’t it work? 687 01:01:54,000 --> 01:01:58,710 Because international trade isn’t just neutral exchange, 688 01:01:58,960 --> 01:02:04,876 where the nice Natives trade with the charming conquistadors. 689 01:02:05,120 --> 01:02:07,395 It doesn’t work like that and it never did. 690 01:02:07,640 --> 01:02:11,838 The conquistadors kill everyone. Then trade comes in 691 01:02:12,080 --> 01:02:16,232 as Phase Two of pacification. But in international trade, 692 01:02:16,440 --> 01:02:20,479 which is the matrix of business … That’s another preconceived notion. 693 01:02:20,600 --> 01:02:26,675 Trade’s not intra-village, then city, region, nation. Then international. 694 01:02:27,240 --> 01:02:30,118 It never worked that way. Quite the contrary. 695 01:02:30,360 --> 01:02:33,796 International business follows the military, 696 01:02:34,000 --> 01:02:40,314 it follows predation. Then comes an inward pacification process. 697 01:02:46,120 --> 01:02:48,873 The “invisible hand” theory is quite extraordinary. 698 01:02:49,120 --> 01:02:52,510 First, it wagers that men are bad. 699 01:02:53,400 --> 01:02:57,313 It’s quite lucid. It says, we’ll work with that. 700 01:02:57,560 --> 01:02:59,835 People are self-centred, greedy, 701 01:02:59,960 --> 01:03:03,714 mean and self-interested. They dislike collectives. 702 01:03:03,920 --> 01:03:07,390 They’re unsupportive, anti-social, narcissistic. 703 01:03:07,600 --> 01:03:11,593 Let’s say this kind of flaw turns into … 704 01:03:13,040 --> 01:03:16,476 an advantage for the collective and society. 705 01:03:17,080 --> 01:03:21,995 Let them go. Public happiness will arise from their egoistic antagonism. 706 01:03:22,280 --> 01:03:25,317 That’s the invisible hand. The idea is that 707 01:03:25,560 --> 01:03:31,510 every time one intervenes, tries to order this ego antagonism, 708 01:03:33,240 --> 01:03:37,916 the system gets disrupted and worse. One great reactionary thesis 709 01:03:38,160 --> 01:03:43,109 is the argument of perverse effect. Hirschmann said it. It’s great. 710 01:03:43,400 --> 01:03:46,278 The reactionary rightists 711 01:03:46,520 --> 01:03:50,115 have always accused leftists of causing evil by doing good. 712 01:03:50,360 --> 01:03:54,273 You want to do good, help the poor, you’ll create a lot of poverty. 713 01:03:54,520 --> 01:03:59,389 The Economist published an amazing picture after the Seattle summit. 714 01:04:00,600 --> 01:04:05,879 It showed starving Third-World people, African children, labelled, 715 01:04:06,680 --> 01:04:09,274 Victims of the Seattle failure. 716 01:04:09,520 --> 01:04:13,991 That is vile! Worse than the Benetton ads. 717 01:04:14,240 --> 01:04:17,949 The message was, you played around at hindering the WTO. 718 01:04:18,160 --> 01:04:22,756 To what end? You created poor, unhappy, starving people. 719 01:04:22,960 --> 01:04:26,919 Whereas this system creates the poor, starving, unhappy. 720 01:04:28,880 --> 01:04:31,235 The invisible hand says, let it be. 721 01:04:31,480 --> 01:04:34,278 You can’t fix it. Man is unkind, bad. 722 01:04:34,520 --> 01:04:37,717 Only wickedness can stop wickedness. 723 01:04:38,720 --> 01:04:42,713 Put two bad guys together, it balances out. Laissez-faire. 724 01:04:42,920 --> 01:04:46,390 Economists have been studying the invisible hand since 1776. 725 01:04:46,520 --> 01:04:50,832 So they’ve been studying this problem for quite a while. 726 01:04:52,720 --> 01:04:56,508 For it to work, men have to be separate. Autonomous. 727 01:04:57,520 --> 01:05:02,435 No relationships, no collectives. Only their own rationality, 728 01:05:02,960 --> 01:05:07,636 separate from others’, individual. Absolute individualism. 729 01:05:07,840 --> 01:05:11,310 The second condition is perfect information. 730 01:05:11,520 --> 01:05:15,911 Omniscience about future events for centuries to come … 731 01:05:17,880 --> 01:05:21,031 Second condition. Now, what’s the third … 732 01:05:22,920 --> 01:05:26,754 Perfect information … and thirdly, 733 01:05:27,320 --> 01:05:32,917 no uncertainty, like a storm, chance, Ariane breaking down 734 01:05:33,120 --> 01:05:36,396 on the 25th flight and not the 3rd. 735 01:05:37,600 --> 01:05:41,149 The world must be hazard-free, which is corollary to saying 736 01:05:41,400 --> 01:05:45,075 perfect foresight is necessary. Under these conditions, 737 01:05:46,920 --> 01:05:52,233 the invisible hand might work, but it’s not even sure, 738 01:05:52,520 --> 01:05:55,560 for it’s important to know that liberal economists - 739 01:05:55,560 --> 01:06:00,793 the greatest, most mathematical, most prestigious, Nobel winners - 740 01:06:01,520 --> 01:06:06,116 have shown for about 25 years, 741 01:06:06,960 --> 01:06:13,308 that the invisible hand theorem doesn’t work. It’s bullshit. 742 01:06:13,640 --> 01:06:17,189 They’ve shown it. Many suspected as much. 743 01:06:17,480 --> 01:06:20,552 Keynes suspected it for a long time because he thought 744 01:06:20,800 --> 01:06:24,031 the idea of equilibrium was inapplicable to economy, 745 01:06:24,480 --> 01:06:28,678 It was more disequilibrium - economy was fundamentally chaotic. 746 01:06:29,240 --> 01:06:34,598 But the pure, hard, mean, liberal, most prestigious economists, 747 01:06:34,840 --> 01:06:38,879 draped in the prestige of the most hard-nose science, 748 01:06:39,120 --> 01:06:43,193 starting with Nobel winner, Gérard Debreu, 25 years ago, 749 01:06:44,600 --> 01:06:49,674 have said it doesn’t work. Markets don’t mean equilibrium or efficiency. 750 01:06:50,320 --> 01:06:55,872 Markets don’t mean equilibrium, so supply-and-demand means nothing. 751 01:06:56,040 --> 01:07:00,238 And they’re not efficient, so laissez-faire is the worst solution. 752 01:07:03,320 --> 01:07:07,836 Thank you, liberal gentlemen. Kind of you to say so. We thought as much. 753 01:07:08,080 --> 01:07:13,200 So anyone who says “invisible hand”, “supply and demand”, “equilibrium” … 754 01:07:13,320 --> 01:07:16,517 is either a crook (not uncommon), 755 01:07:16,760 --> 01:07:20,639 or hides his eyes (also happens), someone who’s wilfully blind, 756 01:07:21,400 --> 01:07:24,198 or Sartre’s “bastard” - who knows but stays silent, 757 01:07:24,440 --> 01:07:27,432 or an incompetent. They exist too. 758 01:09:55,320 --> 01:10:00,633 Adam Smith, David Riccardo, Karl Marx, John Stuart Mill, 759 01:10:00,880 --> 01:10:02,154 Malthus, more or less - 760 01:10:03,280 --> 01:10:07,034 all the classic figures in the creation of economics 761 01:10:07,160 --> 01:10:10,391 incorporated social thought. They were social philosophers 762 01:10:10,640 --> 01:10:13,108 more than “pure” economists. 763 01:10:13,360 --> 01:10:17,990 But the neo-classics - Auguste and Léon Walras, father and son, 764 01:10:18,520 --> 01:10:20,476 mid- to late-19th century, 765 01:10:20,560 --> 01:10:25,236 inaugurated a kind of economics that calls itself scientific. 766 01:10:25,840 --> 01:10:30,277 In doing so, it dispenses with all moral or philosophical thought. 767 01:10:30,840 --> 01:10:34,958 So it evacuates all the concerns the classics had until Karl Marx, 768 01:10:35,240 --> 01:10:37,993 which were the following: 769 01:10:38,240 --> 01:10:43,439 Who makes money and why? Has he the right to make so much? 770 01:10:44,280 --> 01:10:46,316 Is this fair? Unfair? 771 01:10:46,440 --> 01:10:51,116 Is it good for the community or bad? Economics had an ethical dimension. 772 01:10:51,480 --> 01:10:54,950 And this was evacuated with neo-classical thought. 773 01:10:55,280 --> 01:10:59,398 This neo-classicism opened the way for neo-liberal thought. 774 01:11:00,080 --> 01:11:05,279 Neo-liberalism then added to neo-classicism’s kind of … 775 01:11:06,360 --> 01:11:10,319 scientific decree (We are a science, so we imitate physics.): 776 01:11:10,680 --> 01:11:13,592 We notice money goes from here to there. 777 01:11:13,840 --> 01:11:16,229 We count, observe, classify. 778 01:11:16,680 --> 01:11:19,069 But we refrain from casting judgment, 779 01:11:19,320 --> 01:11:23,313 because physics, the mother of all sciences, does not judge.” 780 01:11:23,560 --> 01:11:27,553 Economics’ strength is that it comes as obvious, neutral truth - 781 01:11:27,720 --> 01:11:31,030 a neutral discourse that speaks neither good nor evil, 782 01:11:31,280 --> 01:11:35,319 that is scientific, with all the neutrality of science, 783 01:11:35,400 --> 01:11:37,470 that comes across as normal. 784 01:11:38,040 --> 01:11:42,431 Putting pressure on wages to cut inflation is obviously normal. 785 01:11:42,680 --> 01:11:44,671 Obviously we can’t have inflation. 786 01:11:44,920 --> 01:11:48,708 No matter if this generated phenomenal inequality, 787 01:11:49,560 --> 01:11:51,835 led certain peoples into destitution, 788 01:11:52,080 --> 01:11:54,594 created disparities between north and south, 789 01:11:54,840 --> 01:11:58,435 created a caste of rich people taking up the foreground, 790 01:11:58,600 --> 01:12:01,637 eradicating State power, breaking social security. 791 01:12:01,840 --> 01:12:05,276 Despite all this, there is but one obvious truth: 792 01:12:05,520 --> 01:12:07,590 You can’t be pro-inflation!? 793 01:12:08,920 --> 01:12:13,516 But if we look at truth and history, we see that those rare times 794 01:12:13,760 --> 01:12:16,672 when capital was muzzled, as in the glorious ’30s, 795 01:12:16,880 --> 01:12:20,839 were inflationary periods when wages could increase, 796 01:12:21,080 --> 01:12:25,676 because people who borrowed for houses, etc., due to inflation, 797 01:12:25,960 --> 01:12:29,111 managed to pay off debt quickly. 798 01:12:29,720 --> 01:12:32,029 Now, it’s an economy of the rich. 799 01:12:32,240 --> 01:12:36,233 One could ask, “You want the rich to run the world?” 800 01:12:37,080 --> 01:12:39,719 instead of, “Surely, you’re against inflation?” 801 01:12:42,080 --> 01:12:47,120 To impose their ideology, neo-liberals have, over the years, 802 01:12:47,120 --> 01:12:52,160 developed a relentless strategy, thought encirclement. 803 01:12:52,160 --> 01:12:59,280 This strategy rests in large part on the actions of a global network 804 01:12:59,280 --> 01:13:02,080 of propaganda, intoxication and indoctrination 805 01:13:02,080 --> 01:13:07,520 that can make its polymorphous voice heard in all forums. 806 01:13:07,520 --> 01:13:11,240 Largely conceived in think tanks, 807 01:13:11,240 --> 01:13:17,480 neo-liberal propaganda subsequently branched out in many ways. 808 01:13:17,480 --> 01:13:22,759 Education became one of the most important branches. 809 01:13:23,760 --> 01:13:23,880 propaganda and indoctrination 810 01:13:23,880 --> 01:13:31,440 propaganda and indoctrination 811 01:13:31,440 --> 01:13:37,117 education 812 01:13:39,280 --> 01:13:42,511 The idea of national education arose in the 18th century. 813 01:13:42,720 --> 01:13:46,713 In the wake of the French Revolution and European nation-states, 814 01:13:46,800 --> 01:13:48,472 there arose the idea … 815 01:13:49,120 --> 01:13:54,114 that a public democratic space implied people who were informed, 816 01:13:54,560 --> 01:13:59,031 and who were skilled at thinking, discussing, 817 01:13:59,280 --> 01:14:03,478 participating in political discourse. There were 2 institutions for this 818 01:14:03,720 --> 01:14:09,431 to ensure that people could become “citizens”, as they said at the time: 819 01:14:09,680 --> 01:14:15,835 Education, one important function of which was to train citizens, 820 01:14:16,080 --> 01:14:18,548 prepare citizens. And then, the media. 821 01:14:18,800 --> 01:14:21,712 We’ll discuss that later. As for education, 822 01:14:21,960 --> 01:14:27,637 one of its mandates - not that it was implemented or realized very well - 823 01:14:27,840 --> 01:14:30,673 but a mandate of education was to train citizens, 824 01:14:30,920 --> 01:14:34,435 empower people to take part in political debate 825 01:14:34,720 --> 01:14:38,952 and reflect on political questions beyond their own interests. 826 01:14:39,200 --> 01:14:42,431 That was the main thing. Not to think about politics, 827 01:14:42,600 --> 01:14:46,832 or economic and social debates, from a self-serving standpoint, 828 01:14:47,080 --> 01:14:50,959 but from the standpoint of the public good and collective interests. 829 01:14:51,600 --> 01:14:53,397 Education cultivated this. 830 01:14:53,640 --> 01:14:58,430 But in the so-called “neo-liberal” changes of the past 30 years, 831 01:14:58,640 --> 01:15:03,953 the dominant institutions realized education was an important issue, 832 01:15:04,200 --> 01:15:08,352 and important to appropriate. Is what I’m saying right? 833 01:15:08,560 --> 01:15:13,156 Are they penetrating education? Anyone who looks knows it is. 834 01:15:13,280 --> 01:15:16,033 From primary school to university, it varies according to country. 835 01:15:16,240 --> 01:15:19,118 It’s different in the U.S., Canada, Québec, France. 836 01:15:19,360 --> 01:15:22,750 It depends on the history of how each system developed. 837 01:15:22,920 --> 01:15:28,790 But we see massive penetration on the part of private industry 838 01:15:29,040 --> 01:15:31,793 into the education system. Why? 839 01:15:32,040 --> 01:15:34,235 The answers are quite simple. 840 01:15:34,400 --> 01:15:37,119 Education’s a very profitable market. 841 01:15:37,280 --> 01:15:41,956 It’s interesting to appropriate this piece of social and economic activity 842 01:15:42,240 --> 01:15:46,074 because it’s profitable. And it lets children’s minds be appropriated. 843 01:15:46,320 --> 01:15:49,392 It’s as blunt as that. Educating is seizing minds. 844 01:15:52,360 --> 01:15:56,911 Being able to take hold of children’s minds is extremely crucial, serious. 845 01:15:57,160 --> 01:16:02,553 It requires a strong justification and I’m not sure we can give it one. 846 01:16:02,800 --> 01:16:07,191 When companies infiltrate education, they’re aiming for children’s minds, 847 01:16:07,440 --> 01:16:10,398 and to transform the subjects taught. 848 01:16:10,640 --> 01:16:15,873 That’s when training deviates from citizenship and sense of common good 849 01:16:16,120 --> 01:16:22,036 towards the interests of the businesses appropriating education. 850 01:16:22,400 --> 01:16:27,315 Seeing the world through culture, knowledge, outside of oneself, 851 01:16:27,560 --> 01:16:31,235 is different than from the viewpoint of what a company gives us. 852 01:16:31,440 --> 01:16:33,556 The latter element’s always there. 853 01:16:33,800 --> 01:16:36,951 Appropriation of a market, of children’s minds, 854 01:16:37,200 --> 01:16:41,239 and preparation for labour. From this perspective, 855 01:16:41,480 --> 01:16:45,314 education will increasingly lose its other functions - 856 01:16:45,440 --> 01:16:49,592 preparation for civic life, openness to the world, 857 01:16:49,840 --> 01:16:54,356 the pure pleasure of understanding and knowledge for its own sake - 858 01:16:54,600 --> 01:16:57,433 to orient towards market enslavement, 859 01:16:57,640 --> 01:17:02,350 the preparation of subjects taught for economic functions. 860 01:17:02,600 --> 01:17:04,636 Education will become 861 01:17:04,840 --> 01:17:08,719 a prelude to mercantile life, and to employment. 862 01:17:08,960 --> 01:17:10,279 That’s also very troubling. 863 01:17:10,520 --> 01:17:14,832 We’ve seen transformations like this for about 20 years. 864 01:17:15,080 --> 01:17:18,436 With some resistance. As this phenomenon arises, 865 01:17:18,720 --> 01:17:21,075 so does resistance to it, luckily. 866 01:17:24,840 --> 01:17:28,037 Channel One is an American company, 867 01:17:28,840 --> 01:17:31,991 now listed on the stock market. It launched a project 868 01:17:32,200 --> 01:17:35,749 where they go into underfunded schools and say, 869 01:17:35,920 --> 01:17:39,993 Since you have no supplies, we’ll furnish you with TV’s, VCR’s 870 01:17:40,240 --> 01:17:44,916 in exchange for which, you’ll screen for 20 minutes a day 871 01:17:45,160 --> 01:17:50,871 our educational videos.” - current issues shows for children. 872 01:17:51,120 --> 01:17:54,590 Their interest in this is the captive clientele. 873 01:17:54,800 --> 01:18:00,477 Throughout the X minutes of proposed programming, there are ads. 874 01:18:00,720 --> 01:18:03,029 They add a few minutes of publicity 875 01:18:03,200 --> 01:18:08,752 that allows advertisers to address, in an extremely privileged context, 876 01:18:08,880 --> 01:18:11,075 this captive clientele. 877 01:18:11,320 --> 01:18:14,710 This is strong in the U.S. Here, it has been tried. 878 01:18:14,960 --> 01:18:18,032 The company in Canada was called Athena. 879 01:18:18,280 --> 01:18:20,874 It made sustained efforts for a few years. 880 01:18:21,120 --> 01:18:24,476 By and large, the school boards refused. 881 01:18:24,680 --> 01:18:28,229 Our public-service funding is not in the same state as the U.S.’s, 882 01:18:28,440 --> 01:18:32,035 but it’s another assault being conducted against education. 883 01:18:32,240 --> 01:18:35,994 It takes many forms, according to country and region. 884 01:18:36,720 --> 01:18:41,953 Mobil has shows on energy. Learn environmental protection from them. 885 01:18:42,240 --> 01:18:48,429 And nutrition from NutraSweet, which has a kid’s show on nutrition. 886 01:18:48,680 --> 01:18:52,673 You’ll learn the virtues of NAFTA with GM, 887 01:18:52,880 --> 01:18:55,189 and about protecting forests and the environment 888 01:18:55,440 --> 01:18:59,319 from the companies responsible for deforestation. 889 01:19:01,040 --> 01:19:05,520 This model has repercussions from primary school to university, 890 01:19:05,520 --> 01:19:09,718 which means, ultimately, we could have - I’m half joking - 891 01:19:09,960 --> 01:19:14,556 university ecology departments where pollution will be justified. 892 01:19:14,800 --> 01:19:16,518 That’s the troubling thing. 893 01:19:16,800 --> 01:19:20,918 The loss of meaning in certain intellectual and human activities … 894 01:19:21,160 --> 01:19:22,639 that this implies. 895 01:19:23,480 --> 01:19:26,074 The more efficient we think we are economically … 896 01:19:26,560 --> 01:19:30,997 Financially is more precise, since finance is multiplying money. 897 01:19:31,200 --> 01:19:35,955 The more efficiently we make money, the less sense it makes. 898 01:19:36,720 --> 01:19:42,317 Does it makes sense to say that GM, for example, is efficient 899 01:19:42,560 --> 01:19:48,874 because it made $23- or 24-billion net profit in the last decade, 900 01:19:50,280 --> 01:19:53,158 when it created 300,000 unemployed! 901 01:19:53,960 --> 01:19:55,678 Does that make sense? 902 01:19:55,920 --> 01:19:59,469 We say GM is efficient, but what is this efficiency? 903 01:19:59,720 --> 01:20:02,393 We say the American economy is more efficient. 904 01:20:02,640 --> 01:20:08,272 It is, in financial indicators, yield over capital investment, etc. 905 01:20:08,520 --> 01:20:13,958 But the U.S. has never had so many people living under the poverty line, 906 01:20:14,200 --> 01:20:15,713 the American poverty line, 907 01:20:16,000 --> 01:20:19,754 or so many people without access to health care - 908 01:20:20,000 --> 01:20:25,358 40% of the American population has practically no access to health care. 909 01:20:25,600 --> 01:20:30,071 The U.S. has never had such a low level of education. 910 01:20:31,920 --> 01:20:37,438 50% of Americans can’t locate England on a map. 911 01:20:37,640 --> 01:20:39,710 Today, this is aberrant, 912 01:20:40,000 --> 01:20:44,073 when there are at least 50 TV channels per household. 913 01:20:44,320 --> 01:20:47,357 There’s a picture of what I’m calling lack of meaning. 914 01:20:47,600 --> 01:20:50,433 Materially, economically, financially, we’re more efficient. 915 01:20:50,680 --> 01:20:54,673 But ecologically, socially, politically, humanly, 916 01:20:54,920 --> 01:20:59,948 we are steadily losing our values and quality of life. 917 01:21:00,160 --> 01:21:01,639 Senselessness. 918 01:21:01,880 --> 01:21:06,431 To discuss this, we must eschew the dominant economic discourse. 919 01:21:06,640 --> 01:21:10,918 To start to make sense of this, the problem must be reformulated … 920 01:21:11,880 --> 01:21:15,873 from scratch. To do this, we must go back to Aristotle. 921 01:21:16,560 --> 01:21:20,269 He said, “Do not confuse the economic - 922 01:21:20,520 --> 01:21:25,594 oikos nomia, the norms of running home and community, 923 01:21:25,680 --> 01:21:29,434 with chrematistic, krema atos, the accumulation of money.” 924 01:21:30,080 --> 01:21:31,991 That brings us to education. 925 01:21:32,640 --> 01:21:37,156 In education today, to what degree is Aristotle taught? 926 01:21:37,280 --> 01:21:39,316 Who knows Aristotle? Who reads him? 927 01:21:39,520 --> 01:21:43,877 I could say the same of Victor Hugo, Jean-Paul Sartre, 928 01:21:44,880 --> 01:21:46,518 Archimedes, etc. 929 01:21:47,840 --> 01:21:49,671 So, today, 930 01:21:50,720 --> 01:21:53,757 we say we’re in a knowledge-based economy, 931 01:21:54,000 --> 01:21:56,594 but we’ve never educated or taught so little. 932 01:21:57,320 --> 01:22:00,835 Yet we’ve never put so much emphasis 933 01:22:01,040 --> 01:22:03,998 on so-called training and educational institutions. 934 01:22:04,080 --> 01:22:09,074 Now for the paradox and nonsensical. They’re in the fact that 935 01:22:09,960 --> 01:22:12,633 just about everywhere, particularly in North America, 936 01:22:12,840 --> 01:22:18,836 schools are being turned into the system’s servant factories. 937 01:22:19,560 --> 01:22:22,870 In other words, thinking bipeds 938 01:22:24,200 --> 01:22:30,389 must be concerned only about fuelling this free, self-regulating market 939 01:22:30,640 --> 01:22:33,757 and the mechanics of production and finance. 940 01:22:33,840 --> 01:22:35,876 We call this “employability”, 941 01:22:36,160 --> 01:22:38,720 training the employable, 942 01:22:39,280 --> 01:22:43,990 reforming education, from grade school to university - 943 01:22:44,200 --> 01:22:48,159 training people to find their place in the labour market. 944 01:22:48,400 --> 01:22:49,753 That’s horrible. 945 01:22:50,320 --> 01:22:52,914 Would a Victor Hugo be employable today? 946 01:22:53,520 --> 01:22:55,875 Would a Socrates be employable? 947 01:22:56,520 --> 01:23:00,308 Would a Paul Verlaine or a Rimbaud be employable? 948 01:23:00,560 --> 01:23:02,790 No! So, there would be none. 949 01:23:03,240 --> 01:23:06,869 But what would humanity be without Socrates, Aristotle, 950 01:23:07,120 --> 01:23:10,078 Rimbaud, Verlaine, Hugo? 951 01:23:10,280 --> 01:23:13,716 What would we be without them? We’d be animals. 952 01:23:13,960 --> 01:23:17,953 Now, on the pretence that they’re unemployable and unwanted, 953 01:23:18,240 --> 01:23:23,473 we no longer train poets, literary people, pure mathematicians, 954 01:23:23,720 --> 01:23:26,439 or theoretical physicists. 955 01:23:26,960 --> 01:23:30,919 We only train what industry, financial enterprise, wants 956 01:23:31,200 --> 01:23:34,078 to fuel the money-making machine. 957 01:23:34,880 --> 01:23:36,438 Who is employable? 958 01:23:36,640 --> 01:23:40,474 The people I see in universities where I teach, around the world. 959 01:23:40,720 --> 01:23:45,475 In other words, at the highest level - Master’s, Ph.D. - 960 01:23:45,840 --> 01:23:48,673 they’re what I call “technocrats”, 961 01:23:49,960 --> 01:23:54,238 analytical technocrats, trained to analyze problems. 962 01:23:54,440 --> 01:23:57,750 We tell them they’re smart because they do problem-solving. 963 01:23:58,000 --> 01:24:02,710 Problem-solving is not intelligence. Problem-formulation is. 964 01:24:02,960 --> 01:24:06,270 The person who formulates the problem is the smart one. 965 01:24:06,480 --> 01:24:11,156 He articulates it, puts it in terms of links and combinations 966 01:24:11,560 --> 01:24:13,278 that call for a question. 967 01:24:13,680 --> 01:24:17,958 He’s the smart one. The one who relies on a pre-formulated problem 968 01:24:18,240 --> 01:24:22,233 in order to find the right solution isn’t intelligent. 969 01:24:22,360 --> 01:24:25,591 Despite what they say. Analytical technocrats 970 01:24:25,840 --> 01:24:28,991 master techniques of analysis and calculation, 971 01:24:29,280 --> 01:24:32,795 and confuse thinking with analyzing and calculating. 972 01:24:33,160 --> 01:24:37,631 They make decisions with no qualms, like laying off 60,000 in a day, 973 01:24:37,920 --> 01:24:41,708 doubling their salary by a million, and saying “I’m suffering.” 974 01:24:41,960 --> 01:24:45,430 I make hard decisions. These are non-humans! 975 01:24:45,800 --> 01:24:49,395 Someone who openly makes decisions without soul-searching 976 01:24:49,600 --> 01:24:52,672 is saying, “I’m not a human being.” 977 01:24:53,160 --> 01:24:57,915 By what right do we let him make decisions that affect human beings? 978 01:24:58,120 --> 01:25:02,750 He says, “No soul-searching, no soul. I’m not human.” 979 01:25:03,880 --> 01:25:08,954 These are highly trained technocrats. At the intermediate level … 980 01:25:10,120 --> 01:25:15,672 are the producer technicians. These technicians serve machines, 981 01:25:15,920 --> 01:25:19,310 from the computer to the digital machine 982 01:25:19,520 --> 01:25:22,876 that cranks out parts in plastic, steel, aluminum. 983 01:25:23,280 --> 01:25:25,635 These people are there 984 01:25:25,880 --> 01:25:30,032 so the automated mechanics of production never break down. 985 01:25:30,640 --> 01:25:33,438 The only knowledge required of them 986 01:25:33,640 --> 01:25:38,236 is the logic of the machinery they’re overseeing. That’s all. 987 01:25:39,520 --> 01:25:45,436 What’s more, they’re merely required to understand the machine’s demands. 988 01:25:46,640 --> 01:25:51,714 They don’t even dominate the machine, or possess a kind of … 989 01:25:52,360 --> 01:25:57,593 human superiority, additional soul, knowledge or sense of the machine. 990 01:25:57,840 --> 01:26:01,719 Instead, the machine says, if you’re smart enough, 991 01:26:01,960 --> 01:26:07,671 find the bad chip, change the card. And if he can’t, he’s no good. 992 01:26:08,400 --> 01:26:12,109 And on the lower levels, what do we train? We don’t. 993 01:26:12,360 --> 01:26:16,911 45% of the labour of multi-nationals, American in particular, 994 01:26:17,160 --> 01:26:19,230 are completely illiterate. 995 01:26:19,440 --> 01:26:22,352 The multi-nationals don’t want to change that. 996 01:26:22,600 --> 01:26:27,355 They don’t want these illiterates to be the least bit trained, 997 01:26:27,600 --> 01:26:30,637 because otherwise they’ll start asking questions. 998 01:26:31,120 --> 01:26:36,240 lf they read papers and reports, they’ll start asking questions, 999 01:26:36,480 --> 01:26:39,074 unionizing, thinking. 1000 01:26:39,280 --> 01:26:40,918 So, no way. 1001 01:26:41,120 --> 01:26:46,274 Today, particularly in North America and even more in the States, 1002 01:26:46,560 --> 01:26:49,472 there are primary and high school graduates … 1003 01:26:51,560 --> 01:26:54,552 in fairly staggering proportions - 1004 01:26:54,800 --> 01:26:57,840 up to 25% here in Québec, 1005 01:26:57,840 --> 01:27:03,472 and if we looked at U.S. figures, they’d be the same, if not more - 1006 01:27:03,600 --> 01:27:08,833 who graduated, yet are illiterate, who basically can’t read or write. 1007 01:27:09,080 --> 01:27:12,436 They graduated by seniority. 1008 01:27:12,680 --> 01:27:16,639 By attendance and age. This suits the system fine. 1009 01:27:17,000 --> 01:27:21,232 Because when your low-level workers 1010 01:27:22,160 --> 01:27:24,037 are lobotomized bipeds, 1011 01:27:24,240 --> 01:27:29,109 who haven’t even been taught to think because this would require reading … 1012 01:27:29,360 --> 01:27:32,750 lf I want to learn to think, I must read Victor Hugo, poems … 1013 01:27:33,000 --> 01:27:35,468 I must read philosophers. 1014 01:27:35,720 --> 01:27:38,553 Writers teach me to think. 1015 01:27:38,800 --> 01:27:43,590 I can’t think without putting words and their permutations into my head. 1016 01:27:44,080 --> 01:27:46,435 lf I don’t have this, I cannot think. 1017 01:27:46,640 --> 01:27:50,553 But I can become an excellent reproducer of the system, 1018 01:27:50,960 --> 01:27:54,555 who doesn’t think and who defends the system. 1019 01:27:55,200 --> 01:27:58,431 There are now workers who say - and this has happened to me 1020 01:27:58,720 --> 01:28:03,840 in serious situations where there are closures, layoffs, etc. 1021 01:28:04,080 --> 01:28:06,958 and I ask the workers, “What do you think?” 1022 01:28:07,440 --> 01:28:10,716 They often tell me, “It’s the law of the market. 1023 01:28:10,840 --> 01:28:15,038 Competition. We must be more competitive than the Japanese…” 1024 01:28:15,280 --> 01:28:19,273 They defend the very system that’s crushing them. 1025 01:28:20,680 --> 01:28:24,912 We began by examining the networks by which ideas circulate. 1026 01:28:25,160 --> 01:28:28,311 Education’s the same. We find … 1027 01:28:28,560 --> 01:28:32,997 ideological justifications, theorists, people who conceived education, 1028 01:28:34,000 --> 01:28:37,072 advocating its transformation in a way I’ll describe. 1029 01:28:37,280 --> 01:28:40,511 There are also powerful transnational institutions 1030 01:28:40,720 --> 01:28:46,556 that entertain the same discourse and compel agents, governments 1031 01:28:46,800 --> 01:28:49,917 and teachers to adopt practices that conform to these ideals. 1032 01:28:50,160 --> 01:28:54,358 Finally, lobby groups, think tanks, try to accomplish the same thing. 1033 01:28:54,600 --> 01:28:57,592 Education is striking. It has all three. 1034 01:28:59,400 --> 01:29:02,676 The most influential education theorist of the last 50 years 1035 01:29:02,920 --> 01:29:06,117 was an economist, not a pedagogue. 1036 01:29:07,280 --> 01:29:11,831 The top educational theorist was probably Gary Becker. 1037 01:29:12,200 --> 01:29:14,430 He teaches at the University of Chicago. 1038 01:29:14,640 --> 01:29:17,950 He developed the theory of human capital. 1039 01:29:18,240 --> 01:29:19,309 The idea is … 1040 01:29:20,040 --> 01:29:23,032 humans and knowledge are capital that requires investment 1041 01:29:23,280 --> 01:29:26,556 and evaluation from the standpoint of profitability. 1042 01:29:26,680 --> 01:29:29,274 This theory of human capital 1043 01:29:29,520 --> 01:29:34,913 allows mathematical economic tools to be applied to education, 1044 01:29:35,160 --> 01:29:39,836 henceforth viewed as a certain order of capital that can be quantified. 1045 01:29:40,160 --> 01:29:44,119 This has been the most influential theory of the last 50 years, 1046 01:29:44,360 --> 01:29:48,797 especially where it counts, in places where decision-makers are influenced. 1047 01:29:49,040 --> 01:29:52,271 Places where States, education ministers 1048 01:29:52,520 --> 01:29:55,557 and education policy-makers are influenced. 1049 01:29:55,800 --> 01:30:00,749 The second theorist who established the mechanisms that are in play now 1050 01:30:01,040 --> 01:30:04,999 is Milton Friedman, the father of monetary economics, 1051 01:30:05,160 --> 01:30:08,948 who proposed a system of education vouchers, 1052 01:30:09,200 --> 01:30:12,670 the idea again being to inject market mechanisms 1053 01:30:12,960 --> 01:30:16,270 into education, and to make schools compete. 1054 01:30:16,480 --> 01:30:22,396 These 2 education theories, never discussed in education faculties, 1055 01:30:22,640 --> 01:30:26,110 are the most influential recent educational thinking. 1056 01:30:26,320 --> 01:30:31,633 These theories circulate to the IMF, the OECD, the World Bank. 1057 01:30:31,880 --> 01:30:36,078 National education systems are analyzed from their point of view. 1058 01:30:36,240 --> 01:30:38,879 Recommendations are made accordingly. 1059 01:30:39,800 --> 01:30:46,360 Think tanks and major media groups often enjoy privileged connections. 1060 01:30:46,360 --> 01:30:52,240 Propaganda naturally circulates from one group to the other. 1061 01:30:52,240 --> 01:30:57,520 Also, it is largely due to this media transmission 1062 01:30:57,520 --> 01:31:03,117 that neo-liberal ideology attains the status of accepted fact. 1063 01:31:04,120 --> 01:31:04,200 propaganda and indoctrination 1064 01:31:04,200 --> 01:31:11,760 propaganda and indoctrination 1065 01:31:11,760 --> 01:31:17,471 the media 1066 01:31:19,960 --> 01:31:25,080 It has traditionally been said that Hitler invented propaganda. 1067 01:31:25,320 --> 01:31:30,110 Journals, etc., describe how Hitler understood its role in World War II. 1068 01:31:30,400 --> 01:31:34,359 It’s true, he understood it’s societal importance. 1069 01:31:34,600 --> 01:31:37,273 But he didn’t invent it. He learned from us, 1070 01:31:37,520 --> 01:31:41,479 the Western democracies, in particular the English, 1071 01:31:41,680 --> 01:31:43,352 and the Americans. 1072 01:31:43,560 --> 01:31:47,155 Overall, since the advent of modern societies, 1073 01:31:47,360 --> 01:31:49,078 two trends prevail. 1074 01:31:49,320 --> 01:31:53,598 The first calls for participative democracy with aware people, 1075 01:31:53,800 --> 01:31:58,191 who can talk, act and influence decisions. 1076 01:31:58,480 --> 01:32:03,110 The other vision of the world says some people must be pushed aside. 1077 01:32:03,280 --> 01:32:06,989 They must not get involved in the issues that concern them. 1078 01:32:07,080 --> 01:32:10,755 This vision of society, the world and the economy 1079 01:32:10,960 --> 01:32:15,033 also exists in our culture. It strongly manifested itself 1080 01:32:15,280 --> 01:32:20,274 during World War I in the U.S., when the government was elected 1081 01:32:20,360 --> 01:32:23,238 on a promise of abstaining from war. 1082 01:32:23,520 --> 01:32:28,036 Shortly thereafter, for reasons pertaining to internal affairs 1083 01:32:28,280 --> 01:32:30,236 and the role of the industrialists, 1084 01:32:30,440 --> 01:32:34,194 the government decided to enter into the conflict. 1085 01:32:34,440 --> 01:32:39,594 The serious problem it then faced was confronting an opposed population. 1086 01:32:39,760 --> 01:32:44,595 They formed a commission named after the journalist who presided over it, 1087 01:32:44,840 --> 01:32:47,308 Mr Creel. It was the Creel Commission. 1088 01:32:47,560 --> 01:32:52,759 This commission largely invented modern propaganda techniques, 1089 01:32:52,960 --> 01:32:56,839 techniques for shaping and preparing public opinion. 1090 01:32:57,640 --> 01:33:01,952 The Creel Commission magnificently fulfilled its mandate, 1091 01:33:02,160 --> 01:33:04,958 reversing public opinion in a few months. 1092 01:33:05,200 --> 01:33:09,398 The commission engaged very famous people, renowned intellectuals 1093 01:33:09,640 --> 01:33:14,316 and Edward Burnays, founder of the modern public-relations industry. 1094 01:33:14,560 --> 01:33:17,199 These people later left the commission 1095 01:33:17,440 --> 01:33:21,592 and established communication tools within our societies 1096 01:33:21,840 --> 01:33:25,719 that are still present and are among the propaganda mechanisms. 1097 01:33:25,960 --> 01:33:28,520 One very important political aim 1098 01:33:28,800 --> 01:33:32,315 is to exclude part of the population, to shape public opinion 1099 01:33:32,520 --> 01:33:35,717 and build consensus within society. 1100 01:33:35,920 --> 01:33:39,708 The institutions they invented - public relations firms - 1101 01:33:40,000 --> 01:33:44,835 plus the modern concept of the role of companies and of P.R. within them, 1102 01:33:45,120 --> 01:33:49,159 social communication, media, the role of the intellectual, 1103 01:33:49,440 --> 01:33:53,638 the role of publicity and information in our society … 1104 01:33:53,840 --> 01:33:57,753 This was all set up, and was the lesson Hitler rightly remembered. 1105 01:33:58,000 --> 01:34:01,549 Whence the mechanisms that led to today’s one-track thinking? 1106 01:34:01,800 --> 01:34:07,193 They’re the descendents of what I’m describing - the Creel Commission 1107 01:34:08,040 --> 01:34:12,033 and, further back in time, of the conception of politics 1108 01:34:12,280 --> 01:34:16,637 that says society must exclude part of its population to function. 1109 01:34:16,920 --> 01:34:18,990 We find this too. 1110 01:34:19,240 --> 01:34:23,552 But if the agents I’m describing are very powerful, strong, numerous, 1111 01:34:23,760 --> 01:34:28,993 a counter-discourse arises, as do sites where other analyses blossom, 1112 01:34:29,200 --> 01:34:34,069 alternative media, intellectuals, social and community groups, 1113 01:34:34,320 --> 01:34:38,233 where new thought percolates. There’s a dual phenomenon. 1114 01:34:38,480 --> 01:34:41,233 Unfortunately, pensée unique predominates. 1115 01:34:41,440 --> 01:34:44,159 Propaganda is working. 1116 01:34:44,360 --> 01:34:47,511 Through such mechanisms and institutions, 1117 01:34:47,760 --> 01:34:51,548 a world vision, a vocabulary, a way of thinking and conceiving the world 1118 01:34:51,760 --> 01:34:54,354 ensure that certain questions may be asked, 1119 01:34:54,560 --> 01:34:56,391 certain answers given, 1120 01:34:56,640 --> 01:34:59,632 certain analyses made, while others are excluded. 1121 01:35:03,040 --> 01:35:06,715 Currently, dominant ideology, which I call ambient ideology, 1122 01:35:06,960 --> 01:35:11,272 has its official face, the pensée unique we spoke of, 1123 01:35:11,480 --> 01:35:14,199 and its unofficial face, which is … 1124 01:35:14,440 --> 01:35:19,912 this ensemble of behaviours prescribed by the media overall. 1125 01:35:20,160 --> 01:35:23,550 This ideology never appears as an ideology. 1126 01:35:23,840 --> 01:35:29,153 It’s presented as entirely natural, something we should obviously do. 1127 01:35:29,520 --> 01:35:34,594 Owning a TV must be obvious. “How can one not own a TV 1128 01:35:35,280 --> 01:35:37,635 in the late 20th century?” 1129 01:35:38,320 --> 01:35:42,757 Accepting the advertising system is obvious. 1130 01:35:42,960 --> 01:35:45,758 Surely, you won’t, 1131 01:35:46,080 --> 01:35:51,393 in early 2K, call the advertising system into question!” 1132 01:35:51,680 --> 01:35:54,752 All that is ideological, all that is choice, 1133 01:35:56,080 --> 01:36:00,153 which the system has organized without consulting us, 1134 01:36:00,320 --> 01:36:06,190 is presented to us as self-evident, given and above discussion. 1135 01:36:06,920 --> 01:36:10,469 Interesting. Indeed, concerning pensée unique, 1136 01:36:12,080 --> 01:36:16,915 which is a uniform, partial and sectarian way 1137 01:36:17,120 --> 01:36:19,998 of interpreting and conducting economy, 1138 01:36:20,720 --> 01:36:24,156 Alain Minc said, “Thought is not unique, reality is.” 1139 01:36:24,240 --> 01:36:27,471 From that point on, forget calling into question 1140 01:36:27,720 --> 01:36:31,349 what the liberal or ultra-liberal economy was doing. 1141 01:36:31,600 --> 01:36:35,388 It was given as reality. Reality had to be followed. 1142 01:36:35,720 --> 01:36:39,076 For example, “Internationalization is a reality.” 1143 01:36:39,320 --> 01:36:43,472 Of course it is, but not necessarily a good one. 1144 01:36:44,160 --> 01:36:48,950 The ideology says it’s a reality, it’s valid, we must go with it. 1145 01:36:49,520 --> 01:36:51,397 Globalization, same thing. 1146 01:36:53,440 --> 01:36:55,874 Privatization, same thing. 1147 01:36:56,160 --> 01:37:01,234 It’s being done, so it must be done. It had to be done, etc. 1148 01:37:01,480 --> 01:37:04,472 They present as faits accomplis, 1149 01:37:05,520 --> 01:37:10,036 things people must be made to accept, instead of asking whether they agree. 1150 01:37:11,120 --> 01:37:15,238 Naturally, this pertains to what I was saying in my book 1151 01:37:15,680 --> 01:37:18,240 on the sophism of the ineluctable: 1152 01:37:18,480 --> 01:37:23,998 most politicians cover up their actions, their choices, 1153 01:37:24,240 --> 01:37:29,473 because these choices and decisions are being billed as inevitable. 1154 01:37:29,760 --> 01:37:31,671 We couldn’t do otherwise. 1155 01:37:31,920 --> 01:37:35,151 It was decreed. The Americans are doing this. 1156 01:37:36,000 --> 01:37:41,791 Everyone knows what happens in France happened 10 years earlier in the U.S. 1157 01:37:42,120 --> 01:37:44,475 It had to be done in France. 1158 01:37:45,160 --> 01:37:48,311 Renault closed a factory in Belgium 1159 01:37:49,760 --> 01:37:53,150 in order to restructure … 1160 01:37:54,640 --> 01:38:00,192 and create factories elsewhere to do the same work, with cheaper labour. 1161 01:38:00,400 --> 01:38:03,676 That was the result of an economic calculation. 1162 01:38:04,680 --> 01:38:10,596 About this closure, the head of the French state declared the following: 1163 01:38:12,120 --> 01:38:14,588 Alas, factory closures are life. 1164 01:38:14,880 --> 01:38:20,557 Trees are born, live and die, as do plants, animals, men and companies.” 1165 01:38:20,800 --> 01:38:24,429 That is a good example of naturalizing 1166 01:38:25,040 --> 01:38:27,713 what’s happening, which is depoliticization. 1167 01:38:28,000 --> 01:38:30,878 People are obliged to accept as natural, 1168 01:38:31,760 --> 01:38:34,832 as independent of the will of politicians, 1169 01:38:35,080 --> 01:38:41,918 certain decisions that are in fact contingent. 1170 01:38:42,160 --> 01:38:44,833 That’s how they manipulate citizens 1171 01:38:45,040 --> 01:38:50,273 and dissuade them from believing in their own vote, ultimately. 1172 01:38:51,720 --> 01:38:54,314 Today, the functioning of the media 1173 01:38:54,600 --> 01:38:56,989 fosters the creation of truth. 1174 01:38:59,960 --> 01:39:02,679 The truth can only appear as the confrontation, 1175 01:39:04,240 --> 01:39:07,550 the verification of a given version 1176 01:39:07,880 --> 01:39:12,670 confirmed by a number of witnesses. We know truth is hard to establish. 1177 01:39:12,920 --> 01:39:16,117 We see it with investigating judges, 1178 01:39:17,320 --> 01:39:20,835 with analytical scientists trying to discover truth. 1179 01:39:21,120 --> 01:39:23,953 But today, the way the media functions, 1180 01:39:24,200 --> 01:39:27,078 it’s enough that, in coverage of an event, 1181 01:39:29,000 --> 01:39:33,312 all the media - press, radio, TV - say the same thing 1182 01:39:33,600 --> 01:39:37,912 for this to be established as truth, even if it’s false. 1183 01:39:38,360 --> 01:39:43,832 We saw it during the Gulf War, and recent mega-events. 1184 01:39:46,600 --> 01:39:50,673 Consequently, in establishing this kind of false equation, 1185 01:39:51,120 --> 01:39:54,715 repetition equals proof. I was recently rereading … 1186 01:39:54,960 --> 01:39:59,158 Brave New World by Aldous Huxley, 1187 01:39:59,880 --> 01:40:03,395 and I found a phrase about hypnopaedia, 1188 01:40:03,640 --> 01:40:08,350 the aural hypnosis they subject infants to when they’re born 1189 01:40:08,720 --> 01:40:12,030 to persuade them to be happy to be what they are, 1190 01:40:12,680 --> 01:40:16,992 and one of the directors of the Conditioning Centre, as it’s called, 1191 01:40:20,360 --> 01:40:24,148 says, “64,000 repetitions make one truth.” 1192 01:40:24,880 --> 01:40:27,519 We’re now in Huxley’s world. 1193 01:40:37,640 --> 01:40:41,520 Sustained by incessant propaganda and proselytizing 1194 01:40:41,520 --> 01:40:45,840 that pass repeatedly through the multiple relays 1195 01:40:45,840 --> 01:40:50,160 of a sprawling network of mind control, 1196 01:40:50,160 --> 01:40:54,200 neo-liberal reforms gradually impose themselves 1197 01:40:54,200 --> 01:40:58,800 in the anaesthetized consciences of Western democracies. 1198 01:40:58,800 --> 01:41:03,880 In these countries, in the name of a necessary “realism”, 1199 01:41:03,880 --> 01:41:08,000 all parties, both right and left, adopt measures 1200 01:41:08,000 --> 01:41:13,520 that sap the social State more every day, to market’s benefit. 1201 01:41:13,520 --> 01:41:19,320 But elsewhere, where propaganda doesn’t enjoy the same success, 1202 01:41:19,320 --> 01:41:24,520 especially in developing countries, other solutions are imperative. 1203 01:41:24,520 --> 01:41:28,360 Drastic solutions. 1204 01:41:28,360 --> 01:41:32,240 For behind the ideological smokescreen, 1205 01:41:32,240 --> 01:41:36,080 behind the beautiful concepts of spontaneous order 1206 01:41:36,080 --> 01:41:39,920 and harmonized interests in a free market, 1207 01:41:39,920 --> 01:41:44,040 beyond the panacea of the invisible hand, 1208 01:41:44,040 --> 01:41:45,960 what’s really hidden? 1209 01:41:45,960 --> 01:41:51,600 What were the true motivations of the bankers and industrialists 1210 01:41:51,600 --> 01:41:56,469 who financed the establishment of the neo-liberal network? 1211 01:41:57,480 --> 01:42:05,200 neo-liberalism or neo-colonialism? 1212 01:42:05,200 --> 01:42:12,834 strong-arm tactics of the financial markets 1213 01:44:23,200 --> 01:44:25,430 Before, 1214 01:44:26,280 --> 01:44:31,354 nearly all of banks’ operations until the ’70s were monitored. 1215 01:44:32,480 --> 01:44:36,678 All these operations passed via the French central bank 1216 01:44:36,960 --> 01:44:38,757 which kept track. 1217 01:44:39,000 --> 01:44:42,754 Now the problem is, banks transact over the counter. 1218 01:44:43,040 --> 01:44:48,194 They’ve taken out just over half of their business figures - 1219 01:44:48,640 --> 01:44:51,837 OTC transactions outside market control. 1220 01:44:52,080 --> 01:44:54,878 It’s as though there were the normal market, 1221 01:44:54,960 --> 01:44:59,192 and a black market. A grocery with posted prices 1222 01:44:59,440 --> 01:45:03,149 and a proper cash register. Then, a mysterious black market. 1223 01:45:04,040 --> 01:45:06,679 In its reports, the Bank of France says, 1224 01:45:06,920 --> 01:45:09,036 when it checks bank reports, 1225 01:45:09,760 --> 01:45:12,911 about half of bank transactions are unreported, 1226 01:45:13,480 --> 01:45:17,040 beyond the control of a superior authority, 1227 01:45:17,040 --> 01:45:19,270 like a public treasury or a central bank. 1228 01:45:20,960 --> 01:45:26,557 These unreported activities mean that governments count for nothing. 1229 01:45:28,640 --> 01:45:30,119 There must be … 1230 01:45:33,000 --> 01:45:34,831 $500 billion minimum 1231 01:45:35,080 --> 01:45:38,914 circulating every day in off-shore funds, etc. 1232 01:45:39,200 --> 01:45:42,033 If a government hassles a bank, 1233 01:45:42,280 --> 01:45:47,274 it doesn’t care. It just stocks up with one of its foreign counterparts, 1234 01:45:47,480 --> 01:45:49,994 another multi-national bank, 1235 01:45:50,200 --> 01:45:54,512 an off-shore fund or elsewhere. No problem. Money’s mobile now. 1236 01:45:54,760 --> 01:45:57,911 Beyond the control of any public authority. 1237 01:45:58,440 --> 01:45:59,714 OTC transactions 1238 01:46:05,200 --> 01:46:08,158 are a very serious problem. 1239 01:46:08,400 --> 01:46:10,914 To control the economy, you must control money. 1240 01:46:13,480 --> 01:46:18,640 Over-the-counter operations are generally effectuated 1241 01:46:18,640 --> 01:46:23,953 with relatively new financial instruments, derivative products: 1242 01:46:30,160 --> 01:46:33,948 It’s basically insurance contracts. In other words, 1243 01:46:35,360 --> 01:46:38,113 you get insured against future fluctuations 1244 01:46:39,200 --> 01:46:42,078 in interest rates and currency. 1245 01:46:42,320 --> 01:46:44,390 You sign a contract 1246 01:46:46,560 --> 01:46:51,509 with someone to pay in 6 months. The contract is in dollars. 1247 01:46:53,960 --> 01:46:57,270 If the dollar rises, you’re in trouble. In 6 months, 1248 01:46:57,520 --> 01:47:02,514 you’ll have to buy dollars at a 10% premium. So you take out insurance 1249 01:47:03,360 --> 01:47:06,193 on the value of the dollar. 1250 01:47:06,440 --> 01:47:11,958 A guy takes on the risk. You pay him 3% or 4% extra at the onset. 1251 01:47:12,200 --> 01:47:16,591 Whatever the dollar’s rise or fall - the guy wins if it falls - 1252 01:47:16,840 --> 01:47:20,913 you don’t move. You have insurance. That’s derivative products. 1253 01:47:21,120 --> 01:47:24,635 The interesting thing is it creates a risk economy. 1254 01:47:25,520 --> 01:47:29,479 Currency’s no longer controlled, capital flux isn’t monitored, etc. 1255 01:47:29,760 --> 01:47:32,479 So, it’s an economy where risk is maintained 1256 01:47:32,720 --> 01:47:35,996 in order to create on top of this system, 1257 01:47:36,240 --> 01:47:39,516 an insurance system where risk is covered. 1258 01:47:40,240 --> 01:47:44,995 But the difference between this and risks like car accidents 1259 01:47:45,400 --> 01:47:50,110 is that accidents are predictable. It’s the law of probability. 1260 01:47:50,600 --> 01:47:54,388 Whereas the risks in the financial markets … 1261 01:47:55,840 --> 01:48:01,119 are rare epiphenomena that can’t be statistically quantified. 1262 01:48:01,400 --> 01:48:04,153 Absolute risks, absolutely unforeseeable. 1263 01:48:04,400 --> 01:48:08,791 So these insurance contracts that crown the normal economy 1264 01:48:08,880 --> 01:48:11,633 create a 2nd layer that’s even riskier. 1265 01:48:11,760 --> 01:48:16,834 So, sometimes people take out insurance on their insurance. 1266 01:48:17,120 --> 01:48:20,112 It’s Escheresque. You create a risk pyramid. 1267 01:48:20,360 --> 01:48:23,238 And people speculate on that. 1268 01:48:23,440 --> 01:48:27,592 You create a purely speculative economy by sustaining risk. 1269 01:48:28,080 --> 01:48:33,393 A trait of contemporary capitalism is this economy where financial risk 1270 01:48:33,640 --> 01:48:38,270 is systematically maintained, and systematically marketed. 1271 01:48:42,800 --> 01:48:49,000 In the 1980s, under the sway of Thatcher and Reagan, 1272 01:48:49,000 --> 01:48:54,960 a number of countries adopted reforms to deregulate financial markets. 1273 01:48:54,960 --> 01:49:01,840 By allowing capital to flow freely, governments considerably increased 1274 01:49:01,840 --> 01:49:06,480 the power of major institutional speculators: 1275 01:49:06,480 --> 01:49:14,640 hedge funds, commercial banks, pension funds, insurance companies … 1276 01:49:14,640 --> 01:49:18,000 Now in a position of strength, 1277 01:49:18,000 --> 01:49:24,240 these entities would act as a new purveyor of neo-liberal ideology, 1278 01:49:24,240 --> 01:49:29,320 going so far as to compel the most recalcitrant States 1279 01:49:29,320 --> 01:49:32,920 to accelerate the liberalization of their economy. 1280 01:49:32,920 --> 01:49:40,400 Among the methods used to do this, speculative attacks proved to be 1281 01:49:40,400 --> 01:49:42,960 particularly effective … and devastating. 1282 01:49:42,960 --> 01:49:48,840 Certainly, the emperor’s new clothes are woven of complex mechanisms 1283 01:49:48,840 --> 01:49:53,040 that readily deflect the most curious minds. 1284 01:49:53,040 --> 01:49:58,760 But if colonialism has changed its look, its goal remains the same: 1285 01:49:58,760 --> 01:50:00,671 the concentration of capital. 1286 01:50:05,520 --> 01:50:07,192 Speculation … 1287 01:50:07,840 --> 01:50:09,671 has several instruments. 1288 01:50:12,640 --> 01:50:14,756 Without going into technical details, 1289 01:50:15,760 --> 01:50:21,710 I’d like to show what happened in the Asian Financial Crisis of ’97, 1290 01:50:24,320 --> 01:50:28,029 which led to a currency collapse in several countries, 1291 01:50:29,120 --> 01:50:33,875 countries that had been categorized as “Asian tigers”, 1292 01:50:35,720 --> 01:50:38,393 with a successful economy, etc. 1293 01:50:40,240 --> 01:50:42,879 There were various factors in this crisis, 1294 01:50:43,120 --> 01:50:47,159 but I think one of the fundamental elements 1295 01:50:47,920 --> 01:50:51,230 was the prior deregulation of the exchange market. 1296 01:50:52,000 --> 01:50:56,994 In certain cases, this deregulation was imposed, 1297 01:50:57,280 --> 01:51:02,673 if not indeed recommended by the International Monetary Fund. 1298 01:51:03,680 --> 01:51:05,591 Now, speculators 1299 01:51:07,640 --> 01:51:11,519 got their hands on the reserves of the central banks 1300 01:51:12,160 --> 01:51:15,232 through the following mechanism: 1301 01:51:16,480 --> 01:51:21,270 they speculated against national currencies 1302 01:51:22,280 --> 01:51:25,158 by selling short. 1303 01:51:25,960 --> 01:51:31,400 Short selling is speculating on a transferable security’s decrease 1304 01:51:31,400 --> 01:51:37,440 rather than on its increase, as is traditionally the case. 1305 01:51:37,440 --> 01:51:42,720 If a security is the object of massive short selling, 1306 01:51:42,720 --> 01:51:49,480 it leads to a collapse in demand and thus of the security’s price. 1307 01:51:49,480 --> 01:51:52,400 This constitutes speculative attack 1308 01:51:52,400 --> 01:51:58,800 for, in wagering massively on a decrease in value, 1309 01:51:58,800 --> 01:52:03,828 the speculators themselves bring about the decrease. 1310 01:52:04,880 --> 01:52:09,237 Say I want to short sell the Korean won. 1311 01:52:10,080 --> 01:52:13,550 I start selling huge quantities of Korean won, 1312 01:52:14,400 --> 01:52:19,758 deliverable at some future date. The contracts are 3 or 6 months. 1313 01:52:21,040 --> 01:52:24,828 When the contract comes to term, I must deliver huge quantities 1314 01:52:25,120 --> 01:52:27,554 of Korean won or Thai baht. 1315 01:52:28,840 --> 01:52:32,719 But I don’t have them. I can sell as much as I want, 1316 01:52:33,320 --> 01:52:38,394 I can sell billions of dollars’ worth of Korean won. 1317 01:52:39,680 --> 01:52:42,240 Who buys up the Korean won? 1318 01:52:42,440 --> 01:52:45,398 The central bank of Korea, 1319 01:52:45,640 --> 01:52:51,590 which is obliged through accords with the International Monetary Fund 1320 01:52:51,840 --> 01:52:53,910 to stabilize its currency. 1321 01:52:56,160 --> 01:52:58,355 Technically, what happened was, 1322 01:53:00,320 --> 01:53:03,471 when the Korean currency fell, 1323 01:53:04,480 --> 01:53:05,913 a few months later, 1324 01:53:06,160 --> 01:53:09,470 the short-selling contracts came to term 1325 01:53:10,480 --> 01:53:12,436 and that’s when … 1326 01:53:13,080 --> 01:53:17,835 there was an appropriation of the central bank reserves, 1327 01:53:17,960 --> 01:53:20,269 because the won was worthless 1328 01:53:20,520 --> 01:53:25,753 and speculators had only to buy Korean won on the spot market, 1329 01:53:26,120 --> 01:53:31,558 and then fulfill the terms of their contracts. 1330 01:53:31,800 --> 01:53:36,396 So the central bank’s buying back its own money - not too profitable. 1331 01:53:36,600 --> 01:53:39,068 And in exchange, its reserves are confiscated 1332 01:53:39,320 --> 01:53:45,236 and go into the pockets of the major Western banks. 1333 01:53:45,480 --> 01:53:47,630 That’s the mechanism. 1334 01:53:47,760 --> 01:53:51,389 Now the reserves have been sacked, 1335 01:53:52,640 --> 01:53:58,431 and this means Korea must now go to the IMF and say, 1336 01:53:59,360 --> 01:54:02,511 Our reserves have been sacked. We can’t function without them. 1337 01:54:02,760 --> 01:54:07,515 We must reimburse…” (The money hasn’t even gone to creditors yet.) 1338 01:54:07,760 --> 01:54:10,991 We must reimburse our creditors (the speculators). 1339 01:54:11,240 --> 01:54:12,434 What’s going on? 1340 01:54:12,680 --> 01:54:19,153 When the IMF grants a loan in the order of $56 billion, 1341 01:54:19,400 --> 01:54:22,676 there’s participation by a number of countries. 1342 01:54:23,240 --> 01:54:25,231 There were 24 countries, 1343 01:54:27,520 --> 01:54:32,514 because astronomical sums are needed. The American and Canadian treasuries, 1344 01:54:32,960 --> 01:54:35,520 the main Western governments. 1345 01:54:36,560 --> 01:54:40,189 For the American or Canadian treasury 1346 01:54:40,400 --> 01:54:44,678 or another Western country to help give 1347 01:54:44,920 --> 01:54:46,911 a $56-billion loan, 1348 01:54:47,800 --> 01:54:49,950 they have to raise their own debt level, 1349 01:54:50,120 --> 01:54:52,793 which means they must start selling 1350 01:54:54,080 --> 01:54:57,755 and negotiating their debt on the stock markets. 1351 01:54:58,200 --> 01:55:02,637 So, it’s the debt market. And who controls the debt market 1352 01:55:03,560 --> 01:55:08,315 for sovereign Western debt? The same speculating banks. 1353 01:55:08,560 --> 01:55:10,516 There’s a vicious circle here. 1354 01:55:11,880 --> 01:55:15,031 Attack Korea, come to its rescue, 1355 01:55:15,200 --> 01:55:19,239 confiscate its reserves, lend it money … 1356 01:55:20,480 --> 01:55:24,314 from the public funds of various Western governments, 1357 01:55:25,640 --> 01:55:29,428 and increasing the debt of these Western countries 1358 01:55:29,520 --> 01:55:34,514 requires backing from these private-sector banks, 1359 01:55:36,880 --> 01:55:41,396 the underwriters of national debts. 1360 01:55:41,640 --> 01:55:44,473 In the end, everyone goes into debt 1361 01:55:45,440 --> 01:55:47,635 except the speculators, 1362 01:55:47,760 --> 01:55:52,959 who are creditors of both Korea and the Western governments 1363 01:55:53,200 --> 01:55:56,192 who came to Korea’s rescue 1364 01:55:56,480 --> 01:55:59,313 through the intermediary of the IMF program. 1365 01:55:59,560 --> 01:56:01,278 So, what happens? 1366 01:56:03,720 --> 01:56:05,358 The Korean economy 1367 01:56:06,480 --> 01:56:08,118 is doomed to bankruptcy. 1368 01:56:08,320 --> 01:56:13,553 Its bank shares and high-tech industry are sold at a discount. 1369 01:56:16,000 --> 01:56:18,753 What’s in the process of happening 1370 01:56:18,960 --> 01:56:23,988 is the transfer of all this country’s industrial wealth 1371 01:56:24,320 --> 01:56:28,438 to American foreign investors, 1372 01:56:28,680 --> 01:56:30,716 to the point where … 1373 01:56:31,720 --> 01:56:37,397 its shares are practically taken over for an absolute pittance. 1374 01:56:38,120 --> 01:56:40,111 I’ll give you an example 1375 01:56:41,280 --> 01:56:44,716 of one of the primary Korean banks 1376 01:56:44,920 --> 01:56:48,515 that was restructured on the recommendation of the IMF, 1377 01:56:48,720 --> 01:56:52,269 following this operation, because it had conditions. 1378 01:56:53,160 --> 01:56:58,234 This bank, Korea First Bank, was sold for $450 million. 1379 01:56:58,720 --> 01:57:03,714 It was sold to Californian and Texan investors for $450 million. 1380 01:57:04,240 --> 01:57:08,279 But a condition of sale was 1381 01:57:09,120 --> 01:57:14,831 that the Korean government finance the bad debts of this bank 1382 01:57:15,080 --> 01:57:16,638 with grants, 1383 01:57:17,360 --> 01:57:21,876 subsidies that were 35 times the purchase price. 1384 01:57:22,640 --> 01:57:25,279 Something in the order of over $15 billion. 1385 01:57:25,520 --> 01:57:27,954 These American investors arrive in Korea, 1386 01:57:28,240 --> 01:57:33,473 and overnight they gain control over the whole local financial apparatus, 1387 01:57:33,760 --> 01:57:34,875 the commercial banks, 1388 01:57:35,120 --> 01:57:39,079 and they hold the debt of major Korean companies 1389 01:57:39,280 --> 01:57:41,635 like Hyundai, Daewoo, etc. 1390 01:57:41,920 --> 01:57:47,199 And they’re in a position to dictate the break-up of these companies! 1391 01:57:47,440 --> 01:57:51,149 Part of Daewoo has now been sold to GM. 1392 01:57:51,360 --> 01:57:55,035 Other Korean companies will be sold. 1393 01:57:55,760 --> 01:57:59,469 So, through a mechanism that was initially based on 1394 01:57:59,720 --> 01:58:01,631 manipulating financial markets, 1395 01:58:04,440 --> 01:58:07,876 they take possession of an entire economy. 1396 01:58:08,480 --> 01:58:12,598 Korean companies see credit dried up by bank crisis. 1397 01:58:12,720 --> 01:58:15,473 A million people affected by unemployment 1398 01:58:15,600 --> 01:58:16,953 The IMF’s ‘beggars’” 1399 01:58:17,200 --> 01:58:20,317 The most serious social crisis South Korea has faced 1400 01:58:20,480 --> 01:58:21,959 since the war began. 1401 01:58:22,240 --> 01:58:25,437 Early March, the number of unemployed surpasses a million” 1402 01:58:26,320 --> 01:58:31,560 The economic liberalization campaign led by the financial markets 1403 01:58:31,560 --> 01:58:34,960 wouldn’t have enjoyed the same success 1404 01:58:34,960 --> 01:58:40,360 without the precious collaboration of the Bretton Woods institutions, 1405 01:58:40,360 --> 01:58:45,560 which constitute another major vehicle of neo-liberal ideology: 1406 01:58:45,560 --> 01:58:49,400 the International Monetary Fund (IMF), 1407 01:58:49,400 --> 01:58:53,200 the World Bank 1408 01:58:53,200 --> 01:58:58,000 and the World Trade Organization (WTO, formerly GATT). 1409 01:58:58,000 --> 01:59:02,600 The IMF and World Bank were established in 1944 1410 01:59:02,600 --> 01:59:07,920 to ensure the stability of exchange rates and support the reconstruction 1411 01:59:07,920 --> 01:59:11,440 of countries devastated by World War II. 1412 01:59:11,440 --> 01:59:17,200 Over time, however, the U.S. and Europe have considerably altered 1413 01:59:17,200 --> 01:59:22,480 the mandate of the twin institutions, based in Washington. 1414 01:59:22,480 --> 01:59:27,280 Indeed, shortly after the U.S.’s unilateral decision in 1971 1415 01:59:27,280 --> 01:59:32,080 to put an end to the International Monetary System, 1416 01:59:32,080 --> 01:59:39,080 the IMF and World Bank were invested with an entirely new mandate: 1417 01:59:39,080 --> 01:59:43,120 to impose economic liberalization upon developing countries, 1418 01:59:43,120 --> 01:59:47,520 by fixing as a “conditionality” to granting any loan 1419 01:59:47,520 --> 01:59:51,760 the adoption of a series of neo-liberal measures. 1420 01:59:51,760 --> 01:59:59,280 Some have described this set of economic reforms as “shock therapy”, 1421 01:59:59,280 --> 02:00:04,513 while others ironically call it “the Washington Consensus”. 1422 02:00:05,520 --> 02:00:05,640 neo-liberalism or neo-colonialism? 1423 02:00:05,640 --> 02:00:13,200 neo-liberalism or neo-colonialism? 1424 02:00:13,200 --> 02:00:22,800 strong-arm tactics of the Bretton Woods institutions 1425 02:00:22,800 --> 02:00:24,720 or 1426 02:00:24,720 --> 02:00:30,477 the Washington Consensus 1427 02:00:33,000 --> 02:00:36,754 Washington, where the World Bank and IMF are headquartered, 1428 02:00:37,000 --> 02:00:40,197 started dictating to the rest of the world, 1429 02:00:40,480 --> 02:00:43,517 especially the poorest, almost-bankrupt countries, 1430 02:00:43,720 --> 02:00:46,314 how to apply sound economic science. 1431 02:00:46,520 --> 02:00:49,557 It was called “structural adjustment measures”. 1432 02:00:49,960 --> 02:00:53,236 or “the structural adjustment plan”, dictated by the IMF, 1433 02:00:53,480 --> 02:00:58,759 and bolstered with World Bank loans to the countries concerned. 1434 02:00:59,240 --> 02:01:01,310 Equatorial Guinea, 2006 1435 02:01:01,520 --> 02:01:05,479 Many dozens of countries were thrown into chaos 1436 02:01:06,600 --> 02:01:10,752 precisely because of the measures of the IMF and the World Bank, 1437 02:01:11,400 --> 02:01:14,551 of which there are many. It would take too long to outline 1438 02:01:14,800 --> 02:01:20,158 fundamental adjustment measures vs. short-term cyclical adjustments 1439 02:01:20,400 --> 02:01:21,435 but overall, 1440 02:01:22,400 --> 02:01:26,712 let’s say the 3 or 4 most important measures can be summed up. 1441 02:01:27,360 --> 02:01:31,353 first measure: reduce State expenditures 1442 02:01:32,080 --> 02:01:36,358 The first measure imposed on countries approaching default, 1443 02:01:36,640 --> 02:01:38,392 i.e., poverty-stricken, 1444 02:01:41,680 --> 02:01:44,797 was governmental non-deficit or deficit reduction: 1445 02:01:45,000 --> 02:01:47,639 the reduction of State expenditures. 1446 02:01:48,520 --> 02:01:51,239 Shrink the government, shrink its expenditures. 1447 02:01:51,840 --> 02:01:55,628 second measure: privatization 1448 02:01:57,000 --> 02:01:59,639 In privatization, who will buy? 1449 02:02:00,840 --> 02:02:03,115 There are no local operators. 1450 02:02:03,280 --> 02:02:06,078 If there were enough local money to buy 1451 02:02:06,320 --> 02:02:11,997 entire oil, phosphate or steel companies, 1452 02:02:12,800 --> 02:02:15,030 the country wouldn’t be so poor. 1453 02:02:16,960 --> 02:02:22,193 The extraversion of these Third-World impoverished economies gets so bad, 1454 02:02:22,560 --> 02:02:28,032 they sell off their last national economic interests 1455 02:02:28,320 --> 02:02:30,356 to foreign interests. 1456 02:02:31,280 --> 02:02:36,798 So, multi-nationals start buying and relocating to these countries, 1457 02:02:37,000 --> 02:02:40,276 due to low wages and dollarization. 1458 02:02:40,520 --> 02:02:46,675 It gets cheaper for multi-nationals to produce there than at home. 1459 02:02:47,360 --> 02:02:51,239 But these multi-nationals can also acquire, dirt cheap, 1460 02:02:51,520 --> 02:02:54,193 installations and production capacities, 1461 02:02:54,440 --> 02:02:57,750 like sugar production and refining, 1462 02:02:57,920 --> 02:03:01,230 oil or gas production and pre-refining, 1463 02:03:01,440 --> 02:03:05,115 gas liquefaction or mineral transport, etc. 1464 02:03:05,360 --> 02:03:10,229 at low prices, which cost these national economies years and years. 1465 02:03:10,760 --> 02:03:14,548 third measure: currency devaluation 1466 02:03:15,480 --> 02:03:18,358 Devaluing local currency means, all of a sudden, 1467 02:03:18,760 --> 02:03:20,478 for already-poor countries, 1468 02:03:21,040 --> 02:03:25,113 anything imported becomes proportionally more expensive 1469 02:03:25,920 --> 02:03:28,480 than the level of devaluation. 1470 02:03:28,600 --> 02:03:32,275 When the CFA franc was suddenly devalued by half 1471 02:03:32,400 --> 02:03:34,231 in the early ’90s, 1472 02:03:34,400 --> 02:03:39,838 well, suddenly about a third of Africa or more 1473 02:03:40,400 --> 02:03:42,834 that was using the CFA franc, 1474 02:03:42,960 --> 02:03:47,476 found itself with half its purchasing power overnight. 1475 02:03:48,240 --> 02:03:52,631 So, your wage, that lets you live at a certain level, 1476 02:03:52,840 --> 02:03:55,229 only gives you half of that. 1477 02:03:57,320 --> 02:04:01,233 That’s an immediate 100% inflation. 1478 02:04:01,800 --> 02:04:06,430 Add to that manufactured or semi-manufactured products, 1479 02:04:07,200 --> 02:04:10,829 refined products and everything you’d expect Africa, 1480 02:04:11,080 --> 02:04:13,913 West and Central French Africa, to import. 1481 02:04:14,160 --> 02:04:19,075 Suddenly with the franc cut in half, these things are twice as expensive. 1482 02:04:19,440 --> 02:04:23,592 Combine that with the effects of local devaluation, 1483 02:04:23,800 --> 02:04:28,749 and products and services suddenly cost you 4, 5, 6 times more, 1484 02:04:29,000 --> 02:04:30,752 from one day to the next! 1485 02:04:31,360 --> 02:04:35,239 Add time, and see what happens. Local products 1486 02:04:35,520 --> 02:04:39,069 made from imported semi-raw materials, 1487 02:04:39,560 --> 02:04:44,634 or that need imported binders, glues, solvents, paint, etc., 1488 02:04:44,880 --> 02:04:47,394 over a longer wavelength, 1489 02:04:48,080 --> 02:04:52,870 1 , 2, 3, 6 months later, they become 2, 3, 4 times more expensive. 1490 02:04:53,520 --> 02:04:59,675 fourth measure: reorient the national economy around export 1491 02:05:00,240 --> 02:05:04,472 If we measure the effects of making the poorest countries, 1492 02:05:04,560 --> 02:05:07,518 where the IMF and World Bank intervene, 1493 02:05:08,360 --> 02:05:11,033 boost the production of exportable products, 1494 02:05:13,040 --> 02:05:16,316 we make them compete with the same products. 1495 02:05:16,560 --> 02:05:21,554 Coffee-producing countries all start producing more coffee. 1496 02:05:21,800 --> 02:05:24,598 Cocoa, petroleum, same thing. 1497 02:05:25,560 --> 02:05:26,754 Bauxite … 1498 02:05:29,360 --> 02:05:32,796 Whatever it is … Sugar, wheat … 1499 02:05:33,680 --> 02:05:36,035 All the base products 1500 02:05:37,280 --> 02:05:41,910 suffer falling prices due to over-production. 1501 02:05:42,120 --> 02:05:46,511 Not only do their prices fall, and countries made to compete, 1502 02:05:46,760 --> 02:05:51,311 but added to this is the inflation effect from currency devaluation 1503 02:05:51,560 --> 02:05:56,190 and the automatic increase in anything the country imports. 1504 02:05:56,680 --> 02:06:00,958 We witness a kind of reversal of the countries’ interests - 1505 02:06:01,160 --> 02:06:05,278 even as we pretend to defend them - caused by this initial phenomenon. 1506 02:06:06,880 --> 02:06:09,792 All their imports are increasingly expensive, 1507 02:06:10,080 --> 02:06:13,117 while all their exports bring in less. 1508 02:06:13,600 --> 02:06:19,357 They enter a spiral of indebtedness that means that now, in 2002, 1509 02:06:20,000 --> 02:06:24,198 servicing the debt of most of the poorest countries - 1510 02:06:24,960 --> 02:06:31,308 I’m talking about countries like Bangladesh, Ruanda, Burundi, Togo - 1511 02:06:31,560 --> 02:06:35,473 countries like that, that are already minus 250th … 1512 02:06:36,400 --> 02:06:41,918 Their debt servicing alone can be up to 600 x their export revenues. 1513 02:06:42,440 --> 02:06:46,228 fifth measure: “getting the prices right” 1514 02:06:46,920 --> 02:06:49,878 Getting the prices right goes like this: 1515 02:06:50,120 --> 02:06:54,875 no subsidies for basic necessities, so no more subsidized housing, 1516 02:06:55,080 --> 02:06:59,153 no more subsidies for health, oil, rice … 1517 02:07:01,440 --> 02:07:03,908 transportation … No more subsidies, 1518 02:07:04,520 --> 02:07:06,875 in the name of the right price. What does this mean? 1519 02:07:07,120 --> 02:07:11,716 In terms of dollars, all prices become equivalent world wide. 1520 02:07:12,960 --> 02:07:17,750 If you travel with dollars, as I, a Canadian citizen, do, 1521 02:07:18,440 --> 02:07:22,513 wherever you go, products and services cost the same. 1522 02:07:22,720 --> 02:07:26,429 Whether in Cotonou, Benin, one of the poorest countries, 1523 02:07:26,720 --> 02:07:29,439 or Chicago, New York, Paris, 1524 02:07:29,640 --> 02:07:34,873 your Holiday Inn or Sheraton room, your Holiday Inn meal 1525 02:07:34,960 --> 02:07:39,476 cost about the same in dollars throughout the world. Fine. 1526 02:07:40,040 --> 02:07:45,398 But in Cotonou, capital of Benin, one of the world’s poorest countries, 1527 02:07:45,640 --> 02:07:50,191 one night at the Sheraton, where I sleep when I go there, 1528 02:07:50,440 --> 02:07:55,195 equals six months’ salary of a Benin public servant. 1529 02:07:56,040 --> 02:07:59,510 One meal in the restaurant of this Cotonou hotel 1530 02:07:59,760 --> 02:08:04,959 is a week’s work for a minor Benin official. 1531 02:08:05,520 --> 02:08:11,550 sixth measure: liberalization of investment and reverse wage parity 1532 02:08:12,520 --> 02:08:16,593 Next comes reverse wage parity. This consists in … 1533 02:08:16,840 --> 02:08:20,435 a succinct formula that slides all wages 1534 02:08:21,320 --> 02:08:23,788 down to the lowest, by sector, 1535 02:08:28,040 --> 02:08:33,717 and does so in concert with the “movement” to liberalize trade. 1536 02:08:34,560 --> 02:08:35,629 I’ll explain. 1537 02:08:35,840 --> 02:08:41,392 NAFTA is announced: the Mexico, U.S., Canada free trade zone. 1538 02:08:42,400 --> 02:08:48,270 Wages naturally slide from the American level to the Mexican level. 1539 02:08:49,120 --> 02:08:53,955 That’s what happens when Mexican, Canadian and American labour compete. 1540 02:08:54,240 --> 02:08:59,519 Relocation to Mexico means NAFTA has created employment in Mexico. 1541 02:09:00,520 --> 02:09:06,072 But in net terms, 6 or 7 years after NAFTA, 1542 02:09:08,480 --> 02:09:13,190 wages in the whole region of Leone, northern Mexico, 1543 02:09:13,440 --> 02:09:16,876 where the American multi-nationals moved in - 1544 02:09:17,480 --> 02:09:20,278 while they shut down proportionately in the U.S. … 1545 02:09:20,520 --> 02:09:23,990 There has been an elimination of jobs 1546 02:09:24,240 --> 02:09:27,471 that were high-paying, compared to Mexico, 1547 02:09:28,120 --> 02:09:32,113 to “create” jobs in Mexico 1548 02:09:32,360 --> 02:09:37,070 that are infinitely lower-paid. So, for the past 5 years, 1549 02:09:37,560 --> 02:09:42,509 the average wage in the most active, richest region of Mexico, 1550 02:09:42,760 --> 02:09:45,558 where the American multi-nationals relocated … 1551 02:09:46,440 --> 02:09:51,673 Wages dropped in net terms of purchasing power by 23%. 1552 02:09:52,560 --> 02:09:58,510 Five years ago, a General Motors worker in northern Mexico 1553 02:09:58,760 --> 02:10:04,915 could survive and maintain a family of 1 or 2 kids. 1554 02:10:05,040 --> 02:10:10,194 Today, the same worker can support only his own needs. 1555 02:10:10,400 --> 02:10:11,469 Survive alone. 1556 02:10:12,680 --> 02:10:16,912 On the eve of the summit to be held in northern Mexico, 1557 02:10:17,920 --> 02:10:23,199 they’re building in Monterey a wall to hide the slums. 1558 02:10:23,760 --> 02:10:27,150 Three meters high and kilometers long, 1559 02:10:27,400 --> 02:10:30,949 so summit participants won’t see the poverty there. 1560 02:10:31,400 --> 02:10:36,633 That’s reverse parity: sliding wages from highest to lowest by sector. 1561 02:10:36,800 --> 02:10:42,079 And now that the most modern sectors - like information technology, 1562 02:10:43,000 --> 02:10:48,438 electronics, etc. - are increasingly saleable in the Third World, 1563 02:10:48,960 --> 02:10:52,748 you have entire companies - such as Swissair I think, 1564 02:10:53,320 --> 02:10:56,437 and other companies, the steel industry, whatever - 1565 02:10:56,680 --> 02:11:00,798 that do all their accounting, financial and IT work in Bombay. 1566 02:11:02,680 --> 02:11:08,312 A Bombay accountant who does the same work as a Swiss or Canadian one 1567 02:11:08,480 --> 02:11:10,914 costs 100 times less. 1568 02:11:11,120 --> 02:11:15,398 A programmer who writes an aviation program is 200 times cheaper. 1569 02:11:16,360 --> 02:11:19,318 And so on. That’s reverse wage parity. 1570 02:11:19,760 --> 02:11:23,958 What bothers me is that when we combine these measures - 1571 02:11:24,200 --> 02:11:27,317 devaluation, export, debt servicing, 1572 02:11:27,960 --> 02:11:30,554 privatization, shrinking public budgets, 1573 02:11:30,800 --> 02:11:33,872 forced public lay-offs making more unemployed … 1574 02:11:34,120 --> 02:11:36,759 Combine all these with the prices and wages, 1575 02:11:37,000 --> 02:11:40,037 and we come to the situation we’re in today: 1576 02:11:40,320 --> 02:11:45,678 rich countries are infinitely richer and poor countries infinitely poorer. 1577 02:11:46,640 --> 02:11:50,997 And I’m alarmed to see the World Bank and the IMF 1578 02:11:51,240 --> 02:11:56,951 trying to repeat in Argentina exactly what massacred the Argentine economy. 1579 02:11:57,800 --> 02:12:02,590 It’s like we never learn. Why not? There’s a reason. 1580 02:12:03,200 --> 02:12:08,274 It’s in their interest that this ideology that explains the world, 1581 02:12:08,520 --> 02:12:11,990 continue to survive, as long as the planet, 1582 02:12:12,320 --> 02:12:14,880 in its entirety, is exploitable this way. 1583 02:12:17,920 --> 02:12:22,710 At the International Monetary Fund, the right to vote is exercised 1584 02:12:22,960 --> 02:12:25,394 within the board of directors. 1585 02:12:25,520 --> 02:12:29,593 Now, it’s a right based on … 1586 02:12:29,920 --> 02:12:32,115 financial participation, 1587 02:12:32,360 --> 02:12:35,397 or the financial contribution of each State. 1588 02:12:35,920 --> 02:12:38,832 In fact, it’s the IMF shareholders. 1589 02:12:39,080 --> 02:12:42,197 Same for the World Bank. It’s not like the U.N. 1590 02:12:42,440 --> 02:12:46,911 The main shareholders of the IMF are, of course, 1591 02:12:47,200 --> 02:12:51,478 the U.S., Germany, Japan, Great Britain, France, etc. 1592 02:12:51,680 --> 02:12:55,309 But ultimately, that’s just one aspect, because … 1593 02:12:55,560 --> 02:13:01,430 under the political representation in an intergovernmental organization, 1594 02:13:01,760 --> 02:13:05,275 there are other issues. It’s the backroom. 1595 02:13:06,400 --> 02:13:10,996 It’s influence-peddling between Wall Street, on one hand, 1596 02:13:11,240 --> 02:13:16,030 and Washington. It’s the connections between the IMF and the think tanks: 1597 02:13:16,320 --> 02:13:19,232 the Heritage Foundation, the Brookings Institute. 1598 02:13:19,440 --> 02:13:23,672 The American treasury’s involved. The U.S. Federal Reserve. 1599 02:13:25,880 --> 02:13:30,431 This all forms what’s been called “the Washington Consensus”. 1600 02:13:30,560 --> 02:13:32,278 It’s a power game. 1601 02:13:33,480 --> 02:13:35,880 In 2005, Paul Wolfowitz, 1602 02:13:35,880 --> 02:13:40,880 one of the most radical ideologues of imperialist politics 1603 02:13:40,880 --> 02:13:44,040 and President Bush’s warmonger, passed directly 1604 02:13:44,040 --> 02:13:50,720 from the U.S. Defense Department to being head of the World Bank. 1605 02:13:50,720 --> 02:13:53,480 This appointment put an end 1606 02:13:53,480 --> 02:13:58,240 to any ambiguity about the World Bank’s real goals 1607 02:13:58,240 --> 02:14:03,189 and revealed the true face of the Bretton Woods institutions. 1608 02:14:11,840 --> 02:14:14,593 Bretton Woods conference, Mount Washington Hotel, 1944 1609 02:14:14,800 --> 02:14:18,429 After the war, naturally there was the creation 1610 02:14:19,440 --> 02:14:22,671 of the IMF and the World Bank. 1611 02:14:23,760 --> 02:14:28,197 In the mind of John Maynard Keynes, the architect of these institutions, 1612 02:14:28,760 --> 02:14:32,196 a third thing was needed. 1613 02:14:32,480 --> 02:14:37,395 A third organization, the International Trade Organization. 1614 02:14:37,640 --> 02:14:40,279 This didn’t work. The Americans didn’t want it. 1615 02:14:41,600 --> 02:14:44,194 So, as a fallback position, 1616 02:14:44,600 --> 02:14:46,079 GATT was created. 1617 02:14:49,600 --> 02:14:53,957 It was created in ’47 and was supposed to take care of 1618 02:14:54,080 --> 02:14:59,313 lowering customs duties on industrial products. 1619 02:15:00,000 --> 02:15:02,309 GATT worked fairly well 1620 02:15:02,520 --> 02:15:06,354 because during its 50 years of existence, 1621 02:15:08,520 --> 02:15:12,149 there were major reductions in duties, 1622 02:15:12,360 --> 02:15:17,593 which went from an average of 40% to 50% 1623 02:15:18,160 --> 02:15:20,037 down to 4% or 5%. 1624 02:15:20,280 --> 02:15:24,796 But that covered only industrial goods. Products. 1625 02:15:26,240 --> 02:15:28,595 So, the need was felt, 1626 02:15:28,800 --> 02:15:34,352 primarily by transnational financial companies 1627 02:15:35,160 --> 02:15:37,594 to create an organization 1628 02:15:38,600 --> 02:15:42,354 that would cover many more domains 1629 02:15:43,040 --> 02:15:46,430 than just industrial products. That’s why, 1630 02:15:48,000 --> 02:15:52,994 at the end of the Uruguay Round, the final GATT negotiation cycle, 1631 02:15:53,960 --> 02:15:58,829 the decision was made to create the World Trade Organization, 1632 02:15:59,760 --> 02:16:04,914 which became a reality on January 1, 1995, 1633 02:16:05,120 --> 02:16:10,069 and covers a multitude of agreements. Not just the perennial GATT 1634 02:16:10,320 --> 02:16:12,675 but the agricultural accord, 1635 02:16:12,800 --> 02:16:16,475 the TRIPS accord on intellectual property, 1636 02:16:16,600 --> 02:16:21,754 the general accord on the service trade, a huge thing that covers 1637 02:16:22,400 --> 02:16:25,153 11 main areas and 160 sub-areas, 1638 02:16:25,360 --> 02:16:28,716 so that all human activities are found there, 1639 02:16:29,920 --> 02:16:32,593 covered by GATT regulations: 1640 02:16:32,840 --> 02:16:36,196 education, health, culture, environment. 1641 02:16:36,480 --> 02:16:40,029 There are other technical agreements 1642 02:16:40,320 --> 02:16:44,552 that may seem technical, but that are extremely political: 1643 02:16:45,000 --> 02:16:48,276 the accords on technical trade barriers, 1644 02:16:49,000 --> 02:16:52,674 on sanitary and phytosanitary measures. 1645 02:16:52,959 --> 02:16:57,511 These are accords on standards that various members, i.e., States, 1646 02:16:58,000 --> 02:17:00,308 can put in place 1647 02:17:01,000 --> 02:17:06,074 and which declare that certain norms are technical barriers to trade. 1648 02:17:06,400 --> 02:17:10,712 Perhaps lesser known, but the most important of all 1649 02:17:11,240 --> 02:17:14,277 is the Dispute Settlement Understanding, 1650 02:17:14,879 --> 02:17:19,510 which is the very powerful judicial branch 1651 02:17:19,760 --> 02:17:21,990 of the World Trade Organization, 1652 02:17:22,240 --> 02:17:26,790 which enables it to settle disputes among members 1653 02:17:27,040 --> 02:17:29,429 and exercise jurisprudence. 1654 02:17:29,959 --> 02:17:32,155 So, who judges? 1655 02:17:32,719 --> 02:17:37,748 We don’t really know. Experts are chosen from lists. 1656 02:17:40,040 --> 02:17:43,510 Countries may recommend someone for these lists. 1657 02:17:43,760 --> 02:17:46,478 They’re generally private citizens. 1658 02:17:46,719 --> 02:17:51,510 Business lawyers or sometimes former business executives. 1659 02:17:52,160 --> 02:17:56,039 But they’re unidentified. They meet in secret, 1660 02:17:56,320 --> 02:17:58,072 generally in three’s. 1661 02:17:59,200 --> 02:18:00,951 They decide fairly quickly. 1662 02:18:01,240 --> 02:18:04,596 There’s also an appeals process, 1663 02:18:04,840 --> 02:18:08,913 but appeals have the same conditions: a new panel, 1664 02:18:10,080 --> 02:18:11,832 and it’s done in secret. 1665 02:18:12,080 --> 02:18:18,030 What’s important to know about the DSB, the Dispute Settlement Body, 1666 02:18:18,240 --> 02:18:20,117 is that it’s at once 1667 02:18:21,480 --> 02:18:25,678 the legislator, the jurist and the executive, 1668 02:18:25,920 --> 02:18:31,630 because it renders verdicts and establishes jurisprudence. 1669 02:18:32,639 --> 02:18:35,950 It places itself above all the laws 1670 02:18:36,160 --> 02:18:38,389 that have been passed 1671 02:18:38,719 --> 02:18:42,508 by the countries’ individual legislatures, 1672 02:18:42,760 --> 02:18:48,153 but also above international law, established laboriously over 50 years. 1673 02:18:48,240 --> 02:18:49,593 Human rights, 1674 02:18:51,559 --> 02:18:54,518 multi-lateral conventions on the environment, 1675 02:18:55,559 --> 02:18:59,838 the basic labour conventions of the International Labour Organization. 1676 02:19:00,080 --> 02:19:04,834 All this is forgotten and verdicts are rendered at the DSB 1677 02:19:05,040 --> 02:19:07,793 that say, “Business trumps all, 1678 02:19:08,959 --> 02:19:13,795 and we don’t want to hear about your environmental conventions.” 1679 02:19:14,080 --> 02:19:19,074 And it’s executive because it has the power to impose sanctions. 1680 02:19:19,840 --> 02:19:23,674 When a country disagrees with its verdict, it’s told, “Fine. 1681 02:19:24,639 --> 02:19:29,555 Don’t make your legislation conform to our verdict, but you’ll pay. 1682 02:19:29,799 --> 02:19:31,313 You’ll pay annually, 1683 02:19:33,280 --> 02:19:38,718 through customs duties that your adversary in this settlement process 1684 02:19:38,959 --> 02:19:42,669 will determine.” So when the U.S. decides 1685 02:19:43,360 --> 02:19:46,716 to impose duties on Europe, for France, 1686 02:19:46,959 --> 02:19:50,839 on foie gras, mustard and roquefort, 1687 02:19:51,040 --> 02:19:53,793 it’s perfectly within its rights. 1688 02:19:54,400 --> 02:20:00,589 And it’s expensive. And few countries can afford this annual leaching. 1689 02:20:02,280 --> 02:20:08,037 At the WTO, various negotiations go on at the same time. 1690 02:20:08,520 --> 02:20:13,230 A country with no ambassador in Geneva, 1691 02:20:13,440 --> 02:20:16,273 or that shares one with other countries, 1692 02:20:16,520 --> 02:20:22,231 as is the case with the Africans and with many small micro-States … 1693 02:20:26,680 --> 02:20:31,470 It’s impossible for them to follow negotiations. 1694 02:20:32,360 --> 02:20:38,629 So, the South doesn’t know what’s going on in all areas, 1695 02:20:38,880 --> 02:20:41,952 and they say so openly. One Southern ambassador 1696 02:20:42,240 --> 02:20:45,357 said, “The WTO is like a multiplex theatre. 1697 02:20:45,680 --> 02:20:49,593 You must pick a film, you can’t see them all.” 1698 02:20:50,880 --> 02:20:55,237 So they pick only what seems important to their country. 1699 02:20:55,760 --> 02:20:58,479 So who really makes the decisions? 1700 02:20:58,720 --> 02:21:03,077 They say it’s by consensus. There’s never been a vote. 1701 02:21:04,080 --> 02:21:09,438 And the American ambassador said a vote would be a very bad precedent. 1702 02:21:09,640 --> 02:21:11,870 So much for democracy. 1703 02:21:12,960 --> 02:21:16,589 In reality, it’s the Quad. The Quad is 4 countries - 1704 02:21:16,840 --> 02:21:21,709 Canada, the U.S., the European Union and Japan - 1705 02:21:22,240 --> 02:21:26,233 that meet all the time and have numerous staff 1706 02:21:26,720 --> 02:21:28,153 at the WTO, 1707 02:21:28,360 --> 02:21:31,352 and that come to their own consensus 1708 02:21:31,560 --> 02:21:34,836 and come back before the plenary assembly 1709 02:21:35,080 --> 02:21:37,958 and say, “Well, you agree, don’t you?” 1710 02:21:40,480 --> 02:21:45,873 And it’s very hard for Southern countries to say no. 1711 02:21:46,120 --> 02:21:48,759 It takes courage and they must be certain, 1712 02:21:48,960 --> 02:21:53,556 because pressure tactics against them exist. 1713 02:21:54,480 --> 02:21:56,357 And don’t delude yourself. 1714 02:21:56,440 --> 02:22:02,515 If you’re dependent on the IMF or have problems with the U.S., 1715 02:22:02,760 --> 02:22:06,833 you know you can’t step out of line. 1716 02:22:07,840 --> 02:22:13,360 Certainly, the financial markets and the Bretton Woods institutions 1717 02:22:13,360 --> 02:22:18,920 have become privileged instruments of the neo-liberal conquest. 1718 02:22:18,920 --> 02:22:23,120 But some countries still obstinately refuse 1719 02:22:23,120 --> 02:22:26,560 to join this forced march. 1720 02:22:26,560 --> 02:22:30,920 That’s when colonialism sheds its new suit 1721 02:22:30,920 --> 02:22:35,200 and comes forth in its old warrior gear. 1722 02:22:35,200 --> 02:22:42,920 From the break-up of Yugoslavia to the war in Afghanistan via Darfur, 1723 02:22:42,920 --> 02:22:49,960 post-Cold War conflicts hinge on very different issues 1724 02:22:49,960 --> 02:22:57,800 than the ones Western propaganda presents as new “military humanism”. 1725 02:22:57,800 --> 02:23:03,960 Control over resources, financial flux and geostrategic space - 1726 02:23:03,960 --> 02:23:11,240 like the dictates of the IMF, the World Bank and the WTO - 1727 02:23:11,240 --> 02:23:17,440 ensure the domination of mega- corporations and giant capitalists 1728 02:23:17,440 --> 02:23:20,360 over the entire planet. 1729 02:23:20,360 --> 02:23:25,160 Also, the colonial governments that the conquerors have installed 1730 02:23:25,160 --> 02:23:30,400 have soon moved to adopt the dogma of neo-liberal ideology. 1731 02:23:30,400 --> 02:23:34,234 And the encirclement is complete. 1732 02:23:35,240 --> 02:23:35,400 neo-liberalism or neo-colonialism? 1733 02:23:35,400 --> 02:23:42,920 neo-liberalism or neo-colonialism? 1734 02:23:42,920 --> 02:23:50,600 strong-arm tactics of military humanism 1735 02:23:50,600 --> 02:23:52,520 or 1736 02:23:52,520 --> 02:23:58,197 war is peace 1737 02:24:02,040 --> 02:24:04,918 The Dayton Accords were signed in ’95 1738 02:24:05,520 --> 02:24:07,590 on an American military base. 1739 02:24:08,320 --> 02:24:12,836 And if we consult the text of these accords, 1740 02:24:13,840 --> 02:24:18,072 we see the Constitution of Bosnia-Herzegovina appended 1741 02:24:18,320 --> 02:24:19,799 to the Dayton accords. 1742 02:24:20,040 --> 02:24:25,398 This constitution was written by American consultants and lawyers, 1743 02:24:25,800 --> 02:24:30,555 who got together and wrote a fundamental document 1744 02:24:31,000 --> 02:24:34,788 without so much as a constituent assembly 1745 02:24:35,040 --> 02:24:37,395 of Bosnia-Herzegovina citizens. 1746 02:24:37,760 --> 02:24:40,797 And we can read in this constitution 1747 02:24:43,080 --> 02:24:45,958 prepared by the United States, 1748 02:24:49,600 --> 02:24:50,999 Article X: 1749 02:24:52,040 --> 02:24:54,838 The central bank of Bosnia-Herzegovina 1750 02:24:55,520 --> 02:25:02,119 shall not function as a central bank. It must function as a currency board. 1751 02:25:04,400 --> 02:25:07,437 In other words, a colonial bank, 1752 02:25:07,640 --> 02:25:11,633 with no chance of creating money. 1753 02:25:11,880 --> 02:25:16,954 Meaning, it’s completely trapped by its external creditors. 1754 02:25:17,320 --> 02:25:22,030 Well, that’s the model that currently exists in Argentina. 1755 02:25:22,280 --> 02:25:28,150 Moreover, in the Bosnia-Herzegovina Constitution, written in Dayton, 1756 02:25:29,000 --> 02:25:30,194 we read that 1757 02:25:30,800 --> 02:25:36,796 the IMF will nominate the president of Bosnia-Herzegovina’s central bank, 1758 02:25:37,120 --> 02:25:39,350 and this person … 1759 02:25:39,600 --> 02:25:42,194 may not be a citizen 1760 02:25:43,080 --> 02:25:45,913 of either Bosnia-Herzegovina or a neighbouring country. 1761 02:25:46,160 --> 02:25:50,358 In other words, we see that this constitution, 1762 02:25:50,560 --> 02:25:52,357 which is totally fabricated 1763 02:25:52,560 --> 02:25:57,953 and has no citizen base within Bosnia-Herzegovina, 1764 02:25:58,640 --> 02:26:01,279 is installing a colonial government. 1765 02:26:02,080 --> 02:26:07,074 We don’t call it that. We say it’s the international community … 1766 02:26:07,360 --> 02:26:12,639 But ultimately we see that all the administrative structures 1767 02:26:13,680 --> 02:26:16,478 are dominated by foreigners. 1768 02:26:16,960 --> 02:26:22,318 Budgets are dominated by foreigners. Monetary policy is non-existent. 1769 02:26:26,120 --> 02:26:28,759 Nevertheless, the Dayton Accords 1770 02:26:29,000 --> 02:26:34,677 are now being presented by the so-called international community 1771 02:26:34,880 --> 02:26:39,237 as the answer to the problems of various countries. 1772 02:26:39,440 --> 02:26:44,116 They’d like to establish the same management model - 1773 02:26:46,760 --> 02:26:49,479 colonial administration - 1774 02:26:51,240 --> 02:26:54,232 in countries like Macedonia and Yugoslavia. 1775 02:26:55,520 --> 02:26:58,671 Indeed, they talk about a mosaic. 1776 02:26:58,800 --> 02:27:00,950 A mosaic of protectorates. 1777 02:33:09,040 --> 02:33:12,589 Adaptation: Kathleen Fleming Anrà Médiatextes, Montréal 1778 02:33:13,040 --> 02:33:16,589 srt & ripped by Tokadime