DEAD PARROT

Number 31 -- Saturday, June 28, 2003

WHITHER GLOBALIZATION?

PART ONE: TIN MAN TRADING COMPANY

Robert Zoellick, the United States trade representative, is to "trade" what tactical nukes are to a battlefield: he's there to make things as one-sided as possible. It was Zoellick who warned Lula da Silva that if Brazil declined to join a free trade area on US terms, it would be left with Antarctica as its sole export market (see DP #7: South of the Border). Now he's at it again, trying to force genetically modified food down the throats of the European Union (NY Times, 6/20).

The GM food controversy (with which we'll deal more fully next week) is both interesting in itself and exemplary of the tensions and ambiguities that shadow globalization. With the Republican Tabernacle Choir singing hosannas to the "free markets" that are to revolutionize the world economy, these raw spots may at first be hard to notice. If a concept has "free" in the title, what can be wrong with it? Opponents, so runs the refrain, are luddites, marxists, hippies--a rabble of superstitious smashers who don't understand that the WTO and the GATT are there to help them move on to a benign new order, under which the meanest subsistence farmer in Pakistan or Peru will be able to pick up a cell phone and order his broker to sell IBM short. The alternative view, which seems to be widely shared abroad, holds that the whole apparatus is designed to advance the interests of American corporations and maintain the flow of luxuries to people in the industrialized world and that the poor and vulnerable in other countries stand to gain almost nothing from the deal. Unfortunately, we have given the proponents of this economic imperialism theory a great deal to work with.

What we import so rapaciously is no more damaging than what we demand the right to export at will, such as tobacco. Now that umpteen Surgeons-General have put a damper on the US market, the cigarette industry is determined to increase sales abroad and has purchased the Bush administration's enthusiastic support. (A generous 79% of tobacco contributions went to Republicans in 2002 [www.opensecrets.org].) According to the New Republic (1/20), one of Bush's first moves after being granted "fast track trade authority" by Congress was to strike an accord with Chile eliminating tariffs on most goods. Zoellick at first promised that the 8% Chilean tariff on American cigarettes could stay put, then at the last minute insisted that it, too, be removed.

Philip Morris actually manages to poison some Third World countries both coming and going. Take Mexico. Not only does PM manufacture 60% of the cigarettes sold there, but it imports a great deal of Mexican tobacco, which is cheap to produce (Boston Globe, 4/27). At $7 a day for a Huichol Indian picker, labor costs won't break the bank; and agreeably lax pesticide controls make it possible to bombard the crop with chemicals that would violate US laws. The result for Mexico's tobacco region: a pesticide poisoning rate that is 24 times that of California. PM's spokesman blames the problem on local landowners: "At the end of the day," he says, "they are free to decide how to treat their workers, where to get them from and what to give them." Freedom again--it's just another word for something more to gain.

In the interests of freedom, the administration has tried its hardest to scuttle the World Health Organization's Framework Convention on Tobacco Control. It wants license to pick and choose which treaty provisions US companies must observe and is concerned (can you see the Tobacco Institute's lips moving?) that limits on advertising would violate First Amendment rights (Times, 5/1). The issue here, as Derrick Jackson observed in a trenchant Globe column (3/4), is a weapon of mass destruction that dwarfs anything even Bush's most extravagant fantasies attributed to Hussein. Cigarettes now kill four million people a year, and without active steps of the kind mandated by the Convention, WHO expects the figure to hit 10 million a year by 2030. The treaty became available for signing on 6/16. As of 6/20, 40 countries and the European Union had signed. The United States was not among them.

DP REVIEWS

That war presents a good chance to turn a buck is not exactly a new idea in human history, but the last couple of centuries have both redefined the practice of it and increased the profitability exponentially. As the more direct forms of plunder began to acquire a certain moral stigma, people saw that much greater fortunes could be made in supply; and the industrial revolution provided a vast variety of lethal things to be supplied and a lucrative system for supplying them in bulk. Death, which had been a handicraft, began to roll off the assembly line. A few people got very, very rich.

The archetypal profiteers are the Krupp family of Essen, Germany. Manchester's classic study traces the cozy triangular relationship they developed with government and military--an unholy menage à trois that produced three major wars in 70 years and set the pattern for similarly fruitful ventures in other countries, such as our own. The patriarch of the family weapons trade was Alfred, who delivered his first steel gun barrel to the Prussian army in 1847. The general staff, a conservative group, preferred to stick with iron and bronze, but the obsessive Krupp was a marketing genius and would not be denied. After a sharp setback when several of his breechloaders blew up and killed their crews in the war with Austria (1866), he more than recouped in the Franco-Prussian War, as improved versions shattered the French ranks at Sedan, mauled the defenders of Paris, and set the stage for Wilhelm of Prussia to declare himself Kaiser of a new German Empire. Alfred, now the Kanonenkönig, was among the most favored citizens of the Reich.

Of course Alfred believed strongly in "free trade" and did his best to sell to everybody. An international arms race was much to his advantage, and he spurred it vigorously, inviting observers from 17 foreign countries to a "Bombardment of the Nations" trade show at his firing range in Meppen in 1879 and winning many new customers with the fearsome display his gunners put on. He perfected the art of planned obsolescence, developing artillery that would pierce the current armor and then armor that would resist the new artillery in an ongoing spiral of destructiveness. After World War I, his heirs, who held the patent on a type of shell that had killed more than a million German soldiers, demanded and received a royalty from the British manufacturers.

Despite such conflicts of interest and the slight embarrassment they sometimes occasioned, the Konzern remained a German national treasure. Manchester shows how a doting government takes care of its arms industry. When Alfred's son Fritz, who had inherited the firm, debauched a gaggle of little Italian boys in a grotto he had built for the purpose on Capri, Kaiser Wilhelm II repressed the Social Democratic newspaper that broke the story and saw to it that Fritz's distraught wife was confined to a mental hospital before she could compound the damage. When Fritz then committed suicide without a male heir, Wilhelm, regarding a Kononenkönigen as unthinkable, handpicked a husband for Fritz's daughter Bertha (later of eponymous "Big Bertha" fame) and decreed that the lucky bridgegroom, Gustav von Bohlen und Halbach, henceforth would be surnamed Krupp. (Manchester's description of the Kaiser--"an irresponsible, pompous, impulsive popinjay" who "never stopped playing at war"--has a decidedly contemporary ring.)

Gustav proved an excellent choice, even after the popinjay was hustled into Dutch exile in 1918. He began violating the Versailles treaty before the ink was dry, and, when the French occupied the Ruhr to enforce reparations in 1923, he made brilliant use of a propaganda opportunity that soon fed Nazi myth: a squad of 11 Frenchmen fired on a threatening crowd of 30,000 Krupp workers, killing 13. Gustav staged the funeral as a pageant of national martyrdom--black wreaths, massed flags, the company choir, 300,000 mourners, and a Catholic bishop who cried "Murder!" at graveside. No one said a word about the millions who had been murdered for Krupp profits in the preceding 50 years. When the occupiers sentenced Gustav himself to prison for inciting a riot, another chapter in the Deutschland-as-victim narrative was complete. Like the America-as-victim narrative after 9/11, it made up in emotional leverage what it lacked in historical balance.

Gustav served seven months of a 15-year term. A decade later, he and a posse of fellow industrialists coughed up several million marks for the Nazis in the election of 1933, encouraged by Göring's assurance that there would be no more elections for at least the next 10 years and possibly the next 100. Between 1933 and 1943, Krupp both tripled its assets and earned such gratitude from the Führer for its contributions to his Deutschland-as-avenger scenario that he approved a special law governing the firm's succession and exempting it from inheritance taxes. By this time Gustav was senile and the heir, Alfried, had his hands full. Not only did he have the works in Essen to supervise, but he had to travel throughout occupied Europe, seizing the defeated countries' industrial assets for Krupp and marshalling slave labor from Auschwitz and other camps to build and staff new factories to replace the ones the allies were bombing. It was a lot for one man, but Alfried had his great-grandfather's tenacity and was still trying to maintain production when an American patrol arrived at the family castle to arrest him in April, 1945.

Does the story end here abruptly, with the death mills flattened and Herr Krupp at the end of a rope? To expect such a denouement would be to overestimate our ability to learn from even the most painfully repeated lessons. It would also be to underestimate the hypnotic power that what Bushonomics calls "wealth creation" may exert on its admirers. Alfried did not swing with the major Nuremberg defendants. He was sentenced to 12 years and the confiscation of all his property. The confiscation never took place, and Alfried was released in 1951 on orders from American High Commissioner John J. McCloy. The Cold War had begun and a re-industrialized West Germany in the Free World camp seemed worth a little selective amnesia. Soon Alfried was hosting shooting parties for the U.S. and British ambassadors, launching a new yacht at Kiel, and becoming one of mankind's first billionaires.

As for the slaves who managed to survive starvation diets, torture by company guards, nightly air raids, and the death camps to which many of them were sent in the last weeks of the war, they received scant compensation for their ordeal. Some of the Jews among them brought suit and were eventually given payments of $500-750 apiece. When Gentiles asked for the same, they received rejection letters suggesting that there was nothing left--the Jews had cleaned Krupp out! In fact, Manchester notes, the cost of the settlement had been "less than one-fifth of one percent of the family fortune." Ill-gotten money, it seems, can be the hardest kind to part with.