Shaping Globalization: Civil Society, Cultural Power and Threefolding
by Nicanor Perlas

Co-optation: The Ironic Fruit of the Battle of Seattle?

Civil society’s great victory in the Battle of Seattle may make the question of identity seem a minor detail. But already this victory is triggering a subtle backlash–a backlash that will increasingly threaten the very opportunities that the victory made possible. The backlash can only be adequately addressed if the issue of the nature and identity of civil society is also addressed.

To understand the above challenge, we need to take a look at how the Seattle debacle affected the thinking and strategies of the power establishment behind elite globalization.

Figure 4 presents an idealized flow chart of developments after the Battle of Seattle. And I am using the word, "idealized" advisedly. While we can discern general tendencies and even a hardening of certain positions, reality is more complex. It is possible for an institution to actually move towards two different and even conflicting positions, depending on time, place, and issue. With this caveat, let us first take a look at what is happening on the side of the power structure behind elite globalization.

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Cracks in the Power Establishment

The Battle of Seattle has demonstrated to those who hold the reins of power that there is now a third global force that can neutralize their global ambitions. So a debate is going on within their constituency, a debate that is weakening the consensus within the elite establishment.

One side is saying: Let us maintain the status quo. We are high government officials elected by the people. We have the social legitimacy to lead society. And who are these people behind civil society anyway? They are not representative of the people. They just assert their own significance and are interfering with our mandate to help the poor. Therefore, there is no need to change the course of (elite) globalization, no need to take seriously what civil society is saying. Instead let us aggressively criticize civil society and erode its public image and legitimacy. In this way, we can lessen and ultimately remove the influence of civil society from our economic and political affairs.

Charles Krauthammer, a writer for the highly influential Time magazine, speaks for die-hard worshippers of elite globalization who have the above point of view.

‘The mere words socialism and communism,’ wrote George Orwell 62 years ago, ‘drew towards them with magnetic force every fruit-juice drinker, nudist, sandal-wearer, sex maniac, Quaker, ‘Nature Cure’ quack, pacifist and feminist in England.’ Today it is the bogeymen of globalization and world trade that bring out their own kooky crowd. There they were in Seattle last week: Zapatistas, anti-Nike-ites, butterfly defenders. They joined steelworkers and the Sierra Club, Ralph Nader and Pat Buchanan in a giant anti-trade jamboree.

The mayhem was ecumenical. You had your one-world paranoids, who stay up nights fretting that David Rockefeller, the Trilateral Commission and a Wall Street cabal run the world through such shell organizations as the WTO. And you had your apolitical Luddites, who refuse to accept that growth, prosperity and upward living standards always entail some dislocation. A century ago, they tried to destroy the satanic mills of industrializing Europe. Today they want to stop the global redistribution of labor, in which previously starving Third World peasants get their start with low-paying jobs while First World workers shift to the more antiseptic high-skill information economy.

. . . But the demonstrators of yesteryear opposed military intervention in places like Vietnam, El Salvador and Nicaragua on the grounds that the real problem in these places was not communism but poverty. And the solution was not war but economic assistance. . . . Well, it turns out that the best cure for the poverty the left so agonized about then is precisely what the left is demonstrating against today–capitalism and trade. In one country alone, China, capitalism and trade have lifted more people out of poverty in a single generation than ever before in human history.

. . . Of course, earning a few dollars a day making running shoes is undesirable compared with the life of Western workers. But it is infinitely better than the subsistence farming these workers have left behind–and to which they would be forced to return should their supposed friends succeed in stopping trade by imposing Western-style labor and environmental standards that no Third World manufacturer could meet. . . . Some champions.

The cynicism of Krauthammer is echoed by the editors of The Economist.

As the dust has settled and the tear gas has dispersed, a new parlour game has taken hold. People are vying to decide who won, and who lost, from the failure of the World Trade Organisation’s meeting in Seattle last weekend. Did the protestors, whether greens, trade unions or ‘anarchists’ win? Did Bill Clinton, or Mike Moore (the head of the WTO) or big business lose? As the game is played, . . . one group, representing more than 5 billion of the world’s 6 billion people, sits bemused and befuddled, more or less ignored–just as in Seattle. These 5 billion live in developing countries, and include the poorest of the world’s poor. They are the real losers from this whole sorry episode.

Those who wish to claim to have been the winners now also claim that last weekend marked the high point of globalisation, in general and freer trade in particular. On this view, globalisation will now at least be halted, but preferably even be forced into reverse. The battle to prevent this from happening needs now to begin. But as that fight takes place, it is as well to be clear about who would stand to lose most if globalisation really were to be pushed sharply backwards–or indeed, simply further liberalisation fails to take place. It is the developing countries. In other words, the poor. . . .

Free trade, like freedom in general, is not a panacea. It is not likely to bring better welfare on its own. But also, it is not likely simply to enrich multinationals and destroy the planet. Trade is about greater competition, which weakens the power of vested interests. It is about greater opportunity for millions rather than privileges for the few. It is about more countries joining the handful–Japan, South Korea, Singapore and a few more–that this century have closed the gap on the West and transformed the lives of their people. Ten years ago, when the fall of the Berlin wall signaled the failure of communism and other forms of autarchic central planning, it looked as if a new chance had arrived for the 5 billion poor to join the world economy and improve their lives. That chance remains. It must not be thrown away, amid the debris of Seattle.

Another block within the establishment is saying: We can no longer keep out civil society from proclaiming their perspective on burning national and global issues. This has been clearly demonstrated in the Battle of Seattle and in the defeat of our MAI initiative. Furthermore, global civil society also seems to be gaining respectful adherents from millions around the world. Some of these supporters are even coming from among our own ranks, due to disenchantment with the visible failure of our worldview. It seems that our neo-liberal economic approach, while powerful in many ways, has reached a kind of limit. It has not been successful in dealing with world poverty and the environmental crisis. It cannot stop the volatility of the financial markets that have melted down a number of economies around the world. Social unrest is increasing in many places in the world, making these areas unsafe for foreign direct investment.

Therefore, we should be pro-active and bring civil society to the table for dialogue and discussions. There may even be instances where we can develop innovative partnerships with them. However, we must realize that civil society will bring in a development perspective that will be quite different from the neo-liberal framework that we have been propagating around the world for the last two decades or so. So we must be prepared to address their demands and aspirations.

The editors of Business Week are among this group of influential members. They see the writing on the wall.

In an era of unprecedented prosperity, why is there a growing backlash in America against globalization? The benefits of free trade may appear obvious to CEOs, policy-makers, and pundits, but denial of a rising wave of public anger against trade could prove dangerous. Those who marched in Seattle and Washington D.C., reflect a disparate but real collection of grievances that simply will not go away. That they are joined by growing numbers of protesters in Europe makes their cause all the more powerful. Champions of free trade must begin to understand the underlying reasons behind the protest, and craft creative solutions to maintain the momentum of globalization. Unless measures are taken now, with the world economy in a strong upswing, the backlash will become much worse once the economic cycle begins to turn down. Denial is not an effective strategy.

A new Business Week poll highlights the fragility of public support for globalization in the U.S. . . . Forty-seven percent of the people believe that expanded trade leads to a decrease in jobs; 68% think trade with Mexico and other low-wage countries lowers wages in America; and 37% describe themselves as protectionists–only 10% say they are free traders. And 79% say Congress should give China permanent access to U.S. markets only when it agrees to meet human-rights and labor standards. These are startling figures to those, including Business Week’s editors, who are convinced that free trade incontrovertibly generates growth, competitiveness, jobs, and wealth for all involved.

… How can the public consensus about globalization be reconstructed? The easiest step is to open up the decision-making process at the IMF, WTO, and World Bank. Ending the secrecy would give labor and environmental groups a chance to join in the global conversation over policy. It would open the doors to Asian, African, and Latin American economists, who often have a much better feel for the consequences of IMF actions. And it would provide the kind of fresh insight that might prevent the cloistered IMF from making serious mistakes in applying cookie-cutter prescriptions to new situations. …

The pro- and anti-globalization divide is fast becoming the new post-cold-war line of socio-political disjunction. If the backlash is met with denial, there is a significant risk that the free flow of ideas, people, capital, goods, and services will slow down or come to an end. There is a strong case to be made for the benefits of globalization. Now is the time to make it–and to initiate the reforms that are needed.

Joseph Stiglitz, the former chief economist of the World Bank, makes an even more powerful case for the elite establishment to move beyond secrecy and open up communication channels with global civil society.

Next week’s meeting of the International Monetary Fund will bring to Washington, D.C., many of the same demonstrators who trashed the World Trade Organization in Seattle last fall. They’ll say the IMF is arrogant. They’ll say the IMF doesn’t really listen to the developing countries it is supposed to help. They’ll say the IMF is secretive and insulated from democratic accountability. They’ll say the IMF’s economic ‘remedies’ often make things worse–turning slowdowns into recessions and recessions into depressions.

And they’ll have a point. I was chief economist at the World Bank from 1996 until last November [1999], during the gravest global economic crisis in a half-century. I saw how the IMF, in tandem with the U.S. Treasury Department, responded. And I was appalled.

Convincing people at the World Bank of my analysis proved easy; changing minds at the IMF was virtually impossible. … Of course, everybody at the IMF assured me they would be flexible: if their policies really turned out to be overly contractionary, forcing the East Asian economies into deeper recession than necessary, then they would reverse them. This sent shudders down my spine. One of the first lessons economists teach their graduate students is the importance of lags: it takes twelve to 18 months before a change in monetary policy (raising or lowering interest rates) shows its full effects. When I worked in the White House as chairman of the Council of Economic Advisers, we focused all our energy on forecasting where the economy would be in the future, so we could know what policies to recommend today. To play catch-up was the height of folly. And that was precisely what the IMF officials were proposing to do.

I shouldn’t have been surprised. The IMF likes to go about its business without outsiders asking too many questions. In theory, the fund supports democratic institutions in the nations it assists. In practice, it undermines the democratic process by imposing policies. Officially, of course, the IMF doesn’t "impose" anything. It "negotiates" the conditions for receiving aid. But all the power in the negotiations is on one side–the IMF’s–and the fund rarely allows sufficient time for broad consensus-building or even widespread consultations with either parliaments or civil society. Sometimes the IMF dispenses with the pretense of openness altogether and negotiates secret covenants.

When the IMF decides to assist a country, it dispatches a "mission" of economists. These economists frequently lack extensive experience in the country; they are more likely to have firsthand knowledge of its five-star hotels than of the villages that dot its countryside. …

Economic policy is today perhaps the most important part of America’s interaction with the rest of the world. And yet the culture of international economic policy in the world’s most powerful democracy is not democratic.

This is what the demonstrators shouting outside the IMF next week will try to say. Of course, the streets are not the best place to discuss these highly complex issues. Some of the protesters are no more interested in open debate than the officials at the IMF are. And not everything the protesters say will be right. But, if the people we entrust to manage the global economy–in the IMF and in the Treasury Department–don’t begin a dialogue and take their criticisms to heart, things will continue to go very, very wrong. I’ve seen it happen.

Thus, the first division within the ranks of the power establishment behind elite globalization arises between those who want the status quo and those who seek to engage global civil society. There is a second division, however, among those who seek to engage with global civil society.

Within this latter group of "engagers," there are those who see a unique opportunity in the dilemma presented to them by global civil society. They will engage global civil society to the extent that it will be beneficial for their interests. They are open to refinements within the neo-liberal economic framework but only to the extent that it will bring them greater control over world social processes. They intend to graduate from the kind of economic engineering that uses neo-liberal economics to systemic global social engineering that uses the insights of global civil society. In the process, they will pretend to take in the criticisms, while appropriating the information for their own advantage. Political, human, cultural, social, ecological, and spiritual aspirations will be commodified to serve the interest of the global economy, while appearing to address human, social and ecological issues.

The Economist, again, captures the mood of this group of "engagers" who are ultimately more interested in co-opting civil society than engaging it.

Less obvious is whether NGO attacks will democratise, or merely disable, these organisations. At first sight, Seattle suggests a pessimistic conclusion: inter-governmental outfits will become paralysed in the face of concerted opposition. History, however, suggests a different outcome. Take the case of the World Bank. The Fifty Years is Enough campaign of 1994 was a prototype of Seattle (complete with activists invading the meeting halls). Now the NGOs are surprisingly quiet about the World Bank. The reason is that the Bank has made a huge effort to co-opt them.

James Wolfensohn, the Bank’s boss, has made "dialogue" with NGOs a central component of the institution’s work. More than 70 NGO specialists work in the Bank’s field offices. More than half of World Bank projects last year involved NGOs. Mr. Wolfensohn has built alliances with everyone, from religious groups to environmentalists. His efforts have diluted the strength of "mobilisation networks" and increased the relative power of technical NGOs (for it is mostly these that the Bank has co-opted). From environmental policy to debt relief, NGOs are at the centre of World Bank policy. Often they determine it. The new World Bank is more transparent, but it is also more beholden to a new set of special interests.

The WTO will not evolve in the same way. As a forum where governments set rules that bind rich as well as poor countries, it is inherently more controversial. Nor does it disburse money for projects, making it harder to co-opt NGOs. But it could still try to weaken the broad coalition that attacked it in Seattle by reaching out to mainstream and technical NGOs. Some will celebrate this as the advent of the age when huge institutions will heed the voice of Everyman. Others will complain that self-appointed advocates have gained too much influence. What is certain is that a new kind of actor is claiming, loudly, a seat at the table.

There is a second group, however, in this larger group of "engagers." This group consists of individuals and institutions that genuinely see the need for a comprehensive approach to sustainable development. This group will champion authentic tri-sector partnerships or threefolding partnerships between civil society, government, and business, because they appreciate the potential synergy or greater good that can arise out of this approach. The authentic involvement and participation of civil society will ensure that economic and political imperatives are sensitized and guided by cultural, ethical, human, ecological, and spiritual considerations.

I will quote Wolfensohn, President of the World Bank, to illustrate the sentiments of this group. Wolfenson may seem the wrong person to choose as an example of a serious "engager," given the Economist’s charge that the World Bank is trying to co-opt civil society. Nevertheless, a personal meeting with Wolfensohn in 1998 convinces me that he is serious about engaging global civil society, much to the distress of some of his senior officials and probably a significant number of the Bank’s staff.

It is true that the World Bank itself has a mixed record in authentically engaging global civil society and that it continues to support projects which are highly questionable. But this very fact may illustrate the division under discussion–a division which exists within institutions such as the World Bank. I am linking the statement below to the Wolfensohn I met two years ago. If he has since changed for the worse, then it may be time for a reality check.

‘As policy makers from developing and developed countries prepare to gather in Washington this week at the World Bank and the IMF for their Spring Meetings, their mission will be to push for greater progress in tackling the most pressing issues in development today,’ writes World Bank President James D. Wolfensohn in an op-ed appearing in El Universal (Venezuela), El Tiempo (Colombia), Sowetan (South Africa), and Pioneer (India).

‘Issues to be discussed are reducing poverty and inequality, the continuing human devastation caused by HIV/AIDS and other communicable diseases, bridging the digital divide, and making international trade more equitable. As they meet, demonstrators taking their cue from their victory in Seattle, will try to close down the meetings. We respect the demonstrators’ right to protest, but who wins by shutting down discussion of some of the world’s most pressing problems?’ Wolfensohn asks.

‘We need those discussions,’ Wolfensohn adds. ‘First, because these events spur important public debate about the big economic, political and social questions we face in a frantically changing world. But more importantly, because despite all the efforts of governments, official institutions and non-governmental organizations (NGOs), we will never significantly reduce the number of hungry children in the world unless we build dynamic coalitions of governments, civil society, and the private sector to construct a global economy that benefits all people.

To sum up, the power establishment behind elite globalization is splitting into three general tendencies.

First there are those who champion the status quo. They want to continue with the neo-liberal framework that drives elite globalization. And they want no obstacles on their way. So they will continue resisting the intrusion of global civil society into their domain. They will also systematically slander the reputation of global civil society to try to diminish the influence and effectiveness of global civil society.

Second, there will be those who use the engagement process to try to co-opt civil society for purposes of systemic global social engineering.

Then there is the third group who want to form authentic tri-sector partnerships. Together, enlightened and progressive elements in civil society, government, and business will pursue comprehensive sustainable development which addresses the challenges of elite globalization.

Ultimately, however, there are really only two groups. One opposes the presence and initiatives of global civil society. Part of the first group will offer direct opposition; the other part will try to co-opt. The second group welcomes the contributions of global civil society and is willing to work toward a different kind of globalization.

Divisions Within Global Civil Society

Global civil society is undergoing similar debates and divisions. (See Figure 4.) Again, I want to emphasize that the tendencies I refer to are idealized. In reality, some people or institutions may exhibit one or more of the described tendencies, depending on the particular need or situation, while others tend to stick to one approach.

A certain segment of global civil society does not want to engage government or business institutions as a matter of principle. We will call them the "rejectionists." They believe that many of these elite institutions cannot be trusted. They are too powerful and too fixed on their mode of operation to authentically transform themselves into more responsible entities. The best approach would be to shut down these institutions. They view those who are open to dialogue and/or partnerships with the institutions of elite globalization as either naïve or as having sold out. This group continues to pursue social change through criticism, protests and demonstrations. These groups tend to be active in global, regional, and national conferences and/or demonstrations.

In contrast, the group that is open to accepting or initiating dialogues and/or partnerships with the institutions and people behind elite globalization may be called the "engagers." The engagers appreciate the validity of both rejection and criticism. They also see, however, that one intent of criticism is to show decision-makers the problems in the their programs and projects. And, when decision makers are open to hearing and acting upon criticism, the next logical step may be to accept invitations for debate or dialogue and even partnerships.

Engagers typically do not think civil society should gain state power or take over the operations of corporations. They would rather set the preconditions and context for the exercise of state and corporate power to ensure that these latter help the poor, respect human rights, protect the environment, and advance true democratic space–in other words, serve nature and society, rather than only themselves. They value dialogue and/or partnership to ensure that unique perspectives are brought together and different capacities are mobilized towards an agreed ideal or task.

From the outside, all civil society "engagers" may look alike, but they are not. Despite good intentions, some of these civil society "engagers" enter the dialogue and/or partnership process with certain vulnerabilities.

A key vulnerability is the lack of understanding of the structural constraints of large institutions like governments and transnational corporations. For example, those who engage with large, publicly traded corporation have to find a way to grapple with their agenda for corporate transformation and the realities of the speculative and often irrational movements on the stock market. The socially responsible, transformative efforts of CEOs can be totally neutralized and set back by the signals of the stock market. The social efforts by CEOs may be good and genuine, but unhappy speculative stockholders may dump their shares in corporations, resulting in a hemorrhage of corporate financial resources.

Another vulnerability is entering into dialogue, negotiations, and/or partnerships to gain access to financial resources. This is a particularly vulnerable point for global civil society organizations, most of which rely on external sources to fund their operations. The widespread nature of this vulnerability has prompted The Economist, a prominent member of the "status quo" grouping of the elite, to thumb its nose at global civil society. The article in The Economist quoted in Chapter 3 is a reminder that public disdain, as well as private recriminations, come to the person who sells his or her soul for a few pieces of gold.

So the principal reason for the recent boom in NGOs is that western governments finance them. This is not a matter of charity, but of privatisation: many ‘non-governmental’ groups are becoming contractors for governments. Governments prefer to pass aid through NGOs because it is cheaper, more efficient–and more at arm’s length–than direct official aid.

… Perhaps the most potent sign of the closeness between NGOs and governments, aside from their financial links, is the exchange of personnel. … In the developed world, … increasing numbers of civil servants take time off to work for NGOs, and vice versa: Oxfam has former staff members not only in the British government, but also in the Finance Ministry of Uganda.

This symbiotic relationship with government (earning some groups the tag GRINGO) may make the governments of developing countries work better. It may also help aid groups to do their job effectively. But it hardly reflects their independence.

NGOs can also stray too close to the corporate world. Some, known to critics as ‘business NGOs’ [BINGOS], deliberately model themselves on, or depend greatly on, particular corporations. … The focus of such NGOs can easily shift from finding solutions and helping needy recipients to pleasing their donors and winning television coverage [as an aid to fund-raising]. …

Any neat division between the corporate and the NGO worlds is long gone. Many NGOs operate as competitors seeking contracts in the aid market, raising funds with polished media campaigns and lobbying governments as hard as any other business. Governments and U.N. bodies could now, in theory, ask for tenders from businesses and NGOs to carry out their programmes. It seems only a matter of time before this happens. If NGOs are cheap and good at delivering food or health care in tough areas, they should win the contracts easily.