Nonprofit Impact on World "Plunder by Trade?"

Well, this has been an interesting week. The best part, however, was reading about Mr. Obama relaxing with family and friends in Chicago over this long weekend. It's so great to understand that we have "one of us" in the White House at last. Here he is with friends in Chicago, playing basketball, watching the tournament on TV, eating in familiar restaurants, etc. It's just so folksy and "real life" in the sense that any of us might be doing the same thing. It's a real symbol of identiification with the people in the country. Getting out of Washington and being with "real" people must be refreshing for the Obamas and is also good for the rest of us just to see that this is happening.

Thr first of four inputs to the week was the comment in the NY Times for yesterday (Sunday): the banking crisis boils down to the fact that the largest banks simply have a mound of debt on top of which has been placed a pile of worthless securities. Maybe the time has come to really let the American people know just how dreadfully serious this whole thing is.

The guys who were supposed to be keeping the money safe were gambling it away trying to make themselves personally rich. But the most disturbing thing to me is that we don't seem to be able to mete out the necessary punishment for these guys. This I don't understand. I have written numerous times to Dingell, Stabenow and Levin, but outside of a couple of days of questioning by Congress, these bankers are getting away with murder. And what they're killing is our banking system.

One of my other inputs this week has been to read a most interesting and fairly technical book setting forth the research of Claudia Goldin and Lawrence Katz on the premium of a college education throughout the period of 1915 to 2005 in the United States. The title of the book is "The Race between Education and Tecynology" published by Belknap Press of Harvard Univ, 2008.

Basically, what the Goldin/Katz research boils down to for me is this: that up until the 1940s advances in technology consistently and gradually pushed up the level of education necessary to get jobs that paid middle-class wages. By and large, the number of people needed by increasing technologica advances in the workplace were available to be hired, as America benefitted from the land grant colleges and universities and went through the "high school phenomenon" that made it culturally mandatory to get a high school educaiton through those years. The differential between those with and those without a college degree was marked, and the premium of a college education outpaced that of a high school diploma.

Then WW II and strong unions, plus huge numbers of women in the work force, plus the GI Bill that gave higher education to so many, helped the number of people with college degrees (high skilled workers) increase to the point where they were pulling ahead of technological advancements. The premium on a college education went down a bit in this post-war years. But then technology began to pull ahead in the 1960s and 1970s and the premium of a college education increased.

But then in the 1980s to the present, a lack of emphasis on and funding for college and university education once again slowed down the number of highly skilled people available for the jobs that needed their expertise. That slowed the premium of a college education. And this is where we are now -- that we don't yet have an adequate supply of well-educated people to fill the jobs created by advancing technology. I'm not a political scientist, but my thought would be that this is yet another result of the Republican public policy shift to downsize government and place responsibility for doing social good on the backs of those who would choose to donate to it and fund it voluntarily out of the goodness of their heart. And, of course, there's not enough money (only about $300 billion a year) to get all those jobs done that need to be done, through voluntary contributions from the public.

The third input I've had this week has been my research into poverty -- in the world, in our nation, and in Michigan and Detroit. I'm doing this as part of putting together the Case for Support for a new campaign by a new client to increase their capability to handle the tremendous influx of poverty-induced problems faced by the people of the urban areas of southeast Michigan.

The state of our country, with regard to those who have low or no incomes is shocking! Much more than I remember in the 1960s and 1970s, and we thought it was bad then. It's a national disgrace the 15% of our people live below the poverty line. That this gap between rich and poor is widening at an incredible pace. That the gap is not just local, but national and worldwide. I'm sure you probably know the statistics better than I do, so won't include those. But they're completely shocking.

And then the fourth input for the week, also a result of my research on poverty, was the discovery of an economist and his several books over the last decade, all under the banner of "economic democracy." The author is Mr. J.W. Smith, who is described as a independent economicst with a PhD in political economics from Union Institute and University in Cleveland. He heads an outfit called the Institute for Economic Democracy. Have you ever heard of it? He espouses a more cooperative and democratic capitalism and claims the world is in a cycle of "plunder by trade" and is therefore locked into a cycle of violence and war.

The basic premise of his latest book "Economic Democracy: The Political Struggle of the Twenty-First Century" 4th ed. 2005, is that we have now extended the practices of colonialism to all the under-developed countries of the world. We have done this, he says, by using trading superiority to raid and plunder one country after another.

How this works, he says, is that we take out the natural resources of a country and then force them to buy our finished products, rather than giving the people of each country the means to turn their own raw materials and resources into finished products for export. England did the same to India and, for a time, to the American colonies.

Now we do it, in turn, on a global scale. He has harsh words for the U.S. and the IMF and the World Bank. He says that how this works is that we (wealthier companies and nations) see natural resources in the Third World that we need, and we understand that if those countries developed their own resources and had their own industrial capital and processed their own resources into consumer products, that we could not compete successfully with them. They could demand full value for their natural resources while simultaneously underselling the current developed world on manufactured product markets.

So the wealthier companies and nations set the rules, shape international institutions and influence communication in ways that shape trade in ways that are disadvantageous to the developing countries. Whether we support a dictatorship or a fledgling democracy, we make it hard for developing nations to break out from poverty, or to reduce dependency from the US or the IMF or the World Bank.

Smith says, "The Thirdl World remains poor because the powerful strive to dominate every choke-point of commerce. One key choke-point is political control through the 'co-respective' support of local elites." "If a government cannot be bought or otherwise controlled, corrupt groups will be financed and armed to overthrow that government." He calls it "plunder by trade" rather than "plunder by raid" as in the old colonial days. Societies and nations are caught in the trap of unequal trade. "Once unequal trades are in place, restructuring to equal trade would mean the severing of the arteries of commerce which provide the higher standard of living for the dominant society and collapse of those living standards would almost certainly trigger open revolt. So to forestall such restructuring to equal trade, the wealthier nations talk in terms of "national security" and "defense." Thus the world is trapped in that pattern of unequal trades today."

So, putting all these inputs together gives an interesting and somewhat depressing picture.
1. Our domestic public policy has allowed education to fall to near the bottom of national priorities, so that the gap between rich and poor is widening (Detroit high school graduates don't have the skills to get the jobs that might provide wages and salaries that could help them climb out of poverty).

2. Internationally, we are plundering other nations' raw materials, while encouraging them to purchase our finished goods. We encourage privatization and reduced protection of domestic industries in poor nations (and impose similar restraints on people in areas like Detroit at home).

3. We loan the pooorer countries money and then impose conditions that force those countries to export more raw materials in order to raise enough money to pay off their debts (and we have "welfare to work" policies that force people to take low-wage, high energy jobs that don't permit or encourage and supplement people to obtain an education that could help them obtain better jobs).

4. So resources from the poorer countries become even cheaper, which favors consumers in the West (and we promote a culture that demands consumption of commodities, rather than promoting a culture that supports and demands education for all people here in our area).

Smith describes this as the "spiraling race to the bottom." And then I'm reading about the statistics and conditions that describe "the bottom." Whether in Detroit, or in Mauritania or Mozambique or wherever, we have set up the conditions that keep poor people in poverty, and keep them becoming continually poorer. It's the result of economic plunder.

These are basically the same issues -- a little different teminology, but the same basic concepts -- that we were demonstrating and working against in Chicago during the "Freedom Movement" there during the late 1960s. "Daley politics, and Daley economics" were our daily fare. "Plantation economics" was what we experienced on the west and south sides of Chicago.

My question is, what is it that nonprofit organizations serving the needs of the poor can really do that is other than paliative? What ways can we start chopping away at the huge, strong roots of this giant "plunder-ty-trade" weed that has captured 37 million Americans and about 2 billion people -- one third of the world's population? Are there any ways that we can gather together, or structure ourselves, to begin to create any kind of serious damage to this system that fosters and thrives on isolation, separation and the gap between rich and poor? Is human greed and selfishness, as expressed in huge conglomerate companies and in world-leading governments controllable? Do we really have no alternative except to put up with this? I found the website of the Global Call to Action Against Pocerty (GCAP) very interesting in this light: