Monday, 11 May 2009

Globalization's Hidden Agendas

Former Commerce Department official David J. Rothkopf reveals a disconcerting ambiguity in the domestic politics of countries affected by America's economic domination. He recounts the tale of Chile presidential candidate Ricardo Lagos' appearance before his Wall Street constituency. "A Socialist, he made sure to meet with George Soros, David Rockefeller, Steve Forbes and other members of the American financial elite. Call this the dual-constituency conundrum--the dilemma faced today by many political leaders who must balance the demands of two diametrically opposed groups."

One is the voters who elect the government in a given country. The other is the 30,000 or so traders and fund managers who conduct "instant referendums on the policies made by the world's governments."

A political leader can have broad support at home and run afoul of the men and women who vote with their money. When investors pull their money out, local economies flounder, policies are derailed and support at home can erode quickly.

This happens with dismaying frequency because Wall Street voters are not much interested in the long-term well-being of the countries they judge. What they want to know is whether their money will grow now or in the cycles during which their bonuses are being calculated.

Rothkopf concludes his fresh analysis of this paradox in the process of globalization by urging America's financial elite to be cognizant of the dual constituencies of the developing world. "A far-sighted leader like Ricardo Lagos will try to strike a balance that takes advantage of the opportunities created by this situation. Wall Street 'voters' need to realize that it is in their interest to support policies that are both politically and economically sustainable in the countries where they invest." ("So the Chilean Socialist Has to Campaign on Wall Street," IHT, 3/11/99, p.8.)

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