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Jewish World Review / May 19, 1998 / 23 Iyar, 5758

William Pfaff

Globalized capitalism is more significant than nuclear weapons

PARIS -- Indonesia today presents much more of a threat to international society than India's nuclear weapons. Indonesia's crisis could ignite reactions elsewhere in countries suffering the consequences of unconsidered and unbridled globalization. India's weapons are primarily a danger to India, and to Pakistan and China.

International concern about India's nuclear tests is understandable, but the protests and sanctions of the existing nuclear powers are politically and morally hollow. An enormous American nuclear arsenal is maintained today even though there is no nuclear threat. It could not be eliminated, or seriously reduced, without provoking congressional outrage (public opinion itself is a more complicated affair).

India believes that it is threatened by China and Pakistan. Whether the threats are nuclear, and whether India's nuclear weapons improve the situation, may be questioned. But India was invaded by China in 1962, has fought three wars with Pakistan, and Pakistan actively disputes India's domination of Kashmir.

The United States has also been a complacent witness to China's nuclear armament, and American firms have helped the Chinese develop their missiles. The United States has silently approved Israel's nuclear armament. Why can China and Israel have nuclear forces, and not India?

Why are the United States, Russia, Britain, France, and China the authorized nuclear military powers? India's record of fair elections, democratic government, and respect for human rights is infinitely better than either China's or Russia's.

We know why: Those five countries already have nuclear weapons and nothing can be done about it. India has now played the test card to put itself into the same category. Now it is part of the nuclear club, even if the others would blackball it. They can't, because membership is not by election.

Soon Pakistan will undoubtedly have the weapons too, following the same logic. And if experience is a reliable guide, the two of them, and China, will be a great deal more careful in the future than they have been in the past. It's a funny old world, as Margaret Thatcher said.

Indonesia provides a bloody and frightening case of what can happen to a society ravaged by what Edward Luttwak has called turbo-capitalism, but might better be called nihilo-capitalism.

I say nihilo-capitalism because unlike what Joseph Schumpeter described as ``creative destruction,'' produced by technological innovation in industry, the capitalist force driving globalism is a destroyer of prevailing values that substitutes, in John Maynard Keynes' phrase, the values of the casino.

In the 1920s, Keynes expressed his fear of the moral nihilism of an unregulated capitalism which makes livelihood and employment ``the by-products of the activities of a casino.'' Were he alive today, he would find casino values the international norm, warmly endorsed by nearly all respectable parties.

What distinguishes Japan, Taiwan, and South Korea from the other Asian tiger-economies is that their development was internally controlled and financed, directed by their governments. They are not casino economies.

In the casino, the rich who can collaborate with foreign investors are made enormously richer. Foreign investors ordinarily do very well in a society such as Indonesia's, with the IMF to look after their interests -- doing so in a manner which even the Wall Street Journal finds unjust and offensive.

Some poor also benefit. The larger number of them are made still poorer by the destruction of traditional livelihoods, uncontrolled urbanization, and what usually amounts to the rape of national resources. The natural tendency of nihilo-capitalism is to destroy social structures, tear people from their cultural roots, and install an impoverishing internationalization of the consumer market and popular culture.

While the political protests in Indonesia began with university students, children of a middle class which largely has benefited from Indonesia's boom, the consequences for the poor of the crisis are what now have driven people into the streets of every major Indonesian city, producing in Jakarta itself, at the end of the week, what the BBC correspondent on the scene described as ``a total breakdown of law and order.''

The Chinese minority in Indonesia, some 7 percent of the total population, already are suffering badly in these riots because they are the merchant and financial class. Long-installed ethnic hostility thus is wedded to class and economic-based resentment and anger.

This combination was responsible for the massacre of something like 750,000 people in late 1965, in the aftermath of a failed coup for which the Chinese were held responsible, and whose repression set then-General Suharto on the road to dictatorial power.

So much for the complacent and unhistorical argument made by a majority of the American policy class today, from the leaders of the Clinton Administration to those of the conservative American Enterprise Institute, that globalization naturally promotes democracy and the defense of human rights.

Globalized market capitalism is a radical and revolutionary force. It is more revolutionary in its effects than was Leninism. Leninism came to power in Russia on the back of the first world war, installing itself in the ruins of a war-destroyed Czarist system. Maoist Communism gained power by attaching itself to the outraged nationalism of the Chinese people.

War and nationalism were the revolutionary forces. The globalization of unregulated capitalism ranks with them as a force in history, and in our common future. Nuclear weapons are a detail.