Sunday, July 12, 2015

Book Reviews: Flat Broke In The Free Market

Flat Broke In The Free Market
by Jon Jeter
This book's subtitle is "How Globalization Fleeced Working People" so it's not as if the reader should be too surprised that the author, a former Washington Post bureau chief for southern Africa and South America, and Pulitzer Prize finalist, very clearly takes a stand against globalization, or to be more precise, globalization as it's been implemented. Broadly speaking globalization has meant that there have been ever greater capital flows in search of cheap labor and low regulation, less protection of native industry, deindustrialization and destruction of unions, massive privatization of key public sectors and monetary policy that is far more concerned with fighting inflation and protecting the value of investments than with fighting unemployment and ensuring that those people outside of the investor class at the very least have a job. However this book was written in 2009 so some of the specific economic information cited about certain countries is now out of date. Some of the countries Jeter cited as basket cases have slowly turned things around but on the other hand some of the countries which he didn't mention because they didn't support his arguments have since had experiences which fit well with Jeter's theme. However, specific data points aside, the larger trends remain more or less the same across the United States and especially what is called the Third World. Corporate profits are up. Banking, investment, finance, and real estate sectors are larger parts of the world economy. Wages are down. Inequality has risen. Worldwide, people struggle to pay or obtain basic services and goods such as food, clean water, electricity and housing. Theories that seem to make sense and have a certain elegance in academia or corporate board rooms somehow have devastating impact on the real lives of people across the world, especially the half of the world's population who struggles to live on less than $2.50 a day. Jeter struggles to make sense of all of this. He describes the genesis of this book as coming to him after interviews with right-wing libertarian Nobel Prize winning economist Milton Friedman and former Rhodesian white separatist leader Ian Smith. Although he had no truck with either man's point of view, Jeter found that each man was surprisingly hard to dislike even though they apparently lived in an alternate reality to that which most of the world's population inhabited. Friedman thought that everything was going well for the world's investor class and that everyone else would be helped further on down the line by what he called reduction in interference in trade. The polite and genteel Ian Smith thought that the blacks in "Rhodesia" were much better off under white rule and were the "happiest in the world". I guess that Smith didn't really think too much about why such "happy blacks" launched a war to end white rule.

It's after these conversations when the basic thesis of this book came to Jeter. His argument is that colonialism and globalization are basic riffs on the same theme, service to imperialism and the ownership class. This is not a dry book full of charts or mathematical models. But there are oodles (and I do mean oodles) of footnotes. Jeter explains over and over again that he's not an economist. Jeter was born in 1965 and grew up in the Midwest. He describes the difference it made in his lifestyle that his father was able to find a job at Chrysler plant. In later years when because in part of globalization and capital transfer, inner city (i.e. black) male residents suffered through wage drops and high unemployment, Jeter appreciated even more the value of a good paying job. Jeter doesn't believe that people are inherently damaged or less than because of their race or ethnic class. Nor, would I venture to say does he think that individual failings are the sole cause of poverty. This book is a strong corrective to the widely accepted view that poverty is always and only a personal moral problem. Many of the issues which are used to criticize the underclass are quite often a response to economic stresses.For example, in Argentina, probably South America's whitest nation, Jeter talks to lower and middle class women who've turned to prostitution to feed their families. He also gives a history of the country's economic policies to see what's worked and what hasn't. In this book Jeter examines communities and countries across the world and points out how they have been ill-served by so-called "free trade" and globalization. His points of exploration include Zambia, Chile, Argentina, South Africa, Brazil, Malawi, Mozambique, Mexico, Venezuela, and of course places closer to home such as Washington D.C., Chicago and the post-industrial Midwest. Jeter mixes economic history and personal stories together to put everything into context. For example, if we didn't have subsidies for corn and sugar, would we have our food supply overflowing with added sugar and high fructose corn syrup? And if that weren't the case would we have skyrocketing obesity and diabetes rates? If you take nothing away from this excellent book you should understand that globalization is neither inevitable nor is it a force of nature. It is a result of human decisions designed to benefit a very particular set of people. It could be changed to benefit a wider group of individuals. For example in South Africa, the whites took steps away from the free market to benefit themselves at the expense of the Africans. It was only after their economic dominance was complete that they were interested in a "free market". This book was just about 200 pages in hardcover. It's quick but rewarding and even dense reading. Jeter ties a LOT of disparate events and problems together. I found it generally convincing but then again I share some of his assumptions. Jeter is scorching in his dismissal of the black political class, a group he views as being largely unable or uninterested in helping the black masses they claim to represent. He does give some positive attention to street level activists across the world who are challenging the narrative, albeit with decidedly mixed success.
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