A baby who doesn’t cry gets no milk, and a man who doesn’t hustle is a fool.
Crime is the mirror image of order. The criminals who fill jails are poor and nearly always use small arms and crude methods. If not for those defects of poverty and preindustrial technology, slum criminals could well be wearing the crowns of kings, the wide-brimmed hats of gentlemen, the miters of bishops, or the caps of generals, and they would be signing government decrees instead of placing their thumbprints on confessions.
IMPERIAL POWER
Queen Victoria of England gave her name to an epoch that was indeed victorious, a time of splendor for an empire that ruled the seas and a good part of the lands as well. As the Encyclopaedia Britannica tells us under the letter V, the queen led her subjects by the example of her austere life, always upholding strict morals and good habits, and it is to her in great measure that we owe the spread of concepts like dignity, authority, and respect for family, which were characteristic of Victorian society. In portraits she always wears a scowl, due perhaps to the difficulties she faced and the boredom she suffered in pursuit of the virtuous life.
Although the Encyclopaedia Britannica doesn’t mention this detail, Queen Victoria was also the greatest drug trafficker of the nineteenth century. Under her long reign, opium became the most valuable commodity of imperial trade. Large-scale poppy cultivation and opium production were developed in India at British initiative and under British control. A large portion of that opium entered China as contraband, and the drug industry pried open a growing consumer market. The number of addicts was said to have grown to about 12 million by 1839, when, observing its devastating effects on the population, the Chinese emperor outlawed the trafficking and use of opium and ordered the cargoes of several British ships impounded. The queen, who never in her life uttered the word “drug,” decried that unpardonable sacrilege against free trade and sent her fleet of warships to the coasts of China. During the two decades, with a few interruptions, that the opium war lasted, the word “war” was also never uttered.
On the tail of the warships came cargo ships loaded with opium. At the conclusion of each military action, commercial operations resumed. In one of the first battles, the taking of the port of Tin-hai in 1841, three Britons died and so did more than two thousand Chinese. The balance of losses continued more or less like that in the years that followed. The first truce ended in 1856, when the city of Canton was bombarded by order of Sir John Bowring, a devout Christian who liked to say, “Jesus is free trade, and free trade is Jesus.” The second truce ended in 1860, when Queen Victoria’s patience ran out. It was time to put an end to the obstinacy of the Chinese. Peking fell under cannon fire and the invading troops assaulted and burned the imperial summer palace. After that, China accepted opium, the number of drug addicts skyrocketed, and British merchants lived happily ever after.
THE POWER OF SECRECY
The richest countries in the world are Switzerland and Luxembourg. Two small nations, two large financial markets. About minuscule Luxembourg, little or nothing is known. Switzerland, in contrast, is famous for the marksmanship of William Tell, the precision of its watches, and the discretion of its bankers.
The prestige of Swiss banks is long-standing; a seven-century tradition guarantees their seriousness and security. But it was during World War II that Switzerland became a great financial power. Loyal to its equally long tradition of neutrality, Switzerland did not take part in the war. It did, however, take part in the business of war, selling its services, and at a very good price, to Nazi Germany. The deal was brilliant: Swiss banks took the gold that Hitler stole from the countries he occupied and from the Jews he trapped, including gold teeth from the dead in gas chambers and concentration camps, and turned it into convertible currency. The gold crossed into Switzerland without any problem, while people persecuted by the Nazis were turned away at the border.
Bertolt Brecht used to say that robbing a bank is a crime but the greater crime is to found one. After the war, Switzerland became the cave of Ali Baba for the world’s dictators, crooked politicians, tax-evading acrobats, and traffickers in drugs and arms. Under the resplendent sidewalks of the Banhofstrasse in Zurich and the Corraterie in Geneva lie the fruits of looting and fraud, transformed into stacks of gold bars and mountains of bills.
Besieged by scandals and lawsuits, numbered accounts are not what they used to be, but for better or worse the engine of national prosperity hums along. Money still has the right to wear a costume and a mask in this never-ending carnival, and referendums have proved that the majority of the population finds nothing wrong with that.
Though the money arrives as dirty as can be and the washings are incredibly complicated, this launderette leaves it spotless. In the eighties, when Ronald Reagan presided over the United States, Switzerland was the center of operations for the many-faceted manipulations of Oliver North. As Swiss journalist Jean Ziegler discovered, U.S. arms went to Iran, an enemy country, which paid for them in part with morphine and heroin. From Switzerland the drugs were sold and in Switzerland the money was deposited that later financed the mercenaries who bombed cooperatives and schools in Nicaragua. Back then, Reagan liked to compare those mercenaries to the U.S. Founding Fathers.
Whether temples with high marble columns or discreet chapels, Swiss sanctuaries dodge questions and proffer mystery. Ferdinand Marcos, despot of the Philippines, kept between $1 billion and $1.5 billion in forty Swiss banks. The Philippine consul in Zurich was a director of Crédit Suisse. At the beginning of 1998, twelve years after Marcos’s fall and after many suits and countersuits, the Federal Tribunal ordered $570 million returned to the Philippine government. It wasn’t everything, but it was something and an exception to the rule: normally, stolen money disappears without a trace. Swiss surgeons give it a new face and name, fabricating a new legal life and a fake identity for it. Of the booty looted by the Somoza dynasty, vampires of Nicaragua, nothing at all turned up. Practically nothing was found, and nothing at all was returned, of what the Duvalier dynasty stole from Haiti. Mobutu Sese Seko, who squeezed the last drop out of Congo, always visited his bankers in Geneva in a fleet of armored Mercedes. Mobutu had between $4 billion and $5 billion: only $6 million could be found after his dictatorship fell. The dictator of Mali, Moussa Traoré, had a little over $1 billion; Swiss bankers returned $4 million.
The money of the Argentine officers who sacrificed themselves for the fatherland by waging terror from 1976 on ended up in Switzerland. Twenty-two years later, a lawsuit revealed the tip of that iceberg. How many millions vanished into the mist that shrouds their phantom accounts? In the nineties, the Salinas family stripped Mexico clean. Raúl Salinas, the president’s brother, was called “Mr. Ten Percent” in recognition of the commissions he pocketed from privatizing public services and protecting the drug mafia. The press reported that his river of dollars ended up in Citibank, the Union des Banques Suisses, the Société de Banque Suisse, and other affiliates of money’s Red Cross. How much will be recovered? Money plunges into the magic waters of Lake Geneva and becomes invisible.
There are those who praise Uruguay by calling it the “Switzerland of America.” We Uruguayans aren’t too sure about that tribute. Does it honor our democratic traditions or our own secret banking laws? Since numbered accounts came in a few years ago, Uruguay has become the Southern Cone’s cashier, a huge bank with an ocean view.
DIVINE POWER
On the last night of 1970, three of God’s bankers met in a hotel in Nassau. Caressed by tropical breezes, surrounded by postcard scenery, Roberto Calvi, Michele Sindona, and Paul Marcinkus celebrated the birth of the new year by raising their glasses in a prayer for the annihilation of Marxism. Twelve years later, they annihilated the Banco Ambrosiano.
The Banco Ambrosiano wasn’t Marxist. Known as “la banca dei preti,” the priests’ bank, Ambrosiano would not accept stockholders who had not been baptized. It wasn’t the only banking institution linked to the Church. Back in 1605, Pope Paul V had founded the Bank of the Holy Ghost, which no longer performed financial miracles for divine benefit, as it had been taken over by the Italian state, but the Vatican had, and continues to have, its own official bank, piously called the Institute for Religious Works. In any case, Ambrosiano was very important, the second-largest private bank in Italy, and the Financial Times called its collapse the gravest crisis in the history of Western banking. In this colossal swindle, over a billion dollars went missing and the Vatican itself, one of the bank’s primary stockholders and greatest beneficiaries of its loans, was directly implicated.
Many camels went through the eye of that needle. Ambrosiano wove a global spider’s web for laundering money from drug trafficking and arms dealing, working hand in hand with the Sicilian and U.S. mafias and with drug networks in Turkey and Colombia. The Cosa Nostra used it to evade taxes on the profits of its smuggling and kidnapping operations, and it sent a shower of dollars to Polish unions fighting against the Communist regime. The bank also generously supplied the Contras in Nicaragua and the P-2 Lodge in Italy, Masons who allied with their traditional enemy the Church to fight the red threat. The capos of the P-2 received a hundred million dollars from Ambrosiano, which contributed to their family prosperity and helped them set up a parallel government for carrying out terrorist attacks meant to punish the Italian left and sow panic among the population.
For Religion Class
When I went to Rome for the first time I no longer believed in God, and for me earth was the only heaven and the only hell. But my memory of God the father from my childhood wasn’t a bad one, and deep inside I kept a special place for God the son, the rebel of Galilee who defied the imperial city where my Alitalia flight was then landing. Of the Holy Ghost, I confess, not much stayed with me, just a vague recollection of a white dove that dives down with outspread wings and impregnates virgins.
As soon as I walked into the Rome airport a huge sign loomed before my eyes: BANK OF THE HOLY GHOST.
I was young and it made quite an impression on me that this was what the Holy Ghost was up to.
The bank was cleaned out over a number of years, its assets flowing into a number of open financial mouths in Switzerland, the Bahamas, Panama, and other fiscal paradises. Heads of government, ministers, cardinals, bankers, captains of industry, and top bureaucrats were all accomplices in the looting organized by Calvi, Sindona, and Marcinkus. Calvi, who administered monies for the Holy See and presided over Ambrosiano, was famous for his icy smile and his accounting pirouettes. Sindona, king of the Italian stock exchange, trusted by the Vatican to handle its investments in real estate and finance, also served as a bag man for the U.S. embassy’s donations to right-wing parties. He owned banks, factories, and hotels in several countries and was even the owner of the Watergate building in Washington, which earned a spot in the history books thanks to the curiosity of Richard Nixon. Archbishop Marcinkus, who presided over the Institute for Religious Works, was born in Chicago, in the same neighborhood as Al Capone. A muscular man always chomping on a cigar, he had been the pope’s bodyguard before he became his business manager.
The three men worked for the greater glory of God and their own pocketbooks. It could be said that they had successful careers. But none of them escaped the persecution and martyrdom trumpeted in the Gospels for apostles of the faith. Shortly before Banco Ambrosiano went belly-up, Roberto Calvi was found hanged under a bridge in London. Four years later, Michele Sindona, then in a maximum-security prison, asked for coffee with sugar. They didn’t quite catch the order and gave him coffee with cyanide. A few months after that, an arrest warrant was issued for Archbishop Marcinkus, for fraudulent bankruptcy.
POLITICAL POWER
Sixty years ago the Argentine writer Roberto Arlt had some advice for anyone wanting to pursue a career in politics: “Proclaim: ‘I have robbed, and I aspire to robbing on a larger scale.’ Promise to sell off every last inch of Argentine soil, to sell the Congress building and turn the Palace of Justice into a tenement. In your speeches, say: ‘Stealing isn’t easy, gentlemen. You have to be a cynic, and that’s what I am. You have to be a traitor, and that’s what I am.’”
Arlt thought this would be a sure-fire formula for success, since all the scoundrels speak of is honesty and people tire of lies. A Brazilian politician, Adhemar de Barros, won over the electorate of the state of São Paulo, the richest in the country, with the slogan “Rouba mas faz”—“He steals but he gets things done.” In Argentina, in contrast, Arlt’s advice never caught on and today it’s still impossible to find a politician who has the courage to admit he will steal or to confess he has stolen. And none of these looters of the public purse is capable of acknowledging, “I stole for myself. I stole to give myself the good life.” If any of them had a conscience that could torment him, he would at least say: “I did it for the party, for the people, for the country.” Some politicians love their country so much they take it all home.
Roberto Arlt’s formula won’t work. No Brazilian politician has copied Adhemar de Barros’s recipe. As a general rule, what garners the most votes are the arts of theater — good acting, well-chosen masks. As another Argentine writer, José Pablo Feinmann, once put it, electoral politics tends to reward doublespeak and split personalities. Many professional politicians cultivate the schizophrenia that turns timid Clark Kent into Superman just by his removing his glasses and insipid Bruce Wayne into Batman when he puts on his bat cape.
Prices
In 1993, the tiny Brazilian Social Democratic Party didn’t have the minimum number of representatives in Congress to be eligible for the presidential elections. For a price that varied between $30,000 and $50,000, it bought a number of congressmen from other parties. One of them admitted it and, what’s more, he offered an explanation: “That’s what soccer players do when they change clubs.”
Four years later, prices had gone up in Brasilia. Two congressmen received $200,000 apiece for voting in favor of a constitutional amendment to allow President Cardoso to run for reelection.
You don’t need to be a poli-sci major to realize that political speeches usually have to be read backwards for their real meaning. There are few exceptions to the rule: politicians promise change and once they’re elected they change … their minds. Sometimes they turn around so fast they get dizzy and you get a stiff neck from watching them spin to the right. “Education and health first!” they proclaim like the captain of a ship crying, “Women and children first!” and sure enough, education and health are the first to drown. Their words praise hard work, and their deeds damn the workers. Politicians who swear, hand over heart, that national sovereignty has no price tend to be the ones who give it away for nothing. And those who proclaim they’ll round up all the crooks tend to be the ones who steal even the shoes off horses galloping by.
In mid-1996, Abdalá Bucaram won the presidency of Ecuador by calling himself the lash of the corrupt. Bucaram, a boisterous politician who thought he sang like Julio Iglesias and was actually proud of that, provoked widespread outrage and was thrown out of office after only a few months. One of the straws that broke the back of people’s patience was the party he threw for his eighteen-year-old son, Jacobito, to celebrate the first million he made performing miracles in the customs office.
In 1990, Fernando Collor became president of Brazil. In a quick and dirty election campaign made possible by television, Collor gave speech after moralistic speech attacking the “maharajahs,” or top bureaucrats, who were looting the state. Two and a half years later, up to his neck in scandal, Collor was impeached for his secret bank accounts and ostentatious displays of instant wealth. In 1993, the president of Venezuela, Carlos Andrés Pérez, was also thrown out of office and sentenced to house arrest for embezzling funds. Never in the history of Latin America has anyone been obliged to return the money he stole — neither overthrown presidents, nor the many ministers forced out by overwhelming evidence of corruption, nor the directors of public services, nor the legislators, nor the petty officials who take money under the table. No one has ever returned a cent. I’m not saying they didn’t intend to, it’s just that it never occurred to anyone to ask.
For International Relations Class
Terence Todman and James Cheek were U.S. ambassadors to Argentina in recent years. One after the other, they followed the same trajectory: for love of the tango, they came right back. As soon as their diplomatic stints ended, they returned to Buenos Aires as lobbyists.
Both of them used their influence with the Argentine government to assist private companies eager to pocket the country’s airports. Shortly afterward, a picture of Cheek with a doll in his lap was all over television and the papers. With his victorious airport campaign behind him, Cheek went to work for Barbie, the little woman who tempts us to commit the sin of plastic.
Generous Souls
In the United States, the sale of political favors is legal and can be carried on openly — no need to pretend, no risk of scandal.
Over ten thousand bribery pros work in Washington, plying their trade with members of Congress and the tenants of the White House. In an account that was certainly not exhaustive, the Center for Responsive Politics recorded $1.2 billion legally paid out in 1997 by numerous business and professional organizations, an average of $100 million a month. Leading the long list of “donors” was the American Medical Association, which is linked to the private health care business, the Chamber of Commerce, and the companies Philip Morris, General Motors, and Edison Electric Institute.
The figure, which rises year after year, does not include payments made under the table. As Johnnie Chung, a businessman who acknowledged making illegal donations, explained in 1998, “The White House is like a subway: You have to put in coins to open the gates.”
Exemplary Lives/1
In September 1994, in the Brasilia studios of Globo television, Treasury Minister Rubens Ricupero was waiting to be interviewed. While the lights and microphones were adjusted, he chatted with the journalist. Relaxed and speaking off the record, the minister admitted he only gives out economic information favorable to the government and hides figures that aren’t. “I have no scruples,” he said.
And he told the journalist confidentially: “Once the elections are over, we’ll sic the police on the strikers.”
But there was a mix-up. This private chat was picked up by satellite and transmitted to every parabolic antenna in Brazil. The words of the minister were broadcast throughout the country. On that historic occasion, Brazilians heard the truth. For once, and by mistake, they heard the truth.
Afterward, the minister didn’t crawl the path of Saint James on his knees or flagellate himself or throw ash on his head; nor did he seek refuge in the heights of the Himalayas. Rubens Ricupero became secretary-general of the United Nations Conference on Trade and Development (UNCTAD).
Money isn’t all they steal. Sometimes they steal elections too, as occurred in Mexico in 1988, when the presidency was snatched away from the left-wing opposition candidate, Cuauhtémoc Cárdenas, who had won a majority at the polls. Years later, in 1997, several legislators from the governing party accused the leader of the right-wing opposition, Diego Fernández de Cevallos, of receiving fourteen million dollars in return for his complicity in that electoral fraud. The press had a field day because an exchange of blows turned the parliamentary session into a boxing match, and the accusation of bribery got a lot of publicity. But passed over as hardly worth mentioning was something much more serious: the accusation itself was an implicit confession of electoral fraud by congressmen from the party that had committed it.
The greatest crimes are on the order of bad habits considered normal. While democracy gets besmirched, the ethic of anything goes is embraced: no one succeeds by pissing holy water. How many North Americans believe their senators have “very high morals”? All of 2 percent. At the end of 1996, the Buenos Aires daily Página 12 published a Gallup poll: seven of every ten Argentine youth claimed that dishonesty is the only way to succeed. And of all those polled, young and old, nine out of ten acknowledged that evading taxes and bribing officials or the police are common practices.
What is rewarded above is punished below. Petty robbery is a crime against property; grand larceny is a property owner’s right. Unscrupulous politicians do no more than act in accordance with a system where success justifies the means that make it possible, dirty as they may be: cheating the tax man and your neighbor, falsifying accounts, hiding assets, looting companies, inventing fictitious enterprises, underbilling, overbilling, fraudulent commissions …
THE POWER OF KIDNAPPERS
According to the dictionary, “kidnap” means to hold someone illegally in order to obtain a ransom. The crime draws a stiff sentence in every penal code, but no one would dream of jailing the financial bigwigs who hold countries hostage and, delightfully immune to consequences, collect fabulous ransoms day after day.
Exemplary Lives/2
At the end of the eighties, all young men in Spain wanted to be like him. The polls agreed: this star from Spain’s financial world, this King Midas of the banks, had eclipsed El Cid and Don Quixote as the model of choice for generations to come. An acrobat who did high jumps up the social ladder, this native of a little town in Galicia had reached the summits of power and success. The readers of romance magazines showered him with praise, calling him the most attractive man in Spain, the most marriageable. Always smiling, every hair in place, he looked fresh from the dry cleaners whether they photographed him reading spreadsheets, dancing sevillanas, or yachting in the Mediterranean. “I Want to Be Mario Conde” was the name of a hit song.
In 1997, the prosecutor demanded forty-four years for Mario Conde, not much for the man who masterminded the greatest financial swindle in the history of Spain.
In the olden days, the marines would take over the customs houses in Central America and the islands of the Caribbean to collect the debts those countries owed. The U.S. occupation of Haiti lasted nineteen years, from 1915 to 1934. The invaders did not leave until Citibank had collected on all its loans, multiplied several times over by usurious interest rates. In their place, the marines left a national army created to prop up the dictatorship and keep the payments flowing. Today, in these democratic times, international technocrats are more effective than military expeditions. The Haitian people did not elect, did not even cast a single vote for, the directors of the International Monetary Fund or the World Bank, but that’s who decides the fate of every dollar that enters Haiti’s public coffers. As in all other poor countries, more powerful than the vote is the veto: the democratic vote proposes and the financial veto disposes.
The Monetary Fund is called International, just as the Bank is called World, but these twin brothers live, collect, and decide in Washington, and their well-populated technocracy never spits in the plate from which they eat. Although the United States is by far the most indebted country in the world, no outsider orders it to put a FOR SALE sign on the White House; such an act of insolence would never occur to any international bureaucrat. In contrast, the countries of the South, which service their debts at the rate of $250,000 per minute, are captives, and creditors cut their sovereignty to ribbons just as Roman patricians in previous imperial times cut their plebeian debtors to ribbons in the public plaza. No matter how much these countries pay, there is no way to quench the thirst of that huge leaky jug called the foreign debt. The more they pay, the more they owe; and the more they owe, the more they are obliged to obey orders to dismantle the state, mortgage their political independence, and alienate the national economy. “He lived paying and he died owing” could be written on their gravestones.
Saint Hedwig, patron saint of the indebted, is the saint who garners the most prayers in Brazil. Thousands upon thousands of desperate debtors make their pilgrimage to her, pleading for her to keep creditors from taking away their televisions, cars, or homes. Sometimes Saint Hedwig performs a miracle. But how can the saint help countries when creditors have already carted off the government, countries free to do whatever they’re told by faceless, far-off men who practice financial blackmail by remote control? Creditors open and close stock exchanges, depending on the degree of submissiveness to the “right economic track.” The one and only truth is imposed with a fanaticism worthy of the Inquisition, single-party commissars, or Islamic fundamentalists; exactly the same policy is dictated to countries as diverse as Bolivia and Russia, Mongolia and Nigeria, South Korea and Mexico.
At the end of 1997, Michel Camdessus, president of the International Monetary Fund, declared: “The state should not give orders to the banks.” Translated, this means: “It’s the banks who ought to give orders to the state.” Nearly two years earlier, German banker Hans Tietmeyer, president of the Bundesbank, put it this way: “Financial markets more and more play the role of gendarmes. Politicians should understand that from now on they are under the control of financial markets.” Brazilian sociologist Hebert de Souza, “Betinho,” once suggested sending all the presidents off on a luxury cruise. Governments govern less and less, and the people who voted for them feel less and less represented by them. Polls reveal this lack of faith: fewer than half of all Brazilians and just over half of all Chileans, Mexicans, Paraguayans, and Peruvians believe in democracy. In the 1997 legislative elections, Chile recorded the largest number of blank ballots in the country’s history. And never have so many young people not bothered to register to vote.
GLOBALITARIAN POWER
In the twelve years of her government, from 1979 on, Margaret Thatcher ran a dictatorship of finance capital in the British Isles. The iron lady, much praised for her masculine virtues, brought an end to the era of polite behavior, crushed workers on strike, and reestablished a rigid class society with astonishing speed. Thus Great Britain became the model for Europe. Meanwhile, Chile, under the military dictatorship of General Pinochet, had become the model for Latin America. These two models figure today among the most unjust countries in the world. According to World Bank statistics on income distribution and consumption, a deep chasm currently separates those Britons and Chileans who have plenty left over from the Britons and Chileans who survive on leftovers. In those two countries, incredible as it seems, social inequality is greater than in Bangladesh, India, Nepal, or Sri Lanka. Just as incredibly, since Ronald Reagan took the helm in 1980, the United States has achieved even greater inequality than Rwanda.
Grease
German companies are prohibited from paying bribes to Germans. On the other hand, up until a short while ago, when companies bought off politicians, military officers, or officials from other countries, they were rewarded by the tax man. Bribes could be taken as deductions. According to journalist Martin Spiewak, telecommunications giant Siemens and metals conglomerate Klöckner paid $32 million to officers close to Indonesian dictator Suharto.
In 1997, a spokesman for the Social Democratic Party, Ingomar Hauchler, estimated that German companies spend $3 billion a year to grease the wheels of their businesses abroad. Officials justified the practice as protecting jobs and good trade relations, and they also invoked respect for cultural identity: buying favors is, after all, a way to respect the cultures of countries where corruption is customary.
The logic of the market imposes totalitarian dogmas on a global scale. Ignacio Ramonet, editor of Le Monda Diplomatique, calls them “globalitarian.” This logic has become a religion that obliges us all to follow its commandments: sit up straight, don’t raise your voice, do your chores without asking why. What time is it? Whatever you say, sir.
In the pummeled countries of the South, those on the bottom pay the piper but those on top call the tune, and the consequences are plain to see: hospitals without medicine, schools without roofs, food without subsidies. No judge can send a global system to jail for killing by hunger, but a crime is a crime even when it’s carried out as the most normal thing in the world. “Bread is life to the destitute, and to deprive them of it is murder,” says Ecclesiasticus, and as theologian Leonardo Boff points out, the market celebrates more human sacrifices than the Aztecs did at the Great Temple or the Canaanites before the idol of Moloch.
The globalitarian order steals with its trade hand what it lends with its finance hand. Tell me how much you sell and I’ll tell you what you’re worth. Latin America’s exports aren’t even 5 percent of the world’s total, and Africa’s add up to 2 percent; what the South buys costs more and more, and what it sells is worth less and less. To buy, governments go further and further into debt, and to comply with the usury on the loans, they sell grandma’s jewelry and then grandma herself.
The market gives the order and the state is privatized. Shouldn’t we rather “deprivatize” the state, seeing as it’s controlled by the international banking cartel and by local politicians who do nothing but slander it so they can unload it at bargain-basement prices? Trafficking in favors and handing out jobs in return for votes has distended the parasite-ridden bellies of Latin America’s governments. The insufferable “burrocracy” acts as a procurer, in the original sense of the word: two thousand years ago “procurator” referred to those who arranged administrative transactions in exchange for a tip. Thanks to such inefficiency and corruption, privatizations meet with the approval or indifference of public opinion.
Latin America’s countries are being denationalized at a dizzying pace, with the exception of Cuba and of Uruguay, where in a plebiscite at the end of 1992, 72 percent of the country voted to halt the sale of public enterprises. Presidents go about the world like traveling salesmen, selling what doesn’t belong to them. “My country is a product, I offer a product called Peru,” President Alberto Fujimori has proclaimed on more than one occasion.
Profits are privatized, losses are socialized. In 1990, President Carlos Menem ordered Aerolíneas Argentinas to die. That profitable public enterprise was sold or, better put, given away to another public enterprise, Spain’s Iberia, which was a model of poor administration. The Argentine airline’s national and international routes were ceded for one-fifteenth their value, and two Boeing 707 planes, still perfectly airworthy, were purchased for the modest price of $1.54 apiece.
On January 31, 1998, the Uruguayan daily El Observador congratulated the Brazilian government on its decision to sell the national telephone company, Telebras. On page 2, the paper applauded President Fernando Henrique Cardoso “for getting rid of companies and services that had become a burden on the treasury and on consumers.” On page 16 that day, the paper reported that Telebras, “the most profitable company in Brazil, last year made liquid profits of $3.9 billion, a record in the country’s history.”
The Brazilian government mobilized an army of 660 lawyers to defeat a fusillade of lawsuits against the privatization of Telebras, and it justified its program of denationalization by citing the need to show the world “signs that we are an open country.” Writer Luis Fernando Verissimo noted that such signs were “like the pointy caps they put on village idiots in the Middle Ages.”
THE POWER OF THE CASINO
They say astrology was invented to give the impression that economics is an exact science. Economists never know tomorrow why the predictions they made yesterday didn’t pan out today. It’s not their fault. Frankly, they’ve been left without much to do since the real economy closed up shop and made way for the virtual economy. Today, finance rules, and frenzy and speculation fall more into the bailiwick of psychiatrists than into that of economists.
The Rothschilds learned of Napoleon’s defeat at Waterloo by carrier pigeon. Now news travels faster than the speed of light, and flying alongside it on the computer screen is money. A ring worthy of Saturn spins wildly around the earth: the $2,000,000,000,000 that move on world financial markets every day. Of all those many zeros, so many you get dizzy looking at them, only a minuscule portion corresponds to commercial transactions or productive investments. In 1997, of every $100 in currency transactions, only $2.50 had anything to do with the exchange of goods and services. That same year, on the eve of the hurricane that battered stock markets in Asia and the world, the Malaysian government suggested a commonsense measure: outlawing currency trading for noncommercial purposes. The shouting of floor traders makes a lot of noise, and understandably those who benefit from currency speculation were deaf to the idea. In 1995, only three of the ten largest fortunes in Japan were linked to the real economy. The other seven multimillionaires were speculators.
Language/4
The language of the business world, the universal language, gives new meanings to old words, enriching human communication in the tongue of Shakespeare.
“Options” define not the freedom to chose but rather the right to buy. “Futures” have dropped their mystery and become contracts. “Markets” are no longer boisterous plazas but computer screens. A “lobby” is no longer used to wait for friends but to buy politicians. Not only do ships travel “offshore,” now money does too, to evade taxes and questions. “Laundries” that once upon a time washed clothes now wash dirty money.
“Lifting” no longer consists of raising weights or spirits: “lifting” is surgery that keeps the authors of all these good deeds from growing old.
Ten years ago, the financial markets suffered another collapse. Distinguished U.S. economists from the White House, the Congress, and the New York and Chicago stock exchanges tried to explain what had happened. The word “speculation” was not uttered in any of their analyses. After all, popular sports deserve respect: five out of every ten North Americans play the stock market in one way or another. Just as “smart bombs” killed Iraqis in the Gulf war without anyone except the dead finding out, “smart money” earns 40 percent profits without anyone finding out how. Wall Street, which some say was named for a wall built to keep black slaves from escaping, is today the center of the great global electronic gambling den, and all of humanity is enslaved by the decisions made there. The virtual economy moves capital, trashes prices, plucks fools, ruins countries, and churns out millionaires and mendicants in the time it takes to say, “Amen.”
The world may be obsessed with personal insecurity, but reality teaches us that the crimes of finance capital are far more fearsome than those we read about in the papers. Mark Mobius, who speculates on behalf of thousands of investors, told the German magazine Der Spiegel at the beginning of 1998, “My clients laugh at ethical criteria. They only want us to increase their profits.” During the crisis of 1987, another phrase made him famous: “You’ve got to buy when blood runs in the streets, even if the blood is mine.” George Soros, the most successful speculator in the world, who made a fortune successively bidding down the pound, the lira, and the ruble, knows what he’s talking about when he says, “The main enemy of the open society, I believe, is no longer the Communist but the capitalist threat.”
Capitalism’s Dr. Frankenstein has created a monster that walks on its own, and nobody can stop it. It is a superstate over and above all others, an invisible power that governs us all even though it was elected by no one. In this world there is too much misery but there is also too much money, and wealth doesn’t know what to do with itself. In other times, finance capital broadened the consumer market by extending credit. It served the real economy, which to exist needed to grow. Today, utterly bloated, finance capital has put the productive system to work for it, while it plays with the real economy like a cat with a mouse.
Every crash on the stock exchange is a catastrophe for small investors who swallowed the line and bet their savings on the financial lottery. And it’s a catastrophe for the poorest barrios of the global village, whose residents suffer the consequences without ever knowing what caused them: in a single blow each “market correction” empties their plates and wipes out their jobs. But rarely do crises on the stock exchange fatally wound the suffering millionaires who, day after day, backs bent over their computers, fingertips calloused from the keyboards, redistribute the world’s wealth by moving money, setting interest rates, and deciding the value of labor, commodities, and currencies. They are the only workers who could refute the anonymous scribe who wrote on a wall in Montevideo: “He who works has no time to make money.”
Unemployment sends the crime rate soaring and humiliating wages spike it higher still. Never has the old Spanish proverb been so apt: “The hustler lives from the fool, and the fool from his work.” In contrast, no one says, “Work hard and you shall prosper,” because no one believes it anymore.
Labor rights have come down to the right to work for whatever you can get under whatever conditions you can stand. Work is the most useless of vices. There is no commodity in the world cheaper than labor. While wages fall and hours rise, the labor market vomits up people. Take it or leave it — there’s a long line behind you.
EMPLOYMENT AND UNEMPLOYMENT IN THE TIME OF FEAR
The shadow of fear is nipping at your heels no matter how fast you go. Fear of losing your job, your money, your food, your home. No talisman can protect you from the curse of sudden bad luck. From one moment to the next, even the greatest winner can turn into a loser unworthy of forgiveness or compassion.
Who is safe from the terror of unemployment? Who doesn’t fear being shipwrecked by new technologies or by globalization or any other of the many storms whipping today’s world? The waves pound furiously: the ruin or flight of local industries, competition with cheap labor from other latitudes, the implacable advance of machines that need no salary or vacation or bonus or pension or severance pay or anything but the electricity that feeds them.
The development of technology leads not to more free time or freedom, only to more unemployment and fear. Panic at the specter of the pink slip is universal: We’re sorry to inform you that due to the new budget policy we must make do without your services. Or simply that’s the way it is, without any euphemism to ease the blow. Anyone can get shot down anytime, anywhere. At forty, anyone can become old from one day to the next.
In a report on conditions in 1996 and 1997, the International Labor Organization says, “The evolution of employment in the world continues to be discouraging.” In industrialized countries, unemployment remains high and contributes to increasing social inequality, and in so-called developing countries, both unemployment and poverty have risen spectacularly. “That’s what spreads fear,” the report concludes. And fear does spread: you have a job or you have nothing. At the entrance to Auschwitz the sign said: “Work Shall Make You Free.” A little more than half a century later, any worker with a job should thank the company for its kindness in allowing him or her to carry on day after backbreaking day, fodder for the tedium of office or factory life. To find a job, or hang on to one, even if it comes without vacation or pension or any benefits at all and even if the pay stinks, is celebrated as if it were a miracle.
Famous Words
On November 28, 1990, the Argentine papers published a pearl of wisdom from a union leader now in political office. This is how Luis Barrionuevo explained his sudden fortune: “You don’t make money by working.”
When charges of fraud rained down on him, his friends offered him a testimonial dinner. Later on, he was elected president of a first-division soccer club, and throughout it all he remained at the helm of the food service workers’ union.
Saint Cajetan, patron saint of the unemployed, is the most popular saint in Argentina. Crowds come to him begging for work. No other saint, male or female, has such a large clientele. Between May and October 1997, when new jobs suddenly appeared paying two hundred dollars a month, many wondered who was responsible, Saint Cajetan or democracy. With legislative elections on the horizon, the Argentine government astonished the saint by handing out half a million jobs right and left. But they didn’t last much beyond the campaign. Some time later, President Menem suggested that Argentines take up golf, because it’s relaxing and keeps your mind off your troubles.
The number of unemployed keeps on growing. The world has more and more surplus people. What will the owners of the planet do with so much useless humanity? Send them to the moon? At the beginning of 1998, huge demonstrations in France, Germany, Italy, and other European countries made headlines around the globe. Some of the marchers acted out the drama of labor in today’s world and wore black plastic garbage bags. In Europe there may still be insurance to ease the fate of the unemployed, but the fact remains that even there one young person in every four cannot find a steady job. Work under the table and outside the law has tripled in Europe over the past quarter century. In Great Britain there are more and more stay-at-home workers, always available, who don’t earn a thing until that telephone rings. Then they work for a while for an employment agency and go back home to wait for the phone to ring again.
Globalization is a magic galleon that spirits factories away to poor countries. Technology, so dizzying in its ability to reduce the labor time needed to produce anything, impoverishes and oppresses workers instead of liberating them from need and servitude. And labor is no longer necessary for making money. No need to transform raw materials, no need to lay a finger on them, since money is more fertile when it makes love to itself. Siemens, one of the largest industrial companies in the world, earns more from its financial investments than from its productive activities.
In the United States, there is a lot less unemployment than in Europe, but new jobs are temporary, poorly paid, and without benefits. “I see it in my students,” says Noam Chomsky. “They’re afraid that if they don’t behave themselves they’ll never get a job, and that has a disciplinary effect on them.” At the five hundred largest U.S. companies, only one worker in ten has the privilege of a permanent, full-time job. In Great Britain, nine of every ten new jobs are temporary; in France, eight of every ten. History is leaping two centuries, but backwards: most workers in today’s world have neither job stability nor the right to severance, and job insecurity drives wages down. Six out of every ten North Americans are earning less than they did a quarter century ago, even though the U.S. economy has grown 40 percent over the past twenty-five years.
Despite this, thousands and thousands of Mexican braceros, the “wetbacks,” continue crossing the river that marks the border, risking their hides in search of a better life. In a couple of decades the ratio of U.S. to Mexican wages has doubled. The U.S. average used to be four times the Mexican; now it’s eight. As is well known by those whose investments migrate south in search of cheap labor, and the cheap labor that tries to migrate north, in Mexico work is the only commodity whose price goes down every month. Over the past twenty years, a good part of the middle class has fallen into poverty, the poor have fallen into misery, and the miserable have fallen off the charts. The law guarantees job stability for those who have jobs, but in reality it depends on the Virgin of Guadalupe.
Along with unemployment, job insecurity is the principal factor underlying the decline in pay, and it’s as common as the flu. No one is safe. Not even skilled workers in the most sophisticated and dynamic sectors of the world economy can breathe easy. There, too, contracting and piecework are rapidly replacing steady jobs. In telecommunications and electronics, “virtual companies” already operate with only a handful of employees. Tasks are carried out from computer to computer. Workers never meet one another or their employers, those fugitive ghosts who owe obedience to the laws of no nation. Highly skilled professionals — the poster children you see in magazines that praise the miracles of technology in an era of universal happiness — are condemned to uncertainty and job instability just like any poor kid, even though they earn much more.
Fear of losing your job and terror at the prospect of never finding one can’t be separated from a ridiculous statistic that could only seem normal in a world gone mad: over the past thirty years, formal working hours, which tend to be less than real hours worked, have gone up significantly in the United States, Canada, and Japan and diminished only slightly in a few European countries. This trend constitutes a treacherous attack on common sense by the upside-down world: the astonishing increase in productivity wrought by the technological revolution not only fails to raise wages but doesn’t even diminish working hours in countries with state-of-the-art machines. In the United States, frequent polls indicate that work, far more than divorce or the fear of death, is the principal source of stress, and in Japan karoshi, overwork, kills ten thousand people a year.
Capitalist Realism
Lee Iacocca, once a star executive at Chrysler Corporation, visited Buenos Aires at the end of 1993. At a press conference he spoke with admirable sincerity about unemployment and education: “The problem of unemployment is a tough one. Today we can make twice as many cars with the same number of people. When they talk about improving people’s educational levels as a solution to the problem of unemployment, I’m always bothered by the memory of what happened in Germany. Education was put forward as the solution to unemployment, and the result was hundreds of thousands of frustrated professionals who then turned to socialism and rebellion. It’s not easy for me to admit, but I wonder if it wouldn’t be better for the unemployed to smarten up and go straight to McDonald’s to find a job.”
When the French government decided in May 1998 to reduce the workweek from thirty-nine to thirty-five hours, offering a basic lesson in common sense, the measure set off cries of protest from businessmen, politicians, and technocrats. In Switzerland, where unemployment is not a problem, I witnessed an event some time ago that left me dumbfounded. A referendum was held on reducing working hours with no reduction in pay, and the Swiss voted the proposal down. I recall that I could not comprehend the result at the time. I confess I still don’t. Work has been a universal obligation ever since God sentenced Adam to earn his daily bread by the sweat of his brow, but we don’t have to take God’s will so literally. I suspect that this urge to work has something to do with fear of unemployment — though in Switzerland unemployment is an abstract threat — and with fear of free time. To be is to be useful; to be you have to be salable. Time that isn’t money, free time lived for the pleasure of living and not dutifully in order to produce, provokes fear. There’s nothing new about that. Along with greed, fear has always been the most active engine of the system that used to be called capitalism.
Fear of unemployment allows a mockery to be made of labor rights. The eight-hour day no longer belongs to the realm of law but to literature, where it shines among other works of surrealist poetry. And such things as employer contributions to pensions, medical benefits, workers’ compensation, vacation pay, Christmas bonuses, and dependents’ allowances are relics that belong in an archeological museum. Legally consecrated universal labor rights came about in other times, born of other fears: the fear of strikes and of the social revolution that seemed so close at hand. The powerful who trembled in fear yesterday are the powerful who strike fear today, and thus the fruits of two centuries of labor struggle get raffled off before you can say good-bye.
Fear, father of a large family, also begets hatred. In the countries of the North, it tends to cause hatred of foreigners who offer their labor at desperate prices. It’s the invasion of the invaded. They come from lands where conquering colonial troops and punishing military expeditions have disembarked a thousand and one times. Now this voyage in reverse isn’t made by soldiers obliged to kill but by workers obliged to sell themselves in Europe or North America at whatever price they can get. They come from Africa, Asia, and Latin America and, since the burial of bureaucratic power, from Eastern Europe as well.
Statistics
In the British Isles, one out of every four jobs is part-time. And many are so part-time that it’s hard to say why they’re called jobs. To massage the numbers, as the English say, the authorities changed the statistical criteria for unemployment thirty-two times between 1979 and 1997 until they hit on the perfect formula: anyone who worked more than one hour a week was not unemployed. Not to boast, but that’s how we’ve measured unemployment in Uruguay for as long as I can remember.
In the years of the great European and North American economic expansion, growing prosperity required more and more labor, and it didn’t matter that those hands were foreign, as long as they worked hard and charged little. In years of stagnation or weak growth, they become undesirable interlopers: they smell bad, they make a lot of noise, they take away jobs. Scapegoats of unemployment and every other misfortune, they are condemned to live with several swords hanging over their heads: the always imminent threat of deportation back to the grueling life they’ve fled and the always possible explosion of racism with its bloody warnings, its punishments: Turks set on fire, Arabs stabbed, Africans shot, Mexicans beaten. Poor immigrants do the hardest, poorest-paid work in the fields and on the streets. After work comes the danger. No magic ink can make them invisible.
Paradoxically, while workers from the South migrate north, or at least risk the attempt against all odds, many factories from the North migrate south. Money and people pass each other in the night. Money from rich countries travels to poor countries, attracted by dollar-a-day wages and twenty-five-hour days, and workers from poor countries travel, or try to travel, to rich countries, attracted by images of happiness served up by advertising or invented by hope. Wherever money travels, it’s greeted with kisses and flowers and fanfares. Workers, in contrast, set off on an odyssey that sometimes ends in the depths of the Mediterranean or the Caribbean or on the stony shores of the Rio Grande.
In another epoch, when Rome took over the entire Mediterranean and more, its armies returned home dragging caravans filled with enslaved prisoners of war. The hunt for slaves impoverished free workers. The more slaves there were in Rome, the more wages fell and the more difficult it was to find work. Two thousand years later, Argentine businessman Enrique Pescarmona praised globalization: “Asians work twenty hours a day,” he declared, “for eighty dollars a month. If I want to compete, I have to turn to them. It’s a globalized world. The Filipino girls in our offices in Hong Kong are always willing. There are no Saturdays or Sundays. If they have to work several days straight without sleeping, they do it, and they don’t get overtime and don’t ask for a thing.”
A few months before Pescarmona voiced this elegy, a doll factory caught fire in Bangkok. The workers, women who earned less than a dollar a day and ate and slept in the factory, were burned alive. The factory was locked from the outside, like the slave quarters of old.
Many industries emigrate to poor countries in search of cheap labor, and there’s plenty to be had. Governments welcome them as messiahs of progress bringing jobs on a silver tray. But the conditions of the new industrial proletariat bring to mind the word they used for work during the Renaissance, tripalium, which was also an instrument of torture. The price of a Disney T-shirt bearing a picture of Pocahontas is equivalent to a week’s wages for the worker in Haiti who sewed it at a rate of 375 T-shirts an hour. Haiti was the first country in the world to abolish slavery. Two centuries after that feat, which cost many lives, the country suffers wage slavery. McDonald’s gives its young customers toys made in Vietnamese sweatshops by women who earn eighty cents for a ten-hour shift with no breaks. Vietnam defeated a U.S. military invasion. A quarter of a century after that feat, which cost many lives, the country suffers globalized humiliation.
Law and Reality
Gérard Filoche, a Paris labor inspector, proved that a thief who steals a car radio gets a longer sentence than a businessman who causes the death of a worker through an avoidable workplace accident.
Filoche knows from experience that many French companies that evade health and safety regulations also lie about wages, hours, and seniority. “Employees have to keep their mouths shut,” he says, “because they live with the knife of unemployment at their throats.”
For every million violations found by labor inspectors in France, only thirteen thousand end in conviction. In nearly all those cases, the sentence is a tiny fine.
The hunt for cheap labor no longer requires armies as it did during colonial times. That’s all taken care of by the misery that most of the planet suffers. What we have is the end of geography: capital crosses borders at the speed of light thanks to new communication and transportation technologies that make time and distance disappear. And when an economy anywhere on the planet catches a cold, economies around the world sneeze. At the end of 1997, a currency devaluation in Malaysia killed thousands of jobs in the shoe industry in southern Brazil.
Poor countries have put their heart, soul, and sombrero into a global good-behavior contest to see who can offer the barest of bare-bones wages and the most freedom to poison the environment. Countries compete furiously to seduce the big multinational companies. What’s best for companies is what’s worst for wage levels, working conditions, and the well-being of people and of nature. Throughout the world, workers’ rights are in a race to the bottom, while the pool of available labor grows as never before, even in the worst of times.
Globalization has winners and losers, warns a United Nations report. “A rising tide of wealth is supposed to lift all boats, but some are more seaworthy than others. The yachts and ocean liners are rising in response to new opportunities, but many rafts and rowboats are taking on water — and some are sinking.”
Countries tremble at the thought that money will not come or that it will flee. Shipwreck or the threat of it causes widespread panic. If you don’t behave yourselves, say the companies, we’re going to the Philippines or Thailand or Indonesia or China or Mars. To behave badly means to defend nature or whatever’s left of it, to recognize the right to form unions, to demand respect for international norms and local laws, to raise the minimum wage.
In 1995, the Gap sold shirts “made in El Salvador.” For every twenty-dollar shirt the Salvadoran workers got eighteen cents. The workers, most of them women and girls, spent fourteen hours a day breaking their backs in sweatshop hell. They organized a union. The contracting company fired 350 of them; the rest went on strike. There were police beatings, kidnappings, jailings. At the end of that year, the Gap announced that it was moving to Asia.
Thanks to the new global reality, the “informal sector” of the economy in Latin America has mushroomed. The “informal sector,” which translated into English means work outside the law, generates eighty-five of every hundred new jobs. Workers outside the law put in more hours, earn less, get no benefits, and are not covered by labor legislation won through long, hard years of union struggle. Not that the situation of legal workers is much better: “deregulation” and “liberalization” are the euphemisms used to describe a situation of every man for himself. The elderly Paraguayan woman who told me about her pension summed it up succinctly: “If this is the reward, imagine the punishment!”
Jorge Bermúdez has three children and three jobs. At dawn he heads out to scour the streets of Quito in an old Chevrolet that passes for a cab. From early in the afternoon he teaches English. He has been a public school teacher for sixteen years and earns $150 a month. When the day ends at the public school, it begins at a private school where he works until midnight. Jorge Bermúdez never gets a day off. For a long time he has suffered from stomach trouble, moodiness, and insomnia. A psychologist told him they were psychosomatic symptoms caused by working too hard and suggested he give up two of his three jobs. The psychologist did not explain how he could pay the bills.
Exemplary Lives/3
The middle of 1998 unleashed a whirlwind of popular indignation against the dictatorship of General Suharto in Indonesia. So the International Monetary Fund thanked him for his services and the general retired.
His working life had begun in 1965 when he took power by killing half a million Communists or alleged Communists. In the end he had no choice but to leave the government, but he hung on to the savings he managed to set aside during his more than thirty years of labor: $16 billion, according to the July 28, 1997, issue of Forbes magazine.
A couple of months after Suharto’s retirement, his successor, President Habibie, made a televised speech: he called for fasting. The president said that if the Indonesian people refrained from eating two days a week, Mondays and Thursdays, the economic crisis could be overcome.
In the upside-down world, education does not pay. Public school teachers in Latin America have been among the hardest-hit by the new labor regime. Teachers and professors earn praise: hackneyed speeches exalt the stoic efforts of the apostles of education who lovingly mold the clay of the next generation. And they earn salaries you can’t see without a magnifying glass. The World Bank calls education “an investment in human capital,” which, from their point of view, is homage. But in a recent report they suggested reducing teachers’ pay in countries where “the supply of teachers” would allow for it without lowering the level of instruction.
By the Grace of God
At the end of 1993, I attended the funeral of a beautiful trade school that had existed for three years in Santiago, Chile. The students came from the poorest slums of the city, kids condemned to be delinquents, beggars, or whores. The school taught them trades like ironwork, carpentry, and gardening; above all, it taught them to love themselves and to love what they were doing. For the first time they heard people say that they were worth something and that doing what they were learning to do was worth something. The school depended on foreign financing. When the money ran out the teachers turned to the government. They went to the ministry and got nothing. They went to city hall and the mayor suggested, “Turn it into a business.”
Reduce pay? What pay? “Poor but docent,” we say in Uruguay, or, “I’m hungrier than a schoolteacher.” University professors are in the same boat. In the middle of 1995 I saw a job posting in the papers for the School of Psychology at the university in Montevideo. They were looking for someone to teach ethics and were offering a hundred dollars a month. I could only think that you’d have to be a magician at ethics not to be corrupted by such a fortune.
Advantages
At the end of 1997, Leonardo Moledo published an article defending the low salaries paid in Argentina’s universities. This professor argued that meager wages contribute to general culture, encourage diversity and the spread of knowledge, and help prevent the problem of overspecialization. Thanks to his puny salary, a professor who in the morning teaches brain surgery can enrich his own culture and the culture of everyone else by making photocopies in the afternoon and showing off his talent on the circus trapeze at night. A specialist in German literature has the stupendous opportunity to run a pizza oven and also be an usher at the Columbia theater. The dean of criminal law can enjoy the luxury of driving a delivery truck from Monday to Friday and working as a security guard on the weekends. And an adjunct in molecular biology can make use of his training by fixing plumbing and painting cars.