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posted 18 Dec 2016, 20:50 by Gerry Kangalee

With the coming dispensation in the White House the world may be in for a turbulent trip as far as economics and politics are concerned. The two have always been two sides of the same coin. This is the reason why Econometrics - mathematical economics - has not been a reliable predictor of economic outcomes. Even if the data inputs are accurate and the model design rigorous, the discipline cannot take account of human motivation.

Since the end of World War Two, mainly starting with the Bretton Woods Conference, the aim of which was to restructure international currency and financial relationships, so as to avoid a Third World War; high government and business officials (some very powerful but unknown to the general public) have been attempting to establish a New World Economic Order, which in effect would be a New Political Order; dominated by Europe and North America, though such was not stated.

But the best laid plans of mice and men often go awry. So now there is a Republican President-elect who, on the face of it, is threatening to bring major established structures of that Order- crashing down. This is very ironical because it is the conservative business and political leaders in North America and Europe who have been the most ardent proponents of this New Order.

In a series of articles I intend to show how the policies enacted have negatively affected developing countries like Trinidad and Tobago, where once there were several garment manufacturers that were killed off by trade liberalization; as one example. World economics may return to a more nationalistic or bi-lateral paradigm if Trump begins to up-end the mango-cart. Of course change is in the air because of the serious negative effect World Trade Organisation policies have had on the working class populations in North America and Europe. This will also be dealt with.

The following is a letter which I had published in the Guardian in 2008, which summarises the intent of the New World Order. It was published when the international financial system was in free-fall. It is a good starting point.


"There were those of us who recognised from early on that globalisation was primarily about facilitating the economic viability of Europe and North America into the distant future. Their economic hegemony could not continue on the basis of aggressive nationalism! colonialism, as in the past such a posture had led to wars, the destruction of the international economy and the loss of great treasure for most of the combatants.

Their solution therefore was to seek free rein for corporatism on an international basis. The WTO, IMF, IFC, and the World Bank were made arbiters of the new ground rules. For this to succeed, Japan had to be included because of its worldwide economic strength. China and India too, because huge impoverished populations have always been a source of great turmoil in the world.

One important reason for the plan was the stagnating profits of the primary commodity and consumer-product industries (so-called sunset industries in North America and Europe).

Sales of these products had reached a saturation point internally, and much of their installed technology was outdated. The Japanese were defeating them in both product- quality and price in the international marketplace. To make matters worse there were all the newly-independent countries with their tariffs aimed at protecting nascent industries; and their new openness to non-colonial products.

As a result the Europeans and North Americans decided that the rules of international trade and finance had to be changed through the WTO, IMF etc. (West Indian cricket lovers are well aware of this ruse as used by the ICC in the past.)

Another prong of the strategy was to lower the factor-costs of production wherever possible. For political and economic purposes Ronald Reagan set about systematically destroying the power of the Unions in the US.

In conjunction with the above tactic, US manufacturing corporations began exporting their jobs to low-wage countries (China, Indonesia, Malaysia, India, Mexico). The mantra was that the US economy was to become service-oriented. However there were unforeseen consequences and those consequences have brought us to the brink of an international financial collapse."

Now we are in the Trump era. Hang on for the ride!