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Harel Barzilai
112 Sapsucker Woods Rd 1A
Ithaca, NY 14850
(607) 257 - 7057

\address
ECAAR Global Essay Contest
c/o Professor Lawrence Klein
and President Oscar Arias
World Essay Contest
Economists Allied for Arms Reduction
70 West 40th Street, 4th Floor
New York, NY 10018



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We take as given the desirability of redirecting resources from
armaments to human needs, and of attaining a sustainable,
environmentally healthy, and nonviolent world, and focus on the
``blueprint'' of how such a vision might be attained; namely, on the
obstacles which must be overcome.

While the growth of universal love and empathy among the world's
people would surely help attain this vision, we will not address these
themes since the focus of the topic is not religious or psychological,
but economic and political.  Such an analysis entails an examination
of institutional obstacles, whose nature is revealed by surveying the
global scene.
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According to the World Health Organization [WHO], eleven million
children die every year of diseases from which they could be saved
for pennies to a few dollars per head. This ``silent genocide'' is ``a
preventable tragedy because the developed world has the resources and
technology'' to quickly put an end to these deaths (WHO's Hiroshi
Nakajima). This human disaster is merely one symptom of the amoral
structures which govern resource allocation and national policy, and
which will continue to bring about such results if left intact.

Throughout the Third World, infant formula manufacturers continue to
disregard WHO guidelines, thereby maintaining high profits --- and
high infant mortality rates. As practiced by drug-dealers, these
corporations dole out huge numbers of ``free samples'' and encourage
hospitals to bottle-feed babies. Since a new mother's lactation must
be stimulated by suckling, even brief use of the formula in the
hospital can make the mother's milk dry up, creating a dependent
``client.''

These mothers who cannot breastfeed often dilute the expensive formula
to make it last longer. In addition, the formula does not provide the
natural immunization against disease and complete nutrition found in
mother's milk. Not surprisingly, the mortality rate of bottle-fed
infants in developing countries is significantly higher than that of
breast-fed babies. UNICEF estimates that each year one and a half
million infants die unnecessarily, deaths which could be averted
through breastfeeding, a practice which suffers from one defect: its
unprofitability.

Regarding national policy, the effects of profit-based (and hence
amoral) economics are highlighted by Oxfam's report {\it Why Farmers
Go Hungry}, whose analysis of ``food aid'' policies in the eighties
notes that 55\% of U.S. grain export is fed to animals in countries
where the hungry cannot afford to buy meat.  Most U.S. agricultural
exports ``do not go where they are most needed,'' but to developed
countries; in 1982, the Netherlands alone received more U.S.
agricultural products than the entire continent of Africa, while World
Bank figures for that year reveal twice as much agricultural exports
to Canada (with 24 million people) than to the 17 most hunger-ravished
countries --- just under a billion people --- {\it combined.}

Oxfam also states that only 3\% of U.S.  agricultural exports that
year were given away; most ``food aid'' is sold with low-interest
financing to Third World governments, then usually resold at prices
the poorest cannot afford.  Another consequence of ``free enterprise''
is the taxpayer subsidy of agribusiness while ``even our food
`donations' do little to alleviate hunger worldwide.'' That examining
who benefits, who pays, and who continues to suffer might shed light
on the forces driving U.S.  policy is a notion thoroughly ignored in
the mainstream when undesirable attention to the influence of
corporate interests may result.

Similar causes underly resource misallocation in First World domestic
policy, particularly in the U.S.

In this super-rich country, the cumulative AIDS rate per 100,000 ranks
fourth highest in the world after Malawi, Uganda, and Congo; the rate
for nonwhites tops even the worst-case African nations.  Infant
mortality rates are the worst among all western industrial nations,
comparable to Cuba's rate, which is far lower than that of U.S.
Blacks.  Rates of child immunizations are among the lowest in the
hemisphere.

The racial statistics do represent an independent dimension of
exploitation. The underlying issue, however, is power relations
(class), relations which are more easily established and maintained
when the victims are readily identified, e.g., by race or gender. When
elite interests are relatively minor, change comes more easily ---
witness the transformation of gays and lesbians from among the most
maligned groups into beneficiaries of protection from the highest
levels of government --- than when the stakes (profits and power) are
high, where we find a \$300 billion military budget alive and well
long after the Soviet threat --- and Soviet Union --- has evaporated,
and the national disgrace of the lack of an Equal Rights Amendment.

The health care crisis and concomitant debate about skyrocketing costs
and the tens of millions of uninsured Americans presents another
``paradox'' of economic mismanagement. Solutions typically offered
include ``managed competition'' and other market-based proposals
protecting health industry profits.

Almost never mentioned is that the U.S. is the only western industrial
nation without a universal-access, national health plan. The General
Accounting Office reports that if a single-payer, Canadian-style
program were implemented in the U.S., {\it tens of billions} of
dollars of savings per year would result: ``the savings {\it in
administrative costs alone} would be more than enough to finance
insurance coverage'' for all uninsured Americans; ``there would be
enough left over to permit a reduction, or possibly even the
elimination'' of all co-payments and deductibles. But that would be
bad business for the multibillion dollar health industry, whose
political influence mirrors its financial power under our
capital-based economics which put profits before people. More
accurately: which put profits first, period, and for which human needs
are entirely incidental, accounting for the Third-World features in
U.S.  society following a decade of particularly enthusiastic
adherence to the logic of ``free-market'' public subsidy and private
``enterprise'' (profits), the polar opposite of a democratically-run
economics.

As with U.S. ``food aid'', capitalist economies' socialization of
costs --- not profits --- were highlighted by Dr. Fazlur Rahman in the
{\it Times} business pages: ``Basic biomedical research has long been
heavily subsidized by United States taxpayers'' to the tune of
billions of dollars; ``high-tech pharmaceuticals owe their origin
largely to these investments'' but are often ``out of reach of our
patients'' as corporations rake in private profits.

In this crucial respect, capitalism scarcely differs from communism: a
tiny elite controls the key economic levers --- not the people. That
the people can and should is as ``Utopic'' as were the elimination of
slavery and child labor, or attaining suffrage for women.  The common
features of communism and capitalism were suggested by candidate
Harkin in comparing communism with the virulent form of the later,
``trickle-down economics.'' Both had the ``same outcome'': they were
``supposed to help everyone'' but benefited a ``privileged few at the
top'' --- just as in the ``regular'' capitalist examples reviewed.

Another example is the U.S.  military budget, some \$300 billion per
year including Energy Department, NASA, and other hidden spending ---
excluding interest on the deficit.

``We spent \$150 billion during the height of the Cold War, back in
1980,'' observes Rep. Maurice Hinchey. ``{\it Obviously} we can spend
substantially less on the military than we were spending [then] ---
not having to double it as we have.''

In fact, even the 1980 Cold War budget was excessive, with Soviet
might consistently exaggerated, and the {\it defensive} uselessness
of being able to destroy the USSR so many times over.  For the
purposes of violent intervention abroad, however, and as a corporate
welfare program, the ``defense'' budgets functioned well. As for
``economic stimulation'' from the technology of homicide (or
tax-breaks for the rich), the same defects as plague breastfeeding
explain lack of interest in productive stimulation via purchases
of homes for the homeless, food, clothes, etc.

The breadth of mainstream political discourse on this issue is
reflected in Clinton's interview with {\it Defense Electronics}
(10/92).  Clinton contrasts his proposed military budgets with those
of his conservative Republican opponent: over the period 1993-1997, he
would spend a whopping 5\% less. For the same institutional reasons,
in discussions of the deficit, one may mention tax increases and
spending cuts, but not the vastly bloated military budget, nor basic
economics of resource allocation --- i.e., productive endeavors versus
building military waste-products unnecessary for defense --- and their
public (versus private) consequences.

1991 was good business for military contractors, with \$ {\it 41
billion} in U.S. arms sales. These striking deviations of national
policy from economic prudence (and moral sanity), and an analysis of
the beneficiaries of these policies, reveal a great deal about
effective power distribution which cannot be legislated away but is
rooted in the economic systems and in the institutional relations
between the business and governmental sectors in a capitalist order.

Disarmament cannot be addressed separately without an examination of
the same economic forces which allow millions of children to starve.
Both paradoxes of misallocation resolve by observing that costs and
benefits {\it for the nation as a whole} differ from those of the
elites who control the national economy and national policy. In
addition to these institutional dimenstions, there are interrelated
personal ones; the deterioration of public schools and hospitals do
not affect George Bush's family.

``Throwing the bums out'' will not change the systemic roots which
consistently bring about amoral economic allocation, infanticide, etc.
One cannot judge capitalism --- or any economic system --- by how it
would function with ``decent, honest people'' in high office and
corporate suites; Soviet communism would pass such a test, suggesting
the system be maintained while we strive to make CP officers more
``decent,'' with ``integrity,'' so they don't abuse their power.

That East Bloc elites referred to these states as ``socialist'' is
as significant as the label ``democratic'' which they also adopted. We
are not told that democracy has been ``discredited'' following the
fall of the ``German Democratic Republic.''

Beginnings of democratic socialist alternatives have consistently been
crushed by both Powers: Prague (1968) and Guatemala (1954) for
example; ``but, while the Moscow-imposed government in Prague would
degrade and humiliate reformers, the Washington-made government in
Guatemala would kill them'' writes Guatemalan journalist Julio Godoy,
adding, ``it still does, in a virtual genocide that has taken more
than 150,000 victims,'' (citing Amnesty International's reports on the
``government program of political murder.'')

These essential features are obscured in our capitalist Free Press ---
the large corporations in the business of selling mass-audiences to
client advertiser companies --- which is controlled by the same
interests behind the national and global disasters reviewed. Also
obscured are the striking parallels between capitalistic and
East Bloc-style media: both are run and controlled by a tiny, elite
class --- not the public.

The proclamations of the ``Triumph of Capitalism'' in the Cold War are
part of the PR campaign, and worth examining. To assess them we
natually compare public welfare in the former East Bloc with Latin
America, where the Monroe Doctrine, free-market capitalism, and
U.S./IMF control have reigned.

We find that Cuba and East Europe are human rights paradises compared
to the U.S-backed ``fledgling democracies'' employing a governmental
```Death Squad' strategy'' (Amnesty ), murdering hundreds of thousands of
their citizens (El Salvador, Guatemala); or compared to the murder of
a child per day by Brazilian death squads in league with security
forces, among other victims of U.S.-backed terror necessary for
maintaining oppressive capitalist orders; victims whose ``lives and
deaths have not touched the conscience'' of those shedding tears over
Soviet atrocities, writes correspondent Marth Gellhon; ``I can testify
that it was far better and safer to be a peasant in communist Poland
than it is to be a peasant in capitalist El Salvador.''

We correctly ascribe East Bloc atrocities to the system which produces
them, not ``those bad people over there.'' The same logic applies to
capitalism in Latin Ameria (and elsewhere); the higher levels of
violence it requires do not make totalitarian ``socialism''
benign, but should dispel similar illusions about capitalism.

Capitalism's environmental and development catastrophes can barely be
sampled within these confines. The nightmarish results of the
maquiladoras highlight the former; meanwhile, Chilean poverty has
risen five-fold, from 1 million under Allende to 5 million today in
that ``economic miracle'' following two decades of ``free-market''
medicine, and two-thirds of Brazil's people do not get enough to eat,
for whom East European life would be a feast.

Remarks Economist Jose Camargo, ``Saying that Latin America needs `free
market reforms' is a little bit crazy, because we've basically had
market economies from the times our countries were founded;'' the
catastrophes reviewd reflect ``a failure of the market and not of
socialist economics.''

Millions of children do not starve and die of diseases each year
because the world's people are heartless, but because of a system of
elite-controled, profit-based allocation of resources to which
starving children, environmental destruction, etc, are externalities,
and because in a profit-run, market economic order those who put
babies' lives above profits will be replaced by more amoral actors who
win out in this system, which requires overhaul, not ``modification''
at the margin with new carrots and sticks to perhaps correct some of
its more vicious manifestations.

A private, profit-based ``competitive'' economy {\it drives} players
to externalize costs, punishing those who consider human and
environmental consequences and are thus overtaken by those who more
singlemindedly pursue profits.

Governmental regulation does not address and cannot eliminate these
incentives. At best, some protections may be afforded; however, the
profit-based market economy will encourage elites to try to get
around such restrictions and transfer costs to the weak. This they are
likely to succeed in doing given their inherent influence and power,
under this system, over the political institutions in charge of
legislating and enforcing such laws, as well other key institutions
like the mass media with its vast influence over public opinion and
perceptions.

The notion that the consequences --- let alone global or long-term
consequences --- of the pursuit of private interest in a profit-run
system can deliver prosperity in any more than an incidental fashion,
let alone that such a system is ``the best'' or ``only'' economic
order humanity can hope for, is so self-evidently absurd as to require
no comment, but extreme marginalization in the Free Press and the
political culture generally awaits those who would deviate from the
capitalist Party Line; including any progressive economists, with
tragic consequences.

If ``socialism'' means a party-run economic order administered under a
totalitarian regime, then ``socialism'' has indeed died. Amen. But any
reasonable definition of ``socialism'' must minimally encompass a
social order in which the economy and principal institutions are run
and democratically controlled by (all) the people --- not by elites,
be they Corporate- or Vanguard Party-based . {\it This} socialism did
not die; it has yet to be born.

In the long run, economic democracy mandates that capitalism, like
feudalism and communism before it, must be overcome, in favor of a
popularly controlled economy, a Participatory Economics like that
described by Albert and Hahnel.

Until that time, and in that direction, economic empowerment and
enhanced democracy may be advanced by various means. A genuine labor
movement, Party, and press, could counterbalance the ``War on Labor
and the Left'' described by Patricia Sexton. Public Access media and
citizen control of the airwaves generally, and minimally a financially
corporate-independent PBS would promote a truly free press.
``Freedom'' without resource equality is Animal Farm Freedom, in which
some players are ``more free than others'' --- free to control,
manipulate, and exploit.

Democratically controlled, credit-union based rather than profit-based
financial institutions; Ralph Nader's concept of Citizen Utility
Boards and similar organizations; and Worker's Councils and
Worker-ownership would be additional steps towards establishing a
truly democratic, socialist order, as would generally reversing the
assaults of the capitalist/Corporate class and their counterparts,
Lenin and Trotsky, who abolished factory councils, Soviets, and other
institutions of popular control soon after the revolution, thus
preventing socialism from taking root.

Since then and to this day, the human struggle towards economic
democracy and liberation from all forms of elite-controlled economics
and oppression has continued, offering the hope of a just, peaceful
future for humankind, and a future for the Earth.

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Harel Barzilai

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\ps Footnotes available upon request.
\endletter
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