ANALYSIS Global Capitalism and the Challenges Facing SocialEcological Transformation in Latin America V ivianne V entura -D ias In the age of mature modernity, the dangers and uncertainties derived from the high degree of spatial-temporal integration that has eroded national borders; the concentration and centralization of capital; and technology development and its tensions are all turning societies that had overcome the basic hazards of survival into societies at risk. Limitations on technological and social changes are gaining currency once again in light of the magnitude of the impact of human activity on the planet. Nevertheless, the human limits on confronting these changes are just as important as the planet’s physical limits. The acceleration of the times is leaking into every corner of our personal and collective lives, throwing off the balance between the social time needed for sociability and citizen engagement and the pace set by technological changes. The word modernity refers to forms of social life to which the Latin American people were introduced as“modernizing” projects, imposed from the top down and which, far from responding to the exclusive property ownership structure, only reproduced the power structure and widened the prevailing economic and social inequalities. Every technology innovation opens up a window of opportunities for societies to choose what is best for them. This open window of opportunities contains within it policy options. But it is the institutions, ideas, and social movements which will in the end delimit the field of potential by adopting the technologies that are best for society.

Global Capitalism and the Challenges Facing SocialEcological Transformation in Latin America V ivianne V entura -D ias

Friedrich-Ebert-Stiftung Proyecto Regional Transformación Social-Ecológica © Fundación Friedrich Ebert Representación en México Yautepec 55, Col. Condesa, Del. Cuauhtémoc, C. P. 06140, Ciudad de México. Teléfono:+52(55) 5553 5302 FES Transformación Social-Ecológica @fes_tse Proyecto Regional Transformación Social-Ecológica To request additional copies: transformacion@fesmex.org Responsible Christian Denzin ISBN: 978-607-7833-95-6 Commercial use of all media edited and published by the Friedrich-Ebert-Stiftung is not permitted without written consent of the FES. The views expressed in this publication are not necessarily those of the Friedrich-Ebert-Stiftung.

Contents Introduction ........................................................................................................................................ 5 1. Mass society and global capitalism .......................................................................................6 1.1. The contradictions of modernity..................................................................................................6 1.2. Mass society and complex interdependence..............................................................................7 1.3. Late modernity and risk society...................................................................................................9 1.4. Social acceleration: Consumption time..................................................................................... 11 1.5. Leisure time: Time poverty and modern life..............................................................................12 1.6. Public and private spheres: Cities, autonomy, and citizenship.................................................14 2. Global capitalism: The concentration of wealth and power ........................................16 2.1. The political economy of globalization.......................................................................................16 2.2. Finance capitalism: The financialization of economies.............................................................19 2.3. Concentration and centralization of wealth, power, and income...............................................22 2.4. The crime of globalization and the globalization of crime.........................................................24 3. The political economy of international cooperation .......................................................27 3.1. Governing common goods: Committing to protect the rights... of whom?................................27 3.2. The World Trade Organization’s trade and investment regulatory framework..........................30 4. Final considerations ..................................................................................................................33 4.1. Recent changes to the global political economy.......................................................................33 4.2. The contradictions of modernity in Latin America.....................................................................34 4.3. Incentives to encourage social-ecological transformation in Latin America..............................35 References ........................................................................................................................................39

GLOBAL CAPITALISM | Vivianne Ventura-Dias Introduction This essay presents and problematizes some of the economic, political, cultural, and institutional features of the contemporary international context, examining the challenges that they present for the construction of a more just and ecologically responsible society in Latin America. Ultimately, the objective is to discuss the degrees of freedom that Latin American societies have to alter their productive infrastructure and consumption matrix to achieve a social and economic structure that is more equitable in terms of access to goods and services, more committed with the sustainable use of natural resources, and more focused on the freedom of each and every one of its citizens to“search for the good life.” This process constitutes what is now called social-ecological transformation(SET). The current international context is complex, marked by increased uncertainty and limited knowledge. We are currently experiencing social, economic, technological, and political changes that are full of contradictions and that we do not fully understand. The world of the 21st century, described by sociologists as a risk society based on “manufactured” uncertainty, is developing in the context of acute and increasing inequality; severe financial, ecological, social, cultural, and political crises that are shaking the legitimacy of political parties and programs; and an increasing distrust in and discrediting of democratic institutions. Any attempt to extract coherent narratives from the imprecise contours of the changes currently underway will contain inevitable biases—generally pessimistic—and this essay is no exception. On the one hand, there is evidence that ideas, values, and sentiments that are hostile to more inclusive and tolerant democratic societies are spreading. These ideas and values have gained ground in core countries, such as those in Latin America, and have facilitated the rise to power of authoritarian groups in some countries, including the United States, Poland, Hungary, and Turkey, among others. On the other hand, the 2008-2009 financial crisis, the European debt crises, and the current refugee crisis fueled by wars in the Middle East and Africa have all contributed to creating significant resistance movements in core countries. In the United States and Europe, groups of mostly young people have taken to the streets in defense of solidarity, in opposition to discrimination based on race, gender, sexual preference, nationality, religion, or ethnicity, and in favor of significant social, economic, and political changes focused on sustainability and respecting our planet. 1 In the United States, Donald Trump’s presidency is generating a nation-wide resistance movement in a country that has little history of social movements. It is important to highlight the strength of the indigenous movements in Latin America, despite the efforts of government and progressive parties to stifle social movements. In Bolivia, Ecuador, and Peru in particular, local indigenous communities and allies have rallied together to resist the invasion of their lands, standing against both domestic and international companies and fighting back against these companies’ attempts to appropriate mineral resources. As these movements have gathered strength, the number of murders of campesinos 2 and indigenous activists has increased across all of Latin America, from Mexico to Brazil. These activists are murdered by landowners or their hired guns, or by officials from the legal and illegal mining sectors; the murderers remain unpunished. The rise of the far right in industrialized countries shows the power of society’s fear and insecurity 1. It is also important to mention the Occupy Wall Street movement, which began in New York City in September 2011. The movement eventually spread to other U.S. cities, as well as countries around the world, influencing other movements such as the Indignados in Spain, who took their name from the book Indignez-Vous, published by Stéphane Hessel(2010) when he was 93 years old. It is also worth highlighting the creation of new political parties, such as Podemos in Spain and Syriza in Greece; the revitalization of existing parties, such as the Labour Party in the United Kingdom and the rise of Jeremy Corbyn; and the passionate campaign of young people in the United States for Senator Bernie Sanders. 2. Translator’s note: In Latin America, campesino refers to a member of a typically agrarian community and carries connotations of the long history of social, cultural, and political relationships between people and the land. 5

Vivianne Ventura-Dias | GLOBAL CAPITALISM when faced with the other . If an utopian society is one where“there is room for all human beings,” and that provides the means for every man and woman to“live their lives according to their own plan, with the assurance of a decent life based on their work,” then the anxiety of exclusion and the primacy of individualistic solutions for collective problems represent the opposite ideal(Mora Jiménez, 2017). The dystopia created by the sectors of society disillusioned with globalization and modernity is individualistic. Enclosed in an imperialistic nationalism intolerant to diversity of thought, culture, or life plan, these reactionary societies reject the secularism of modern society. Hindered by their fears, whether real or fabricated, they seek the protection of authoritarian leaders and look for solace in mysticism and sectarian religious credos. The other in this case is the immigrant—legal or undocumented—who becomes the scapegoat for the frustrations of social groups that prefer to ignore the fact that their struggles are in fact the result of the global policies and practices of CEOs, private investors, financial institutions, and technocrats. These same policies and practices work to ensure enormous benefits for a minority while transferring the costs of exploiting the planet to the rest of humanity. The critical literature review presented here highlights the crimes of globalization and capitalist companies, as well as the brutal national and international labor, environmental, and human(and non-human) rights violations that are not challenged in court. This essay outlines the complex scenario of contemporary reality in broad strokes; the intention of this essay is to organize the questions that are relevant for SET in Latin America, rather than trying to provide concrete answers. How can we move towards a global future with a political economy that is more human, more equitable, and more responsible for the planet? What spaces exist to create policies that counter the status quo demanded by global financial capitalism? Can distinct national political economies exist within the framework of contemporary financialization in spite of the pressure imposed on nations from the integration of the international economy? Are globalization and financialization truly definitive, incontestable, and irreversible? Can the relationships between machines and workers be negotiated? How can limits be imposed on growth and change? Will there be space to create the utopias of possible minority groups in both core and peripheral societies? In addition to this brief introduction, this essay consists of three substantial sections that examine the social, economic, and political transformations derived from global financial capitalism and that form the backdrop for SET in Latin America. The essay concludes with a section on final considerations. 1. Mass society and global capitalism Within the current context of neoliberalism and anti-liberal ideas, it is more important than ever to reclaim and reinforce the ideals of the thinkers of the Enlightenment—tolerance, fraternity, freedom, and equality—to prevent increasing irrationality and fear of the other from being manifested in racist, classist, and sexist violence. As Sen(2009) argues, in spite of Grounds for skepticism about the practical effectiveness of reasoned discussion of confused social subjects, this particular skepticism of the reach of reasoning does not yield – nor... is it intended to yield – any ground for not using reason to the extent one can, in pursuing the idea of justice or any other notion of social relevance.(pp. xvii-xviii) 1.1. The contradictions of modernity Modernity is not an easy concept to define. It has multiple meanings, and the interpretations of its normative content have multiplied over the last decades. In the words of Bolívar Echeverría(2011), one of the Latin American authors who approaches the Eurocentric interpretation of modernity from a critical perspective,“some are more modern, others are less, but all of us, whether we like it or not, are already modern or are becoming modern, permanently”(p. 67). Beyond its contradictions, moder6

GLOBAL CAPITALISM | Vivianne Ventura-Dias nity encompasses concepts that have allowed part of humanity to think critically about individual and collective history and convince itself that it is possible to change it. SET falls within the philosophical tradition of modernity due to its aspiration to create social change that contributes to individual and collective autonomy. Recently, a critical analysis of the diversity of modern institutions and cultures, in regions both near and far from Western tradition, engendered the concept of“multiple modernities”—or plural forms of modernity—within the political and social theory of modernity. This concept created space for the coexistence of different experiences of modernity by questioning the notion that modernity must necessarily be associated with the set of institutions it emerged with in Europe—i.e. an industrial, market-based economy; democracy limited by national territory; rational administration; and production backed by science and technology(Wagner, 2009). In conclusion, the cultural program of modernity in other regions does not have to assume“the basic institutional constellations” that were formed in Europe, although“the original Western project constituted the crucial(and usually ambivalent) reference point” (Eisenstadt, 2000, p. 2). Modernity has been criticized as positivist, Eurocentric, technocentric, and rationalist, proposing absolute truths that do not correspond to the histories of all peoples, nor of all human beings, since women were excluded(Harvey, 1989). However, the strength of modernity lies in its commitment to the triumph of science over disease and pain, the comfort of material life, secularism, and the liberation of the human being from religious obscurantism. It is the modernity of the Enlightenment, with its moderate, conservative, and radical thinkers(Israel, 2010/2015); the modernity that encompasses the ideas of justice and freedom and each individual’s rights to the pursuit of happiness and the good life; the modernity that has been the birthplace of the ideals of Latin America’s anti-colonial movements, a result of the European expansion towards the Americas(Ribeiro, 1969/1977); the modernity of democracy, republican institutions, and the rights of citizens. The concept of human rights is essentially a product of the ideas of the Enlightenment at the end of the 17th century. The works of Montesquieu, Voltaire, and Kant also created the philosophical foundations for 19th century liberalism, which in turn laid the foundations for the conceptual framework of the legal human rights framework implemented in the post-World War II period (Bassiouni, 2015). However, the optimistic conclusions regarding the control of nature by human reason, science, and technology began to be questioned once the harmful effects of industrialization, urbanization, and mass consumption on the environment and the planet’s resources were first documented. The speed and scale of economic growth—reflected in the negative costs of natural resources, the poorly paid work of men and women, and the unpaid work of women and girls in the home—highlighted the perverse effects of economic growth on people, societies, and the environment and further disturbed the optimistic belief that the use of science and technology would lead to social progress. On the contrary, for some classical modern philosophers, the very assumption of active control and domination of nature by human beings was leading humanity towards a tragedy that humanity itself had created. 1.2. Mass society and complex interdependence We live in the midst of mass societies defined by the magnitude of the phenomena resulting from a world population estimated at 7.4 billion people. These societies are intensely and extensively connected by mercantile, monetary, and financial circuits, and even more importantly, by circuits of ideas and information. Flows of people, goods, currencies, and information connect people and groups of people around the planet, generating a complex world with multiple interdependencies and interconnections that have the ability to quickly spread and amplify economic shocks, political tensions, disease, and cultural practices. 7

Vivianne Ventura-Dias | GLOBAL CAPITALISM In the contemporary global mass society, the figures are colossal. For example, in the last quarter of 2016, more than 1.86 billion people were monthly users of the social network Facebook. That amounts to 25 percent of the world’s population, including infants, the elderly, and illiterate. 3 In fact, data indicates that more than half of the young adult population globally uses Facebook, WhatsApp, and/or Instagram. In 2017, the number of mobile phone subscribers was expected to surpass 4.77 billion. In 2016, India alone exceeded one billion mobile phone subscribers, more than 80 percent of its population(Rai, 2016). According to data from the World Bank, only a handful of countries have less than 40 mobile phone subscriptions per 100 inhabitants. This means that even in poor countries such as Afghanistan and Angola, more than 60 percent of the population is connected. 4 Major sporting events, such as the 2014 FIFA World Cup or the 2016 Summer Olympics, were watched by more than 3 billion people worldwide, around half of the world’s total population. 5 Local and prosaic events, such as the funeral of Princess Diana of Wales in 1997, become global spectacles—more than 2.5 billion people saw the funeral rituals. This phenomenon is unprecedented in the history of mankind. For the first time in history, the media has the ability to impact the personal and cultural life of almost the entirety of the global population in real time. As a result of capitalist industrial development, we exist in a world built by humans via mass production methods. All of the objects and services that we use in our day-to-day lives are products of an extensive and complex industrial system that depends on the labor of men and women with diverse qualifications located around the world. These workers are 3. Data Retrieved from:<https://www.statista.com/statistics/264810/number-of-monthly-active-facebook-usersworldwide/>. 4. Data Retrieved from:<http://data.worldbank.org/indicator/IT.CEL.SETS.P2>. 5. Data Retrieved from:<https://www.statista.com/statistics/280502/total-number-of-tv-viewers-of-olympic-summer-games-worldwide/>. supported by increasingly effective machines that will one day put them out of a job. In this global mass economy, interdependence is profound, complex, unbalanced, and asymmetric, touching every aspect of people’s lives across the most diverse regions of the planet. Within the context of the time-space compression that characterizes globalization, the manner in which this interdependence is manifested, and the degree to which it is perceived individually, depends on the structure and depth with which individuals, societies, and regions are integrated into the global economy. In short, contemporary interdependence is the fruit of the capitalist system’s dynamics of consolidation, hegemony, and expansion and, as such, is part of the analytical framework of the political economy of globalization. The concept of complex interdependence seeks to transcend the concepts of globalization or internationalization as the articulation between the national markets for capital, labor, goods, and services; it seeks to comprehend the social and cultural processes that result from the formation of a worldwide capitalist system in which decisions made by economic, social, and political agents in a certain region of the globe impact the employment, livelihoods, health, and lives of people located in other regions. Interdependence is profound and complex, involving multiple different environments, relationships, actors, and regions that create a network of interdependencies. Economic interdependence is only one aspect of this network, although in many ways it is the most relevant. Contemporary interdependence is fundamentally inequitable due to the centrality of the economic and financial aspect, which privileges the mobility of capital and the protection of investor’s rights, reinforcing obstacles to labor mobility. It is also asymmetric, implying certain power dynamics between capital and labor, between core governments and others, and between different social groups that exist outside major cities. In turn, these power dynamics establish hierarchical and authority structures between countries with dissimilar economic, technological, and military capabilities. In situations of significant asymmetry of power and resources, inter8

GLOBAL CAPITALISM | Vivianne Ventura-Dias dependence becomes a relationship of subordination of the weak to the strong. Unfortunately, interdependence within the context of global mass society has not created conditions conducive to increasing the legal protections of the weak against the strong. On the contrary, in the opinion of respected legal scholar M. Cherif Bassiouni: We are living through a period of decline in the observance of and respect for human rights as they have evolved since the end of World War II. And we may well be witnessing a setback in the evolution of international criminal justice… in a curious, not to say perverse, way—our globalized world is becoming more interdependent and interconnected at the same time that it is becoming less committed to the identification and enforcement of the common good.(As cited in Barak, 2015, p. 104) In the context of a global society that is unequal in its distribution of wealth and power, the negative consequences of global interdependence most heavily impact the social groups, societies, and regions that did not benefit from economic progress, nor did they contribute to the damages resulting from that same progress. Climate change is an example of long-term, collective processes whose consequences are distributed indiscriminately and unequally to individuals and groups of people, regardless of the manner and/or intensity of their contribution to the collective result. Economic and financial crises, environmental issues, and pandemics are global issues that require global solutions. However, recent experiences show that the cumulative effects of global factors on individuals and societies become more profound and less controllable over time, making it more difficult for governments and international institutions to find effective solutions for their negative consequences, particularly in terms of the life and health of people, animals, and the environment. Returning to Bassiouni:“There are no international institutions with the capacity and effectiveness to exercise control over the negative effects and outcomes of globalized factors on the planet, states, and individuals”(Bassiouni, 2015, p. 64). 1.3. Late modernity and risk society The interdependence imposed on the passive actors of globalization implies daily encounters with an unknown risk for which people are not prepared and that is derived from the actions of others. Within the context of global capitalism, the complexities of contemporary social life have increased the degree of uncertainty and risks inherent to everyday life, subverting one of the components of modernity and secularism that is directly associated with reason and the control of nature: the ability to use scientific and technological means to reduce the dangers of everyday life, to measure risks, and to create the appropriate instruments to limit the material impacts of these risks. On the contrary, in mature modernity, the dangers and uncertainties resulting from the high level of spatio-temporal integration and erosion of national borders, the concentration and centralization of capital, and from technological development and its corresponding tensions convert societies that have overcome the basic dangers necessary to survive into risk societies. The immediacy of these risks permeates the routine of individuals located in regions distant from the original danger, reflecting a way of life that is based on the intensive use of technology, the continuous search for high profits on capital, an accelerated rhythm of social changes, and a context of high levels of interdependence. Within a context of strongly interconnected societies among which news is circulated in real time, local problems, mainly from core countries, become global problems that end up harming periphery regions. As established by Ulrich Beck in his pioneering work, the risks and the opportunities created by the expansion of industrial society across the globe have no comparison in human history. According to Beck(1986/1998), the term risk society refers to a particular set of social, economic, political, and cultural conditions and factors that are characterized 9

Vivianne Ventura-Dias | GLOBAL CAPITALISM by a manufactured logic of uncertainty that is progressively amplified and that fundamentally transforms existing structures, institutions, and social relations, introducing increasing levels of complexity, contingency, and fragmentation. Beck emphasizes that the Chernobyl disaster was an example that showed the“end of all our highly bred possibilities of distancing...”(1986/1998, p. 81). It is important to note that modern risks are not limited to the immediate area where they occur. For example, the impacts of the Chernobyl nuclear disaster(1986), and more recently the Fukushima nuclear disaster(2011), were not limited by time or space, as radioactive material travels through the air and its effects can impact multiple generations. The costs that come with economic crises can also impact multiple generations. The distribution of these risks and vulnerabilities between local economies, families, and distant regions is completely unjust and unequal, but does not incur any responsibilities or legal obligations(Kennedy, 2016). In addition to the environmental risks, it is also important to include the planetary consequences of the financial crises and wars of mass destruction fomented in Afghanistan, Iraq, Libya, and Syria, among other countries, by the core powers. These consequences include provoking and arming armies of religious fanatics, creating millions of political and economic refugees, spreading terrorist attacks around the world, disrupting international cooperation, massacring civilian populations, and undermining international law. The class-based society that dominated during the modernity of classical liberalism did not disappear with the advent of risk society. On the contrary, these risks exacerbate the tensions inherent in a class-based society. Beck(1986/1998) emphasizes that the distribution of risks is inversely proportional to the distribution of wealth. Wealth accumulates at the top, while the risks accumulate at the bottom of the pyramid, impacting the most vulnerable groups and regions. Avoiding risks is no longer an option, but rather a class-based privilege that the wealthy enjoy and the poor do not. Political agendas should include these risks in order to implement procedures and sanctions that attempt to minimize these risks, assign responsibilities related to the events that cause the risks, and allow a fairer distribution of the impacts of these risks, both within and between countries. The disperse impacts that the actions of companies and investors have on people’s lives, as well as the difficulties in establishing legal repercussions for the harm caused, facilitates impunity when it comes to crimes of globalization(Barak, 2015). The 20082009 financial crisis is another example of the potentially catastrophic effects of the criminal actions of global capitalist entities. The economic, social, and political effects of this crisis extended through both time and space and are still being felt in the global economy, as well as by those who lost their homes, jobs, and/or savings in the United States, Spain, and Greece. Irrefutable evidence exists proving that ongoing fraud committed by banks and financial institutions eventually led to the Great Recession. However, not a single one of these companies or their employees have been prosecuted, despite clearly being responsible for significant violations of innocent people’s human, economic, and social rights. Contemporary risks are related to another feature of modernity: the increase in the speed of individual and collective experiences resulting from technological transformations that impact the entire fabric of society within the framework of global capitalism. Historically, the process of time compression and expansion—or of technological and social acceleration—has accompanied the evolution of modern industrial society throughout the different industrial revolutions. 6 However, the technological innovations of the past few decades have exponentially increased the rate, scale, and magnitude of social transformations. 6. Gordon(2016) references three important“industrial revolutions” : the first, which occurred between 1770 and 1840, corresponded to the introduction of the steam engine and the railroad, as well as the transition from wood to steel; the second, which occurred between 1870 and 1920, corresponded to the introduction of electricity and the development of new industries; and the third, which began in 1960, corresponded to the introduction of information technology and communications. 10

GLOBAL CAPITALISM | Vivianne Ventura-Dias 1.4. Social acceleration: Consumption time The experience of modernity implies permanent change as a result of the essential dynamism of capitalism. This experience was outlined by Marx and Engels in their Communist Manifesto, although, according to Marshall Berman(1982/1988, pp. 9293) this Manifesto can be read more as a lyrical celebration of bourgeois achievements than as a communist document. According to Berman,“What is startling about Marx’s next few pages is that he seems to have come not to bury the bourgeoisie, but to praise it”(parodying Shakespeare). Berman, who added the subtitle The Experience of Modernity to his book, defined modernity as“a mode of vital experience—experience of space and time, of the self and others, of life’s possibilities and perils” (1982/1988, p. 15). The concept of constant acceleration of time or the accelerated changes of the human experience as a designation of the alteration of the rhythm of temporal experience is central to the emergence of a qualitatively different time, a new time( eine neue Zeit ), that accompanied the advent of modernity from 1740 and 1850. It was not until this period of time that modern European society established the concept of history, designating the difference between natural time and historical time(Koselleck, 2002). When humanity established the difference between natural time and historical time, it also began to recognize that historical time could be modified by human intervention. Koselleck incorporated the idea of an open future as a dimension of the concept of“new time,” or a transition period in which it is difficult to reconcile established traditions with the innovations necessary(Koselleck, 1979/2004, 2002). Because of their unequal and exclusive character, the processes of social acceleration and interdependence present multiple contradictions and generate a variety of tensions. The driving force of social acceleration is the inherent dynamic of capitalism that promotes continuous revolutions in the means of production, distribution, and consumption of goods and services. Today, social acceleration has been multiplied by the scientific and technological innovations of the 20th and 21st centuries, which have been extended from their initial military applications to the material, emotional, and intellectual spheres of human life. The digital revolution, the Internet, real-time information, and cultural globalization processes all contribute to create new dynamics that affect temporal aspects of existing processes. Likewise, the fall of the Berlin Wall, the end of the Soviet Union, and the integration of China and India into the global market served to further compress space, facilitating the total hegemony of the capitalist system in all regions of the world, although with local institutional and cultural specificities. It should be noted that technology is the most visible dimension of the acceleration of time, understood as the incessant reduction of the time necessary to perform processes and daily tasks, ranging from actions related to production and the market to reproductive functions in the private sphere. On the one hand, the continuous process of productive modernization has allowed workers to do more things in less time, generating free time for the worker. On the other hand, competition among capitalists has encouraged the creation of new products, services, and entertainment to occupy said free time. These two processes increased the number of ways individuals living in a mass consumption society could use their free time. During mature modernity, the expansion and diversification of the goods and services that make up the entertainment industry increased the ways that individuals could use their free time while also expanding the consumer base. Throughout the last century, the pleasures that were once the privilege of the few spread to the urban social classes, mainly with the creation of a mass market for entertainment goods and services such as tourism, sports, arts and games, etc. This increased supply of recreational goods and services met the increased demand resulting from the reduction of working hours in England, the United States, Continental Europe and, eventually, Latin America and the rest of the world. 11

Vivianne Ventura-Dias | GLOBAL CAPITALISM 1.5. Leisure time: Time poverty and modern life The acceleration of transportation and communication methods creates the sensation that the rhythm of life is also accelerating, which, contradictorily, translates into a shortage of time to enjoy the many ways created by the leisure industries to use one’s free time. Time is becoming increasingly scarce, and people in wealthy societies, or the more or less wealthy people in poor societies, are experiencing increasing time pressure. Dealing with the pleasant dilemma of deciding between different ways of using one’s leisure time was what economist John Maynard Keynes envisioned for the future of humanity 90 years ago, in a short essay that has recently acquired a sudden fame. The widespread dissemination and discussion of this essay shows the existing interest in understanding the paradox that has emerged during the past few decades: a massive increase in labor productivity has neither resulted in a continuous reduction of the working day, nor in increased quality of life for all people and less impact on the planet. In the essay, published in 1930, Keynes optimistically predicted that over the next 100 years, the average standard of living would increase by about eight times. According to Keynes, the accumulation of capital and increasing labor productivity, supported by the technological innovations already available and those that would come later, would free humanity from the obligation to work to survive. For the first time, men and women would have to face the pleasant task of“living wisely and agreeably and well.” As predicted by Keynes, the grandchildren that he never had would be able to satisfy their basic (“absolute”) needs working only around 15 hours per week. In comparison, the average workweek in Great Britain in 1930 was approximately 46 hours. From the perspective of Keynes, a lover of the arts, the biggest problem would be teaching workers how to better use the enormous amount of free time that they would have in the future. Between 1930 and 2014, the world economy grew at rates close to those foretold by Keynes, but, as we know, the distribution of growth, productivity, and technological changes was not spread equally among countries, or even between individuals and social groups within industrialized countries. The increase in productivity achieved through the automation of manufacturing and services had the potential to confirm Keynes’s forecasts, leading to a significant reduction in the working day without decreasing salaries. However, between 1930 and 2014, the average number of hours worked in industrialized countries did not decrease at the same rate as it did in the decades before 1930. 7 It is difficult to imagine that the International Labour Organization(ILO) Convention concerning the Reduction of Hours of Work to Forty a Week was signed in 1935, considering that by 1967, many of the Convention’s resolutions had not been implemented in the majority of European countries. 8 Moreover, the trend of decreasing the hours in the workweek has suffered a reversal since the 1970s, with the loss of union bargaining power, first in the United Kingdom and then in the United States. The workweek in Continental Europe remains significantly shorter than in the United States and the United Kingdom. The automation of manufacturing and the services industry occurred in parallel with the migration of jobs from industrialized countries to developing countries and China. The result has been the gradual transformation of the world of work, including the increasing flexibility of the workday and a decrease in salaries. The general loss of labor rights for the majority of workers around the world has created a new configuration of social classes, in which only workers from certain professional categories with relatively secure jobs, and/or from sectors where unions still have bargaining power, can enjoy the dilemma originally proposed by Keynes (Standing, 2011). 7. In the United Kingdom, the average hours worked per week decreased from 60 to 47 from 1870 to 1929. From 1929 to 2000, the average hours worked per week decreased from 47 to 42(Huberman& Minns, 2007, p. 542, Table 1). 8. In France, the Popular Front briefly adopted the 40-hour workweek in 1936. 12

GLOBAL CAPITALISM | Vivianne Ventura-Dias Data from the ILO itself indicates that in the first decade of the 21st century, the average workweek still clocked in at 48 hours or more in the majority of middle-income countries. By 2005, for example, the 48-hour workweek limit dominated in Latin American countries, but with an implementation rate of less than 75 percent(Lee, McCann,& Messenger, 2007). To be sure, two fundamental considerations are missing from Keynes’s essay. The first is the distribution pattern of productivity growth among social groups, separated by levels of income, age, race, and gender. The second is the changes in the function of consumption in global capitalism, which notably includes goods and services to fill leisure hours. Over the course of decades, the models of consumer desire have transformed into the global village, engendered by capital and the media. Like the other components of modernity, inequality in the increase of leisure time is influenced by factors of gender and income, as established by feminist scholars and research(Aguirre, García Sainz, & Carrasco, 2005). Empirical analyses of the use of time throughout the 20th century in industrialized countries indicate an increase in leisure time for both men and women, although the increase was greater for men(six to eight hours per week) versus women(four to eight hours per week)(Aguiar& Hurst, 2006). The so-called“second shift,” or double burden, that working women face has been recognized and debated ever since the publication of Arlie Hochschild’s book of the same name in 1988. The increase in working hours for both men and women, together with a reduction in public services that help reconcile career work and care work, further exacerbated existing gender inequalities(Schulte, 2014). However, these inequalities in the distribution of average leisure time did not prevent the creation of a mass market for entertainment goods and services beginning in the late 19th century. By the last decades of the 20th century, this market had acquired a global scale and wide diversification. The set of activities and occupations that form part of the“creative economy”(fashion, architecture, design, media, arts, sports, science, and haute cuisine, among others), together with the large and diffuse tourism sector, constitute a dynamic segment that employs a growing number of people in urban societies in both the developed world and in developing regions. Some economists criticized Keynes for assuming that basic consumption needs are finite; the dynamics of contemporary capitalism are based on the continuous creation of new consumer desires that encourage workers/consumers to prefer working longer hours to be able to consume more goods and services. 9 Many of these goods and services were not part of the consumer basket in Keynes’s time, such as digital entertainment, video game consoles, etc. In the evolution of consumer society, the very notion of basic needs is dynamic, since“mad men” create and recreate people’s desires to own new goods and services(Skidelsky& Skidelsky, 2012). 10 Additionally, the privatization of public services such as health, education, and pension systems implied the addition of new private expenses to the consumer baskets of the middle class in industrialized countries, including health insurance, pension plans, and private education. In 21st century mass society, digital media and mass communication technologies disseminate and homogenize cultural values related to consumption across national borders, consolidating a global market for the products and brands promoted by the dominant multinational companies. As a result, more material goods are produced and consumed in increasingly shorter periods of time. Contemporary society uses up non-renewable natural resources like gas and oil at rates much higher than necessary for their reproduction and produces 9. Hunnicutt(2013) analyzes the shifts in the labor movement in the United States, which stopped fighting for a reduction in the workweek in the 1930s. 10. Mad men was the term used to refer to advertising executives in the 1950s and 60s, whose offices were located on Madison Avenue in New York City. It is also the title of a television show about the advertising industry during that era. 13

Vivianne Ventura-Dias | GLOBAL CAPITALISM and dumps large amounts of toxic waste at faster speeds than the ecosystem is able to dispose of it. 11 The result is a temporal gap separating contemporary society’s use of natural resources and nature’s capacity for regeneration(Rosa& Scheuerman, 2009, p.12). Social acceleration is intimately connected to the ecological crisis that we are currently facing. 1.6. Public and private spheres: Cities, autonomy, and citizenship Considering the above, two major issues stand out: the limits to technological and social changes and the volatile frontier between the private and public spheres. Questions regarding the limits on production and consumption became controversial issues in both academic and political debate following the dissemination in the 1970s of the conclusions of the Club of Rome regarding the impacts of human action on natural resources. Issues of limits on production and consumption returned to the agenda with the creation of the Intergovernmental Panel on Climate Change(IPCC) in 1988, set up by the World Meteorological Organization(WMO) and the United Nations Environment Program (UNEP). The IPCC’s Assessment Reports, published periodically, have become increasingly confident in terms of the causality between human action, greenhouse gas emissions, and climate change. Additionally, the construction of boundaries between the public and private spheres has profoundly impacted the evolution of modern legal, political, and economic thought(Habermas, 1962/1991; Arendt, 1958/1998). These terms are used to differentiate, whether in a descriptive or normative sense, two types of human actions, two domains of social life, or two different physical and social spaces in which action and life occurs. For the po11. Under present conditions, the world’s oceans and terrestrial biomass can absorb only a part of the 40 billion tons of carbon dioxide that humanity discharges into the atmosphere annually by burning firewood and other fossil fuels (data from 2016). litical philosopher Norberto Bobbio(1978/1989), the public-private duality represented the“great dichotomy” of Western thought. Together, the two spheres cover the entire social universe—that which is private could also be defined as not-public. This dichotomy encloses values, positions, and hierarchies, and within it, the boundaries between individual liberties, private property, common goods, private interests, and public interests are not neutrally defined. The conservative movement of the 1980s rebuilt the boundaries between the public and private spheres. The current digital revolution is also reconstructing public spaces through privately-owned social networks, while digital media is increasing the state’s ability to repress and electronically monitor the privacy of ordinary people. This creates a paradox, as private entities increase their influence over the public sphere and assume control of common goods, such as knowledge, water, and forests, while simultaneously restricting spaces for individual freedom. Initially, expanded access to the Internet, in itself a public good and a common good, created false hope as to its liberating potential. However, several episodes have shown that digital communication networks host unprecedented forms of power that threaten democracy and individual freedoms. Within the framework of consumerism and global capitalism, each individual, as a consumer, is guided by his or her own narrow interests; as a citizen, however, each being is an informed free agent that opts for policies and programs that benefit the public interest and collective welfare. The division between citizens and consumers reflects the dichotomy between the public sphere, which corresponds to the citizen, and the private, which corresponds to the consumer. In an increasingly consumerist society, the structural changes impact both spheres. The term private also refers to the subjective self and personal intimacy, which must be preserved in spaces separated from the interference of others, while public is instead concerned with general knowledge and lived in spaces shared by large groups. In this opposition between the public and the private, the concept of public is linked to the Latin term res publica (loosely meaning public affair), as opposed to 14

GLOBAL CAPITALISM | Vivianne Ventura-Dias res privata (private or family, or private property). The public sphere includes the administration of public goods and political action through active citizenship and the creation of the political community. Within the area of political and legal science, feminist theorists added another element to the political debate, emphasizing the relational dimension of the human experience as central to the concepts and institutions around which we are able to organize our collective lives. In contrast to the individualistic conception of autonomy of traditional political theory, human relationships, in their various degrees and contexts, are central and constitutive to creating autonomous selves with rights and responsibilities. These relationships include intimate relationships, such as those with parents or lovers, but also include more distant relationships, such as those with professors, managers, acquaintances, and even the state. As affirmed by Nedelsky(2011), autonomy, the still prevailing concept of modernity,“cannot be understood as independence from others”(p. 5). Every person is relational, because the identity, capacities, and desires of human beings are the result of the set relationships in which they participate. Consequently, each individual’s freedom and their capacity to formulate and execute their own decisions should not be considered as independent of others, but rather in coordination with others. Autonomy and political action should be built based on cooperation rather than competition. In reality, the concept of autonomy contains a set of obligations, including the recognition of the existence of others. This recognition considers the other as an end in itself and not as a means to an end(Treiger-Bar-Am, 2008, p. 550). The notion of human beings as relational is associated with the importance of vulnerability and with care in human life. As Tronto(2013) posits, citizens are not limited to just their economic roles as workers and consumers; they also inhabit two other spheres: the world of intimate care in their homes, with their families and friends, and the world of politics. Politics belong to the public sphere, while care belongs to the private sphere. Shifting care into public life requires focusing politics on the concerns of ordinary people, because care involves feelings of affection and love, but also empathy, a behavior that implies attention and responsibility towards others. Thinking about care as a political action means thinking about the way in which society assigns responsibilities and opportunities to reopen the political system to the real concerns of citizens. Households and politics are institutions that are both based on connections and relationships that arise when people do not exclusively pursue their self-centered interests. Politics require our attention (care), and we should expect the state to support our care needs(Tronto, 2013). The inclusion of care in political thought and action also means including vulnerable people, whether they are children, dependent elderly adults, drug addicts or alcoholics, unemployed, infirm, or have a physical and/or mental disability. Including a vision of care in political action means demanding that politics stop focusing on abstract issues and instead engage with the issues that truly concern the citizens in their regions. Beginning in the 1990s, reflection within the wealthiest societies on the catastrophic consequences of economic growth on the environment, biodiversity, and the fate of animal species, gradually engendered a movement that rejected unlimited growth and devastating consumption. For the English historian Hobsbawm(1995), the great paradox of the 20th century was that“an era whose only claim to have benefited humanity rested on the enormous triumphs of a material progress based on science and technology ended in a rejection of these”(p. 11) by the influential sectors of the wealthiest societies. The issue of limits to technological and social change has taken on renewed importance in light of the impact of human actions on the planet. However, humanity’s limited ability to face these changes is just as important as the physical limits of our planet. The acceleration of time affects the different dimensions of personal and collective life, creating imbalances between the social time necessary for sociability and citizen participation and the time imposed by technological changes. The increase in employment volatility and the mobility of people 15

Vivianne Ventura-Dias | GLOBAL CAPITALISM has impacted the traditional concept of the good life based on relations of community cooperation whose development is based on a trust built up through stable, long-term commitments(Sennett, 1998/2005). Likewise, the debate must include the limits that societies can impose on the pace of technological change and the necessary negotiation between the dignity of the worker, the importance of work for all, and automation à outrance , as proposed by David Noble(1986):“For the process of technological development is essentially social, and thus there is always a large measure of indeterminacy, of freedom[…].[Technology] merely consists of an evolving range of possibilities from which people choose”(p. xi). Social practices and coexistence are based on limits, from the traditional saying“your right to swing your arms ends just where the other man’s nose begins” to speed limits for cars on the roads, the limits of fine particles in fuels, or the limits that define the quality standards for products and services. Why not implement speed limits for social transformations and technological changes? In a way, this is one of the objectives of social-ecological transformation. In order to achieve this, capitalism’s logic of growth and accumulation must be changed. 2. Global capitalism: The concentration of wealth and power 2.1. The political economy of globalization What new questions are posed by the contemporary global economy? In the previously mentioned Communist Manifesto of 1848, Marx and Engels emphasized the global nature of capitalism due to its inherent dynamic of accumulation and growth. They described a victorious bourgeoisie that had given a cosmopolitan character to national production. The dynamics of capitalism required all nations to“adopt the bourgeois mode of production...[creating] a world in its own image”(Marx, 1848/2008). By the end of the 19th century, triumphant capitalism encouraged the integration of nations into the global economy, by force of reason and by reason of force, with the imperialist expansion of the European and Japanese monarchies, as well as the U.S. republic. The optimism of this first globalization ended in the tragedy of the Great War, and it took approximately 70 years to recreate the conditions necessary for a new integration of the national financial and production markets, as well as the full liberalization of capital(Frieden, 2006; Piketty, 2013). 12 The second half of the 20th century was marked by the internationalization of the activities of manufacturing companies from the United States, Europe, and Japan through direct investment or other forms of control. U.S. companies were the first to internationalize their activities during the reconstruction of the European and Japanese economies, devastated by World War II. They were followed by European companies, which were in the process of forming the European Communities and actively competing with U.S. companies in periphery countries. Japanese companies then moved into international markets, and finally, companies from middleincome countries in Asia, Latin America, and the Caribbean did as well. 13 Global integration gradually acquired its own organizational forms with the creation of global value chains. Although the internationalization of large, mainly durable goods companies began in the late 1950s with the full convertibility of the primary currencies, it was not until the 1980s that these now international companies changed their strategies and began operating as multinational or transnational companies. Companies stopped conducting their business as entities concentrated in the same con12. Piketty(2013, p. 76) shows that the movement to reconstitute capital began in the 1960s and picked up speed during the conservative revolution of the Thatcher-Reagan decade. 13. See Ventura-Dias(1994) for more information on the internationalization of Brazilian companies and the references mentioned. 16

GLOBAL CAPITALISM | Vivianne Ventura-Dias glomerate but segmented by national markets, each with their own vertical operations. Instead they began to contract more services from other companies and outsource most of the less-profitable operations with higher labor costs associated with their plants and factories. Changes in the characteristics of trade became more evident during this period: 1) large, multinational companies consolidated their operations in different regions; 2) the association between trade and investment in the location and relocation of productive activities increased; 3) the fragmentation of international production increased, along with the distribution of production across different countries and the creation of global value chains; and 4) trade in services acquired more importance, particularly due to the value of royalties derived from intellectual property in the form of patents, copyrights, trademarks and franchises, etc. As a result of these changes, the 1980s saw the manifestation of contradictions between the established national regulatory frameworks and the international order sought by global capitalism. Previously, trade policy only covered measures and instruments implemented at a country’s borders, primarily tariffs and quotas. With the increased connection between trade, foreign direct investment, and the location of productive activities; the increase in trade in services; and the demand for greater and more effective intellectual property protection, core governments demanded new multilateral rules that provided increased security for investors while also making it more difficult for other countries to access more advanced levels of technological development. This will be further discussed in Section 3. Over the years, the world economy was transformed into an increasingly integrated system of production and trade in which the creation and distribution of wealth in a certain region became dependent on the expectations, procedures, and decisions of economic and political agents located in other regions of the planet. However, it is important to emphasize that the growth of capitalism on a global scale has not created a truly global economy. Despite the power of transnational corporations, they have not yet replaced the nation-state, which remains the organizing principle of international politics. The volume, composition, and direction of international trade were transformed according to the changes in the technical, institutional, and organizational conditions of production and consumption, which also impacted the costs and risks of international integration. Economic history, however, teaches us that change in the structures and strategies of companies is reversible. In the same way that the reduction of the risks and the costs of international operations prompted companies to relocate their activities over the last decades, the opposite is also possible. The increase in the uncertainty of cross-border operations, whether from actions taken by national governments to protect jobs and industries or from natural disasters, can result in an increase in the costs of global integration, impacting the international organization of production and trade. It should be noted that global integration was the result of the strategies of companies and investors, with support from technological innovation and government policy. In his lengthy study of the fall and rebirth of global capitalism in the 19th and 20th centuries, Frieden(2006) affirms that contemporary globalization, as well as the earlier attempt at global capitalism that ended with World War I, should not be analyzed as an unavoidable fact, but rather as the result of political decisions that are reflected in the definition, design, and execution of specific public policies. In reality, global financial capitalism is supported by neoliberalism, defined as: A theory of political economic practices that proposes that human well-being can best be advanced by liberating individual entrepreneurial freedoms and skills within an institutional framework characterized by strong private property rights, free markets, and free trade. The role of the state is to create and preserve an institutional framework appropriate to such practices.(Harvey, 2005, p. 2) Curiously, the first post-war experiments with neoliberal policies were implemented in South America in the 1970s by the“Chicago Boys”: in Chile dur17

Vivianne Ventura-Dias | GLOBAL CAPITALISM ing the dictatorship of Augusto Pinochet and in Argentina under then Minister of Economy José Alfredo Martínez de Hoz(Harvey, 2005). However, the neoliberal policies of deregulating agriculture, industry, and finance; privatizing public goods and basic services; and opening up the consumer goods and capital markets became dominant with the conservative revolution that began in 1979 and extended into the 1980s with the governments of Margaret Thatcher and Ronald Reagan, establishing the supremacy of the market and spreading neoliberalism around the globe, regardless of the political beliefs of local governments. In recent decades, we have observed the primacy of financialization over productive globalization. According to this narrative, the actors, instruments, and financial institutions not only define the pace of the expansion of productive activities, income, and job creation, but also define the very structure of contemporary capitalism. Financialization is also a major aspect of the struggle of the core countries to maintain the hegemony of their financial centers and their metropolises. Beyond the growth in the production of goods and services, it is the increase in profit margins that becomes an imperative issue for the dynamics of financialization. Entrepreneurs and investors are willing to use any means necessary to obtain that desired increase, as observed in the events leading up to the 2008-2009 financial crisis. These gains would not be feasible if the final prices of the products and services reflected the real costs of labor, including the unpaid reproductive labor in the home that is mainly shouldered by women and girls, as well as the use costs associated with renewable and non-renewable natural resources and damage to the environment(environmental liability). The global economy exposes the role of financial and non-financial corporations in the legal trade of goods and services, but also their direct or indirect involvement in the black market of drugs, weapons, and human trafficking. This black market has tragic effects in both wealthy countries—drug users and weapons producers—as well as in Latin American countries—drug producers and weapons users. Additionally, the separation between licit and illicit activities is nothing more than a formality. There is no shortage of evidence regarding the criminal nature of global capitalism, which began with its history of extermination and expropriation—primarily in Africa, Asia, and the Americas—and continues to manifest itself in a never-ending list of infamous acts: the slave or semi-slave labor of men and women who labor in the textile and electronic factories in Asia and other parts of the Global South; 14 in the production of foods with excessive amounts of sodium, glucose, and other substances that created the global obesity epidemic and continue to threaten the health of consumers; in the active lobbying of these same companies to stall and prevent adequate regulations; in the introduction, production, and diffusion of pesticides that have harmful effects on nature and on human and non-human health; in the decades-long discharge of toxic waste into rivers and soils; in the systematic rejection of the precautionary principle as regards the use of genetically modified organisms; in falsifying information about tobacco addiction; in the production of medicines with prices that put them beyond the reach of patients; in the falsification of pollutant emissions data, etc. On top of all this, respectable banks and financial corporations launder the money from criminal activities, such as drug trafficking, eventually financing the legal activities of the criminal capitalists. It is necessary to reiterate that the contemporary global integration of markets, like other themes of mature modernity, is part of a historical movement that encompasses continuities, as well as tragic ruptures. These discontinuities in the history of global integration serve as a warning that the perspectives opened up by technical innovations do not necessarily imply inevitable and irreversible outcomes. The unresolved tensions of triumphant liberalism in the 19th century finally came to a head in 14.“By now, these Indonesian workers were used to people like me: foreigners who come to talk to them about the abysmal conditions in the factories where they cut, sew, and glue for multinational companies like Nike, the Gap, and Liz Claiborne.”(Klein, 2000/2001, p. 3) 18

GLOBAL CAPITALISM | Vivianne Ventura-Dias the major crises that shook the world from 1914 to 1945. As a whole, the predominant system in Europe prior to the Great War offered an effective global governance system based on the following features: 1) the broad liberalization of the consumer goods market and borders that were open to European immigration with limited oversight; 2) financial stability and currencies that were backed by the gold standard or British pound sterling; 3) a liberal ideology based on a self-regulating market with minimal state interference; and 4) a political system facilitated by the balance of powers between the decreasing numbers of European monarchies (Polanyi, 1957/2001). These stabilizing elements are absent from the current movement towards global economic integration. Contemporary globalization is occurring within a context of financial and monetary instability, extensive and intensive protection of the rights and property of investors, increasing barriers to the free movement of persons, progressive elimination of labor and social rights, a selective liberalization of trade in goods and services, and a total uncertainty regarding global governance and power structures. However, both waves of globalization are similar in terms of the tensions created as a result of a severely unequal distribution of the costs and benefits of global economic integration. The growth of antiliberal movements and a certain disillusionment with representative democracy among the working class in Europe and the United States help reveal the general lack of well-being caused by global capitalism and the dominating ideology of neoliberalism and raises concerns regarding the capacity of our collective institutions to face the negative consequences of contemporary globalization. 2.2. Finance capitalism: The financiali zation of economies The changes in the global structures of production and trade represent only the most visible aspects of the transformations of the dynamics of contemporary capitalism. In fact, the true motor of the major social-economic transformations is found in the income derived from the multiplication of capital markets and financial instruments. The figures speak for themselves: in 2015, the value of the exports of goods and services was$20.7 billion dollars, while the total sales of multinational companies in the world, with an assessed value of$105.8 billion, was estimated by the United Nations Conference on Trade and Development(UNCTAD) at $36.7 billion(United Nations Conference on Trade and Development[UNCTAD], 2016). However, the predominance of finance over trade is illustrated by the transactions in foreign exchange capital markets. In 2012, daily operations in foreign currencies reached$4 trillion dollars, with only about one percent of operations in foreign currency markets linked to merchandise trade(UNCTAD, 2012, pp. 16-17). 15 In 2010, the total value of the world’s financial stock was estimated at$212 trillion dollars, surpassing the previous 2007 peak(Roxburgh, Lund,& Piotrowski, 2011). In economic sociology literature, the term“financialization” is used to draw attention to the omnipresence of the finance sector in the different aspects of personal and collective life. In contrast to the perspective of the analysts that have adopted Karl Polanyi’s(1957/2001) double movement framework—which considers financial markets as independent of social organization—the discussion in the literature of financialization proposes a narrative in which financial markets are deeply embedded in social, political, economic, and cultural life, and in which their evolution depends directly on the actions of the state(Montgomerie, 2008; Goldstein, 2009; Dore, 2008). Finance ceases to be conceptualized as a set of markets for the sale and purchase of products and is instead evaluated as a set of processes and interactions intimately articulated with social practice(Montgomerie, 2008, p. 235). Studies seek to understand the impacts of institutions and financial innovations on the growth dynamics of the productive sector, corporate governance(shareholder primacy), and growing income 15. The data includes forex spots and forwards and other derivatives used in carry trade operations(UNCTAD, 2012, p. 17). 19

Vivianne Ventura-Dias | GLOBAL CAPITALISM and wealth inequality within a framework of the intentional deregulation of the markets(Goldstein, 2009; Davis& Kim, 2015). As suggested by Ronald Dore(2008),“‘financialization’ is a bit like‘globalization’—a convenient word for a bundle of more or less discrete structural changes in the economies of the industrialized world”(p. 1097). Kotz(2015) prefers to consider financialization as one of the consequences of the changes to the policies and institutions that make up neoliberal capitalism. In fact, neoliberalism, globalization, and financialization can be considered as separate but interrelated components of contemporary capitalism that co-evolved during the same period of time. Beginning in the 1970s, two movements converged to facilitate the increase in high-risk investments: 1. the loss of effectiveness of the institutions responsible for controlling risk and 2. the growth of risk instruments anchored in algorithms that exploited the explosive increase in computational capacity. Since the 1970s, the changes introduced to limit governments’ ability to intervene in the United States, the United Kingdom, and then in European Community countries were aimed at increasing the scope of private, high-risk activities for individuals and legal entities. Some of these changes were gradual, while others were radical. These changes began with the collapse in 1971 of the Bretton Woods fixed exchange rate system; the creation of floating currencies; and the creation of a private foreign exchange market. Simultaneously, key industries that had previously been recognized as natural monopolies(electricity transmission and telecommunications) or as public goods (education, health, security, and defense) were deregulated. In Europe, state-owned companies in these sectors were partially or totally privatized and opened to private competition. Likewise, in the United States, both Republican and Democratic governments progressively deregulated the financial sector throughout the 1980s and 1990s and the enforcement of antitrust laws was weakened, allowing for mergers and acquisitions that led to a highly concentrated goods and services markets, as discussed below(Kotz, 2015). A significant number of public functions were also privatized for the same purposes, mainly at the state and municipal levels. Certain functions were subcontracted to private companies, while others, such as the management of prisons, were completely handed over to private companies. Private military and security companies, such as Blackwater, have replaced the United States Army in certain cases, and become an extension of the Army in others(Gómez del Prado, 2010). Additionally, from the 1970s to the end of the 1990s, there was a significant reduction in social welfare programs, which had never been as strong in the United States as they were in Europe, along with the modification of the capital-labor relation, including a major decrease in worker’s bargaining power. As a result of these changes, financial markets became fundamentally involved in even daily household activities, as well as in those of corporations and the state. In almost every industrialized country, individuals and families invested the savings meant to finance their retirement and/or their children’s university education in mutual funds, while, unbeknown to them, their mortgages, car loans, credit cards, and student loans converted into collateralized debt obligations(CDOs) and were sold to international investors(Epstein, 2005). 16 The financial crisis revealed the full extent of the“parallel” banking system of credit intermediation—the so-called“shadow sector” or“shadow” banking system—which transforms short-term funds obtained in the currency market into long-term investments and are not subject to the periodic reporting obligations that traditional banks must adhere to. As presented by Epstein(2005), the framework of financialization attempts to understand“the increasing role of financial motives, financial markets, financial actors, and financial institutions in 16. In 1980, Ronald Reagan’s government introduced a retirement savings vehicle known as a 401(k). Employees are able to allocate a certain portion of their salary to a 401(k) account, which can then be invested in financial vehicles. Taxpayers are also able to deduct the percentage of their salary that they contribute to this account. 20

GLOBAL CAPITALISM | Vivianne Ventura-Dias the operation of the domestic and international economies”(p.3), as well as international power dynamics. The concept of financialization has also been applied to other diverse phenomena, such as the globalization of financial markets, the importance of shareholder primacy in the strategies and structures of large companies, and several changes related to the theory and practice of corporate governance(Orhangazi, 2008). The studies on financialization are unanimous in concluding that finance ceased to play its traditional role as the provider of capital for the productive economy. 17 On the contrary, the experiences derived from the 2008-2009 crisis questioned how an increasingly autonomous sphere of global finance modified the underlying logic of the industrial economy, even influencing the internal operation of democratic societies(Zwan, 2014). Additionally, data shows that finance models the way the real economy generates profits. As outlined by Orhangazi(2008), empirical analysis shows that: Non-financial corporations(NFCs) have been increasing their financial investments relative to their real investments; they are earning a larger share of their profits from financial operations; and NFCs are discharging higher proportions of their earnings to the financial markets in the forms of interest payments, dividends, and stock buybacks.(p. 7) More profits are being generated from financial operations than from the real economy. For example, “the gross value added of financial corporations[in the United States] rose from about 6% of nonfinancial corporate gross value added in the 1960s to 16% in the early 2000s”(Orhangazi, 2008, p. xii). It is important to keep in mind that, beyond financial instruments, financial companies intervene in the operations of both financial and non-financial corporations in two ways: 1) by holding company capital, i.e. as shareholders and 2) by holding positions on the board of directors of NFCs. 17. In the words of Orhangazi(2008),“in the so-called ‘Golden Age of Modern Capitalism’... the appropriate role for the financial sector was thought to be‘servant’ of the real sector rather than... as its‘master’”(p. xi). The financial crisis drew attention to the practices of corporate boards, in particular to the low level of independence that members had, particularly regarding decisions made by the chief executive officer (CEO), including executive compensation packages. A related phenomenon known as“board interlocking”—when one board member is also a member of various other companies—is also proof of the connections and networks that exist among companies. Inconclusive evidence exists showing that interdependence between boards is related to the degree of concentration of the market, with the interdependence highest at an intermediate level of market concentration of the industry(Mizruchi, 1996). Some authors, such as Guy Standing(2016), denounce financialization as a model of rentier capitalism à outrance that generates and concentrates extreme wealth. Rentier capitalism is understood to be a parasitic and criminal capitalism that only produces wealth for investors, destroys jobs, and seeks to obtain short-term profits by any means possible, whether legal or illegal. As defined by Standing (2016),“rentiers derive income from ownership, possession or control of assets that are scarce or artificially made scarce,” such as natural resources or intellectual property. In rentier capitalism, the very rich live on investment income, patent rights, brands, franchises, copyrights, marketing of athletes, and business models and platforms(e.g. Uber, Airbnb, Amazon), among others. All the institutional architecture that has been built in recent decades by the World Trade Organization(WTO), the World Intellectual Property Organization(WIPO), and the mega-regional trade agreements promoted by the United States to harmonize standards, among others, all have the fundamental objective of protecting rentiers’ activities. According to Standing(2016), this institutional architecture was created to establish a global market system in which rentiers can enjoy their profits without risk. For the reasons established above, the most remarkable phenomenon of global financial capitalism is the impressive concentration of economic power with a small number of individuals and legal entities that have the means to intervene in the political life of countries and prevent the design and imple21

Vivianne Ventura-Dias | GLOBAL CAPITALISM mentation of laws that might reduce their power to accumulate wealth. 2.3. Concentration and centralization of wealth, power, and income In the past few years, issues related to the distribution of wealth and income inequality have assumed a central role in public discourse. In particular, the work of Thomas Piketty(2013) disseminated the research of a group of economists who documented the gradual restructuring of the wealthiest segments of the studied countries(France, the United Kingdom, and the United States) beginning in the 1960s, as well as the continuous rise in inequality resulting from the fiscal and financial policies adopted in those countries during the 1970s and 1980s. The rapid growth of inequality in the personal distribution of income can primarily be explained by the income of the leading cadres of financial and non-financial corporations, who have the enviable condition of setting their own salaries (Piketty, 2013, pp. 52-53). The growth of private assets(stock) is reflected in the growth of income derived from capital(flow) and, consequently, in the reduction of labor income in gross national income(without considering the extremely high wages of business executives)(Baker, 2015). In Piketty’s analysis(2013, p. 76), the movement to reconstitute private capital was accelerated by the conservative Anglo-Saxon revolution of 1979-1980, the collapse of the Soviet bloc in 19891990, as well as the financial globalization and deregulation that occurred from 1990-2000. Despite the crisis that began in 2007–2008, by 2010, capital had reached a level of prosperity not seen since 1913. Other authors investigated the composition of the capital encompassed within the term industrial capital, which represents the sum of all non-financial assets belonging to individuals and legal entities (residences, buildings, land, machines, equipment, patents, and other professional assets). As presented by Baker(2015), the resulting argument is that most of the income growth of the top 1 percent of the population comes from“four major areas: patent and copyright protection, the financial sector, the pay of CEOs and other top executives, and protectionist measures that have boosted the pay of doctors[artists, sports players, scientists] and other highly educated professionals”(p. 1). In the United States, from 1993 to 2007, the income of the top one percent of earners grew at a rate of 10 percent per year, while the income of the remaining 99 percent grew at a total rate of only 2.7 percent per year between 1993 and 2000 and 1.3 percent per year between 2002 and 2007. As a result, the top one percent of earners captured 45 percent of total growth from 1993 to 2000, and 65 percent of the country’s income growth from 2002 to 2007(Atkinson, Piketty,& Saenz, 2011, pp. 8-9). In terms of the distribution of wealth, in the first decade of the 21st century, the wealthiest one percent in the United States owned about 35 percent of aggregate wealth, while in Europe, the proportion varied between 20 percent and 25 percent (Alvaredo, Atkinson, Piketty,& Saez, 2013, p. 9). Additionally, the wealthiest 0.1 percent of the population increased its fraction of total wealth from seven percent in 1978 to 22 percent in 2012. To provide an idea of the magnitude of this wealth, in 2012, the top 0.1 percent included a group of about 160,000 families with net assets equal to or greater than$20 million dollars(Saez& Zucman, 2014, p. 1). The concentration of income and wealth has also increased in other industrialized countries, although not to the same extent as in the United States and the United Kingdom(Organisation for Economic Co-operation and Development[OECD], 2011). These figures reveal a context of extreme social injustice. Following the financial crisis, an almost obscene concentration of wealth benefited a couple of thousand people, while millions of people lost their jobs, income, and assets. This concentration of wealth is also associated with the concentration of economic-financial and political power. However, beyond the normative dimension, it is important to add that this enormous concentration of wealth threatens the sustainability of contemporary capitalism itself. For example, according to several conventional economists, this context of social and 22

GLOBAL CAPITALISM | Vivianne Ventura-Dias economic imbalance is a factor in the stagnation of the U.S. economy, which in turn affects the growth of the international economy. 18 The concentration of wealth among a handful of individuals and families is also reflected in the control of the global economy by a small group of multinational companies. This intuition is difficult to verify empirically due to the web of direct and indirect ownership relations through which a company is able to control many others, as well as the scale at which global companies operate. In spite of the amount of research carried out in each national context, it has been impossible to obtain sufficient empirical evidence of the global power of these corporations due to the fact that most of the data on market concentration is limited by the national boundaries where these companies operate. Large corporations, economic groups, and investment companies extend their operations to a vast number of product markets and domestic markets through the purchase of small and large companies with consolidated brands in local markets; through takeovers, hostile or not; and through mergers and other types of operations. For example, Unilever, a Dutch-British company, is the third largest company among the top 10 companies that control the food, non-alcoholic beverage, ice cream, home care, and personal care markets. The company has 400 brands in nearly 190 countries that employ more than 168,000 people. Fourteen of Unilevers’ brands have annual sales exceeding€1 billion euros. In 2015, the company reported total turnover of more than€53 billion euros and operating profit of€7.5 billion euros. 19 According to Oxfam’s Behind the Brands initiative, the enormous influence of the 10 largest food and beverage corporations allows them to determine 18. Another important adverse factor is the public debt of the United States, which increased dramatically after the implementation of an expansionary monetary policy and the purchase of“toxic” assets, amounting to over 70 percent of total U.S. GDP. 19. Data Retrieved from:<https://www.unilever.com/Images/q4-2015-full-announcement_tcm244-470010_en.pdf>. how food will be produced, how natural resources will be used, and the extent to which benefits will transfer down their supply chains to the millions of workers and small-scale farmers who form the base of their operations. In the world of global consumer goods companies, the dominance of brand over product derives from the experience of new companies in the 1980s, such as Nike and Microsoft. These companies operated under the thesis that their primary focus was the production of brand image and equity, and that the production of goods was a secondary aspect of their operations. The company’s real work was marketing, not producing. Subcontractors that are committed to delivering the orders on time and at a low cost are responsible for production, while the company that owns the brand concentrates on marketing the products(Klein, 2000/2001). Additionally, as documented by Klein(2000/2001) these international brands seek to cover up the poor working conditions in which their products are made, in places where the brands are not even available: The travels of Nike sneakers have been traced back to the abusive sweatshops of Vietnam, Barbie dolls’ little outfits back to the child laborers of Sumatra, Starbuck’s lattes back to the sun-scorched coffee fields of Guatemala, and Shell’s oil back to the polluted and impoverished villages of the Niger Delta.(p. 6) At the same time, companies invade private and public spaces through the pervasiveness of their brands, including physical spaces, such as sports stadiums and websites and even through the shirts and shorts of sports players. It should be noted that the highest concentration of not only economic power, but also cultural, ideological, and political influence, is found in the new industries of digital media, social networks, future products, and entertainment that form the creative economy, now considered the“New Establishment.” The five tech giants—Apple, Amazon, Facebook, Google, and Microsoft—have enormous 23

Vivianne Ventura-Dias | GLOBAL CAPITALISM power measured by their market value, earnings, and ability to influence both people and institutions. In 2015, just two companies, Google and Facebook, controlled 75 percent of all paid advertising on the Internet. In the first quarter of 2016, these two companies captured$0.85 cents of every dollar spent on digital media advertising in the United States(Garrahan, 2016). Google and Facebook have the capacity to mine the personal data of their more than 1.6 billion users. These corporations are then able to use this information to attract companies that want to sell their products or brands, but the information can also be used for other purposes. 2.4. The crime of globalization and the globalization of crime The separation between licit and illicit activities depends on social, cultural, and institutional conventions, which vary over both time and geography. Alcohol is now permitted in all Christian countries, but was considered illegal in the United States for a short period(January 1920 to December 1933). Furthermore, before the second half of the 20th century, the consumption of narcotics and psychoactive drugs, such as cannabis and cocaine, was legally and socially accepted in several countries. For example, in the United States, trade and consumption of cocaine and certain other drugs was legal between 1884 and 1900 and then limited to medical prescriptions until 1914. More severe controls were implemented after 1915. These drugs were relatively inexpensive and accessible in pharmacies, department stores, and even through mail order catalogs(Brecher, 1972). The consumption of both marijuana and cocaine began to be controlled beginning in the 1950s. In the United States, cocaine consumption dropped off before World War II, emerging again in the 1970s(Musto, 1990). The term“organized crime” can be used, in its literal sense, to designate systematic illegal activity whose purpose is to obtain money or power outside of the sphere of legal activities. For many, the meaning of organized crime refers to organizations of criminals who have power that is not accepted“by respectable society”—either because this power was achieved through violence, or because of its ability to corrupt weak, ambitious, and“passive” public officials (Edwin H. Sutherland, as cited in Geis, 2011, p. 3). In his various publications, Michael Woodiwiss has tried to highlight the active participation of legitimate businessmen in organized crime. From the beginning, landowners, merchants, and government officials have actively participated in illegal activities including insurance fraud, fraudulent bankruptcy, financial fraud, forgery, illegal gambling, theft, extortion, and trade of stolen or illegal goods and services. In the 1930s, analysts in the United States concluded that, rather than being a threat to economic, legal, political, and social structures, organized crime was an integral part of them. However, the recommendations about controlling crime ceased to include the economic, political, and social systems. Film and literature reinforced the perception that the problem of organized crime could be reduced to groups of bad people that corrupted government and business. Those perceptions led to a seemingly simple solution: more power for the government to identify, investigate, and punish the bad guys. Over decades, an official consensus was formed that these negative influences were foreign to the culture of the United States and that they constituted a threat to the country’s strong institutions. The hegemonic power of the United States in multilateral organizations ensured that the world order followed U.S. legislation related to organized crime, mainly with regard to drugs(Beare& Woodiwiss, 2014). Edwin H. Sutherland, a sociology professor at the University of Indiana, introduced the term“whitecollar crime” at a professional conference in 1939. In his speech, Sutherland argued that crime was not only associated with poverty and highlighted the impact of criminal behavior committed by businessmen and professionals who use their positions of influence, power, and trust in legitimate economic, political, and institutional structures. They do so to obtain illegal benefits or to commit illegal acts for their personal or organizational benefit (Geis, 2011, pp. 3-7). Subsequently, criminology and criminal justice literature began to use the expression“crimes of the powerful” to refer to the crimes committed by in24

GLOBAL CAPITALISM | Vivianne Ventura-Dias fluential people or societal groups. In addition to the power they wield, similarities exist between organized crime groups and white-collar criminals: 1. Both seek economic control of the financial markets, whether legal or illegal. In general, both groups are seeking monopolistic power over the markets in order to set and control prices. 2. The two groups not only seek to control criminal legislation, but also to change the government standards and procedures that are designed to check the predatory behavior of the powerful and protect consumers. 3. The crimes both groups commit impose both human and financial costs on society. 4. Their purpose is to accumulate wealth and exercise power for the benefit of the organization and its members, regardless of the costs imposed on the rest of society(Vito, Maahs,& Holmes, 2006, pp. 400-401). For Barak(2015, p. 105), the“crimes of the powerful” are economic crimes, in other words, crimes of capital accumulation and reproduction. Under the dominant interests and relationships of global capital, these crimes include the institutionalized political and economic arrangements that create structured routines of harm, offense, and victimization. Crimes of the powerful refers to transgressions that simply normalize victimization as“the cost of doing business” and“collateral damage.” Although they are systematic and illegal violations of civil and human rights, these crimes manage to escape judicial action and social stigmatization. A recent example is the epidemic of fraud in the largest U.S. financial institutions and in the capitalist world that spawned the Great Recession of 2008-2009. As defined by Barak(2015): The crimes of the powerful are typically committed by well-established private and/ or public organizations in violation of the rights of workers, women, children, taxpayers, consumers, marketplaces, political and eco-systems... a plethora of harmful and dangerous activities that are routinely beyond legal incrimination and safe from civil action.(p. 106) In contrast to drug trafficking itself, which is always present in the news, the laundering of the profits generated by drug trafficking remains in relative obscurity. The National Crime Agency (NCA) estimates that many hundreds of billions of British pounds from illegal activity is“recycled” by banks in the United Kingdom each year. In 2012, the United States levied a fine of$1.9 billion dollars against British bank HSBC for laundering money from the Sinaloa, Mexico and Norte del Valle, Colombia drug cartels(Hanning& Connett, 2015). In 2009, the total amount of money laundered from criminal activities committed by international companies, government officials, and other illegal actors, including tax evasion, was estimated to total 2.7 percent of global GDP, or $1.6 trillion dollars. 20 Despite the fact that the“war on drugs”—a policy that is considered highly inefficient and with a strong racist bias—has been waged for half a century, the impact of this criminalization has been minimal, both in the production and trade of drugs and in the apprehension of associated revenues: only between 10 percent and 15 percent of drugs are intercepted, while less than 0.5 percent of money associated with drug trafficking is confiscated(Ivanov, 2011). As with the production and commercialization of licit merchandise, the distribution of profits along the supply and distribution chain of the drug trade is also extremely unbalanced. According to data from the United Nations(UN), out of the total $85 billion dollars generated by the cocaine trade in 2009, less than 1.2 percent($1 billion) was earned by the coca farmers in the Andean region; nearly 80 percent of the revenue from the cocaine trade that year was laundered by a legitimate financial in20. For more information, visit the website of the National Crime Agency:<http://www.nationalcrimeagency.gov.uk/ crime-threats/money-laundering>. 25

Vivianne Ventura-Dias | GLOBAL CAPITALISM stitution in the North American and/or European financial system(United Nations Office on Drugs and Crime[UNDOC], 2011). The conversion of money generated from illicit activities into legal financial resources is facilitated by an opaque financial world and the complicity of governments that protect tax havens. Subsequently, the now legal money can be used by organized crime to make new investments in legal and illegal activities. Organized crime groups seek legal businesses in which there are no barriers to entry and whose control implies high profits. In addition to drug trafficking, which has an annual estimated income of between$280 and$320 billion dollars, revenues from counterfeit medicines, music, and movies were estimated at$250 billion dollars; human trafficking at$31.6 billion dollars; illicit oil trafficking at$10.8 billion; and other activities, such as the illicit trafficking of wildlife, weapons, human organs and works of art, illicit fishing, timber, and gold mining, among others, amount to more than $80 billion dollars. Combined, the income from these activities totals between$650 and$690 billion dollars. Global Financial Integrity, a research and advisory organization, collected this data from different sources between 2008 and 2010(Haken, 2011). The most recent estimates of these totals present a very wide range, between$1 and$2 trillion dollars, or between 1.8 percent and 3.6 percent of gross world product(GWP). This number shows the alarming dimension of criminal activities, but also the lack of more precise knowledge regarding the volume and composition of criminal markets. It is important to note that knowledge rentiers obtain their profits by exploiting this resource, which is not scarce and whose consumption is enjoyed and shared by an infinite number of individuals and entities without this consumption decreasing the quantity offered(non-excludable). The privatization of knowledge artificially restricts access to a resource that is based on public investments and collective creation. Knowledge is a shared resource that is a common good, forming part of a commons. The planet’s resources also belong to this domain, including water, forests, fishing resources, and wildlife(Hess& Ostrom, 2007). Apart from the misappropriation of common goods, the criminal nature of capitalism is even more evident in the health sector, where companies capture scientific and technological progress for the privilege of few patients. The price of recent medicines for the treatment of different types of cancer, hepatitis C, and other diseases is so high that public insurance programs have been forced to restrict access to them. Companies manage to maintain their monopoly rights using the justification that the high price of the medication is due to significant research and development(R&D) expenses, even when research shows that pharmaceutical companies spend more on marketing their products than on R&D. Given the evidence that R&D costs do not justify the high prices of new medicines, companies and their advocates suggest that prices should be set by the value that these new drugs provide. For example, if the treatment of a disease previously cost the health system$1 million dollars per patient per year, the price of a new drug could be set at $400,000 dollars per patient per year, regardless of the cost of R&D(LaMattina, 2015). At the same time, groups of investors have found a way to extract extraordinary profits, even from drugs whose patents have expired. Investors purchase pharmaceutical companies that produce one or more drugs that treat rare diseases and that are used by a small number of patients; this reduced market helps ensure that there are no incentives for other companies to compete. Immediately following the purchase of the pharmaceutical company, drug prices are increased significantly, sometimes by more than 1,000 percent. This was the case for a medicine marketed in the United States under the name Daraprim, used to treat a certain parasitic infection. When Turing Pharmaceuticals, a company run by a former hedge-fund manager, acquired the drug, the price increased from$13.50 per tablet to $750 per tablet(Pollack, 2015). 21 21. Another case involved Valeant Pharmaceuticals International, whose purchase of drug rights and subsequent price increases made the company’s CEO a billionaire. One of the drugs purchased by Valeant, Cuprimine, is used to treat 26

GLOBAL CAPITALISM | Vivianne Ventura-Dias In the eagerness to obtain high profits, capital, in the abstract, and capitalists, in particular, have committed crimes against humanity and life on our planet without caring about the consequences for human life, animal life, and the natural heritage of the planet. Through their respective representative institutions, local governments previously tried to contain and sanction the most disastrous actions of capitalist companies with varying levels of success. But that tendency has reversed in recent years. Similarly, on the international level, the international order of the first decades of the postwar period, which favored consensus and multilateralism, was dissolved and replaced by an institutional disorder in which the United States and other core countries use their military power to unilaterally and arbitrarily resolve conflicts that, in other circumstances, could be mediated by diplomacy. 3. The political economy of international cooperation Students of international relations are familiar with terms such as international order and global interdependence, and with institutions that effectively manage economic and political conflicts and promote cooperation among nations. The basic premise is that, in a more integrated international environment, the decisions that a government makes to defend national interests can also have an impact on the welfare of other nations and may adversely affect their interests. At the same time, the interdependence that results from economic integration offers the potential for cooperation, and the collective benefits of cooperation are greater than resolving conflicts with violence. Therefore, within the context of interdependence, rules and governing a rare inherited disorder called Wilson disease. Untreated, Wilson disease can cause severe liver and nerve damage. Prior to its acquisition by Valeant, a month’s supply of Cuprimine cost approximately$888 dollars. After the acquisition, the price for a month’s supply increased to$26,189 dollars (Pollack& Tavernise, 2015). Other companies have used a similar strategy. organizations are essential to promote international cooperation and prevent conflicts from ending in violence(Keohane, 2001). The major difference between the institutions that regulate national society in democratic countries and those that regulate global society is effectiveness. There is no global government or supranational institution with the capacity to sanction national behaviors that violate the rules. Due to the absence of international institutions with the power to implement the agreed-upon standards, the adoption of and compliance with international standards and practices is decided by the existing power dynamics between countries. Additionally, these standards and practices generally seek to protect the interests of the core powers. Concerns about the effectiveness of international organizations in offering solutions to collective problems are not a purely academic issue. In reality, collective solutions are needed to solve serious problems such as climate change, population pressure, competition for scarce natural resources (e.g. water), the emergence of new powers, nuclear proliferation(e.g. the failure of the Treaty on the Non-Proliferation of Nuclear Weapons), transnational terrorism, and religious and ideological fundamentalism. In order to avert the possibility that the core powers always opt for a military solution, it is necessary to rebuild collective institutions that favor international consensus and cooperation. 3.1. Governing common goods: Committing to protect the rights... of whom? The UN continues to be the only universal membership international organization; it is open to all countries, everyone has a voice and vote, and all members have accepted the organization’s charter. Therefore, the UN has been, and continues to be, an important framework through which governments can collectively discuss relevant issues, including international security. Considering the range of topics covered by international cooperation, the adoption of international standards that cover a broad set of technical issues, the number of countries involved, and the high participation of organized civil society, 27

Vivianne Ventura-Dias | GLOBAL CAPITALISM the work of the UN has never been so important. Within the UN, human rights are embodied in the UN-Charter and are a fundamental part of its history. The Universal Declaration of Human Rights sets out the fundamental human rights that must be universally protected to ensure the dignity of every human. 22 The International Covenant on Civil and Political Rights and the International Covenant on Economic, Social and Cultural Rights are even broader and were signed separately due to issues related to the Cold War. Historical experience has shown that economic and social rights directly condition civil and political rights. In fact, international human rights treaties enshrined the concept of the indivisibility of civil, political, economic, social, and cultural rights. The UN development agencies, particularly the Economic Commission for Latin America and the Caribbean(ECLAC), have shown time and time again in their publications that there can be no sustainable political democracy without the democratization of economic opportunities and equal access to quality education and justice for all. 23 A population in a situation of poverty or abject destitution is vulnerable to political pressure and cannot exercise its citizenship or access comprehensive justice; these populations are thus deprived of their civil and political rights. However, these covenants are not binding. States’ obligations in this area are not legally recognized and do not include a dispute resolution mechanism, unlike investment treaties, which are reviewed more in depth below. A discussion of economic, social, and cultural rights inevitably leads to a discussion of the functions of the state and the market in terms of the allocation of resources and in the distribution of production and income. In capitalist or market economy countries with neoliberal policies, economic, social and cultural rights depend on private agents that operate outside the public sphere. According to the legal literature, intergovernmental organizations therefore cannot commit to“performance obligations.” International agreements established by capitalist states in which economic transactions are coordinated by private agents cannot go beyond the acceptance of “behavioral obligations,” or codes of conduct. The leaders of the United Nations System sought to provide more relevance, consistency, and impact to the work done in the field of international law and human, economic, and social rights. In line with the standards of the 1990s, the UN SecretaryGeneral worked to build relationships with the private sector, abandoning the previous rhetoric of confrontation. Under Secretary-General Kofi Annan, the UN launched the United Nations Global Compact, an initiative intended to“transform the world through business.” 24 In 2000, the UN General Assembly approved the Millennium Development Goals(MDGs) after a long process during which a large number of people and organizations contributed to the creation of quantifiable development objectives. The quantification of these development objectives had been demanded by countries and organizations, private and public organizations, and development aid donors. In September 2015, the UN member countries approved the ambitious 2030 Agenda for Sustainable Development based on the recommendations from the 2012 meeting of the United Nations Conference on Sustainable Development(Rio+20). The 22. The Universal Declaration of Human Rights was adopted on December 10, 1948. 23. It is important to highlight that the issue of economic and social development was“invented” during the first few years of the UN’s existence and became the focus of research and political activity of organizations such as UNCTAD and the regional development commissions, especially ECLAC. See Toye and Toye(2004) for information on the intellectual history of the UN in trade, finance, and development and Ventura-Dias(1998) for the history of ECLAC. 24. For more information, visit the UN Global Compact website:<https://www.unglobalcompact.org/about>. In the words of former UN Secretary-General Ban Ki-Moon,“the United Nations and business need each other. We need your innovation, your initiative, your technological prowess. But business also needs the United Nations. In a very real sense, the work of the United Nations can be viewed as seeking to create the ideal enabling environment within which business can thrive”(UN, 2008). 28

GLOBAL CAPITALISM | Vivianne Ventura-Dias new agenda contained a new set of sustainable development objectives(SDGs). 25 While there is not enough space in this essay to analyze the UN’s activities on issues related to the environment and climate change, the unquestionable importance of this multilateral forum for scientific and political discussions was reaffirmed with the ratification on December 12, 2015 of the Paris Agreement, an agreement within the United Nations Framework Convention on Climate Change. Within the context of the crisis scenarios that had been presented in previous sessions, in September 2015,“world leaders[...] committed to transform our world and to leave no one behind in the quest for sustainable development”(United Nations Research Institute for Social Development[UNRISD], 2016, p. 2). The SDGs are the result of a consultation process that lasted two years and involved the active participation of member states and organized civil society. According to Adams(2016): The 2030 Agenda represents an important break with past agendas, and reflects a political effort to come to terms with the new economic, political and planetary realities—at all levels. It is perhaps the first truly post-colonial agreement in that it is universal, going beyond the paradigm of development cooperation and requiring all countries to measure and report on progress, not just developing or‘programme’ countries and not only in aggregate or income terms. It also is an agenda for all countries on how to tackle inequalities and insecurities living together on a planet of finite resources, with some planetary boundaries already exceeded.(p. 95) The 17 objectives of the 2030 Agenda cover all the central areas of economic and social development, as well as economic, social, cultural, civil, and political rights. From Goal 1—“End poverty in all its forms everywhere”—to Goal 16—”Promote peaceful and inclusive societies for sustainable development, provide access to justice for all and build effective, accountable and inclusive institutions at all levels”—the SDGs set goals that nobody can disagree with, including even the governments in Syria and Yemen that have not stopped bombing schools and hospitals. The issue, of course, lies in the details of who, when, and how. One of the primary issues is how the 2030 Agenda will be financed to effectively solve the problems of development, inequality, and the destruction of the planet outlined in the SDGs(there are less than 15 years left). In concept, the 2030 Agenda represents a major effort to encompass, outline, and connect the essential themes of sustainable development across its three dimensions: economic, social, and ecological. In practice, however, there are many reasons for skepticism, given the technocratic nature of a change process that should instead be political and driven from below by those excluded from growth and globalization, as well as the social movements in which they participate. As previously mentioned, the UN Secretariat under Secretary-General Kofi Annan focused on increasingly and continuously including representatives from the private sector in its decision-making processes and project financing. Adams and Tobin (2014, p. 18) use the term“Philanthropic Colonialism”—originally coined by Peter Buffet 26 —to characterize the increasing dependence of the UN on resources from Big Business; private foundations funded by billionaires such as the Bill and Melinda Gates Foundation; and other international private organizations from wealthy countries. This increase in private financing was a result of the UN Secre25. See Adams and Tobin(2014) for more information on the SDGs. 26. Peter Buffett is the son of billionaire businessman Warren Buffet, who in 2006 donated his fortune to three philanthropic foundations managed by his children. He coined the term“Philanthropic Colonialism” to refer to the actions of wealthy donors who think that are able to solve a local problem. Based on his great knowledge and experience in the world of the super-wealthy, Peter talks about how the process of“conscience laundering” helps these donors feel better about themselves while helping keep the structures of inequality intact. See Buffet(2013) and CKGSB Knowledge(2014). 29

Vivianne Ventura-Dias | GLOBAL CAPITALISM tariat’s efforts to remain relevant in light of the increase in global issues and the reduction of funding provided by the member states. However, the impact of corporate influence on international policy issues and their governance has not been adequately debated(Adams& Martens, 2016). 27 For example, the 2030 Agenda is structured on market-based growth and neoliberal policies that are part of the problem of an exclusionary and destructive development of the planet, and not part of the solution. In the context of market-driven growth, there are no goals that include industrial policies that encourage growth. 28 Additionally, one of the main problems facing the transformation of the SDGs into national development policies in the contemporary context of financialization, rentism, and fiscal austerity policies is the financing available to fulfill the goals, the deus ex machina of the discussions. On the contrary, consistent with neoliberal policies, economic growth is conceptualized as the factor that will generate the internal resources that will make the SDGs viable, in combination with social protection and other redistributive policies. However, there is abundant evidence that economic growth does not automatically translate into greater social equality and, much less, gender equality(Esquivel, 2016). 29 The points analyzed create the feeling that the SDGs fall into the voluntarism inherent in most of the initiatives created by international development agencies, which eliminate the contradictions imposed by the dominant power structures in their documents. In general, the documents try to highlight win-win proposals, but avoid discussing the sacrifices, compromises, and economic compensations that exist 27. See also Adams and Martens(2016) for an analysis of the impact that these new partners have had on the operations of the UN and other independent agencies(WHO). 28. Esquivel(2016) states that“a last-minute addition qualified the countries’ policy space by stressing that this exists ‘while remaining consistent with relevant international commitments’(para. 63)—but it is precisely those rules and commitments that constrain countries’ policy space”(p. 12). 29. Esquivel(2016) strongly critiques the SDGs from a perspective of power and gender relationships. between actors, institutions, and nations due to existing power relations. As is standard for documents produced by international development agencies, an analysis of power relations between nations and within nations, and between men and women, is absent from the 2030 Agenda(Esquivel, 2016). 3.2. The World Trade Organization’s trade and investment regulatory framework Although the institutional architecture of financial capitalism is oriented towards protecting the interests of investors and rentiers, the post-war period has not always been this way. From 1945 to 1980, international economic law, or the multilateral system of economic rules and standards, evolved pragmatically, with enough flexibility to allow countries devastated by war—including Europe and Japan— as well as those in the process of industrialization— such as Australia, Canada, New Zealand, and many Latin American and Asian countries, among others—to adapt international rules to their economic development needs. Although the general purpose of trade negotiations was to create a more liberal trade regime, the specific objective of intergovernmental cooperation was not free trade itself, but rather reducing border protection through negotiated arrangements. The term“embedded liberalism” was created by Ruggie(1982) in his seminal text on multilateralism to explain the success of the international post-war economic order. The trade regime established by the General Agreement on Tariffs and Trade(GATT) was successful because historical conditions allowed the political power of the United States to be linked to a legitimate social purpose: employment policies and investment. The liberalism of the postwar period was thus“embedded” in domestic policies and legitimized by them. This embedded liberalism was characterized by multilateral rules, in the basic sense of non-discrimination, but it was also based on domestic interventionism to maintain full employment. These conditions are no longer valid in today’s reality. The multilateral trade system was established in January 1948 with the GATT, which was subse30

GLOBAL CAPITALISM | Vivianne Ventura-Dias quently replaced by the World Trade Organization (WTO) in January 1995. The continuity between the two treaties is expressed in the validity of the non-discrimination principle, the commercial relations between states, and in the reciprocity of mutually advantageous concessions. But the differences far outweigh the similarities. Whereas the GATT was an informal organization, signed as a provisional agreement and conceived as part of the International Trade Organization that never materialized; the WTO is a structured legal and institutional framework characterized by universal membership with the necessary legal capacity to implement and enforce the set of rights and obligations that resulted from the Uruguay Round negotiations. Over the past few decades, the U.S. government and other core countries, concerned with the effectiveness of international institutions and the need to increase the security of multinational companies’ investments and operations, have successfully implemented changes to the commercial transaction regulatory framework with the purpose of adapting it to the new realities of emerging globalization, introducing more credible dispute resolution mechanisms and expedited sanctions. At the same time, when negotiations at the multilateral level stalled, the United States began to use the appeal of accessing its domestic market to motivate several countries to negotiate, bilaterally or in small groups, more favorable access conditions for U.S. companies to these country’s markets. The Uruguay Round of Multilateral Trade Negotiations(1986-1994) marked a significant turning point, partially because the 1982 GATT Ministerial Meeting preceded, by just a few months, the announcement of Mexico’s debt crisis, which threw the rest of Latin America and the Caribbean into an acute liquidity crisis. The primary Latin American countries and large debtor nations, such as Brazil and Argentina, were well aware of the fragility of their negotiating positions, which would remain unchanged throughout the decade. 30 On the other hand, beyond the formal discontinuities, the Uruguay Round drastically changed multilateral trade rules by extending the most-favourednation(MFN) principle to include the rights of companies and investors where it had previously only applied to merchandise, with the extension of trade rules to“trade-related aspects” such as intellectual property law(trademarks and patents, among others) and investment, and the inclusion of trade in services. Thanks to both the persuasive and dissuasive efforts of the United States, the Uruguay Round incorporated contractual obligations regarding the protection of intellectual property rights through the Agreement on Trade-Related Aspects of Intellectual Property Rights(TRIPS Agreement). During the lengthy negotiation period, developing countries, especially Latin American countries, maintained a traditional market access agenda and a defensive negotiating position regarding the new issues. Essentially, this position was due to ignorance on the part of the Latin American diplomats and trade economists regarding the implications of the new issues for their economies. Prior to the start of the Uruguay Round, the Ministries of Foreign Affairs in most Latin American countries did not encourage the study of international issues in their local universities, resulting in a lack of critical mass to formulate solid negotiating positions. Developing countries were accustomed to being mere spectators of trade negotiations among industrialized countries. From the implementation of the GATT, the few developing countries that were signatories to the agreement were not major exporters of manufactured goods, which were the only tradable products once agricultural products were excluded from the negotiations. As the number of signatory countries increased, the special and differential treatment(S&D) provisions released developing countries from the obligation to offer reciprocity in the tariff concessions received from industrialized countries. One of the results of the Uruguay Round was the elimination of the“developing country” designation, except for the countries identified as least-developed countries(LDCs) by the UN(UNCTAD). 30. See Jara(1993), Ricupero(1994), Tussie(1993), and UNCTAD(1994) for an analysis of the negotiating power of the debtor nations. 31

Vivianne Ventura-Dias | GLOBAL CAPITALISM Under WTO standards, developing countries were entitled to some flexibility, including longer periods to complete the adaptation of their local legislation to the commitments assumed as part of the WTO, among other benefits. However, once this transition period was over, every country was required to comply with the same obligations. It is important to note that attempts to include liberalization and investment protection in the WTO were not completely successful, not only because of the coordinated actions of the developing countries, but also due to conflicts between the interests of the United States and the European Union. Only two WTO agreements contain clauses related to investments: the General Agreement on Trade in Services(GATS) and the Agreement on Trade-Related Investment Measures(TRIMs). The TRIMs Agreement outlined states’ ability to negotiate with multinational companies, specifically establishing that they could not implement performance requirements regarding the exportation of part of the production, entering into joint ventures with local partners, transferring or sharing technology, purchasing locally, local input coefficients, R&D spending, and local employment, among others. In other words, a host country cannot demand any counterpart commitment from the multinational company interested in operating within its territory. The issue of investments was removed from the Doha Development Agenda after the Fifth Ministerial Conference in Cancún in 2003. As a result, home countries of large multinational companies have sought to obtain better legal provisions for investors through bilateral or plurilateral agreements all centralized in the United States, such as the North American Free Trade Agreement(NAFTA); the Dominican Republic–Central America Free Trade Agreement(CAFTA-DR); the Trans-Pacific Partnership(TPP); and the Transatlantic Trade and Investment Partnership(TTIP) between the United States and the European Union, in addition to the Trade in Services Agreement(TiSA). These agreements tend to inhibit the state’s ability to legislate for the common good and the defense of the public interest in the areas of health, the environment, education, culture, and financial prudence, among others. The purpose is to bind the state, giving companies and investors carte blanche in their search for private profits without having to worry about the environmental liability and the consequences of their actions on human lives, non-human lives, and on nature. The agreements are extremely asymmetric in terms of rights and obligations: the state has obligations to fulfill and investors have rights to defend, and no counterpart commitment to contribute to the development of the host country is required. It should also be noted that most countries have already signed a number of bilateral investment treaties(BITs) that provide additional protection to foreign investments and investors. After almost 20 years with these agreements in place, the conclusion is that they are not the answer to the development needs of countries receiving foreign direct investment. To better ensure the protection of intellectual property,“investment” is defined extremely broadly in these bilateral agreements as all types of property assets controlled, directly or indirectly, by a foreign investor. Investment includes patents, commercial brands, trade secrets, and copyrights, among others. Since the 1990s, the United States has consolidated its main negotiating objectives in the areas of foreign investment and intellectual property rights based on the NAFTA negotiation process, particularly chapter 11 of the agreement. 31 The legal text that defines the obligations of the states before foreign investors, and whose dispute resolution mechanism grants more rights to private investors and more obligations to the state, became part of all the agreements that regulate the obligations of the signatory countries regarding the treatment accorded to investors and foreign investment. The BITs also include a dispute resolution mechanism that allows private investors to litigate against the 31. The Investment, Services, And Related Matters section of Chapter 11 of NAFTA establishes protection for foreign investments and introduces an investor-host country dispute resolution mechanism based on international arbitration and aimed at ensuring the state’s compliance with the commitments assumed. See the legal text, available from: <http://www.sice.oas.org/Trade/nafta_s/CAP11_1.asp>. 32

GLOBAL CAPITALISM | Vivianne Ventura-Dias government of the host country without the support and even without the knowledge of their home country. These disputes involve onerous costs for governments, even when international arbitration decides in favor of the host country. The TPP, signed in February 2016, is the only treaty of the three previously mentioned that has been signed. Three Latin American countries are part of the treaty: Mexico, Chile, and Peru. 32 The TPP has not yet entered into force, as it is waiting to be ratified by several countries, including Japan, Malaysia, Australia, New Zealand, and Canada. The negotiations of the other mega-regional trade agreements are progressing slowly and could become more complicated if protectionist policies in the United States are implemented and consolidated. 4. Final considerations 4.1. Recent changes to the global political economy Globalization and the financialization of the economy present regulatory and political issues that must be confronted by social movements and by critical intellectual activism in Latin America. The issues covered in this essay show that global criminal capitalism entails an exclusionary society in which the benefits of modern scientific and technological progress become the privileges of a minority. The enormous concentration of wealth, social exclusion, and the proliferation of precarious work in both rich and poor societies all have repercussions across various institutional spheres, generating legitimation and democratic crises and facilitating the growth of intolerance and totalitarian ideologies. In light of increasing uncertainty and the collapse of illusions, the foreigner—the immigrant—again becomes the scapegoat for the frustrations and discontent of vulnerable workers and unemployed young people. The most disturbing recent political event is the victory of the multimillionaire Donald Trump in the United States presidential elections. His victory revealed the ignorance of both the liberal elites and the conservatives, as well as the interests, anxieties, and values of 50 percent or more of the U.S. population. Predominantly white—whether in terms of race or mentality—intolerant of social change, deeply nationalist and imperialist, Trump voters manifest a strong preference for authoritarian leadership(Taub, 2016; Frum, 2017). Likewise, in Europe, extreme right parties with populist, nationalist, and intolerant programs are attracting the support of workers who reject a political system in which they do not see their interests represented and a globalization that they do not understand, but that they feel is impacting their jobs, income, and personal lives; these same parties are those that refuse to belong to a European Union, apparently more concerned with setting standards for cheeses and consolidating market supremacy than with improving the living conditions of their citizens. As with past reactionary movements, the dissatisfied masses prefer to focus their anger on the other: the foreigner. The current process of the United Kingdom exiting the European Union (Brexit) after local voters approved the proposal by a small margin represents the victory of nationalist and xenophobic campaigns. 33 With the advance of populism and nationalism, the social democrat, socialist, and labor parties remain divided between those who propose an anti-capitalist program and those who prefer to stick with more electable platforms, offering a socially liberal agenda that presents the illusion of controlling capital without actually altering the processes that lead to income inequality and the concentration of wealth. In Latin America, a set of factors, including the collapse of commodities prices, led to the end of an almost two-decade period of progressive govern32. In January of 2017, the new president of the United States unilaterally withdrew the United States from the TPP, fulfilling a promise made during his presidential campaign. The practical consequences of this decision are still unknown. 33. It should be noted that the Brexit victory was due only to 30 percent of the total number of voters, the Trump victory was the result of 25 percent of voters, the Conservatives in the United Kingdom won with 25 percent of the votes, and the far-right Law and Justice party in Poland won with about 20 percent of the voters(Meek, 2017). 33

Vivianne Ventura-Dias | GLOBAL CAPITALISM ments committed to the reduction of social debt and the promotion of a more inclusive economic development in the region(Cálix, 2017). Despite their social progressivism, the impact of the changes implemented by the governments was insufficient, since the economies continued to depend on an extractivist model, without which it would have been impossible to finance the distributive policies that were implemented. In any case, it was more due to their successes than to their mistakes that these progressive leaders were replaced by politicians determined to push Latin American economies and societies towards the status quo ante , either by popular vote, as in Argentina, or by parliamentary coups, as in Brazil, Honduras, and Paraguay. 34 In Brazil, politicians, bureaucrats, and a new police-judicial apparatus appropriated power to stall distributive efforts and the progressive agenda. With support from the financial, corporate, and landlord elites, but also from significant portions of the population, they were willing to destroy the country’s national wealth, built over decades and sold at auctions, in order to oppose a more independent foreign policy and the construction of democratic institutions. Returning to the questions proposed in the Introduction of this essay, the spaces to create policies that oppose the status quo of global capitalism, which must be included as part of social-ecological transformation(SET), are indeterminate. As noted in the previous sections, the concentration of economic, financial, and political power among individuals and legal entities, the existing legal frameworks for the protection of investor rights, and the fact that the public debt of a significant number of governments is held by private finance all significantly reduce the leeway that progressive governments have to operate. In other words, it is time to recognize that the capitalist system has no intention of reforming. However, history has shown that it was possible to reverse the impacts of the first wave of globalization and financial capitalism that was dominant until 1914. The tragedy of World War I and II and the Russian Revolution of 1917 imposed strategies of conciliation and cooperation between labor and capital, between developing and industrialized nations. In addition to the incessant concerns regarding the construction of a fairer distribution system for income and wealth, we must now also urgently address the need to limit the damage caused by human activity to life on planet Earth, which threatens the future of humanity. 4.2. The contradictions of modernity in Latin America The great thinker Hannah Arendt observed that individual and social freedoms only acquired the condition of natural, inalienable, and irrevocable rights and began to play a revolutionary role, when men in the modern age, and not before, began to doubt that poverty was inherent to the human condition. Women were not recognized as historical actors. This doubt was then replaced by the conviction that“life on earth might be blessed with abundance instead of being cursed by scarcity”(Arendt, 1963). These values of modernity arrived very late to Latin America, which modernized without having assimilated the ideals of equality, reason, and citizenship that contradicted traditional, patrimonial, and exclusive Latin American society. Modernity refers to ways of living that Latin American populations knew as“modernizing” projects, imposed from above; far from replacing the existing exclusive, patrimonial order, these projects reproduced the existing power structure and multiplied the prevailing economic and social inequalities. However, no one can be excluded from capitalist modernity, which sustains an economy that devastates both human life and all life on the planet. As seen in this essay, all are integrated into globalized markets, whether by reason or by force, as workers and as consumers. Latin American societies must now face the contradictions of contemporary modernity, despite the 34 . Honduras in 2009, Paraguay in 2012, and Brazil in 2015-2016. The Haitian coup occurred earlier, in 2004. 34

GLOBAL CAPITALISM | Vivianne Ventura-Dias paradoxes found throughout their history. During the 19th century, Latin American modernity in the Spanish America republics was more political than economic, with the adoption of formal republican institutions limited by the oligarchic characteristics of power. 35 The slave-holding Brazilian monarchy of the 19th century did not even adopt formal republican institutions. Even in the 21st century, secularism still has not been fully adopted in many Catholic countries. It is also worth mentioning that the basic principles of modernity, such as the great separation between the private and public spheres, the construction of individual autonomy, the equality of individuals before the law, and the basic rights of citizens, are still ongoing issues in Latin American countries. Modernity and its ideals belong to a small cultural elite and have not been transformed into effective means to create democratic institutions and citizenship. In most Latin American countries, the borders between the private and public spheres are very tenuous. The state—the public sphere—is perceived by the ruling classes as an extension, without interruption or opposition, of the family circle—the private sphere—a justification of their predatory practices and search for personal benefits using public resources. The“old boys’ club” culture establishes the foundation for the tolerance of corruption and the privatization of power by those who hold patrimonial power and political positions. Latin American elites are characterized by the creation and exploitation of monopoly rents derived from political favoritism, using the state for their personal interests. This Latin American ruling class is the greatest obstacle to SET in Latin America. Although an analysis of elites in Latin America requires more systematic work, it is important to consider the strength of existing institutions, which seek to prevent institutional changes, such as those necessary for SET. 35. In Brazil, the First Brazilian Republic was not established until the end of 1889, a year after the formal abolition of slavery. The interdependence derived from global capitalism and late modernity represents challenges and opportunities for SET in Latin America. We can say that late modernity drives SET because the ideas related to ways of life that involve caring for others and the planet, and the practices associated with them, are disseminated more quickly in our interconnected world. New media facilitates access to knowledge and the exchange of new experiences. Another positive factor of the high levels of connectivity is the formation of networks among social groups from different parts of the world—including social movements and NGOs. Communities that are fighting to change the economic and social system to improve their lives are able to discover ways to mobilize public opinion, give a voice to global society, and organize large, simultaneous demonstrations around the world. There are two sides of the coin, however. Late modernity may also limit SET in Latin America because the same new media disseminates, with greater scope and speed, behaviors and values that induce irresponsible consumption and that defend forms of production and consumption that are not sustainable. 4.3. Incentives to encourage socialecological transformation in Latin America The post-war golden age created the myth of wellbeing capitalism. This well-behaved capitalism, also known as“Fordism,” with its competitive markets that depended on the flourishing of mass consumption and the transfer of productivity to wages and prices for its growth, existed for a short period in some countries, while the capitalists rebuilt the personal wealth that had been destroyed by the wars. The benefits of progress were transferred to workers and consumers, while the capitalists(business people) received their normal profits and the salaries of the managers were proportional to the average salaries of the workers. Increases in productivity were transferred to workers in the form of a gradual increase in average salary and better working conditions, and economies of scale were transferred to prices, increasing access to goods and services and promoting intergenerational social mobility. 35

Vivianne Ventura-Dias | GLOBAL CAPITALISM That golden age in the United States and Europe was not golden for Latin America, because the capitalist expansion in the region was derived from the low and fixed price of exported raw materials, primarily from the price of oil. Financial capitalism and neoliberalism, in their most conservative forms, represent one of the primary constraints to changing the production and consumption structure of Latin America. In the international arena, the asymmetric relationship between nations— established by rules agreed to between governments—limits the capacity to implement policies in each country. This essay highlights that the legal framework for trade, whether at the multilateral, bilateral, or plurilateral level, has reduced national governments’ leeway to implement active policies that impact the competitive conditions of national and international markets. This review of global financial capitalism has shown that investor short-termism is dominant, and financial returns predominate over the gains of physical production. As a result, one of the great challenges to SET policies that hope to alter the production and consumption structures in Latin America lies in the types of incentives offered to alter the behavior of local business people. Recent experience in Brazil helps illustrate the difficulties of effectively using traditional incentives to induce desirable changes in private investments. For example, during the governments of Lula da Silva and Dilma Rousseff, economists devised a strategy to promote private investment in the manufacturing industry, mainly in consumer goods production, while using the purchasing power of the large state-owned company Petrobras to encourage the capital goods industry, including the marine industry. The government would take charge of major infrastructure works and, at the same time, create a mass market based on increasing the minimum wage above the increases in productivity and inflation. Government technocrats expected that the increase in demand derived from the increased purchasing power of the new middle class would attract the“animal spirits” of both international and domestic capitalists, encouraging them to invest in the expansion of installed capacity and eventually increasing the local production of consumer goods, thus generating a virtuous cycle of growth. This objective to increase investment was not achieved, mainly because these productive transformation policies coexisted with orthodox monetary policies that established high interest rates, foreign capital flows to the country, and the overvaluation of the Brazilian currency. The demand for consumer goods was satisfied with an increase in imports, and it is suspected that all the fiscal incentives provided in the form of subsidies or tax waivers were pocketed by the“business people” and earmarked for financial activities both in Brazil and abroad. With some exceptions, Latin America generally occupies a place at the end of the value chain, producing basic inputs derived from mining or agriculture or low-skill intensive processing activities. That is the position that the region’s capitalist elites have accepted in the international division of labor. If the objective of SET is to influence the production and consumption structures of Latin American countries, it is fundamentally important to understand the characteristics of rentier financial capitalism, as outlined in this essay, and the obstacles to changing the insertion of Latin American countries in the international economy presented by current conditions. Additionally, the performance of international trade in recent years raises doubts regarding its role as a driver of growth and diversification, contrary to the experience of Asian countries. There is still no empirical data that allows a rigorous evaluation of the impacts of the so-called“Fourth Industrial Revolution,” based on the integration between products(Internet of Things), the digitalization of production with 3-D printers, new materials, artificial intelligence, bioengineering, and other innovations. The scope and reach of the innovations being implemented, the size and characteristics of the subsequent changes, and the time necessary for the impacts to be felt and measured in both the core economies and in the international economy are still unknown. However, we do know that there is an ongoing process of replacing manual labor with high-performance machines(robots/artificial intelligence) and of developing more integrated manufacturing processes, which will result in less displacement of production and, consequently, in 36

GLOBAL CAPITALISM | Vivianne Ventura-Dias less trade . Obviously, the results will be different according to the characteristics of each industry. The current controversy about increasing automation, not only in manufacturing companies, but also in service companies, again centers within the discussion questions about the engine of contemporary capitalism and its inherent instability. David Noble, in his critique of the automation of human tasks and technological determinism, called attention to the fact that robots do not consume the products produced by the companies in which they “work.” 36 The apparent automaticity of the adoption of the most recent technology is highly plausible and, therefore, ideologically convincing. However, it is false, because the technological development process is essentially social and, therefore, always maintains ample room at its core for indetermination— for freedom. Each technological innovation opens a range of possibilities so that societies can choose what is most convenient for them. This open range of possibilities includes policy options. It is the institutions, ideas, and social groups that finally close the field of possibilities by adopting the most socially appropriate technologies(Noble, 1986, pp. xi-xii). Within the context of rentier capitalism, in the absence of a conscious social movement, private investors will decide the technological adjustments based on the rents available through the privatization of knowledge, without paying any attention to the effects on people’s employment, income, and dignity. Latin American countries are ill prepared to enter what is known as“Industry 4.0.” In the core countries, there is a certain continuity of state policies, regardless of the color of the presidents or their parties. 37 In Latin America, policies lack continuity between administrations with different objectives, with a minimum number of government policies, infrastructure that is almost always dependent on the interests of the mining and agro-export sectors, and no attempt to resolve structural economic issues, such as low savings rates and low rates of public and private investment. In conclusion, it is important to reiterate that global capitalism has created an exclusionary social order that exposes, at every point, its criminal nature. It is unquestionable that the global capitalist order creates dichotomies of included and excluded, native and foreign(outsiders), integrated and marginalized. On the one hand, the dominant regions and cosmopolitan actors enjoy the opportunities that have been opened to them by the increased mobility offered by major scientific and technological innovations, and they are able to access the variety of goods and services facilitated by the globalization of markets and financialization of the economy. At the other extreme exist the actors who, as undocumented immigrants to core countries or as inhabitants of the rest of the world, contribute to the low prices of goods and services available to global consumers with their unpaid or poorly paid work. Then there are also those who are excluded from modernity and globalization, even in the leading regions: the chronically unemployed, the“precariat,” 38 the poor, young people who do not work or study, immigrants, political and economic refugees, criminals, and common prisoners, among others. Finally, there are those who, in rich or moderately rich societies, can voluntarily exclude themselves from consumer society with certain comfort and opt into other ways of organizing their lives, the economy, and society, something that is only possible because of technological progress. They are the builders of utopias, men and women who participate in social movements to defend human and non-human rights; the rights of indigenous communities; the centrality of life, care, and nature; and equality, solidarity, and freedom for all. These movements oppose the current order in an attempt to build a more just one, an order in which young people are the main protagonists, based on intergenerational justice and responsible consumption within the limits of the planet. 36. See also Meek(2017), who correctly observes that“robots don’t eat chocolate.” 37. The current administration of the United States is a significant exception, introducing an ideological bias into the actions of state agents and favoring the elimination of all the regulatory policies and standards of previous administrations. 38. Precariat is a term created by Guy Standing(2011) to refer to the social class formed by people with minimal labor or social rights. 37

The products of scientific and technological development and human reason allow each and every person to live a full life, while also respecting the cultural and biological diversity of the planet. However, the appropriation and use of these goods and services by the capitalist system must be confronted by organized civil society in every country, as well as globally. If it is not confronted, we may be building a dystopian society in which the work of most people becomes redundant, the income derived from work is degraded, and society is left fractured between the few that own everything and the rest of humanity that is condemned to survive on the margins of abundance. Or we can move towards a utopian society in which machines will replace humans in the most brutal, monotonous, and dangerous activities, and people will finally come to savor the dilemma, proposed by Keynes, of how to use their free time to live well; develop each individual’s creative potential; and build a society that is fairer, more generous, and more careful with the planet. Vivianne Ventura-Dias | GLOBAL CAPITALISM 38

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Global Capitalism and the Challenges Facing Social-Ecological Transformation in Latin America was published by Friedrich-Ebert-Stiftung in Mexico.

Vivianne Ventura-Dias | GLOBAL CAPITALISM Author Vivianne Ventura-Dias has served as a senior researcher for the LATN network since 1997. She was formerly Director of the Trade and Integration Division at the United Nations Economic Commission for Latin America and the Caribbean. She holds a master’s degree in Urban Planning and a PhD in Agricultural and Resource Economics from UC Berkeley. Over the years, she has held important posts at various international organizations, including the United Nations and the International Labor Organization, among others. Publisher Friedrich-Ebert-Stiftung in Mexico Yautepec 55| Col. Condesa 06140| Mexico City| Mexico Responsible Christian Denzin Director of the Regional Project Social-Ecological Transformation www.fes-transformacion.org Friedrich-Ebert-Stiftung The Friedrich-Ebert-Stiftung, founded in Germany in 1925, is a private and non-profit institution, committed to the ideals of Social Democracy. It was named after Germany’s first democratically elected president, Friedrich Ebert, and continues his political legacy of shaping politics in the spirit of freedom, solidarity and social justice. The Foundation follows this mandate both in Germany and abroad through political education programs, international cooperation, and the promotion of study and research. Commercial use of all media edited and published by the Friedrich-Ebert-Stiftung is not permitted without written consent of the FES. The views expressed in this publication are not necessarily those of the Friedrich-Ebert-Stiftung. ISBN 978-607-7833-95-6