Structural Violence and the International Political Economy
Author: Craig A. Brannagan
Originally published at Peace and Conflict Monitor on 11/17/2005
In the contemporary world, the phenomenon we call globalization has brought to life ideas and predictions previously thought impossible. There has been a global diffusion of information technologies and communications, such as the internet, cell phones and satellite television; the facility of international travel; the increased accessibility of consumer goods and services; and the sharing of unique cultures and customs. While on the surface these realizations seem undoubtedly advantageous, they are not without their own serious downsides. Most notable is the fact that as globalization gained influence in the world, largely throughout the 1990s, the actual number of people living in poverty had increased by almost 100 million(1). To make sense of this dark irony, this increasing polarization between haves and have-nots, we must examine the underlying causes and systems driving the distribution of wealth and debt in the twenty-first century. Broadly, such a system might be referred to as the international political economy (IPE).
In attempting to discuss IPE as a system, it must be understood that its complexities warrant much attention and concern. Accordingly, an analysis of IPE will include two parts: first, an examination of the structure of the IPE regarding economic globalization; and second, an examination of how that structure represents the interests of a relative minority of state-actors in the international community. Specifically, this essay argues that the current state of the international political economy permits of a systematic model of structural violence, wherein strong, advanced industrial states impose violence upon weaker, developing states through multilateral financial institutions, such as the International Monetary Fund. Furthermore, to constructively address the issue of the need for greater global social justice, the international community, and especially those actors responsible for formulating the policies of the IMF and other multilateral economic institutions, must reassess its governing principles and implement development policies that take into account a more humane approach.
At the end of the Cold War in 1991, the United States was recognized as the de facto de Irak world superpower. In that same year, American firms had produced $5.6 trillion in goods and services, which was equal to about 26 percent of the world’s output; American military spending amounted to $281 billion annually, representing 27 percent of the worldwide total(2). With its national population representing merely 5 percent of the global population, such a concentration of power had afforded the U.S. government tremendous flexibility in its capacity to act in the new unipolar era. And with this in mind, the U.S. hastened its calls for a “democratic peace” that would spread democracy throughout the globe, while simultaneously preaching the common benefits of a market-based world economy(3). This was the beginning of what we now call globalization.
At the forefront of this new internationalism was the neo-liberal economic policy of the U.S., commonly known as the Washington Consensus. As alluded to above, this concept proposed that the market, and not the state, should be the impetus behind economic development. It included schemes such as government restraints; lower tax rates; openness to foreign goods and investment; the privatization and deregulation of industry; and the protection of private property(4). To put it another way, the Washington Consensus incorporated the processes of the internationalization of the state, which allowed for the “relatively free movement of goods, capital and technology and a reasonable degree of predictability in exchange rates,”(5) as well as the internationalization of production, as the relatively free movement of corporate production facilities from one country to another, with little to no consequences from state regulations. This expression of global capitalist ideology came to be embodied in several multilateral trade and finance-based institutions, such as the World Trade Organization, the World Bank Group, the Inter-American Development Bank and the International Monetary Fund. In each of these organizations the United States plays a prominent role in policy prescriptions and administration, and as Hook and Spanier put it, “the United States [is] in a strong position to use the WTO as a vehicle to promote its own economic agenda.”(6)
Indeed, the creation of both the World Bank and the IMF at the Bretton Woods Conference in 1944 were both actively encouraged by the combined efforts of the most industrially advanced and prominent countries of the time, referred to as the G-7(7). The central subject of interest here, the IMF, was charged with governing foreign exchanges and providing credits for member states beset by short-term currency crises. In order to receive such credits, however, the recipient states would be bound by conditions that mandate national economic structural adjustments(8). It is in this context that the roots of structural violence can be found, which will be elaborated on and examined below. But first, a vital insight to understanding the structure of the international political economy is that the United States represents the majority of votes cast (17.08 percent) among the 24 Directors of the IMF Executive Board, with Japan (6.13 percent), Germany (5.99 percent), France (4.95 percent) and the United Kingdom (4.95 percent) representing the next highest percentages of votes(9). Hence, these five countries, which are all members of the G-7, command substantial power over the economic policies that compose the international political economy.
For the sake of precision in the context of this paper, the word power requires a clear, workable definition. According to Hannah Arendt, “power corresponds to the human ability…to act in concert. Power is never the property of an individual; it belongs to a group and remains in existence only as long as the group keeps together(10).” And making reference to the instrument of economic power, E.H. Carr proposes that “economic strength has always been an instrument of political power, if only through its association with the military instrument…power is indivisible; and the military and economic weapons are merely different instruments of power(11).” Taking account of these understandings of power, it is not improbable to conclude that the modern international political economy is essentially dictated by the imperial powers of the last two centuries. Indeed, the five most powerful members of the IMF Executive Board are also five of the nations responsible for the funding and reconstruction of the post-World War II era; this hints at the supposition that, perhaps, the IMF is an imperialistic tool for preserving the status quo, the current balance-of-power in international affairs.
As concerns the usefulness of instruments of power in international relations, Hannah Arendt defines violence as having:
an instrumental character…Phenomenologically, it is close to strength, since the implements of violence, like all other tools, are designed and used for the purpose of multiplying natural strength until, in their last stage of development, they can substitute for it.
Violence, therefore, represents an imposition of the will of one actor over another (or several others) in order to gain or retain access to power, which usually presents opportunities for payouts or greater benefits than would otherwise be available to weaker powers. Similarly, structural violence, as understood by Simon Stander, is prevalent where “the social, economic, and/or political system (structure) leads to early death, disease, mental damage and severe restriction of individual and/or collective freedoms. It is fundamentally a form of exploitation.”(13) Among the five forms of structural violence that Stander provides, the most relative here are those of debt War and poverty. In total, then, if Arendt’s definitions of power War and violence are taken into account in terms of the IMF (as the manifestation of power) and the “conditionalities” that they impose on recipient states (as the instrument of violence), then it is reasonable to conclude that the industrially powerful countries of the G-7 are effectively condemning the credit recipients to a system of structural violence; the structural violence imposed upon debtor countries serves to reinforce their roles as subordinates in international affairs, while it similarly preserves and perpetuates the international balance-of-power in favour of the imperial powers of the north.
In order to illustrate the reality of the structural violence caused by the IMF, attention will here be shifted to the case study of Jamaica. In 1973, the Organization of Petroleum Exporting Countries (OPEC) quadrupled oil prices, from $3 to $12 a barrel(14). The resulting energy crisis forced the Jamaican government of Michael Manley into a foreign exchange crisis, and so by the mid-1970s, Manley and his Ministers were left with no choice but to turn to the IMF for credits, which would supposedly help their country get through the crises. In the summer of 1977, the Manley government received credits from the IMF on the condition Jamaica adopt 3-year program of strict austerity measures, which included a hasty currency de-valuation; the slashing of social programs, such as health and education; and an increase in taxation to match Jamaican expenditures in foreign exchange (deficit financing), “where the deficit equalled the margin of demand for imports from abroad.”(15)
The consequences of the IMF policies were catastrophic. The policy emphases on national exports and international imports of goods created a situation of national food insecurity. Whereas local farmers previously grew a variety of vegetables to sustain themselves and their communities, the IMF policies forced farmers to ‘specialize’ on a few export crops, such as onions and cabbage. As a result, Jamaicans purchased import products, such as potatoes and lettuce, at prices less expensive than what the Jamaicans themselves could produce them for. While at the level of the consumer this is beneficial, it actually was crushing for the local farmers who were put out of business by foreign producers, and also left the prices of goods subject to the dictates of the international market.(16)
In addition, Jamaica’s milk industry suffered at the hands of the cross-conditionality between the World Bank, the IMF and the Inter-American Development Bank. Producing as much as 34 million litres of milk in 1991, Jamaica applied to the Inter-American Development Bank in 1992 for a loan of $50 million USD to help support its agricultural sector. As part of the conditions for the credit, the government was made to abandon local subsidies and to abandon controls on imports of milk powder. As it happened, a massive influx of milk powder from the U.S., which was sold at a significantly lower price than the real Jamaican milk, destroyed the dairy industry, forcing dairy farmers to sell off their cows or convert their market to meat sales. The irony is that while the Jamaican government was compelled to abandon their subsidies, there were no restrictions on the U.S. government to subsidize their milk powder industry, which was subsidized 137 percent .(18) As Joseph E. Stiglitz explains:
Forcing a developing country to open itself up to imported products that would compete with those products by certain of its industries, industries that were dangerously vulnerable to competition from much stronger counterpart industries in other countries, can have disastrous consequences – socially and economically. Jobs have systematically been destroyed – poor farmers in developing countries simply couldn’t compete with the highly subsidized goods from Europe and America.(19)
As of April 2005, the Jamaican unemployment rate was 12.2 percent , or 146,000 able individuals of the labour force.(20) According to the CIA World Factbook, 19.7 percent of the Jamaican population live below the poverty line; a public debt of $28 billion USD exists; and the government carries an external debt of $5.964 billion USD.(21) Michael Manley described the consequences of accepting the IMF policies of conditionality as “[setting] Jamaica’s progress back at least 50 years.(22)
It should be evident from the brief case study of Jamaica that the consequences of adopting IMF or other structural adjustment programs can have crippling effects on developing countries where domestic industrial and agricultural sectors are not yet mature. It should also be unambiguous that the IMF, as a power structure of the world’s most influential industrial countries, is both a vehicle for spreading the ideology of global capitalism and for imposing neo-liberal economic policies on countries that might not otherwise adopt such policies. In the case of Jamaica, the enlarged foreign debt, the intensification of poverty through large-scale unemployment and job loss, and the political and economic subservience to the strongest powers of the international community through a system of dependency have seriously damaged Jamaica’s capacity to “develop” or “modernize” as its northern neighbours have. Yet as E.H. Carr asserts,
The doctrine of the harmony of interests [the democratic peace] thus serves as an ingenious moral device invoked, in perfect sincerity, by privileged groups in order to justify and maintain their dominant position…In so far, therefore, as the alleged natural harmony of interests has any reality, it is created by the overwhelming power of the privileged group, and is an excellent illustration of the Machiavellian maxim that morality is the product of power.(23)
Probably the greatest available opportunity the world has to address these injustices is the United Nations. Representing and advocating the principles of responsible government, bottom-up development schemes, and pragmatic approaches to redressing global inequities, the U.N. must be given the credibility and resources it needs to fulfill the Eight U.N. Millennium Goals, of which it has placed “Eradicate extreme poverty and hunger” as its highest priority. However, as the latest U.N. Summit is underway, this highest priority has already been decisively rebuked by many member states, including Canada and the United States. While reaching the goal requires only 0.7 percent of each member’s GDP by the year 2015, the political will to commit to this negligible expenditure does not currently exist.(24) And so, to reiterate, the role of the U.N. must be expanded, but the volition of its members must support their organization for it to act in its full capacity; the functionality of the institution itself depends upon the orchestrated cooperation and altruism of its member states. Yet, perhaps by exercising veto powers in situations like this one, certain member states are actually purposefully undermining the substantive capabilities of the United Nations so as not to work at cross-purposes to their individual aspirations. Could omission be another form of structural violence?
Arendt, Hannah. “On Violence,” from Foundation Course in Peace and Conflict Studies: CD Reader, ed. Victoria Fontan. University for Peace, Costa Rica, 2005
Carr, E.H. The Twenty Years’ Crisis. New York: Palgrave Publishers Ltd., 1981
Cheadle, Bruce. “Blair claims small victories at UN Summit,” in The Globe and Mail. From: http://www.theglobeandmail.com/servlet/story/RTGAM.20050914.wunit0914/EmailBNStory/International (accessed on Thursday, September 15, 2005)
CIA World Factbook, Jamaica, from: http://www.cia.gov/cia/publications/factbook/geos/jm.html (accessed on Thursday, September 15, 2005)
Cox, Robert. “Social Forces, States and World Orders,” in Neorealism and Its Critics. Ed. Robert O. Keohane. New York: Columbia University Press, 1986. 204 – 254
Hook, Steven W., and John Spanier. American Foreign Policy Since World War II. Washington D.C.: CQ Press, 2004
International Monetary Fund, “IMF Executive Directors and Power,” from:
http://www.imf.org/external/np/sec/memdir/eds.htm (accessed on Thursday, September 15, 2005)
Manley, Michael. Life and Debt. Tuff Gong Pictures Production, 2001. Produced and
directed by Stephanie Black
Stander, Simon. “Structural Violence,” from Lecture Notes, the University for Peace,
September 7, 2005
Statistical Institute of Jamaica. Statistics. From: www.statsinja.com/stats.html (accessed on Thursday, September 15, 2005)
Stiglitz, Joseph E. Globalization and Its Discontents. New York: W.W. Norton & Co., 2003
(1) Joseph E. Stiglitz, Globalization and Its Discontents, 5.
(2) Steven W. Hook, and John Spanier, American Foreign Policy Since World War II, 242.
(3) Ibid. 245.
(4) Ibid. 359.
(5) Robert Cox, “Social Forces, States and World Orders,” in Neorealism and Its Critics, 230.
(6) Hook and Spanier, American Foreign Policy, 257.
(7) Stiglitz, Globalization, 15.
(8) Hook and Spanier, American Foreign Policy, 53.
(9) International Monetary Fund, “IMF Executive Directors and Power,” from: http://www.imf.org/external/np/sec/memdir/eds.htm.
(10) Hannah Arendt, “On Violence” from Foundation Course in Peace and Conflict Studies: CD Reader, ed. Victoria Fontan. University for Peace, Costa Rica, 2005, 8.
(11) E.H. Carr, The Twenty Years’ Crisis, pp.105 & 109.
(12) Arendt, “On Violence,” 9.
(13) Simon Stander, “Structural Violence,” from Lecture Notes, the University for Peace, September 7, 2005.
(14) Hook and Spanier, American Foreign Policy, 171.
(15) Former Prime Minister of Jamaica Michael Manley, Life and Debt, Tuff Gong Pictures Production, 2001.
(16) Life and Debt.
(18) Stiglitz, Globalization, 17.
(20) Statistical Institute of Jamaica, Statistics, from: www.statsinja.com/stats.html.
(21) CIA World Factbook, Jamaica, from: http://www.cia.gov/cia/publications/factbook/geos/jm.html.
(22) Michael Manley, Life and Debt.
(23) Carr, Twenty Years’ Crisis, 75.
(24) Bruce Cheadle, “Blair claims small victories at UN Summit,” in The Globe and Mail, from: http://www.theglobeandmail.com/servlet/story/RTGAM.20050914.wunit0914/EmailBNStory/International.