On preserving capitalism in the 21st century: The Lugano Report

01 November 1999


Towards 21st Century Internationalism

TNI 25th Anniversary (1974-1999)


A multi-disciplinary Working Party, convened to consider the future of the world economy, concludes that it is grossly under-managed, gravely threatened by its own excesses, prone to ecological collapse and an unlikely candidate for long-term survival. How then can the winners in the globalisation game guarantee their own comfortable future? There is a way, but one that may be too awful to contemplate. In her Annex to the The Lugano Report, Susan George writes, "this book is intended to afflict the comfortable without, alas, providing much comfort to the afflicted. But these are not pretty times and the stakes are high".


An Interview with Susan George on the occasion of the launch of The Lugano Report (Pluto, 1999), conducted by Howard Wachtel.

Susan George: Associate Director of TNI, fellow and former Co-Director of TNI, she is also President of l'Observatoire de la Mondialisation. She is author of more than half a dozen books on north-south relations. Her latest work is The Lugano Report (Pluto 1999). George is active in the International Forum on Globalisation, ATTAC-France, the Group of Lisbon and the World Forum for Alternatives. She regularly serves as an advisor to various international labour federations, environmental and development NGOs. Her current work is focused on counters to neo-liberalism and the World Trade Organisation.

Howard Wachtel: TNI fellow and the first co-ordinator of TNI's Global Economy Programme. A professor of economics and Director of the Centre for Israeli Studies at the American University in Washington DC, Wachtel works on world economy and international money, labour and the American economy, the transformation of the economies of East-Central Europe, the former Soviet Union and the Third World.

HW: Can you give us a context to the birth of The Lugano Report?

SG: The context is the fact that the people running the world may be ruthless and they may stop at nothing in the pursuit of profits, but they are certainly not stupid and are therefore just as capable as any of us of seeing what the contradictions are and the instabilities of their system. They want to preserve this system because it provides a very comfortable life for them and ensures their power and the power of their companies. The context is that they needed some help from outside academics, "policy intellectuals" as they are called in the US (Samuel Huntington and Henry Kissinger types), to draw up a diagnosis of where capitalism is at the end of this century, where it ought to go, and what is necessary to keep it ticking over. This is the result of a work that was commissioned with the express terms of reference that no holds were to be barred, no feelings were to be spared, and that it would remain absolutely confidential. It was therefore for a limited audience of commissioners. Insofar possible, those writing it should transmit their report unanimously, with total honesty and not spare any feelings.

HW: You were able to get a copy of the report and have given it to us, putting it into the public domain. One of the points the writers make is that capitalism is not merely an economic doctrine, but an intellectual achievement and a revolutionary millennial force and a source of hope, just as communism once was. Now, with the fall of the Wall and a declaration of victory by one side, why was it considered necessary to invest the money and time to commission a report to defend capitalism?

SG: Firstly, because material conditions were deteriorating and, secondly and more to the point, the ideology isn't holding up very well. It used to be the American Dream in which your children would be better off than you, and you were better off than your parents. This had been spread to the rest of the world through ideology and also through the example of some countries such as the Asian Dragons, implying that everyone can participate in this marvelous system. This is no longer holding up. Financial crises are wiping out gains at a stroke from years of work by people who have been attempting to create a better situation for themselves. Privatisation is snapping up valuable properties and foreigners are taking over the results of the work of hundreds of thousands of people over many years, etc. The ideology is wearing out at the seams and this is something that has been recognised in the report. Capitalism is not just an economic system - it is something that promises you the moon, which is exactly what Globalisation also does. Globalisation says we are all going holding hands towards the Promised Land. It's almost a religious ideology.

HW: The authors of the report recognise the problem of the viability of the dream. The problems, as they see it, are firstly that nature is the greatest obstacle to the future of the free market system, which "could reach a critical state and experience a landslide effect, culminating perhaps in a global accident if there is a clustering of ecological events". On this issue there is a recognition of the seriousness of the ecological threat, but then they treat the question of population differently in that "swelling populations and human rights as conceived by the signatories of the Universal Declaration of Human Rights are mutually incompatible". Can you explain how the report dealt with the issue of nature versus population?

SG: This is the heart of the question. In their diagnosis of what is happening and what the obstacles are to capitalism being able to continue to enrich them and their fellows, the authors identify something business people rarely take seriously: we are living in what [Herman Daly calls the "full world"] in which our production systems are taking from nature more than ever before and also dumping waste in proportions that the closed bio-system cannot cope with. You cannot increase the biosphere! The other thing is that the language and metaphor of economics is always "Newtonian mechanics" - in classical economics every phenomenon is basically reversible. However, these people have recognised that when you add unit after unit at some point it can go completely off the chart, and that is what they call "the accident", when there has been a clustering of these critical events, which may already be in motion. They find this a tremendous obstacle because at that point growth is actually making you poorer.

Having recognised this they pose that the impact on the earth = consumption x technology x population (I=CxTxP). Their view is that consumption for those who can afford to consume is going to continue to increase, and the two items which will increase are energy consumption and consumption of meat (i.e. transformed grain). They believe technologies won't change fast enough because of entrenched interests like oil companies who don't want a massive switch to solar energy. Technologies will continue to impact on the environment for a long time to come, the sense of urgency is not there with those in control of technology, so what are the variables you can use to keep the system coherent and within the bounds which have been set for it? The variable that remains is population.

HW: How do they propose to deal with population?

SG: That's not a very pretty story. Their view is that you simply cannot have six and then eight billion people on earth, this will simply not work. They've scarcely regarded the fact that the rich consume more and they don't see that if you've got money you can change the way you live. In their view the consumption you can act on is with the people who actually consume very little - consuming forests, degrading land, etc. There is no compassion for the poor because it is clear they are contributing absolutely nothing to the system either as producers or consumers. Therefore, those people are necessarily expendable. It is really considered only a variable, population with a capital P.

HW: You say the target for 2020 is to cut the present population by about a third. That means a net reduction of 100 million per year for two decades. How do the report's authors reckon this is going to happen?

SG: They say they have no blueprint but do have some lines of action and concentration that should be put into play. They take the metaphor of the four horsemen of the apocalypse which are the four destroyers of humanity: war, famine, conquest and pestilence. Each of these scourges has a chapter in the report. This is a new form of international Malthusiasm. But 200 years ago Malthuser saw famine as a control on population in a national context. For international Malthusiasm to take hold there has to be a combination of factors. No single factor is enough on its own, but they would not suggest nuclear weapons because these would also affect rich and contented people. However, you can encourage hunger and famine, which are the favoured terrain for increased mortality. You wipe out the small farmers by, for example, using the policies of the WTO by making sure there is competition between the largest and the smallest. Before long the productive forces of the small farmers have been wiped out and in no time there is malnutrition on a huge scale because they don't have the resources to buy food. You can also encourage wars, which is happening as we speak. There are a lot of wars today between poor and populous communities. It is the antipathy of Hitler and Stalin as it doesn't take a lot of administration. They even argue if Hitler had not had an obsession with wiping out Jews, gays, communists and gypsies, he might have won the war because he put so many resources into his programme of extermination. There are other means too, such as reducing funding against diseases like tuberculosis.

HW: How do the authors of this report plan to sell it?

SG: They don't go into that much because the commissioners of the report have to sort that out. What they probably would want to say, though, is that the elites of the countries where these programmes are targeted, will probably co-operate. For example, the remarks of some top people in India about AIDS are so callous as to put Western leaders to shame. What probably is a problem is an ideological one in which you have got to change the language of human rights. They have gone into quite a lot of detail about that. They analyse the Universal Declaration of Human Rights in the light that it was written when there were only two billion people. They also cite that protection of the rights of each and every individual is only a recent phenomenon.

HW: One of the more interesting aspects of The Lugano Report is how they see the fragmentation of the world, a breaking up of peoples of the world into smaller and smaller segments. They see this as an opportunity through what they call "identity politics" to sell the project.

SG: More to facilitate it. Their problem is to provide a diagnosis without any holds barred. For them identity politics is a huge opportunity because if you can get groups of people focused on who they are and make that the main concern of their lives, and particularly to aggravate grievances they may have against others, then you've gone a long way in allowing the people at the top to operate freely against all of them. They want people not to concentrate on what they can do, but who they are, and in this way you can prevent certain coalitions like between gays, women, Jews, Arabs, etc. You want ever smaller groups and you want to finance them, for them to have their own publications, you want to encourage their wars, have a lot of noise so they don't concentrate on who's really running the show.

HW: What was your reaction when you received the report?

SG: What I'd say as Susan George is that I wrote the whole thing! This was a terrible decision. A lot of people don't know how to deal with this book, and in a sense neither do I. I thought this was the only way I could say everything I thought that needed saying. I didn't think it was the right time historically for another book like my previous ones on topics like hunger and how to stop it, so eventually the shape of how to say these things began to form in my head. I have come to the conclusion that there is no level of human suffering that will stop the policies we now see underway. Human suffering in itself does not lead to policy change. This is an idea I wanted to get across as forcefully as I could. The debt crisis is an example: hundreds of thousands die because of it, but nobody cares.

The question, do I write an after  word to it and then "why did I write it this way", or do I just put it out there? In commercial terms I probably should just have delivered the report anonymously to a publisher. This would have worked. However, I thought if this book is any good, it's too dangerous to do it in that way. So I tried on the one side to be as ruthless as I could be in describing what I really think is going on, but on the other offering a critique of the premises of the report and then proposing alternatives to this. It is a book most publishers don't know what to do with. A French publisher accepted it with great enthusiasm saying I should have sent it to him through a lawyer, and just a report, but when I said in England it will come out with an afterword he withdrew from it.