"Profits are not the only important factor"

Last Thursday night’s standing ovation in the Jack Simpson Gymnasium for former leader of the Soviet Union Mikhail Gorbachev would have been unthinkable during the Cold War. Many give much of the credit for the end of the Cold War to Gorbachev, making the applause as much an expression of relief at moving out of the nuclear shadow as an expression of satisfaction with the man himself.

Invited to deliver the James S. Palmer lecture this year, Gorbachev referred to many issues of international significance during both his speech and an earlier press conference, but predominantly focused his lecture on the topic of balancing private enterprise with social good.

Gorbachev noted that his own political fortunes had been determined by this relationship.

"An imbalance between consumer goods and demands created political problems with the [Soviet] electorate," said Gorbachev.

While he recognized the inefficiencies of the former U.S.S.R.’s policies, he criticized the West’s own shortcomings and advocated an infusion of social values into current economic models.

"The World Bank, International Monetary Fund and Harvard [University] considered Reaganism the philosopher’s stone," said Gorbachev. "But life is more complex than that. There have been growing inequalities in Organization for Economic Cooperation and Development member nations when we had hoped the gap would close after we moved toward the free market."

Underscoring this fact, the former President pointed to the one billion people who live on less than a dollar a day and the fact that 20 per cent of the world’s population consumes 80 per cent of the resources.

Gorbachev presented part of the problem as the increasing power of multinational corporations who have coupled their sheer size with an increasing ability to undermine the traditional source of global stability, the State.

Referring to a local case, he observed that the Canadian government tried to implement a law that would ban a carcinogenic gasoline additive from the country, but had to stop their efforts under the threat of a lawsuit the government could not afford. This lawsuit was made possible by Canada’s international trade agreements, which give corporations broad powers to litigate against governments.

"We cannot protect our citizens’ health through our own laws," said a concerned Gorbachev. "We need to govern globalization; profits are not the only important factor."

While many Western pundits consider the fall of the Soviet Union evidence of the East’s failures, Gorbachev expressed a different take on the lessons to be drawn from the collapse. He conveyed concern that the West is imitating the totalitarian tendencies of the U.S.S.R. through rigid economic doctrines imposed on the weaker states, doctrines whose lack of flexibility to local realities share the flaws of central planning and are a move toward a homogeneity that would be counterproductive.

"A world government would be ridiculous at this time," he asserted. "The U.S.S.R. shows that does not work."

But according to Gorbachev, an imposed free market is no better than imposed communism.

NATO’s recent actions in Kosovo were an area of similar concern to the leader, who stressed the value of the United Nations and viewed the NATO bombing of Yugoslavia in 1999 as a foolhardy move and a failure.

"We cannot be a bull in a china shop," Gorbachev said during his press conference, pointing to the humanitarian problems in Kosovo over a year after the bombing.
That the regional organization, NATO, eventually returned to the global union of the UN for peacekeeping validity provided Gorbachev with evidence of the UN’s contemporary relevance.

Considering the effect of the free market on social good, Gorbachev said he wants to see changes to the international economic system. To help reduce the rigid approach of the current world trade institutions, Gorbachev proposed expanding the functions of the UN with an Economic Security Council that would have functions related to both the environment and economics. At the same time, Gorbachev proposed changing the roles of the IMF, World Bank and World Trade Organization, although he appreciated the potential value of the role that they play.

Ironically, the former Soviet leader advocated more respect for the global civil society than the democratic West is interested in giving. He encouraged the integration of the views of non-governmental organizations into the world’s decision making, as well as tolerance of protests which he framed as expressions of popular sentiments. Gorbachev modeled his concerns about Western attitudes on reactions to the Seattle protests of the WTO, pockets of which turned into clashes between the police and the public.

"The media called Seattle [protestors] subversives–why?" asked Gorbachev. "The protestors represented the people. We need civil society institutions, NGOs, to speak to governments."

One of the recurring themes throughout Gorbachev’s lecture was the environment. Tying the issue of social good and free enterprise together again, Gorbachev noted the flaws of current economic models that fail to include the loss of resources and environmental degradation in the balance sheet when measuring industrial contributions to the economy.

"National wealth is measured by capital," said Gorbachev. "National resources aren’t [considered]."

The unregulated flow of capital and currency speculation also concerned the former leader, who cited economist Brian Tobin’s proposal that "hot-money" be taxed a fraction of one per cent to provide a global fund to mitigate the damage that massive outflows of capital can have on an economy. Indonesia’s near collapse, leaving their economy at one-third of its previous GDP high, actually made some speculators rich, he observed. He implied this was the free market gains of a few undermining the well-being of 220 million Indonesians.

There are portions of the West that are more critical of Gorbachev’s past policy, and those who would question the wisdom of his recommendations, yet none of them seemed to be present at the lecture. A question period following the speech failed to criticize or challenge his assertions on contemporary issues, but asked -instead for direction.

Gorbachev played to a receptive audience who responded warmly to his jokes and showed their agreement with his positions through the applause that punctuated many of his concerns about the environment and social welfare. Though speaking through a translator, Gorbachev’s charismatic voice and animated gestures conveyed a passion and conviction that make many politicians seem pale in comparison. As he left the Jack Simpson Gymnasium with his security entourage, it was with the grateful audience on their feet, reaching out to shake his hand as he walked past and applauding a vision of the future that places the value of human life above the hunger for profit.

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