Nunan on Mazower: the UN and the Third World project

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Yet as Mazower has emphasized in his earlier 2009 No Enchanted Palace, this was not our UN. Many of the men who played a crucial role in the formation of the organization, from Roosevelt to Churchill to Jan Smuts to Alfred Zimmern (not to mention Stalin) were keenly attuned to the realities of Great Power politics. British liberal imperialists like Zimmern, who had tutored American Secretary of State Dean Rusk when the Georgia bumpkin was a Rhodes scholar at Oxford in the early 1930s, saw the institution as a framework though which a liberal civilizing empire could get a second wind. The South African statesmen Jan Smuts, who drafted the UN’s Charter, had longer-term designs on the civilizing role of the white race in southern Africa, two visions which, at least in Smuts’s quicksilver mind, did not obviously contradict each other. Stalin, about whom we know perhaps the least, appears to have sought some recognition of his vast Eurasian empire from Berlin to Manchuria, and had little interest in any bigger ambitions for the organization as long as Moscow retained a veto right over any actions that threatened its zone of influence.

It was, therefore, a surprise that a body initially organized in some sense to perpetuate empire rapidly became perhaps the leading forum to oppose it, and so quickly. Smuts in particular was shocked by Jawaharlal Nehru’s successful attempt to use the UN as a forum to condemn South African policy towards Indians. And where Stalin’s proposal to include all sixteen of the Soviet republics in the body had almost derailed the formation of the organization, that seemed like a pittance now compared to the wave of postcolonial countries that joined the United Nations as European empires dissolved. The UN went from having 51 members in 1945 (including Ukraine and Belarus, as a concession to Stalin) to 104 in 1961, and 158 in 1975. The growth had tremendous impacts on the focus of the UN, and ones not always beneficial from the point of view of Washington: suborganizations like UNCTAD, the United Nations Conference on Trade and Development, began to articulate demands for global redistribution and criticisms of the free trade regime, GATT (the proliferation of international acronyms truly begins in the 1960s), that intellectuals like Raúl Prebisch claimed chained postcolonial countries to a pattern of structural economic dependency. And as the General Assembly bulged with countries which had, for the most part, been colonies themselves, the body became more obsessed with the idea of national self-determination as the paramount right from which all others flowed. Given the troubled status of South African blacks and Palestinians, South Africa and Israel became frequent whipping boys of the General Assembly. Other countries which were not quite postcolonial templates like those in sub-Saharan Africa—the USSR, China, Pakistan, or India—found ways to climb aboard the Third World bandwagon, whether under the banner of proletarian internationalism, anti-imperialism, Islamic solidarity, or Non-Alignment, respectively.

By the early 1970s, the situation looked particularly dire to Washington. The issue was less that another bout of bellyaching about Palestine, or the latest meeting of third-rate Communist intellectuals with their counterparts from Ifni or Guinea-Bissau, posed much of a concrete threat to the United States. Yet if one conceptualized the Cold War arena to include not just Berlin and the Fulda Pass but also the Third World, the shift clearly did represent a problem. American-led attempts to improve such exotic locales as Vietnam, Latin America, and Afghanistan’s Helmand Valley had been underwhelming. More concretely, just as UNCTAD continued to vilify American corporations and the UN declared nationalization as an “inalienable right” in its call for a “New International Economic Order,” Western capital was under real threat. “Within only a few years,” writes Mazower, “75 percent of the holdings of American raw materials corporations based in the Third World had been nationalized.” Given that social democrats and socialists in Europe at this time were thinking quite seriously of shifting their trading focus away from America and Japan and more towards Africa—morally prudent and a way to prevent a disastrous African economic collapse—the threat to the United States suddenly seemed quite real. Having tamed Mao, negotiated an Arab-Israeli ceasefire, and reached détente with the Soviets, was the United States about to be undone by the likes of Houari Boumediénne?

As it turned out, no. The United States, Mazower argues, found ways to carve out at least two new niches for itself in the international system by the mid-1970s. One had to do with America’s central role in the international financial and monetary architecture. For Ford administration officials like William Seidman, the President’s chief economic advisor, or Treasury Secretary William E. Simon—“a mean, nasty, tough bond trader who took no BS from anyone,” as one friend, Edwin Feulner, called him—bailouts of New York City were one thing; watching the United States be berated by UNCTAD on the one hand and then shaken down for redistributional aid was another. With the appointment of banker Paul Volcker (then the director of the Federal Reserve Bank of New York), the stage was set for an actual NIEO that was good news for the United States and bad news for most of the developing world. While interest rates had already been raised twice, in 1968 and 1974, Volcker was able to raise Treasury Bond yields to 20%. More than that, by the late 1970s there was a growing consensus about top Western financial officials—not just the Americans but also European Atlanticists like British prime minister James Callaghan or the French economist Michel Camdessus—on how the rich countries could work together.

From the point of view of Moscow or Havana, much less Nairobi or Mexico City, there was a touch of the conspiratorial about how things unfolded: U.S. interest rates drew in capital at the same time that the IMF was beginning to enforce a regime of fiscal discipline and privatization on heavily indebted countries, hence freeing up the capital of newly wealthy investor classes to flow through Wall Street and London in search of higher returns. Redistribution was surely happening, only in the opposite direction from what someone like Prebisch had proposed two decades earlier. More than that, international South-South solidarity turned out to be a sham: newly wealthy elites in countries that profited from the oil boom turned out to prefer to spend their new wealth not on elaborate aid schemes to sub-Saharan Africa but rather on the latest in U.S. military hardware and penthouses in Mayfair and Manhattan. The real economic story here may have fewer villains than the one Mazower paints of figures like Volcker, the IMF, and European integrationists; as scholars like Raghuram Rajan and Charles Maier have suggested, the rush of funds to Anglo-American financial centers may have had more to do with global trade imbalances as so many countries turned to pursue export-oriented growth built around American consumption during the 1970s and 1980s in particular. Whether or not European-American coordination or the under-consumption of Chinese factory workers was the ultimate driver of events, however, the result was a nightmare decade for almost all of the G77 countries that had gathered in Geneva for the birth of UNCTAD two decades earlier.

Washington’s new focus on free markets and liberalized international capital flows could also lead Americans, and with them the world, down unexpected rabbit holes. Neoliberal reforms in Pinochet’s Chile by Chicago-trained economists, IMF-led interventions in Latin America in the 1980s and the spectacular failure to impose “shock therapy” on Russia all successfully dovetailed with the discrediting of socialism as an economic system in much of the world; but the hyperinflation, oligarchies, and wealth inequalities that the outsiders’ reforms seemed to engender brought widespread disillusionment about further cooperation. When the pattern repeated itself in Southeast Asia in 1998, even as well-intentioned American economics like Joseph Stiglitz protested, skeptics from Naomi Klein to anti-WTO protestors in Seattle had all the evidence they needed to demand, once more, a “new” NIEO that could serve citizens, not bond markets. Yet ten years later, even as the white heat of financial innovation and international integration played a key role in the largest destruction of wealth in human history, bankers like Robert Rubin and Lawrence Summers continue to thrive as policy mandarins. While the actual NIEO implemented since the mid-1970s may originally have been directed against the Third World (insofar as it was a consciously implemented political project), perhaps one of its most lasting effects has been its distortion of American domestic politics and the closer coupling of Wall Street with White House economic policy. Today, the idea that even Democratic financial appointees—pace Peter Orszag—would do anything after public service other than work on Wall Street, seems quaint. Even more grave than the decision of these policy Wunderkinder to take the money and run, however, has been the failure of this new economics to address seriously perhaps the greatest economic problem of the latter half of the twentieth century, global warming.

 

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Contributors
About Timothy Nunan

D.Phil. candidate in history at Oxford (Harvard Academy Scholar starting in 2013). Twentieth-century international focus, with emphases on Germany, the former Soviet Union, and Persianate Asia. Thematically, his research interests include governance, intellectual history, and modernism in the arts, especially documentary photography and architecture.


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