The power of advertising

Where would modern society be without advertising? Individual advertisers

might think they are just trying to sell a particular product but advertising as
a whole sells us an entire lifestyle. If it weren't for advertising the whole of
society would be quite different. The economy, for instance, would be
plunged into a crisis without the adverts and all the publicity that fuel our
desire for limitless consumption.

As John Berger observed in his book "Ways of Seeing", all advertising

conveys the same simple message: my life will be richer, more fulfilling once
I make the next crucial purchase. Adverts persuade us with their images of
others who have apparently been transformed and are, as a result, enviable.
The purpose is to make me marginally dissatisfied with my life - not with the
life of society, just with my individual life. I am supposed to imagine myself
transformed after the purchase into an object of envy for others - an envy
which will then give me back my love of myself.

The prevalence of this social envy is a necessary condition if advertising is to

have any hold on us whatsoever. Only if we have got into the habit of
comparing ourselves with others and finding ourselves lacking, will we fall
prey to the power of advertising.

While fanning the flames of our envy advertising keeps us preoccupied with
ourselves, our houses, our cars, our holidays and the endless line of new
electronic gadgets that suddenly seem indispensable. Tensions in society and
problems in the rest of the world, if attended to at all, quickly fade into the
background. They are certainly nothing to get particularly worked up about.
After all, there can't be any winners without losers. That's life.

Furthermore, together with the holy rituals of shopping (people get dressed
up now to go shopping in the way that they only used to get dressed up
when they went to church) advertising is one of the ways in which we are
quietly persuaded that our society is the best of all possible worlds (or at
least so good that it is not worth campaigning for any fundamental changes).
Adverts implicitly tell us to get off our fat arses and do some shopping, and
the idea that the shelves of the shops are full of the latest products is indeed
one of the most effective ways in which contemporary society gets its
legitimation.

People like John Berger are also not entirely over the moon about the impact
that advertising and shopping have on the value of political freedom.
Freedom is supposed to be the highest value in our societies, but in the age
of the consumer that freedom is all too readily identified with the freedom to
choose between Pepsi and Coke, McDonald's and Kentucky Fried Chicken,
Toyota and Ford, and people lose interest in the various political freedoms
and our ability to participate in the process of exercising democratic control.
There are lots of criticisms that could be made of modern democracies, but
no one is going to pay much attention to them if they are more interested in
becoming happy shoppers.

In all these ways advertising helps to keep the whole socio-economic show
on the road. We are rarely aware of this because we are too busy working to
earn the money to pay for the objects of our dreams - dreams that play on
the screen of our mind like the little clips of film we see in the commercial
breaks.

Foreign debt:
A curse on the poorest countries of the world
From time to time the media are full of articles about the terrible possibility
that a few thousand or a few million people in the rich countries of the
world might die from a new flu epidemic. By contrast, very few frontpage
articles or prime time TV programmes are devoted to the millions of
children who die every year from water-borne diseases - diseases that are
due to the fact that over a billion people in the world still don't have access
to clean water and sanitation.

These children die quietly and out of sight in some of the poorest countries
in the world, and the poverty of these countries is one important factor in
all this. If the countries were given the help and assistance they need to
develop economically they would be more able to tackle these problems
and stop so many children dying of easily preventable diseases.
Unfortunately such help and assistance is not being given. On the contrary,
many of the poorest countries in the world are effectively trapped in
poverty. One of the reasons for this is foreign debt. Many of these
countries can't use the little money they earn to develop their economies
because they owe so much money to foreign banks as a result of loans that
were taken out 10, 20 or even 30 years ago. The burden of foreign debt is
almost too much to bear. The Ethiopian economy, for instance,
is crippled by a debt that has now reached some 10 billion US dollars. For
the developed economies this is a relatively small amount of money. It is
comparable to the amount Americans spend on cosmetics every year (8
billion US dollars), and it is the same as the amount Europeans spend on
ice cream every year. For developing economies, though, the sums are
huge. Countries like Ethiopia have to pay more money to foreign banks
than they spend on major public services like healthcare and education.

How did these countries incur these debts?

Countries which had only just gained their freedom after centuries of
colonial rule were not known as being centres of stability. With tribal
conflicts and no long-established political institutions it was very easy
for unscrupulous leaders to take control. These people needed money to
buy political support, to build a well-equipped and loyal army and to ensure
their personal prosperity. Foreign banks saw the opportunity to profit from
the situation and didn't worry much about how corrupt the
foreign regimes were as long as they were willing to keep the economy
open to foreign businessmen who wanted to exploit the rich natural
resources that some of these countries had.

Since then, in some countries there have been revolutions and groups have
come to power that are genuinely concerned about the plight of the poor.
All too often, though, they find that so much of the little money the country
can make has to be sent abroad to foreign banks. This is one of the
reasons why so little has changed in a country like South Africa where the
apartheid regime fell in 1994 and the new regime inherited a debt of 25
billion US dollars.

In 2005 the political leaders of 8 of the world's richest nations decided to

cancel some of the debts of the poorest countries. On the face of it, this is
a great step forward. The problem is that debt cancellation is not seen by
these leaders as a means of enabling or encouraging those countries to
tackle the problems of poverty. It is being used as a means of compelling
those countries to open up their economies to foreign investors and
businessmen.

Mozambique, for instance, was told it would have its debt cancelled only if
it imposed a fivefold increase in the charges for treatment in the public
health service, and if it privatised the water company - a move which led
inevitably to higher charges and quicker disconnections for people who
didn't or couldn't pay. The banks also objected to the way Mozambique was
protecting its cashew nut industry from foreign competition (measures
used by all developing countries at one time or another). The country was
told that it would have to drop import controls, meaning that the local
industry would lose out to cheaper nuts coming in from abroad. It has been
estimated that 10,000 jobs have been lost as a result of this.

Similar measures will be imposed on all the countries that are being offered
some degree of debt cancellation. It is clear from this that priority is not
being given to helping the local economy develop on its own terms and to
helping it achieve a greater degree of autonomy. Although some of the
world's leaders - most notably the British prime minister - took up the
slogan "make poverty history'' during the widely publicised debt
cancellation agreements, it is clear to those who are prepared to read the
unpublicised small print that priority is given to the interests of big
businessmen who want to see these foreign markets opened up. No one
can maintain that poverty reduction is a priority when people are being
forced to pay more for the necessities of life like water and health care in a
country where the average wage is less than a dollar a day and when the
immediate consequence of many of these policies is an increase in the level
of unemployment.
 Feed the world - but how?
The assumption in the corridors of power is that the only real hope for the
poorest developing countries in the world is to open their economies to big
business from abroad. There is no need for these multinational companies
to be interested in the future of the developing nations. If they are
interested only in profits then the fact that there is money to be made in
developing countries will attract them there, investments will be made and
those poor economies will develop. In short: just make the world economy
as free as possible for business and everyone will be happy.

(Just to fill you in: people who call for a free international economy also call
for a strict international legal system that companies can use to demand
compensation from governments when the latter impose policies that
constrain the former. It doesn't matter if those governments are acting
democratically and expressing the will of the people. The sovereignty of
individual nation-states doesn't count for much in the eyes of those who
want to make sure that big businesses are free to carry on doing business.)

The idea that there is a perfect harmony between the aspirations of

developing nations and the interests of big business is an appealing one. If
only it were true. However, if we look at what some of the biggest
businesses have done, we quickly come to the conclusion that something
more is needed if these countries are to prosper and the gap between the
richest and the poorest in the world is to be narrowed.

One case in point is that of Nestle and it's dealings with Ethiopia. Nestle -
famous for its milk products, breakfast cereals and Nescafe coffee - is
Switzerland's largest industrial company and the value of its annual sales in
2001 (60 billion US dollars) was eight times greater than the value of all
the goods produced in Ethiopia.

In 1986 Nestle bought a German company called the Schweisfurth Group

which had previously been part owner of the Ethiopian Livestock
Development Company (Elidco). That ownership was lost in 1975 when the
Ethiopian government nationalised the company. Although this had
happened 11 years before Nestle bought the German company, Nestle still
took the Ethiopian government to court and insisted that Nestle should be
compensated by the Ethiopian government. Despite its huge economic
problems the government offered the Swiss company 1.6 million dollars.

Nestle rejected the offer "as a matter of principle" and insisted on a figure
of 6 million dollars, arguing that anything less would indicate that Ethiopia
was not serious about recognising the the rights of foreign investors. They
argued that the payment was "in the interest of continued flows of foreign
direct investment which is critical for developing countries."
While popstars like Bob Geldof were desperately trying to persuade people
to donate more money to help those on the verge of starvation in countries
like Ethiopia, the managing directors of Nestle, sitting in their comfortable
offices in Geneva, refused to sacrifice a tiny 0.01% of their annual
turnover. Ethiopia needed help. The average wage was less than a dollar a
day, 14 million people didn't have enough food to eat, and one in ten
children were dying before they reached their first birthday. But there was
"a matter of principle", and according to international law Ethiopia had to
respect the rights of foreign investors.

Nestle said it was acting "in a spirit of fairness". Is this the spirit which will
save the millions who are condemned to a life of poverty, disease and
hunger? Do the actions of Nestle prove that if big businesses are left free
to do what they want in the poorest economies then those countries will
develop and people will rise out of poverty?

Laptops for the hungry

One of the problems faced by the poorest countries in the world is that of
child labour. Children who ought to be at school getting an education are
out working because there is no other way for their families to earn enough
to make ends meet. The hours are often very long (10 or 12 hours a day)
and the conditions abominable. There are children as young as ten years
old in Bangladesh, for instance, sitting outside for ten hours a day breaking
old bricks (the broken bits of brick are used in a cheap form of concrete).

Aside from this, there is the even more widespread problem of access to
clean water and the provision of good sanitation - something that over a
billion people still don't have.

This is the world in which the United Nations announced in 2005 that it was
setting a goal according to which every child in the developing world would
have a laptop by 2015. A company had designed a very simple
and robust laptop that would be powered by a wind-up mechanism so it
could be used in areas that don't yet have electricity, and assuming at least
100 million would be ordered, the final price tag would be no more than
100 dollars. The plan is for governments and charities to buy these laptops
and distribute them to children in the poorest areas of the world.

It is not yet clear what software will be installed on the laptops, but it will
surely include one or two games. Those children in Bangladesh will be
delighted to know that after a long day breaking bricks they can relax with
their laptops playing their favourite computer game.

When hearing announcements like this it is not easy to avoid being cynical.
Of course it would be great if everyone had a computer and access to the
internet, but is it right to make that a priority now when so many children
are currently deprived of the most basic education? And when so many
children are falling ill and dying from water-borne diseases isn't it much
more urgent that this problem be sorted out?

It is hard to believe that there isn't some kind of hidden agenda. At a time
when the New World Order (or the New American Century, as it has also
been called) is becoming the focus for a violent reaction from other social
groups perhaps the laptops and their software can subtly persuade the
youngest and poorest kids in the world that the West is unquestionably the
best.

One of the snags with the plan concerns what families are likely to do with
the laptops. The hundred dollar price tag is equivalent to an adult wage for
three months in many cases. These families are much more likely to try
and sell the computer and get money to buy grain or fertilizer or food, than
to let their kids play with it in the evenings while the rest of the family sits
listening to their stomachs rumbling.

The forces of globalisation

Most people who watch the evening news on TV everyday will hear about
every major natural disaster that happens in the world: every earthquake,
every drought, every fatal landslide, every tornado and hurricane. Rarely
will they hear a thing about the two most powerful financial institutions in
the world: the IMF (the international monetary fund) and the World
Bank, and yet these institutions probably have a bigger impact on the lives
of more people than do all those natural disasters that we hear about so
regularly.

Here we present a brief introduction to these two institutions - two

institutions that are supposed to be the forces of good in the world, though
they seem to many of us like the true axis of evil.

With so many European cities in ruin at the end of World War II the IMF
and the World Bank were set up primarily to finance European
reconstruction. There was also a longer term goal: to ensure that there was
no repetition of the global economic depression that occurred in the 1930's.

(An aside: what does an economic depression look like? It looks like a
downward spiral. For one reason or another companies experience falling
profits so they start to cancel investments and lay off workers.
Unemployment rises and the demand for goods falls. The government's
income from taxes also declines, so publicly funded projects have to be cut
back. All of this makes it even more difficult for companies to make a profit
so they make more cutbacks and the spiral continues downwards. This can
spread to other countries when they start to suffer a loss of demand for
their exports.)

To avoid the spreading downward spiral of another global depression the

idea was that governments could turn to the IMF to borrow money to help
reduce unemployment and maintain demand for consumer goods whenever
a local economic crisis started.

The objectives of the IMF and World Bank changed fundamentally in the
1980's. Instead of simply providing assistance to market economies that
get into trouble, they became instruments of a much more aggressive drive
to open up new markets around the world that companies in the more
advanced countries could then gain access to and exploit.

By this time the IMF and World Bank were concerned less with Europe and
much more with the Third World countries which had previously been
colonies and had now gained independence. At the time of World War II
those countries had been the sole responsibility of their imperial masters.
Now, when they got into trouble and needed foregn loans, the IMF and
World Bank stepped in. They had a carrot and a stick. The carrot was the
desperately needed loan. The stick was the threat to withhold the money
unless the country reformed its economy so that big foreign firms could
come in and make money.

A key word here is "protection". All of the more developed economies used
measures such as import controls in the past to protect their agriculture
and industry. Such controls let companies grow until they are powerful to
be able to compete in the international market.

According to the new philosophy there is no excuse for the world's poorest
countries trying to protect their agriculture and industry. If they need
foreign loans they must open their markets up to big foreign companies
even though their own companies may have no hope of competing.

In the light of the original philosophy of the IMF this makes no sense at all.
The influx of cheap goods from foreign companies may mean a slightly
lower cost of living for many families but as local companies close and
unemployment rises overall economic activity is likely to fall and levels of
poverty will rise.

In effect these two agencies have become two of the strongest proponents
of today's form of globalisation - a process whereby all the countries of the
world are forced to open their markets, thereby maximising the
opportunties for the largest and most powerful companies in the world.
Some people have called the new philosophy of the IMF and the World
Bank "market fundamentalism". This means an insistence upon free
markets that disregards the consequences for local communities and their
traditional ways of life. Take, for example, the poor African countries that
previously subsidised agricultural activities in remote rural areas. When
they needed help from the IMF they were forced to stop these subsidies
and let the local markets operate without the "distortions" introduced by
government intervention. As a result, incomes in remote rural areas
dropped so low that their communities were no longer viable.

To the market fundamentalist this is a small price to pay for the intellectual
satisfaction of seeing the spread of the free market philosophy. In any
case, so the theory goes, the damage is only short term. Those who can no
longer make a living doing what they used to do will be motivated to pack
their bags and move to cities where new jobs are being created. That's the
way markets work.

The IMF will also force developing countries to cut back spending on things
like education, and perhaps insist that fees be charged even for primary
education. In the short term this could seem beneficial for an economy -
government expenditure falls making it easier for the government to pay
back its debts and sort its finances out. Only a market fundamentalist
would ignore the issue of whether it is fair to make poor families pay for
primary education. And only a market fundamentalist would ignore the long
term effects of a policy that will effectively reduce the level of education in
the country.

The phenomenon of child prostitution in Thailand is an example of what can

happen when so-called structural adjustment programmes like these are
implemented. Where wages are already less than a couple of euros a day,
if families are forced into greater poverty and children are denied the free
education they need to find a decent job they are forced to resort to
desperate measures.

So what can we do? Nothing basically. There is no power on the face of the
planet that can effectively challenge the IMF.