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Multinationals And Globalism
Many anti-globalization interests, Jay Walljasper writes in the latest Utne Reader, have coalesced in the belief that growing poverty, environmental destruction and social breakdown, with continuing bloodshed seen around the world, are the direct results of an international political and economic system that places most of the world's wealth and power in the hands of unaccountable and powerful corporations. "To these activists," writes Walljasper, "a new era of global peace and justice can be achieved by reinvigorating local communities and creating a new international system that promotes cooperation over competition."
Sounds great. In fact, it sounds like the early Wired Magazine manifestos about the Net, some of which I wrote. But would such a system work? Even if it did, who would pay for it and maintain it? And who will curb those corporations whose economic, lobbying and political power far outstrips any of those groups protesting their existence? Why would citizens in the west pay to "reinvigorate" local communities elsewhere and create a new international system? Globalism thrives on the contributions of corporations who want to profit from it, not from the efforts of governments or civic groups advancing democratic ideals.
The idea that globalism could even bolster those ideals is a view not widely held by fundamentalists or by certain educated elites in Europe and the United States. The institutions that to most minds represent the global economy -- the IMF, the World Bank and the World Trade Organization -- have become reviled and distrusted in these circles, their meetings developing into bloody standoffs. Political leaders in economically-advanced countries can no longer meet to talk about trade or economic issues without sparking riots.
The protesters opposing them represent a variety of causes, from the loss of good domestic jobs to the lowering of global wages to denouncing sweatshops to decrying environmental desctruction. They have quieter allies, too; even in prosperous Western economies, support for trade liberalization has declined and governments are accused of caving in to business interests. Liberal politicians from Bill Clinton to Britain's Tony Blair have expressed puzzlement and frustration at this sometimes anarchic, unthinking political fury; they claim such organizations are vital if wealth, technology and economic opportunity ever gets equitably distributed around the world.
Moreover, an editorial in the Economist magazine argues that anti-business protesters have their arguments upside down -- with genuinely dangerous consequences for the sometimes just causes they hope to advance. On the whole, says the Economist, stricter regulation of international business won't reduce profits. "What it may well do, though, by disabling markets in their civilizing role, is to give companies new opportunities to make even bigger profits at the expense of society at large." Companies pressured to increase wages will simply move, close overseas plants or charge more, thus make more profits. Afterwards, "The companies, having shafted their third world competition and protected their domestic markets, count their bigger profits (higher wage costs notwithstanding). And the third world workers displaced from locally-owned factories explain to their children why the West's new deal for the victims of capitalism requires them to starve."
If you follow these violent and confusing protests -- many now organized online -- you get the impression that some of these demonstrators confuse globalism with corporatism, since large companies are among the most vocal advocates of globalism and so far are its primary beneficiaries. The trappings of corporatism -- using technologies to create low wages and new markets, while suppressing individual enterprise and distinctive cultures -- have already encircled the world. McDonald's is much more symbolic of globalism than a small village in India getting wired for the Net, even though the latter may ultimately be more significant. And many political scientists equate Afghanistan's poverty, political extremism and instability to the fact that globalization hasn't yet reached the country.
The world's biggest companies sometimes appear more powerful than the world's biggest governments. (Microsoft's long and successful battle with the U.S. Justice Department is a good case in point). In the United States, they control our media and popular culture and are the primary contributors to the political system. Their lobbyists are the single most influential political force in Washington.
It's not surprising that many people feel instrinsically uncomfortable with globalism. Humanists aren't the spokespeople for globalization -- economic interests are. Corporations appear to be unchecked, and corporations have little inate social responsibility. They exist to generate profits, not advance social agendas or protect the environment, so they inevitably spark enormous resentment in foreign cultures whose citizens want jobs but are then puzzled by their own resulting lack of prosperity. These foreign workers also find that new globalizing technologies undermine their own national identities and religious and political values, all increasingly subsumed by the homogenized Disneyfication and Wal-Marting of the world that has swallowed up U.S. popular culture and countless small business, from pharmacies to family farms. The U.S. comes to seem like a remote, sometimes monstrous, always greedy and insensitive force.
But Giddens argues that democracy -- and the globalism inextricably linked with it -- is the most powerful emerging idea of the 21st century. Few states in the world don't call themselves democratic now, even when they aren't, like China and North Korea. In fact, the only countries are explicitly refer to themselves as non-democratic are the remaining semi-feudal monarchies or fundamentalist entities -- Saudi Arabia, Afghanistan, Iraq, Iran, Syria.
Democracy's spread has now in fact created a bloody confrontation with fundamentalism, a holy war. Both sides refer to one another in evil blasphemers. Lost in this confrontation is the idea that Democracy isn't only about multi-national markets, cheap labor and business opportunities. It's about the liberation of information, freedom of religious and cultural choice, and a brorader value system with a complex civic structure. Yet another good reason why multinationals ought not to appear more powerful than governments (they aren't) and become the sole face and voice of globalization.
If we are going to have globalization of business profit making, should we not also have globalization of ethical awareness too ?
It is easy to dismiss this because it happens far away in another country, but the events of September 11th should have given us a heads-up that we need to pay close attention to the poorer parts of the world if we are to avoid our own destruction.
There are 34 pages from 'No Logo' available by following the Amazon link I have included above. Read them. You might not agree, but you will be better informed.
Realizing I'll get flamed to hell and back...
Please please please, all of you liberal, or socialist, or leftist, black-mask wearing protesters please read the Economist article.
Would you really stop large corporations? Would you really want to deny people in the 3rd world a chance to move ahead far more quickly than America ever did?
I totally agree that cultural homogenization is horrendous, but the vast majority of people the world over apparently don't agree! That doesn't prevent small, unique businesses and institutions from existing! There are still mom-and-pop ISPs out there! There are still small manufacturing companies!
Why do you folks insist that the world is coming to an end, and that multinationals are taking us there?? Reading too much cyberpunk fiction?
(note: I hate the homogeneity. I abhor Walmart, McD's, and their ilk. I'll buy by stuff from tiny stores when I can. Because I want to support local, unique business, even if that means I have to pay a few extra bucks. How about you?)
Globalism is never a problem for anyone -- it allows competition to level the paying field for even the poorest nations as long as they have the people who want to work for it.
Where globalism, capitalism, and "Big Business" get ugly is when the government (any government) intervenes in any way: whether its a subsidy, a tariff, an embargo, even a bailout (a la airlines). The minute a government steals from the citizens in order to help a business, the system falls apart. Those who worked hard to make their business profitable get hurt for their smarts (Look at the airline industry, there are numerous airlines HIRING right now, and some of which who are still profitable). Instead, our government takes the biggest ones, with the worst track record of profitability, and bail them out, hurting the little guy who was making it work.
Big Business will always fail with no government intervention, eventually. 10 smaller companies in a co-op situation will always do better in the long run if they have the competitive edge and no sanctions to hurt them or subsidies to help the Big Business competition.
It's evident that totally free trade can "save the world." It's more evident that our country will never allow it. Sanctions against Iraq destroyed that country (NOT Saddam Hussein as the media and government portrays as the culprit). Sanctions and subsidies destroyed the wheat crop in Columbia, then destroyed the coffee crop. What was left? Coca. Now our government intervenes to destroy that crop.
In order to have a peaceful society, we need to get government ENTIRELY out of free trade. Let businesses and people deal with whomever they want, bar none. I can understand if government may want to limit arms sales, but other than that, I can see no reason to ever limit or subsidies trade or business of any kind. In a totally free economy, there will always be winners and losers. Unfortunately, government intervention makes losers into smaller losers, and the winners into big losers. Tell them to stay out, and you'll see happy people all over the world, able to buy and sell their wares at prices that they deem proper.
We believe that without the government, prices would skyrocket (they wouldn't, supply and demand and competition prevent that), or we'd have shortages (again, suppy and demand and competition would help), or we'd see our economy fail because other countries do it cheaper (they do, and better, sometimes its even our unions that make our businesses unprofitable, not necessarily our business tactics).
In my experience, this is more true of the confused and lazy reporting about "anti-globalists" than of the actual activists.
The activists have sincere, complex concerns that don't reduce well to sound-bites. So the media reduces them to sound-bites anyway, for their own purposes, and then commentators use these sound-bites to complain that the activists are simplistic.
I mean, heck, if you get your information from the news media, you might have the impression that a coalition of government representatives working on regulating the global market is really an organization in favor of free trade.
Hell, even the Libertarians are falling for this one. A little hint for the Randoids: You get a bunch of governments together in a room to agree on a set of rules and regulations about the economy and I guarandamntee you that "free trade" isn't going to come out the other end.
Quiquid latine dictum sit altum viditur
A study contracted by the Australian Department of Foreign Affairs and Trade was released this month discussing the effects of globalization on poverty. One of the key points to the study was:
The evidence also shows that international income inequality has narrowed over the past 30 years when countries ' population sizes and the purchasing power of local incomes are considered. The very poorest countries now represent less than 8 per cent of the world 's population compared with just over 45 per cent in 1970.In countries that have embraced the opportunities created by integration with world markets, globalisation has enabled stronger income growth. But national policies have not always been sufficient to ensure that the benefits of this growth are enjoyed by all.
The study can be found at: www.dfat.gov.au/publications/globe_poverty/index.h tml
Either learn to play the game according to the rules which are quite fair, or fuck off and retreat into isolationism. Grow your own goddamned corn and feed yourselves, and build your own industrial infrastructure, and your own educational institutions, and call us in 200 years.
Ok, oblig disclaimer - I'm white, privately educated, English, live in Kensington, London, and once worked for Rupert Murdoch. Hence, on paper at least, I'm unusually evil.
Having said that...
Globalisation can only, in the end, work out as a force for good. I say In The End, so bear with me a second...
Klein's NoLogo theories (nicely offset by having her name in massive print, and her picture on the back, *sigh*) are nice, but forget the fact that Globalisation works on all levels: education included. As corporations spread across the world, so does the rest of the world come badck to the corporations. Sept11 is an extreme example of this, but so is the Globalisation'd media reporting on Nike sweatshops in Vietnam, or human rights abuses in China. Anything - anything at all - that forces connections between different cultures can only add to increased understanding.
Whether that understanding is developed in the first instance as a tool to exploit is somewhat irrelevent, because the same globalisation process is used by those who want to help.
You really only need look at the change in mindset that has been brought round by globalisation. Take a generation or two back - little knowledge of the rest of the world compared with today (well, at least in Europe).
A silly example: food. Look at food from 30 years ago: Spaghetti Bolognaise was an exotic dish in the UK. Now I can get Sushi at the corner shop. 30 years ago it was John Wayne, now it's John Woo.
Taco's hobby is obscure Japanese animation, my wife loves African guitar music. THAT is just as much globalisation as the spectre of nasty corporations.
I, for one, get tired of hearing all this hub-bub about how large corporations are "supressing" local culture or somehow magically putting mom-and-pops out of business (with the implication that they're superior). The simple fact of the matter is that, by and large, where these corporations prevail, the corporations are prevailing with the will and consent of each and every one of their customers. The local culture or shop may do one or two things better, but overall, the failing institutions are failing for a reason: the disruptive corporation/culture is providing something the individual prefers, on the aggregate. People don't go and do business with corporations that they think are worse; they shop the shops that do the best by them on the aggregate. These choices are made on a wide variety of grounds: speed, price, selection, quality of service, novelty, consistency, and so on. No matter what poor judgement you feel these choices are made with, they are just that, choices, many of them. Rather than allowing the individual to exercise free will, a vocal minority wants to regulate and legislate this choice out of existence.
It's the highest form of snobbery and arrogance. If you don't like the choices made, then try to enlighten the individuals; bring hard evidence to the table. If you feel the companies are succeeding because of unethical practices, then fight those unethical practices and/or push for greater transparency.....But do NOT try to assert your value system on other people by force and the rule of law. It's unfair and inefficient.
The third world debt problem couldn't be because kleptomaniac leaders stole a good portion of the money and wasted a large portion of the rest could it? No, that would imply that it's at least partially their own fault. Cancelling debts makes it harder to borrow in future and encourages the 3rd world government thieves to keep right on stealing because if they mismanage things badly enough, fraternal, compassionate first worlders will just cancel their debts again in order to help those suffering 3rd world people.
They deserve to be able to develop and they *are* able to develop, they are just cursed with leaderships that choose *not* to develop, having a preference for luxurious living over the welfare of their people. I don't know how we are supposed to fix that besides reinstituting colonialism and I doubt anybody wants to pick of "the white man's burden" (thank God).
DB
Here's a quick history lesson. England's empire was built with the idea that raw materials (cotton, sugar, spices, ores) would be cheaply exported from its colonies back to the homeland by a group of powerful corporations (such as the hated "East India Company" whose tea was dumped over board in Boston harbor). To this end it forbid/discouraged the manufacture of these resources domestically. So no cotton was weaved in the states but raw cotton was sent to England, and if you wanted to buy a shirt you'd have to import it from there. Moreover, farmers in America (and later colonies) had to sell their crops to chartered conglomerates who controlled prices, and when they placed orders for manufactured goods, they had little control about the price or quality of what was shipped to them. Washington once ordered a carriage, and by the time it arrived, he opened a door and the whole door came off in his hand. Many people were very pissed and had a revolution.
Immediately afterwards, large tarrifs and sometimes embargoes were passed so that the states could develop their own industries. That is how the US developed. In the industrial revolution, especially. There was lots of cronyism, but it was aimed towards the native conglomerates as opposed to the foreign ones. Carnegie went to Europe where the Bessemer process for smelting steel had just been invented and when he returned to the states, congress passed high tariffs against european steel. Carnegie then began to build native steel plants, married the daughter of the secretary of the Navy, and another "self-made" billionaire was born. We got a steel navy and lots of factory jobs out of the deal. So, a lot of cronyism, but directed at national interests, helped to develop our economy. Another example: England banned Indian textiles because it couldn't compete on price, then they conquered the country, burned down all the cotton "gins", cut the thumbs of the home-weavers, and reimported massive amounts of cotton back home. Then, and _only_ then, did they proclaim the need for "open" markets. Wars were similarly fought to "open" china. You do your own research.
So the story is the same. All countries which have _ever_ developed _any_ industry have done it with large govt. subsidy as well as a protective wall of tarrifs. I challenge you to cite just _one_ example of this not happening (wheras I have cited several examples when this did happen). The examples of the Asian tigers, as well as china, shows this playing out in the 20th century. Those nations which followed a "neoliberal" process have all ended up in shambles. Before nafta, 25% of mexico lived below the poverty line. That figure is now 50%. You can look at Indonesia, central america, brazil, the congo for more examples.
Now, we (the US) are doing the same thing to much of the third world that England has done to us:
We forbid or overthrow their govts. if they try to control their own resources (i.e. Iran nationalizing the foreign imposed oil "company" which has a monopoly on extracting oil, or Zaire taking the diamond monopoly from DeBeers, etc.)
We try to prevent them from raising tarrifs to protect their own industries (like the US forced on Japanese automakers, or the steel example citied above, or the ban on mexican tomatoes we had just a few years ago, or the current tarrifs against lamb from new zealand).
We punish those (foreigners) who subsidize their domestic companies. Note that the US still gives many billions to _our_ farmers, accounting for about half of median farm-owners' incomes. US corps pay only 10% of govt. expenditures. Recall the bailouts of chrysler or the many subsidies that we pour into high-tech sectors and aerospace. The 70 billion we're giving US comapanies now because of 9/11 is another example of this double standard.
The above are the policies. We don't have colonies such as Britain, but we enforce these policies on the rest of the world through our military (we put "our guys" in power) in some cases and purely institutional pressures in other cases:
IP laws allow us to monopolize key technologies.
Large syndicates such as cargill engage in price-fixing for many raw materials.
the "loans" US taxpayers send to third world dictators (many of whom we've put in power) make the third world reliant on us and institutions such as the IMF. In order to get more loans to cover the interest, we force them to engage in the economically suicidal practices cited above, thereby insuring that they will remain dependant on future loans, and so not develop independent economic policies.
free flow of foreign capital ensures that investments flee at the first sign of economic nationalism.
One significant difference is that while England assembled the raw materials at home which provided more higher paying jobs and gave birth to their middle class, modern conglomerates use the sweatshops in the third world. These are far from "heavy handed" laws such as minimum wage and environmental protection. So that we in the US don't even get the benefits that the British got 150 years ago.
This is why many oppose "globalization" as it's practiced today. It has nothing to do with trade and comparative advantage. It's just the modern version of the East India Company wrecking havoc on both our own country and on the third world.
When in doubt, have a man come through a door with a gun in his hand.
The Economist piece is worth reading, the economist usually is worth reading, Kats is usually not worth reading. So lets pretend that we just had a link to the articles in the Economist, BBC, etc. etc.
I have very little sympathy with either side of the slashdot 'debate'. The liberweenie 'corporations are the absolute good' view is infantile. Equally infantile is the 'corporations are absolute evil view'. These are not two poles of the argument, they are actually the same argument which really has more to do with the ego of the person making the statement. There really is no difference between most of the Libertarians, Trotskyites or 'anti-globalists', any more than there is a difference between different varieties of religious bigott. All beliefs in absolute revealled truth are bogus and as Karl Popper pointed out are the enemies of the open society.
The policies of the third world countries are no different at the topmost level of abstraction than those of the West, their priority is to do the best for their country. To that end various ideological dogmas may be used as rhetoric, the reality is for the most part more pragmatic.
Immediately after the second world war the whole of the West was a command economy. There was simply no other alternative, if the war was to be won 40% of the GNP had to be redirected towards military spending. The US was no different to Europe in this, the only rhetorical difference was that the word 'socialism' was never used.
It took the West something like 20 years to dismantle most of the command economy. A command economy is only efficient in the short term and then for only very narrow short term goals.
The leaders of the third world are not the morons that many posters appear to believe. Empirically it takes a lot more brains to become the leader of the average Third world or post-communist european country than President of the US.
There is no real disagreement that the ideal for the third world would be to establish a free market system supported by a modern idustrial base. The problem is that you can't get there by simply declaring your country to be a free market. You have to achieve a certain level of prosperity before the surplus capital is available to make the free market work.
Last month the US government gave its airline industry a $15 billion government handout. The 'stimulus' (i.e. pork) bill that just passed the house gives $25 billion in backdated tax cuts to large corporations, in particular Texan oil companies. It is therefore somewhat rich for the US to go preaching the wonders of the free market.
The third world has been complaining about the vast cost of AIDs drugs for five years. The US has been insisting that the rights of the patent holders come before the lives of Aids victims in the third world. But when the US and Canada decide that they need to build a stockpile of Cipro the threat of voiding Bayer's patent rights is made within days.
Before the war on terror Unilateralism was the policy of the day. The Bush administration did not think it needed foreign support. The US army could crush any other and the ABM shield would shortly eliminate any threat of nuclear blackmail. To the extent the US had a foreign policy it was determined by campaign contribution bribes.
Now the world is very different. The US suddenly needs friends in places it did not care existed. The national interest is suddenly more important than the narrow corporate interest.
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