Globalisation's myths and victims
BY ALASTAIR GREIG
When I heard the World Economic Forum was to be held in Melbourne in early September, my mind raced back to an ABC interview I heard around six months ago with Pru Goward — the Prime Minister's favourite feminist — and now a chief promoter of the Sydney Olympics.
In the interview, they were talking about the Olympics ticket scandal. Goward was discussing the allocation of seats to the rich and powerful and was asked whether our politicians would be getting special seats at the main events.
She said that of course they would. There would be a lot of important and influential overseas businesspeople there and it was the duty of our politicians to woo these people. It was in our national interest!
Well, now I know who these powerful businesspeople will be! And while the World Economic Forum between September 11 and 13 will be planning the penetration of market forces into ever more aspects of our lives, you might find that the real practical discussions which will affect the lives of ordinary Australians will be going on under our very noses while we watch the Olympics.
Indeed, it is the issue of "the national interest" and the nation-state that has most absorbed the attention of those interested in the concept of globalisation.
Power shift?
The claim made by many political and economic analysts is that there has been a shift in power over the past few decades that has profoundly affected the decision-making capacity of nation states.
This argument states that the freeing up of markets has effectively rendered the state redundant as a mechanism for national economic management. In the place of the democratic state, decision-making powers have been usurped by a coalition of non-democratic or non-representative organisations and institutions ranging from transnational corporations, to global governance bodies such as the World Trade Organisation, the World Bank and the International Monetary Fund.
Technologically, this decline of the nation state is said to be premised on the phenomenal capacity of micro-electronic communications to deliver real-time transactions, which has allowed capital — especially financial capital — to cross boundaries without state monitoring or controls. Each day trillions of dollars of speculative capital slosh around the globe seeking higher returns, with the potential to destabilise entire regions.
Economically, the "end of the state" thesis is based on the idea that more open markets, in conjunction with technological change, has made transnational capital more physically mobile, and this allows firms to uproot themselves from any specific location. Therefore they are able to play one nation off against another nation and demand lower wages from workers and lower taxes from governments. Ultimately, this leads to lower social services and poorer workers' conditions.
Evidence for this thesis can be found in the growing fear experienced by workers globally of job insecurity and firms threatening to pull up stumps and move to a better, more profitable and cheaper, wicket.
This argument — the "end of the nation state" — is at the heart of much "globaphobic" talk, and is based on either a technological determinist or an economic determinist reading of reality.
'Global imperative'
The problem the left faces with such deterministic approaches is that it can lead to political passivity, and it falls into the trap of accepting the excuses used by mainstream politicians for implementing policies that adversely affect the wellbeing of the majority of citizens.
Reactionary policies have been implemented by conservative and social democratic regimes alike over the past few decades in the name of what can be called the "global imperative" or — to employ Margaret Thatcher's famous phrase, "there is no alternative" — the TINA principle.
If we accept the claim that the forces of globalisation are so inexorable, and that economic and technological forces invariably force national governments to adopt unpalatable policies, then the inevitable political consequences are grim indeed, and ultimately they are dis-empowering for the left.
However, a more balanced view on the role of globalisation in changing our world is to argue that globalisation is a symptom, not the cause, of growing global inequality and dis-empowerment. From this perspective, globalisation is part of the struggle between capital on the one hand and workers, citizens and consumers on the other hand.
From this perspective, the focus of political action needs to be controlling the power of capital. The problem isn't the growth of international trade, it's capitalist power.
If we adopt a longer historical time frame corporate globalisation is not historically unprecedented, although its contemporary manifestation can be seen as a project adopted by dominant sectors of the capitalist class as a response to the end of the long post-war economic boom in the 1970s.
Viewing globalisation through this longer historical perspective helps to debunk the myth of the decline of the nation state and the TINA principle. Powerful nation-states have acted as a willing accomplice in the offensive of corporate globalisation.
This process of globalisation is as old as capitalism itself. Globalisation began in the 15th century with the discovery of the New World. Indeed, capitalism was born global.
Evidence on trade, investment and capital flows suggests that the world is no more globalised now than it was 100 years ago. The period of "economic nationalism" between 1914 and the early post-WWII era was an aberration from a longer trend towards global integration.
Footloose capital?
Evidence suggests that productive capital is not as footloose as many people presume. This image of transnational corporations playing one nation-state off against the other, in an attempt to reduce wages and lower working conditions globally, is not as prevalent or as easy as some commentators assume.
It is more common for capital to relocate in labour-intensive industries such as the clothing industry, but in other, more capital-intensive industries the location decision-making process is based on a broader range of factors, such as skills base, proximity to market and production synergies.
Seventy five per cent of US foreign direct investment is in the higher-wage countries, such as Canada and in western Europe. Around 85% of industrial output is still produced by domestic firms with one geographic plant. In other words, the foreign bases of transnational corporations account for only 15% of industrial output.
What does give power to the "global imperative" thesis is the truly spectacular increase in global or cross-border financial flows over the past 30 years, which has far surpassed the mobility of global productive capital, and the growing size of many TNCs, evidenced in the frightening fact that of the world's largest 100 economies, 50% are TNCs.
But what we're talking about here is the problem of capitalist power, and its influence on governments, not globalisation as such.
If global capital penetration was the main problem facing the world today, then we could expect this capital to be more evenly distributed across the globe. However, no one could seriously suggest that the main problem facing many impoverished Third World countries today involves high levels of foreign capital investment. On the contrary, TNCs avoid the world's poorest geographical areas where two-thirds of the world's population live.
This reality of Third World marginalisation needs to be borne in mind when the term "globalisation" is used. While 75% of the world's population has access to television reception, only 20% have access to disposable income or credit. The richest 20% of the world's population consume 86% of all goods and services, while the poorest 20% consume just 1.3%.
This isn't a result of too many TNCs shifting their operations to the Third World. Two-thirds of the world's population have been bypassed by global commodity chains even though they have felt the fiscal constraints imposed by international lending agencies which have acted as agents opening up their territory to global competition.
Left response
What the left needs to do is look beyond the concept of globalisation and see the specific corporate project behind current political and economic trends.
Globalisation is not some "natural" process. Like "the invisible hand" of the market, it is the product of social relations. It is the product of a range of choices made by those who control social resources. More specifically, it is a response by capital against labour in order to lubricate the wheels of growth and heighten the returns to capital.
Globalisation should be viewed as a response to the crisis of capitalism and an attempt to role back workers' rights, and this project can only succeed if nation-states accept the logic of the TINA principle. And it is the world's most powerful states, in conjunction with TNCs and supranational institutions such as the IMF and the World Bank, that have promoted this capitalist logic.
What the left needs to combat is not international trade but the power of capital to dictate the price of labour and the erosion of citizenship rights.
This will involve: struggles at the place of production as well as at the point of consumption; fighting for workers rights to organise both locally and globally; campaigns such as the Fairwear clothing campaign to target the consumption of products manufactured under unethical conditions; and struggles to protect our living environment.
Corporate globalisation isn't inevitable — there is an alternative. But it can only be combated through global solidarity. And that's why I'd urge you to support the S11 campaign.
[Alastair Greig is a senior lecturer in the department of sociology at the Australian National University. This article is abridged from a talk he presented to a July 20 public forum, "Seattle to Melbourne, Fighting Global Capital", organised by the Canberra S11 Alliance. Visit GLW's new S11 web site at <http://www.greenleft.org.au/globalaction/s11>.]