THE GLOBALISATION SHAM by Vera Butler

Among the prominent thinkers of late capitalism is Joseph Stiglitz, an economist with a remarkable range of experience in matters of policy-making, from the White House to the World Bank. Stiglitz has commented:-

"I spent almost forty years working to understand the strengths, and limitations, of the market economy. My research not only has cast doubt on the validity of general claims about market efficiency but also on some of the fundamental beliefs underlying globalisation, such as the notion that free trade is necessarily welfare-enhancing." (1)

At the World Bank Stiglitz came to understand why poverty in some countries was increasing rather than decreasing. Changes had to be made "in policies, in economic institutions(1) in the rules of the game and in mindsets", to help globalisation to work better. Global financial crises such as 1997-1998 in Asia, the Latin American crises of the early new millennium, and the falling dollar since 2003, have forced a rethink of the global financial system.

Stiglitz concedes that the United States missed the opportunity of sustaining values and principles within a new political and economic system. Instead of competing to "win the hearts and minds" of the Third World, the advanced nations actually created a global trade regime which assisted their special corporate and financial interests, without bothering about the others. One of the "central choices" under capitalism, says Stiglitz, is the role of government, i.e. the balance between government and the market. What regulations, if any, should be in place to protect workers, consumers, the environment? The answer might be different in different societies; but properly managed, globalisation could benefit developing and developed countries alike, says Stiglitz. Yet the experience of the past ten years or so has demonstrated to an astounded world that some of the famous corporate names - ENRON, Permalac, Siemens - were run by CEOs using criminal techniques of enrichment, bribery, and deceit of the general public, including robbery of their own employees. Considering the perversions of capitalism, the question needs asking:-can globalism work ?

If one understands "globalisation" as just the global spread of trade, one might as well go back to the days of sailing ships which circled the globe in search of gold and spices. Nowadays global exchange consists primarily in the appropriation of assets, and a vortex of mergers.

Investment does not, therefore, increase production, but destroys existing productive capacity and secures command over enterprises with long-term profitability prospects, such as public instrumentalities.

CATCHWORD or GOAL ?

In retrospect, therefore, "globalisation" appears to be one of those modern catchwords which are supposed to convey capitalism's world-wide reach and business acumen. However, the features which Stiglitz considers important for a more equitable global relationship, include :-

* a fairer trade regime

* trade liberalisation (free flow of goods)

* alleviation of debt burden, including write offs

* a revision of the subsidization regime

* environmental protection

Failures of globalism to meet these social conditions and growth raise doubts as to the system's viability as a new and more humane form of economic management.

Hence voices multiply, singing the requiem to globalism. John Ralston Saul writes about globalism's unavoidable collapse. Focussing on

 

the expansion of transnational corporations across national borders, and operating outside national business regulations, Saul refers to the Davos agenda, which stresses the primacy of money transfers, consolidation of control, and corporate expansion, as against productivity growth.. (2)

GLOBALISATION and FREEDOM.

Freedom fetishists will assert that globalisation brings freedom of entrepreneurial activity (and, therefore, benefits the enterprise and its shareholders). However, it is the freedom to disregard social obligations, minimize taxation returns to the state - and, therefore, it benefits a few at the expense of the many.

Normalised poverty has been the inverse solution to the tax crisis.

Governments save money by simply letting people slip through the social safety net. Who will pick up the slack ? After all, charity was a feature of nineteenth century free marketeering. Now charity - or philanthropy - is en vogue again, involving mega-billionaires such as Bill Gates.

The extent, the sheer volume, of speculative entrepreneurship is mind-boggling. Global mergers and acquisitions grew to a peak of $US1.2 trillion in 2000, then collapsed slowly back to $US300 billion in 2001, then began expanding again. By late 2004 this phenomenon was hitting $US 100 billion a week. (3)

Saul notes the growing entry into the work-force of women, but this did not generate a surge of new productive energy in terms of wealth creation. Somehow the real wealth contribution by women has been inflated away, he says, while a great deal of new paper wealth has been created in money markets in its place. In the 1960s a middle-class family could do all right on one salary, whilst today two are required. (4)

NGOs and GOD.

What we know is that God is again unexpectedly among us and available to be on our side. This might well be the case, but it does not exclude the pursuit of power.

By 1980 the OECD had registered 1600 NGOs. They were spending $US2.8 billion. In France, between 1987 and 1994, 54,000 new nongovernmental charitable associations were created. In Chile, there are 27,000, in the Philippines 21,000, in the United States 1.2 million NGOs. By 1995 there were 3000, spending almost $US6 billion. Now there are more than 50,000. At the international level alone Governments spend more via their NGOs on aid. (5)

Yet there seems to be the occasional quid-pro-quo. In an increasing number of cases NGOs were declared persona non grata on grounds of their involvement in espionage - the latest closures being ordered in Putin's Russia.

Hence we don't quite know what the return of God will mean, because -as Saul says - these days strong belief is often bizarrely linked with the most dubious of free market morality.

IRREGULAR WARFARE: THE UNDERDOG BITES BACK.

The appearance of irregular warfare as a mainstream feature of our life suggests that the globalist idea has not worked out. Globalisation has not spread peace - the main condition for successful trading and international intercourse.

In the last decade or so, even the most convinced globalists have been obliged to notice the return of military conflicts linked to poverty, alienation, racial hatred, dysfunctional nation-states and disastrous leadership. Most of the 40 million war deaths since 1945, including the 22 million since 1970, died not in formal battle but in irregular warfare or as a result of it. (6)

However, the unethical aspect of irregular warfare is, essentially, irrelevant. Western practices of war on terrorism do not hesitate to employ unconventional and uncontrolled techniques of maiming and

killing. The purpose of anti-terrorism, just as irregular warfare, is to destabilize the enemy.

Yet it is remarkable how little strategic thought has been given to dealing with irregular warfare and its psychological effects. Saul quotes Mahathir Mohamad's ironic comments :-"We now live in fear, every one of us. We fear the terrorists and the terrorists, their supporters or alleged supporters, fear us. We fear flying. We fear travelling to certain countries, we fear nightclubs, we fear letters, parcels and cargo containers, we fear white powder, shoes, Muslims, penknives, metal cutlery, etc.etc. They, the other side, fear sanctions, starvation, shortage of medicine. They fear military invasion, being bombed and rocketed, being captured and detained."

The most recent irregular wars have generated fear and chronic uncertainty, prompting targeted societies to start removing legally guaranteed individual rights and discourage debate as unpatriotic.

THE DEMOCRATIC DEFICIT.

The end of the Cold War gave the United States the opportunity of reshaping the global economic and political system on the principles of fairness and concern for the poor. Instead, they reshaped the global system in their own self-interest and that of their multinational corporations.

To make globalisation work, there will have to be a change in mind-set, argues Stiglitz:. "we will have to think and act more globally. Greater interdependence gives rise to a greater need for collective action to solve common problems." In fact, Stiglitz calls for a NEW GLOBAL SOCIAL CONTRACT between developed and developing countries. One would agree with the eminent Nobel Price laureate - but reforming capitalism ? To-date it has been a hopeless undertaking!

There is another alternative - SOCIALISM - which neither Stiglitz nor Saul bother to consider as the ideological and structural basis of a new world order.

References

(1). Stiglitz, F. "Making/Globalisation Work", Penguin (Aust.)2006, Preface.

(2) Saul, J.Ralston "The Collapse of Globalism", Penguin(Aust.)2005,

(3) ibid., 147

(4) " p.p.148-14

(5)p.154 (6) " p.259

(7)Stiglitz, op.cit, p. 278 9

Vera Butler is a political scientist educated in hermany and Australia. She is Secretary of the International Studies Association, Melbourne