Thursday, May 21, 2009

Globalisation is bad!

The following is an article on Globalisation. It is enlightening and interesting. I am very thankful for the Jamaat-e-Islami Hind people for sharing this valuable piece of intellectually stimulating article on Globalisation.
Nowadays everybody talks about Globalisation. It is the most discussed subject today in this country. But seldom I came across persons who are well versed in the subject. Those who take stands in the issue do so without any deep study and analysis. There are some who take an extreme stand and reject Globalisation wholly and fully. They brand globalisation as the tool of modern imperialists. They equate it with evil and reject it with vengeance.
There are some who have splashed in the illusions created by the Globlalisation. They are over awed by the glittering world created by the globalisation. They consciously chose to close their eyes and they refuse to see the side effects of globalisation.

Now with the UPA government once again in the centre and with Dr Singh as PM one could expect a rise in the globalisation process in India. They may behave responsibly and sensibly. Or they may not. And the leftists have already left the scene. They are no longer interested in the interests of the Aam Aadmi. Nandhigram and Singur are the worst examples.

Amidst this challenging scenario with nobody there to challenge the evils of Globalisation it is for the common man to do the job. Hence I commence a series of articles on Globalisation with this post. Excerpts from the article (author unknown):

There are two strands to the argument that globalization is undermining nation states. First, it is that it is empowering corporations at the expense of the nation state, and secondly, that the international institutions such as the WTO and World Bank are not democratic.

There is an issue of sheer size. It is noted that many corporations are larger than nation states – more than half the 100 largest economies in the world are corporations. The sales of Ford and General Motors combined are greater than the combined GDP of sub-Saharan Africa while those of the six largest Japanese trading companies are almost as big as all the nations of Latin America combined.

Critics of capitalism say the problem starts with laws of the early 19th century, which meant individual managers, and directors could not be held liable for the actions of the corporation. It is argued that globalisation was not a democrat choice but was pursued by corporations to suit their own ends of maximising profit by playing one nation off against another.

The international organisations, such as the World Trade Organisation, the World Bank and the IMF are make it their mission to open the world to the influence of transnational corporations. The IMF rules make it hard for nations to legislate to stop currency speculators from attacking their economy. The World Bank insists that nations to which it makes structural adjustment loans privatise government enterprises, often handing them to transnationals. The World Trade Organisation’s effort to break down trade barriers is designed to open markets to transnational corporations.

None of these supranational organisations are democratically constituted, and they make their decisions behind closed doors.

Globalization as an Attack on Democracy

THE GLOBALIZATION OF RECENT DECADES WAS NEVER A DEMOCRATIC CHOICE by the peoples of the world--the process has been business driven, by business strategies and tactics, for business ends. Governments have helped, by incremental policy actions, and by larger actions that were often taken in secret, without national debate and discussion of where the entire process was taking the community. In the case of some major actions advancing the globalization process, like passing the North American Free Trade Agreement (NAFTA) or joining the European Monetary Union (EMU), publics have been subjected to massive propaganda campaigns by the interested business-media elites. In the United States, public opinion polls showed the general public against NAFTA even after incessant propaganda, but the mass media supported it, and it was passed. In Europe as well, polls have shown persistent majorities opposed to the introduction of the Euro, but a powerful elite supports it, so that it moves forward.

This undemocratic process, carried out within a democratic facade, is consistent with the distribution of benefits and costs of globalization, and the fact that globalization has been a tool serving elite interests. Globalization has also steadily weakened democracy, partly as a result of unplanned effects, but also because the containment of labor costs and scaling down of the welfare state has required the business minority to establish firm control of the state and remove its capacity to respond to the demands of the majority. The mix of deliberate and unplanned elements in globalization's antidemocratic thrust can be seen in each aspect of the attack process.

ONE OF THE MAIN OBJECTIVES OF TNC MOVEMENT ABROAD HAS BEEN to tap cheaper labor sources. Labor is often cheapest, and least prone to cause employer problems, in authoritarian states that curb unions and enter into virtual joint venture arrangements with foreign capital, as in Suharto's Indonesia and PRI's Mexico. Capital moves to such friendly investment climes in an arbitrage process, shifting resources from the more expensive to the less costly locale, in a process that penalizes and thereby weakens democracy.

The actual shift of capital abroad, and the use of the external option to drive hard bargains at home, has weakened labor. Labor has also been weakened by deliberate government policies of tight money and restrictive budget policies to contain inflation, at the expense of high unemployment. These policies, and the incessant focus on labor market "flexibility" as the solution to the unemployment problem, reflect a corporate and antilabor policy agenda, fully institutionalized. There have even been more open and direct attacks on organized labor--both Reagan and Thatcher engaged in union busting, and the latter was quite explicit in her aim to weaken labor as a political force. Democracy, according to pluralistic theory, is said to rest on the existence of intermediate groups, like labor organizations, that can bargain and work on behalf of an otherwise atomized population. The deliberate weakening of such groups is thus an attack on democracy.

IN THE UNITED STATES, BRITAIN, CANADA, AND OTHER COUNTRIES the business community has also mounted a sustained ideological campaign to make their preferred policies part of common understanding. These campaigns have proceeded in parallel with globalization and have been remarkably similar, reflecting the global flow of ideology and overlapping sources of funding. The favored neoliberal ideology pushes the idea that the market can do it all, that government is a burden and threat, and that deregulation and privatization are inherently good and inevitable. It presses an extreme individualism and the value of "personal responsibility," which is highly advantageous to corporate power, leaving bargaining between large firms and isolated individuals. Collective and community values, the threat of externalities and ecological damage from unconstrained business growth, free market instability--all are shunted aside in this ideological system. This ideological campaign has been highly successful, because vast sums of business money fed to intellectuals and think tanks, and business domination of the mass media, have allowed their views to prevail. Heritage Foundation leader Edwin Feulner has described the strategy of his corporate-funded and globally linked think tank as analogous to Procter & Gamble's in selling soap--saturate the market with messages that overwhelm any that are less well funded.10 But this is a corruption of democracy; it is a bought market of ideas, not a free market of ideas.

The business community has also mounted a powerful effort to dominate governments--either by capture or by limiting their ability to serve ordinary citizens. Globalization has contributed to this effort, partly by the arbitraging process mentioned earlier, which favors authoritarian rule. Apart from this, by enlarging business profits and weakening labor it has shifted the balance of power further toward business, so that political parties have been even more decisively influenced by business money in elections. In the United States, it is notorious that Mr. Clinton has sought and received enormous sums from business and serves their interests almost exclusively, with only token efforts on behalf of the major nonbusiness constituencies of the Democratic Party. The globalizing corporate media have added their growing strength to the advance of neoliberal ideology and opposition to any vestiges of social democracy, making social democratic policies difficult to implement. The Murdoch effect on British elections, and the current Murdoch-Blair connection illustrates the point.

Another well-known and important antidemocratic force is the power of global financial markets to limit political options. Social democratic policies make for an unfavorable investment climate. Businesses will therefore respond to politicians and acts serving ordinary citizens with threatened or actual exit. Financial market effects on exchange and interest rates can be extremely rapid and damaging to the economy. Spokespersons for the new global economy actually brag about the ability of capital to penalize "unsound" policies, and the fact that money capital now rules.

These business efforts, aided and validated by the IMF and by media support, regularly cause social democrats to retreat to policies acceptable to the rulers. Thus, in country after country social democratic parties have accepted neoliberalism, despite the contrary preferences of great majorities of their voting constituencies. But this means that nominal democracy is no longer able to serve ordinary citizens, making elections meaningless and democracy empty of substance. This helps explain why half or more of eligible U.S. voters no longer participate in national elections.

Not satisfied with this level of political control, the business community has pushed for international agreements, and policy actions by the IMF and World Bank, that further encroach on the ability of democratic polities to act on behalf of their constituencies. These agreements and the demands of the international financial institutions invariably call for precisely the policies desired by the TNC community. The EMU conditions give primacy to budget constraints and inflation control, in accord with the neoliberal and corporate agenda. GATT, the WTO, and the NAFTA agreement also give top priority to corporate investor and intellectual property rights, to which all other considerations must give way. In the early 1980s, the IMF and World Bank took advantage of the Third World debt crisis and used their leverage with numerous distressed Third World borrowers to force their acceptance of Structural Adjustment Programs. These forced the borrowing countries to agree to give first priority to external debt repayment, private as well as government; it compelled them to adapt austerity programs of tight money and budget cutbacks focusing heavily on social expenditures affecting the poor and ordinary citizens; it forced a stress on exports, which help generate foreign exchange to allow debt repayment and that more closely integrate the borrower's economy into the global system; and it stressed privatization, allegedly in the interest of efficiency, but serving both to help balance the budget without tax increases and to provide openings for TNC investment in the troubled economy. The IMF is doing the same in Asia today.

A second characteristic of the new agreements and IMF-World Bank actions is their denial of democratic rights to non-corporate citizens and elected governments. These are subordinated to the rights of corporate investors, the superior class of global citizens with priority over all others and beneficiaries of the New TNC Protectionism. In the NAFTA agreement, governments are denied in advance the right to take on new functions; any not asserted now are left to the private sector and to the superior class of citizens. In these agreements, also, and even more aggressively in the Multilateral Agreement on Investment now under consideration, the global TNCs have no responsibilities and none can be imposed on them. They can fire people, abandon communities, fatally damage the environment, push local companies out of business, and purvey cultural trash at their full discretion. They can or will be able to sue governments, and disagreements are to be settled by unelected panels outside the control of democratic governments.

A third characteristic of the new agreements and IMF-World Bank actions is that they rest not only on neoliberal theory but on a false reading of recent experience and economic history. As noted earlier, globalization so far has been a productivity failure, a social disaster, and a threat to stability. The claim of its proponents that free trade is the route to economic growth is also confuted by longer historic experience: no country, past or present, has taken off into sustained economic growth and moved from economic backwardness to modernity without large-scale government protection and subsidization of infant industries and other modes of insulation from domination by powerful outsiders. This includes Great Britain, the United States, Japan, Germany, South Korea and Taiwan, all highly protectionist in the earlier takeoff phases of their growth process. The governments and institutions bargaining on behalf of the TNCs today, through the IMF, World Bank, WTO and NAFTA, have been able to remove these modes of protection from less developed countries. This threatens them with extensive takeovers from abroad, thoroughgoing integration into foreign economic systems as "branch plant economies," preservation in a state of dependence and underdevelopment, and most particularly, an inability to protect their majorities from the ravages of neoliberal top-down development priorities.


IN SUM, WE ARE IN THE MIDST OF AN ANTI-DEMOCRATIC COUNTERREVOLUTION in which globalization and its imperatives are being used to weaken popular and elected authority in favor of a system of domination by super-citizens, the TNCs. This process sows the seeds of its own destruction, as it serves a small global minority, damages the majority, breeds financial instability, and exacerbates the environmental crisis. Its destructive tendencies are likely to produce an explosion if the process is not contained and democracy is not rehabilitated.

Halting this anti-democratic juggernaut will be difficult, not only because of the power of its beneficiaries, but also because it operates within the framework of nominally democratic structures and musters plausible arguments. But these arguments are self-serving and wrong, and should be vigorously contested. An agenda should be advanced that serves ordinary citizens rather than the TNCs and financial institutions. Negatively, this agenda will include strenuous opposition to all supranational arrangements that take power out of the hands of democratic governments to serve some alleged economic need. Positively, the agenda requires support for the imposition of serious limits and responsibilities on TNCs, including capital controls and other deterrents to financial speculation. Pursuit of this agenda is going to require a combination of understanding and effective organization of the large majority who are the victims of globalization.

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