Globalization

Dec. 1st, 2006

Industrial and political globalization is the wave of the future… according to most media forecasts. In reality globalization is a combination of business and politics that will determine what people are the economic winners in this world, and who are the losers. As a nations big corporations become international mega-conglomerates, the mutual dependence between the nations politics, economics, and society become artificially weakened. In stable societies, an unspoken social contract provides for enough wealth to trickle down to keep the “lower classes” from rebelling. Thus, in the 1950s, when Dwight Eisenhower’s secretary of defense said that what was good for General Motors was good for America, most Americans, including the United Auto Workers, agreed. Within the boundaries of the U.S. economy, capital and labor needed each other. Essentially politics is an interrelated conflict among the different “classes” of people, over who gets what share of the economic pie.

In our shrinking world and with the absence of global democracy, corporate owners and top managers have seized the opportunity to set new business rules without those social constraints, and little to no legal restraints either. The first head of the World Trade Organization called these new rules a “constitution for the global economy.” It’s a constitution that protects just one world citizen—the corporate investor. It bypasses protection for workers, consumers, and the environment. The greatest possible profit at the least expense is the only goal. However, today’s corporate investor is hardly the small scale Mom and Pop retirement investor of only a couple of decades back. Today’s investor owns a few hundred thousand shares… in each of several corporations. Anything less is hardly worth talking about!

We see globalization in the many corporate mergers of today’s international business community, which form international mega-corporations that wield more effective power than many national governments. It’s nearly impossible to explain why the Democrats have championed NAFTA, the WTO, the looming specter of a “North American Union”, along with other instruments of international corporate protectionism, and have traded away the interests of their blue-collar base in favor of the investors from Wall Street. Nor is it possible to explain why Washington is indifferent to a relentlessly rising trade deficit, and the resulting foreign debt that has put the country’s future in the hands of the central bank of China, while the Pentagon still simulates war games with China as the principal enemy. The press consistently talks about our national interest without defining just what that interest is, and who is getting what. Thus, American workers are told that the Chinese, Indonesians, the Mexicans, or the laborers in any of several other countries are taking their jobs. But the so called “China threat” is in fact nothing more than another global business partnership… between Chinese commissars who supply cheap labor, and international businessmen who supply the technology and two-thirds of the capital used to finance China’s exports. Everybody profits, except the Chinese workers who are still paid a pittance, the American economy, and American workers who have lost their jobs.

In the US at least, labor is the single most expensive component in manufacturing. By moving their manufacturing facilities offshore, business escapes that cost, along with consumer protection and the costs of environmental protective efforts. After all, how do you effectively force an international corporation that is not subject to your laws, to abide by those “local” laws?

After a quarter of a century, the world is beginning to resist policies that have shifted wealth and power away from those who work for a living to those who invest. Scarcely a day goes by without a major riot somewhere in China, Indonesia and elsewhere in Asia. In South America, anti-neo-liberal parties have come to power in Brazil, Bolivia, Venezuela and Argentina—and already have slowed down the effort to extend NAFTA to the rest of the hemisphere.

But perhaps more important, the U.S. government is in trouble. The opposition to the war in Iraq has demonstrated the limits of America’s willingness to send its children off to die in order to force the world’s cultures into one vast shopping mall. And the looming crisis of America’s foreign debt will cramp the ability of our elites to use the countries’ economic power to support their global corporate backers. The erosion of the American social contract, already being reflected in stagnant wages, financial insecurity and collapsing health care system, could soon force the government to pay more attention to Bloomington, Ill., than to Baghdad, Iraq.

Globalization will not go away. Improvements in communication and transportation will continue to make the world smaller for as far into the future as we can see. Nor will economic classes soon disappear. The question is, as always, who sets the rules and in whose interests? So although the globalization party may not be over, the rest of the world seems less willing to pay for it.