Fantasy of Fair Globalisation
By Sukomal Sen
15 July, 2004
world is witnessing, for the last several years, extensive resistance
against the economic onslaught of the latest phase of capitalism on
the common people, which is popularly known as neo-liberal globalisation.
Even many of those who welcomed the advent of this globalisation as
marking a progress for human well-being have turned into its critics
and are crying halt to its rampages.
It is in this background
of changed perception of globalisation and active struggle against its
disastrous effects that some of the capitalist ideologues and protagonists
of globalisation have started talking of capitalism with a human face,
globalisation with a human face and fair globalisation.
however, confirm capitalism is not a humane system nor is globalisation
humane or fair. This was precisely the criticism of those opposed to
capitalism and its present phase of globalisation. That globalisation
is not fair or humane is being admitted by a few of the government heads,
intellectuals and well-placed people from different walks of life.
The recent publication
Fair Globalisation: Creating Opportunities for All, produced by the
World Commission on Social Dimension of Globalisation, appears as a
formal recognition of the unfair and inhuman character of globalisation.
However, before making an examination of the facts and arguments advanced
by the commission in its publication, let us have a brief look at the
basic teachings of Marx and Engels on the relevant topic.
The inherent crisis of the capitalist system is a well known proposition
of the Marxist interpretation of the history of capitalist development.
In his celebrated work Socialism: Utopian and Scientific, while vividly
analysing the development of modern capitalism, Engels shows how the
process of evolution of society, motivated by the contradictions between
the productive forces and relation of production at any stage of its
development, has resulted into the present capitalist society. Then
delving into the process of development of capitalism, he shows that
capitalism bristles with contradictions and concludes: The collision
becomes inevitable and, as this cannot produce any real solution so
long as it does not break into pieces the capitalist mode of production,
the collision becomes periodic. Capitalist production has begotten another
The economic collision has its
apogee. The mode of production is in rebellion against the mode of exchange
(emphasis in original). Thus the capitalist crisis cannot be resolved
without a social revolution.
We cannot discuss the current topic without a reference to this basic
The latest phase
of capitalism is also due to its inherent crisis. Beginning with Adam
Smiths laissez faire economic prescription and its relatively
sustained form, it was subsequently impelled by its law of development
into a protective system after the outbreak of war in 1914 when the
laissez faire British government took control of the coal and railway
industry. The period also witnessed a boom till the Wall Street crash
of 1929 precipitated a global collapse and a long and very serious depression.
In 1933, when Roosevelt assumed the office of US president, he committed
to a programme of vigorous federal intervention to stimulate a recovery
in the US economy. Known as the New Deal, it was based broadly on the
principles elaborated by British economist J M Keynes in his General
Theory of Employment, Interest and Recovery (1936).
Yet, throughout the 1930s, the British political and business establishments
--- and many of their counterparts in the United States --- remained
reluctant converts to what later became known as Keynesianism. But events
were to compel them soon to adopt it. It is another thing that Keynesianism
too could not exonerate capitalism from crisis. The law of a vicious
circle of crisis landed capitalism into the present phase of neo-liberal
globalisation --- laissez-faire on a higher level.
What are implications of the recent economic and social development?
A few examples cited here show how, in the globalised economy, the rich-poor
inequality in both economic and social spheres is formidably widening
and the poor are sinking to the bottom.
The World Bank has estimated the number of persons in different countries
and in the world as a whole who subsist on less than 1 and 2 dollars
per day (one US dollar = Rs 45 approx). In Nigeria, for example, in
the early 1990s, 98.8 per cent of the population lived on 2 dollars
a day or less; in India the figure was 86.2 per cent in 1997. In a world
population of some 6 billions, 2.8 billion (about 45 per cent) survive
on 1 dollar a day or less and 1.2 billion (about 20 per cent) on 2 dollars
a day or less.
World Bank economist Branco Milanovic oversaw the most sophisticated
attempt to measure income inequality worldwide (see Monthly Review,
March 2004), using a massive household survey covering the entire world.
He found that the richest 1 per cent in the world get as much income
as the poorest 57 per cent. The richest 5 per cent had in 1993 an average
income 114 times greater than that of the poorest 5 per cent; the ratio
was 78 times in 1998. The poorest 5 per cent grew poorer, losing 25
per cent of the real income, while the richest 20 per cent saw their
real incomes grow by 12 per cent, more than twice the average world
income. World inequality grew because inequality grew between countries.
The rich nations grew richer at the expense of the poor ones.
Buttressing Milanovics findings, the United Nations Development
Programmes Human Development Report 2003 informed that the income
of the richest 25 million Americans was equivalent to that of nearly
2 billion of the worlds poorest. In 1920, per capita income in
western Europe was three times that in Africa; by the 1990, it was more
than 13 times as high. Adding human meaning to these numbers, the report
said, the statistics today area shaming; more than 13 million
children have died through diarrhoea disease in the past. Every year
over a half million women, one for every minute of the day, die in pregnancy
and childbirth. More than 800 million suffer from malnutrition.
Some 54 countries are poorer now than in 1990 --- the year the neo-liberal
imperialist globalisation was unleashed full steam. In 21 countries,
a larger population are going hungry. In 14, more children are dying
before the age of 5. In 12, primary school enrolments are shrinking.
In 34, life expectancy has fallen. Such reversals in survival were previously
rare, said the UNDP report 2003.
In addition, the latest ILO report on employment projects a grim picture
with 187 million unemployed globally and that too only in the formal
sector of the economy. The situation in the informal sector is more
This reality of the sharply widening gap between the rich and the poor,
the inhuman poverty of the poor and the astronomical opulence of the
rich in the wake of imperialist globalisation, again confirms Marxs
brilliant analysis of the process of immiseration in his Capital, Vol
1. To quote Marx: The greater the social wealth, the functioning
the greater is the industrial reserve army
the greater is the mass of solidated surplus population, whose misery
is in inverse proportion to the torment of labour
extensive the industrial army, the greater is official pauperism. This
is the general law of capitalist accumulation.
GLOBALISATION WITH A HUMAN FACE?
It is in this background
of the darkest ever reality of human sufferings for the last few decades
that the report on A Fair Globalisation by a wide-ranging commission
has appeared. The commission was appointed by the director general of
One must not forget that even the appointment of this commission came
in the backdrop of tumultuous and massive anti-globalisation struggles
in almost every part of the world, including inside the ILO fora. More
and more people from all countries are getting mobilised round the slogan
Another World is Possible, meaning an alternative to capitalism.
The slogan was raised by the World Social Forum at its first session
in Brazils Reo de Jeneiro in 2001.
Delineating the background of globalisation, the commissions report
referred to the following underlying causes generating this new economic
thinking in the capitalist economy: a) stagflation in the industrialised
countries, (b) developing countries falling into debt crisis and experiencing
economic regression, (c) widespread recourse by the indebted developing
countries to structural adjustment loans from the Bretton Woods institutions,
prominent among the conditions attached to these loans being liberalisation
of trade and FDI policies, (d) rising influence of the pro-market economic
doctrine, (e) collapse of communism in Europe in 1989-90 as a turning
point; at a stroke it added to the global free market economy an additional
13 former communist countries with a combined population of 400 million
people; (e) end of the bipolar world, meaning the disappearance of any
systemic alternative to the market economy, this coincidentally being
the period of an explosive growth of information technology.
Some pertinent observations made by the commission in regard to the
failure of globalisation are noteworthy:
The global financial
system has been plagued by a series of financial crisis of increasing
frequency and severity. The negative impact of these crises has been
devastating, wiping off the gains of years of prior economic progress
and inflicting heavy social costs through increased unemployment and
poverty (p 34).
A basic step in
evaluating the impact of globalisation is to look at what has happened
to rates of economic growth globally and across countries. Here it is
striking that since 1990 the global GDP growth has been slower than
in previous years (p 35, emphasis added).
Only a small minority
of developing countries have become part of this new global system..
A vast majority of developing countries including almost all the LDCs
receive hardly any private financial flow. 55 developing countries grew
at less than 2 per cent per annum and out of these 23 suffered negative
growth. This uneven pattern is shaping a new global economic geography
(pp 35-36, emphasis added).
The industrial countries
with their strong initial economic base, abundance of capital and skill
and technological leadership, were well placed to gain substantial benefits
from increasing globalisation of the world economy (p 37).
About FDI, the report points out, The evidence suggests that on
the whole, foreign investment does increase growth. Although this should
have been a positive effect on employment, this may be negated by strong
crowding out effects on local firms unable to compete by the introduction
of capital intensive technology by the foreign firms (p 38, emphasis
As for who have been benefited from the process of globalisation, the
report notes, As in the case of countries, the people who benefited
most from globalisation include those associated (as shareholders, managers,
workers or sub-contractors) with successful MNCs and with internationally
competitive national enterprises. More generally, those endowed with
capital and other assets, entrepreneurial ability and education and
skills that are in increasing demand have all benefited.
As for who have lost out, it says, Others who have lost out, except
in countries that have experienced rapid growth, have been the poor,
the assetless, illiterate and unsettled workers and indigenous people.
For example, the increased international competition for markets and
for FDI have generated pressure to increase labour markets and for FDI
have generated pressure to increase labour market flexibility and erode
.. there have been growing concerns over the
inadequate quality of the employment that has been generated in some
parts of global production system. This is partially true of employment
in firms acting as sub-contractor to MNCs in labour intensive industries
such as garments and footwear (p 46).
About women, the report says, Substantial number of women have
been adversely affected by globalisation
. trade liberalization
has often allowed the import of subsidised agricultural products and
consumer goods that has wiped out the livelihood of women workers. The
increased entry of foreign firms has often had similar effect through,
for example, displacing women from their land (p 48).
The ILO report found a formidable growth of unemployment and confirmed
the Milanovic reports findings about the widening inequality of
income and alarming increase in poverty.
About the cultural effects of globalisation, the report mentioned the
grossly inadequate investment in education and also noted that the global
information revolution has also already affected cultural and social
. one contentious issue is the impact of the information
revolution on local cultures and values across the world. There is a
widespread concern at the overwhelming dominance of the culture and
values of the United States, and other Western countries, in the global
media and entertainment industry. The fear is that exposure to the images
of western life style and role model could lead to tension and would
be both culturally and socially divisive (emphasis added, pp 48-49).
Some of the findings of the commissions report on globalisation
are devastating. These amply vindicate the points of criticism raised
repeatedly by those opposing this imperialist globalisation as an inhuman
However, though admitting certain unpalatable truths about globalisation,
the commission took a strongly class position and pleaded for the fairy
tale of Fair globalisation --- creating opportunities for all.
Some of the methods suggested by the commission are world governance,
a few changes in the rules of WTO and other multilateral agencies etc,
which are no solution at all. It is nothing but a desperate class collaborationist
attempt to protect this basic interests of world capitalism.
The neo-liberal globalisation, or neo-liberal imperialist globalisation
in Fiedel Castros words, is a phase of capitalist development
after capitalism successively tried various methods like lasses faire,
protectionism, Keynesianism and welfare state and yet it repeatedly
faced a crises of devastating nature. The huge accumulation of capital
is in perpetual search for lucrative investment. Ultimately, they are
trying for a solution by privatising the public sector and liberalising
trade as potential avenues for investment. But at what cost? With its
sole motive of super-profit, capital has subjected all sections of the
toiling people to inhuman exploitation and degradation.
But this phase of capitalist crisis is not just a phase of its usual
cyclical crisis. It is a phase of general crisis of capitalism encompassing
all aspects of economy, society, politics, culture and environment.
That is why, for its survival, capitalism has ultimately resorted to
a method that is mindlessly inhuman.
Can this methodology,
which itself is intrinsically and universally not only unfair but de-humanising
to the core, be remodelled into a fair one with a human face? To say
the least, all these talks are wild fantasies, a humbug and crudest
form of hypocrisy and deception to cover the cruelties of globalisation
and to benumb the anger and spirit of resistance of the millions of
hapless victims of this imperialist globalisation.
We can say in the
words of Fiedel Castro that The world needs an order. There is
a need for universal, global, just and democratic order. There is an
order coming, one that can be seen coming at a full speed, unstoppable
--- its the neo-liberal globalisation, going global. We have to
start thinking about an order of a different kind and, in the meantime,
denounce and struggle.