The Fantasy of “Fair Globalisation”
By Sukomal Sen
15 July, 2004
People's DemocracyThe 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.
MARXIST THESIS
These terminologies, 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 ‘vicious circle’…… 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 Marxist analysis.
IMPERIALIST GLOBALISATION
The latest phase of capitalism is also due to its inherent crisis. Beginning with Adam Smith’s 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.
IMPLICATIONS OF GLOBALISATION
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 Milanovic’s findings, the United Nations Development Programme’s Human Development Report 2003 informed that the income of the richest 25 million Americans was equivalent to that of nearly 2 billion of the world’s 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 horrible.
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 Marx’s brilliant analysis of the process of immiseration in his Capital, Vol 1. To quote Marx: “The greater the social wealth, the functioning capital…… 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……The more 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 ILO.
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 Brazil’s Reo de Jeneiro in 2001.
Delineating the background of globalisation, the commission’s 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).
GAINERS & LOSERS
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 added).
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 labour protection….. 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).
DEVASTATING FINDINGS
The ILO report found a formidable growth of unemployment and confirmed the Milanovic report’s 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 values…. 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 commission’s report on globalisation are devastating. These amply vindicate the points of criticism raised repeatedly by those opposing this imperialist globalisation as an inhuman phenomenon.
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.
INHUMAN NATURE AND METHODOLOGY
The neo-liberal globalisation, or “neo-liberal imperialist globalisation” in Fiedel Castro’s 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 --- it’s 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.”