Whither Globalisation? By Bal Patil

Whither Globalisation?

By Bal Patil

22 February, 2007
Countercurrents.org

Abstract

The world today is embroiled in an economic turmoil caused by the globalisation process. It is a veritable confusion worse confounded by the North versus South polarities of trading policies, developmental disparities and stark reality of opulence contrasted with destitution. These are increasingly brought in close encounters of an unforeseen variety in an inter-connected global environment with unprecedented, unpredictable and unnatural fusion of economic systems mixed in a strange brew of socio-ethnic and cultural cross-currents buffetted hither and thither by perennial human greed. An unprecedented global dilemma posed by the merciless process of globalisation with all its ostensible benefits and built-in evils.

The natural resources of the earth are not inexhaustible. Oil is fast depleting. The last barrel of oil is not too far. A new energy future has to be worked out. Nearly 2.2 billion people in more than 62 countries, one-third of the world's population, are starved for water. Global population has tripled in the past 70 years while water use has grown sixfold due to industrial development, widespread irrigation, and lack of conservation. It is feared scarcity of water may lead to third world war.1 To top it all there is a projected 3C jump in global temperature caused by global warming which in turn would include a loss of up to 400 million tonnes of cereal production and put between 1.2 billion and three billion people- half of the current world’s population- at risk of water shortage. It is a case of double jeopardy. This is a wake-up call for the developed industrial nations.

In “a terrible indictment of the world in 2007” the UN said 18,000 children die every day of hunger and malnutrition and 85 million go to bed every night with empty stomach, 100 mm. Indian kids are malnourished. The spectre of global warming is knocking at the door. With the US poised for a MAD nuclear adventure the mankind is in for a future shock as never before in human history. It is truly all this and hell too scenario.

‘Oh, yes, the time has come, my little friends To talk of food and things Of peppercorns and mustard ... The time has come,' as the Walrus said.2 Can the world really afford to hanker after opening this Pandora’s box? Isn’t this an appropriate time to think about the basic economic ideology of social justice? Equality is neither outdated nor is it the enemy of freedom. The voices of the voiceless, disadvantaged, the diseased and the destitutes, the less privileged in large parts of the world should not be lost in the clamouring sophistry of debates in the cloistered splendour of IMF and World Bank citadels.

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I am not a trained economist, but a free-lance journalist and writer. I was provoked to study economics by reading Gunnar Myrdal's Asian Drama in the sixties, and also was inspired by the Keynesian observation in his Essays in Persuasion in The End of Laissez-Faire:

"Let us clear from the ground the metaphysical or general principles upon which, from time to time, laissez-faire has been founded. It is not true that individuals possess a prescriptive "natural liberty" in their economic activities. There is no compact conferring perpetual rights on those who Have or on those who Acquire. The world is not so governed from above that private and social interest always coincide. It is not so managed here below that in practice they coincide. It is not a correct deduction from the Principles of Economics that enlightened self-interest always operates in the public interest. Nor is it true that self-interest generally is enlightened; more often individuals acting separately to promote their own ends are ignorant or too weak to attain even these. Experience does not show that individuals, when they make up a social unit, are always less clear-sighted than when they act separately."3

This is the politics and economics of social justice. And hence it was natural for the Father of the Indian Nation, Mahatma Gandhi to give a dire warning: "Economic equality is the master key to non-violent revolution. A non-violent system of government is clearly an impossibility so long as the wide gulf between the rich and hungry millions persists.The contrast between the palaces of New Delhi and the miserable hovels of the poor, labouring class cannot last one day in a free India in which the poor will enjoy the same power as the richest in the land. A violent and bloody revolution is certainty one day unless there is a voluntary abdication of riches and the power that riches give and sharing them for the common good."4

But, alas, even after more than half century of freedom the gulf is ever widening and with all the glitter of globalisation hunger, starvation and suicide deaths are increasing amidst agricultural surplus, and sometimes fifty million tonnes of grain in godowns rots but cannot be sold at subsidised prices for fear of pushing the market prices down. That is the harsh economic reality!

The spate of farmer suicides in the State Of Maharashtra, India is a pointer. There have been about 400 farmer suicides due to agricultural indebtedness during the year 2005. Farmer indebtedness in Maharashtra jumped from 29% in 1991-92 to 88.97% in 2003 against the all-India average of 87.64%. The extent of indebtedness (debt in rupees per household at 1986-87 prices) between 1991-92 and ’03 increased by 232%. All-India average rise 210%. (The Times of India, April 17, 2006)5

Child malnutrition is rampant in Maharashtra and elsewhere in India . Not just tribals but, 47 per cent of India’s children below the age of three are malnourished. This is higher than in sub-Saharan Arica (30 per cent) which has a lower per capita income. More than 10,000 children are believed to have died of malnutrition in this State in the last couple of years. And such dehumanising deprivation occurs in the fastest growing State of India. What is ironical is the fact that children continue to die here not because of scarcity of food but because of rampant corruption and theft in the food distribution system. 6

As noted by David Gordon, Professor in Social Justice in Radical Statistics Annual Conference Global Child Poverty 26th February, 2005

“The world's biggest killer and the greatest cause of ill health and suffering across the globe is listed almost at the end of the International Classification of Diseases. It is given Code Z59.5 -- extreme poverty. World Health Organisation (1995)”7

In stark contrast to this horrendous picture of poverty and starvation is the BBC News Published: 2006/04/15 as to how Britain is now 'eating the planet' by Mark Kinver

“The UK is about to run out of its own natural resources and become dependent on supplies from abroad, a report says. A study by the New Economics Foundation (Nef) and the Open University says 16 April is the day when the nation goes into "ecological debt" this year. It warns if annual global consumption levels matched the UK's, it would take 3.1 Earths to meet the demand.”8
Food wastage is also high: In the United Kingdom, “a shocking 30-40% of all food is never eaten;” In the last decade the amount of food British people threw into the bin went up by 15%; Overall, £20 billion (approximately $38 billion US dollars) worth of food is thrown away, every year.In the US 40-50% of all food ready for harvest never gets eaten;... (Anup Shah, http://www.globalissues.org/TradeRelated/Poverty/Hunger/Causes.asp.)9
It is not a different story in America. Samana Siddiqui ( in her article “Statistics on poverty & food wastage in America” notes “According to the US Census Bureau, 35.9 million people live below the poverty line in America including 12.9 million children. This is despite abundance of food resources. Almost 100 billion pounds of food is wasted in America each year. 700 million hungry human beings in different parts of the world would have gladly accepted this food.”(http://www.soundvision.com/info/poor/statistics.asp)10
Every third person will be a slum dweller within 30 years, UN agency warns. Biggest study of world's cities finds 940 million already living in squalor (John Vidal,October 4, 2003) The Guardian. 11

The report, from the UN human settlements programme, UN-habitat, Nairobi, found that urban slums were growing faster than expected, and that the balance of global poverty was shifting rapidly from the countryside to cities.

The report found that some slums were now as large as cities. The Kibera district in Nairobi, classed as the largest slum in the world, has as many as 600,000 people. The Dharavi area of Mumbai and the Orangi district of Karachi have only slightly fewer people, while the Ashaiman slum is now larger than the city of Tema in Ghana, around which it grew.
But the authors roundly blamed laissez-faire globalisation and "neo-liberal" economic policies imposed on poor countries by global institutions such as the International Monetary Fund and the World Trade Organisation for much of the damage caused to cities over the past 20 years.

The authors conclude that as "cities have become a dumping ground for people working in unskilled, unprotected and low-wage industries and trades... the slums of the developing world swell".
In an Interview to Greg Ross, American Scientist’s, Managing Editor, (The American Scientist www.americanscientist.org/ template/AssetDetail/assetid/50434) Lester Brown of the Worldwatch Institute sees signs in the present global economy of what the ecologists call an “overshoot-and-collapse” mode in which demand exceeds the sustainable yield of natural system which effect has toppled earlier civilizations and which is now occurring at the global level.12
Is this globalisation a mad rush to serfdom? In his “Development as Freedom”, 1999, Amarya Sen sees development "as a process of expanding the real freedoms that people enjoy." Hence, "development requires the removal of major sources of unfreedom: poverty as well as tyranny, poor economic opportunities as well as systematic social deprivation, neglect of public facilities as well as intolerance or overactivity of repressive states."13

This perspective leads Sen to place special emphasis on basic health care, especially for children, and basic education, especially for women. Such economic vision has an unmistakeable Rawlsian perspective of the maximisation of the well-being of the poorest member of a community subject to the preservation of liberty.

The World Bank and the IMF are also targetted in Michel Chossudovsky's The Globalization of Poverty, (Zed Books Ltd. London and New Jersey. 1997).14 Chossudovsky's thesis is that-- that Bank and Fund loan programs create economic strait jackets which feeds on human poverty and the destruction of the environment, generates social apartheid, encourages racism and ethnic strife.

This topsyturvy economics leads me inevitably to Herbert Marcuse's classic indictment in his One Dimensional Man (ABACUS, Sphere Books, 1972)15 of the modern technological society which is even truer today than in the sixties: That in a modern technological society so called "free" institutions and "democratic liberties" are used to limit freedom, repress individuality, disguise exploitation, and limit the scope of human experience. One wonders if it would be ever possible to find a glimpse of light in this ever darkening tunnel. Even Plato would be stumped for an answer.

I doubt if there can be a straight answer to this trillion dollar question. Globalisation, oursourcing, the entire chain of deficit, scarcity, inflation suddenly conjures up images of a horrendous global depression. One wonders if the humanity is going in the right direction? Are we not all like the tethered prisoners in the Platonic cave?16 The Platonic image of the tunnel can perhaps give a clue to the global dilemma we are confronted with.

I am afraid the question :Should developing nations be allowed to ‘poach’ skilled professional labour from countries who have helped pay for this experitse?” is not quite fair. Isn’t it the other way round? Hasn’t the Western world imperialists and colonial powers indulged in it to their heart’s content? Isn’t this a case of pot calling the kettle black?

A glance at the devastating retail havoc let loose by the Wal-Mart and its decimation of the American manufacturing jobs and enslavement of the labour abroad is enough to show how as a result of the Wal-Mart model, combined with the depression, more than 1 million manufacturing production jobs producing consumer goods have been lost since July 2000 alone.

“Wal-Mart Is Not a Business, It's an Economic Disease” by Richard Freeman and Arthur Ticknor the Nov. 14 issue of Executive Intelligence Review.17

“The Wal-Mart department store chain, ...is levelling economies of the U.S., industrial nations, and the Third World...Not since the days of the British East India Company as the cornerstone of the British imperial system, has one single corporate entity been responsible for so much misery “Wal-Mart imports 10% of all America's total imports from China. If Wal-Mart were a country, it would rank ahead of Great Britain and Russia in total imports." Which reminds one of British East India Company as the cornerstone of the British imperial system, as one single corporate entity responsible for so much misery.

The situation has became so outrageous, that it drew international attention. On Nov. 19, 2003 the Observer of London carried an article on the destruction of the City of Buffalo, New York, mentioning the role of Wal-Mart. The article tells the story of Buffalo Color, a manufacturing plant where indigo dye for denim was produced. Once employing 3,000 workers, Buffalo Color lost business to plants established in China, which produce the indigo dye at half the cost that Buffalo Color does. Wal-Mart drove down the price of the indigo dye used to color the denim for clothing.18

On Nov. 18-19 2003, the City of London's mouthpiece, the Financial Times, ran four articles on Wal-Mart, centered on Wal-Mart's practices of hiring and directing cleaning companies that employed foreign illegal workers who cleaned Wal-Mart stores, seven nights a week, under hideous conditions.Ibid.

Remember the Opium war of 1839-1842, the first of Chinese conflict with the West precipitated by the Chinese Government’s efforts to stall the British traders from selling opium to the Chinese people? In this unconscionable trade Britain was the major foreign dealer but Americans, French and others also participated. This eventually culimnated in war between China and England.

The Chinese Commissioner Lin Tse-hsu vainly appealed to Queen Victoria: “Let us ask, where is your conscience. I have heard that the smoking of opium is very strictly forbidden by your country;… Since it is not permitted to do harm to your own country, then even less should you let it be passed on to other countries- much less to China!..Is there a single article from China which has done any harm to foreign countries?”19

Queen Victoria was unmoved. The war ended with the Nanking Treaty of 1842 forcing China to cede Hong Kong and among other humiliating terms pay an indemnity to compensate the British for lost opium and for expenses incurred in the war!!

Aren’t the US, Europe engaged in similar economic trading and hegemonic wars with the rest of the developing world? The global economic problem, outsourcing to low wage countries or the brain drain and vice versa could easily turn out to be a Pandora’s box. Conversely it might let loose in the open a veritable revelation like the dazzling light at the end of the Platonic tunnel to the unfortunate humanity at large in the developing world tethered to the hunger disease, starvation and death amidst islands of garish opulence.

Such globalisation has been argued as the “pluricentral global order...But this apparent pluricentrality poorly disguises the global political hegemony of the US government” as Barbara Harriss-White notes. (Globalization and Insecurity: Political, Economic and Physical Challenges, p.6, ed. Palgrave, Wolfson college, Oxford, 2002)20 As explained by Harriss-White this US hegemony “operates through appeals to liberal democracy as being superior to other forms of political organization, appeals backed materially by conditions attached to loans from the IMF and UN economic institutions, which are dominated by US interests.” (Ibid.)

Joseph Stiglitz has categorically pronounced that the IMF has failed in its original mission of promoting global equality. He calls the policies of IMF as anti-democratic., lacking in a basic sense of decency and social justice. …Those whose lives would be affected by the decisions about how globalisation is managed have a right to participate in that debate, and they have a right to know how such decisions have been made in the past.” p.xvi, Preface, Globalisation and Its Discontents21

The process of globalisation set in motion by such lop-sided institutions based on so-called Washington Consensus has degenerated in a devstating caricature of what Stiglitz calls “global governance without global government one in which a few institutions,-the World Bank, the IMF the WTO- and a few players…in which many of those affected by their decisions are left almost voiceless.”Ibid.

The world is sorely in need of a consensus based in the least developed country. Only then it can realise “what the thoughtful rich people call the problem of poverty, thoughtful poor people call with equal justice the problem of riches” as noted by R.H. Tawney.22

Keynes, godfather of the IMF, identified the market failures and why markets could not be left to themselves and called for global collective action. That is why as far back as in 1933 in his essay The End of Laissez-Faire he declared:

“Many of the greatest economic evils of our time are the fruits of risk, uncertainty, and ignorance. It is because particular individuals, fortunate in situation or in abilities, are able to take advantage of uncertainty and ignorance, and also because for the same reason big business is often a lottery, that great inequalities of wealth come about.”23

The trouble with globalisation with its inbuilt market system dictated by the IMF, WTO occasionally jerked into an unwelcome sharp brake and detour as in the case of cotton and sugar subsidies recently is that it is desperately in need of moral legitimacy. Market rewards merit is the common refuge of its policies. But it is fatally undermined by the advantages gained from inherited wealth and windfall gains: an essential feature of the market system. Remember Keynesian observation: big business is like big lottery?

Market by its very nature is predictable so to say that those who go into the market system with most are likely to come out of it with the most. Which is what made Margaret Thatcher proclaim: that the godly prosper and the sinful go bankrupt. Perhaps Hayek may not wholly approve of this precept because according to him markets allocate benefits according to only one principle-unpredictability. But there is a makebelieve or a curious split in his economic assumption vis-à-vis its political application.24

I think the theme globalisation has a weird air about it of a new-fangled economic voodoo, just as there has been for long in operation in America of what Senator Fulbright called in his Arrogance of Power “That there is a kind of voodoo about American foreign policy. Certain drums have to be beaten regularly to ward off evil spirits-for example, the maledictions regularly uttered against North Vietnamese aggression” (p.32)25 In place of ‘North Vietnamese aggression’ one can replace WMDs of Iraq and international terrorism. And there is no doubt that this too would prove in course of time a Bushgate.

Prof.Gunnar Myrdal was perhaps unwittingly more prophetic than he envisaged when he conjectured a scenario that “Indeed, if the whole Indian subcontinent with what will soon be a population of one billion people should sink into the ocean tomorrow, this would cause only minor distrubance to the curves of international trade, production and consumption, wages and other incomes, values of financial stocks, etc., in the developed world.” p.389, The Challenge of World Poverty, Penguin 1970.26

In view of the aforesaid dismal context of globalisation one is not enamoured of copybook phrases like ‘globalise or perish’, but would rather opt for the good old precept of Voltaire: Il faut cultiver notre jardin27 till the world at large, North as well as South is inspired en masse to engage in economic activity in the age-old spirit of the ancient Indian maxim vasudhaiva kutumbakam- world as a family.

But when? One cannot help recalling wistfully Keynes’ Economic Possibilities For Our Grandchildren (1930) wherein he perorates almost in a poetic vision: “But beware! The time for all this is not yet. For at least another hundred years we must pretend to outselves and to every one that fair is foul and foul is fair; for foul is useful and fair is not. Avarice and usury and precaution must be our gods for a little longer still. For only they can lead us out of the tunnel of economic necessity into daylight.” (Essays in Persuasion, p.372)28

References: Seriatim

1Roots of conflict : Don't blame environmental decay for the next war
by Nils Petter Gleditsch and Henrik Urdal International Herald Tribune Monday, November 22, 2004,

Ibid.Our water, Their Profits by Jonathan Leavitt Znet July 08, 2003, http://www.countercurrents.org/glo-leavitt090703.htm

Ibid.When the last oil well runs dry by Alex Kirby BBC News Online environment correspondent, Monday, 19 April, 2004,

2 Carroll Lewis, Alice in Wonderland

3 Keynes J.M., The End of Laissez-Faire: in Essays in Persuasion, p.312 Macmillan 1933,

4 Myrdal Gunnar, quoted in Asian Drama II, p.787

5 Volume 3, No. 2, February 2002 Death, Hunger and Destitution Haunt the Indian Countryside by Arvind http://www.peoplesmarch.com/archives/2002/feb2k2/death.htm

Ibid (The Times of India, April 17, 2006)

Ibid The Declaration of the People's Science Congress on Food and Agriculture Growing stocks and growing hunger, http://www.1worldcommunication.org/transgenics.htm

6 47 pc of India’s children malnourished: UNICEF, Newsitem in Deccan Herald, December 12, 2005,

Ibid Sub-Saharan malnutrition worse than 10 years ago David Fickling, Guardian Unlimited, November 22, 2005

7 Gordon David, Professor in Social Justice in Radical Statistics Annual Conference Global Child Poverty 26th February, 2005

8 the BBC News Published: 2006/04/15 as to how Britain is now 'eating the planet' by Mark Kinver

9 In the US 40-50% of all food ready for harvest never gets eaten; (Anup Shah, http://www.globalissues.org/TradeRelated/Poverty/Hunger/Causes.asp.)
10 Samana Siddiqui ( in her article “Statistics on poverty & food wastage in America” notes “According to the US Census Bureau, 35.9 million people live below the poverty line in America including 12.9 million children. This is despite abundance of food resources. Almost 100 billion pounds of food is wasted in America each year. 700 million hungry human beings in different parts of the world would have gladly accepted this food.”(http://www.soundvision.com/info/poor/statistics.asp)
11 UN-habitat, Nairobi, found that urban slums were growing faster than expected, and that the balance of global poverty was shifting rapidly from the countryside to cities. John Vidal, Saturday October 4, 2003, The Guardian

12 In an Interview to Greg Ross, American Scientist’s, Managing Editor, (The American Scientist www.americanscientist.org/ template/AssetDetail/assetid/50434) Lester Brown of the Worldwatch Institute
13 In his “Development as Freedom”, 1999, Amartya Sen sees development "as a process of expanding the real freedoms that people enjoy." Hence, "development requires the removal of major sources of unfreedom: poverty as well as tyranny, poor economic opportunities as well as systematic social deprivation, neglect of public facilities as well as intolerance or overactivity of repressive states." The Road From Serfdom: Amartya Sen Argues that Growth Is Not Enough, Richard N. Cooper From Foreign Affairs, January/February 2000
14 Michel Chossudovsky's The Globalization of Poverty, (Zed Books Ltd. London and New Jersey. 1997). Reviewed by Leo Vox, www.worldhunger.com
15 Marcuse Herbert, One Dimensional Man (ABACUS, Sphere Books, 1972)

16 Plato's Allegory of the Cave by Plato, circa 360 B.C., Translated by Benjamin Jowett,
The Republic, Book VII.

17 “Wal-Mart Is Not a Business, It's an Economic Disease” by Richard Freeman and Arthur Ticknor the Nov. 14 issue of Executive Intelligence Review.

18 Wal-Mart `Eats' More U.S. Manufacturers
by Richard Freeman, November 28, 2003 issue of Executive Intelligence Review. Nov. 19, 2003 the Observer of London carried an article on the destruction of the City of Buffalo, New York, mentioning the role of Wal-Mart.

Ibid http://www.larouchepub.com/other/2003/3046wal-mart_pricing.html

Ibid Deliver Us from Wal-Mart? by Jeff M. Sellers http://www.christianitytoday.com/ct/2005/005/17.40.html

19 Fullbright, Senator, J.William The Arrogance of Power, pp.143-44

20 Harriss-White, Barbara notes. (Globalization and Insecurity: Political, Economic and Physical Challenges, p.6, ed. Palgrave, Wolfson College, Oxford, 2002)

21 Stiglitz Joseph, Preface, Globalisation and Its Discontents, p.xvi

22 R.H. Tawney, quoted in Choose Freedom The Future of Democratic Socialism, p.74, by Roy Hattersley, Michael Joseph, London, 1987,

23 Keynes J.M., The End of Laissez-Faire Essays in Persuasion,

24 Hayek Law, Legislation and Liberty, p.61 Routledge & Kegan Paul, London, 1982, vol.2, Ch.9, p.61 ‘Social or Distributive Justice’, p.74, quoted in Choose Freedom The Future of Democratic Socialism, p.74, by Roy Hattersley, Michael Joseph, London, 1987

25 Fullbright, Senator, J.William, Arrogance of Power p.32

26 Myrdal Gunnar, The Challenge of World Poverty, p.389, Penguin 1970.

27 Voltaire, Candide (1759), ch. XXX,

28 Keynes J.M., Economic Possibilities for Our Grandchildren in Essays in Persuasion, p.372, Macmillan 1933,

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