View Full Version : Globalization, and the effects thereof...

07-13-2006, 09:46 AM
If you go here: http://www.lse.ac.uk/collections/LSEPublicLecturesAndEvents/events/2006/20051207t1416z001.htm#generated-subheading1, you'll find transcripts of a fascinating exchange between Martin Wolf (Financial Times commentator) and David Held (Professor, London School of Economics) in a public event at LSE earlier this year.

Wolf maintains that globalization is primarily a good thing - and that, based on the triumph of Liberalism (terminology = free market, not Left Wing), globalization is essentially a force for social betterment. He provides some convincing stats, showing sharp drops in the % of the global population living on less than $1/day, which is the World Bank's arbitrarily defined low-income measure.

Held takes not so much a contrary view, as a skeptical one. Globalization in itself isn't necessarily beneficial - and if you arbitrarily used a $2/day figure for low-income, you'd find Wolf's trend had reversed itself over the same time period. Held's conclusion, in part, is
the question before us is not why globalisation works but, rather, how can it be made to work better to bridge the gap between liberty and social justice, between economic rights and human rights, and between the accelerating affluence of some with the continuing poverty of the many. He proposes a form of social-democracy with teeth, to try to promote this end.

I can't recommend the respective primary documents highly enough - both are very thoughtful, well supported, and both civil and rational. They're also relatively brief, as such things go.

What do you folks think?

07-13-2006, 10:46 AM

Barring draconian trade barriers that never work, it's inevitable. What the unintended consequences will be remains to be seen.

The West's trade deficit with the China gives serious pause for thought. Combine it with idiot borrow and spend policies by the US, with China holding immense numbers of dollars in debt, add in some crisis(the world is rife) and you've got numerous potential formulae for another big war.

It's interesting you somehow equate classical liberalism with captalism. While capitalism is certainly a feature, the two, as you know, don't equate.

No one sees China as a classically liberal state and yet captalism is going great guns. There's also good evidence the West is retrenching due to its war on terror. Consider the surveillance which is affecting all of us, and will at an increasing pace. This is not liberalism, it's anathema to true liberalism.

The rosy ideal of the globalists: that economic forces will so bind the world together that a big war will be unthinkable and wage and price disruptions wil even out -- naive. They haven't reckoned with the power of ideology and emotion.

I used to think, to hope, that we'd entered a period of relative stability after the Berlin Wall fell. Talk about naivety.

Truly, the only way to transform this world is one bit of consciousness at a time. It's why I opted out of regular participation here. It was too full of the pain and anger, accusation and retribution. I'm not pointing fingers, I was a part of it.

When the minds of people are stirred by anger it propagates. It's like an amoeba, not needing anything outside itself to grow and multiply except nourishment.

If I've learned one thing in my fifty years, that's it.

07-13-2006, 10:59 AM
First, Jack, I'll just say that personally I'm delighted to see you reading/posting.

Liberalism/capitalism are fairly co-terminus, I'd argue. I think that it's hard to be a capitalist without adhering in some measure to the individual rights and liberty basis of liberalism ... and those concepts in turn lead directly to their exercize in markets.

In general, I agree that trade liberalization in itself will not lead to a rosy and cozy future - we're both agreeing with David Held here, rather than Wolf. The question is, considering that for the most part the world is choosing to abandon alternatives to free-market capitalism, how to address the moral inequities which amoral market behaviour allows.

Held suggests that some variation on the voluntary Global Compact that Kofi Anan and his advisor J.G Ruggie have promoted through the UN may be workable, but only if somehow adherence to the norms it proposes isn't simply voluntary.


07-13-2006, 11:09 AM
Seems to me that globalization just allows middlemen and manufacturers to reap profits by arbitraging differences in standard of living and wages between different countries.

The inevitable result will be levelling, and the way it will work out when pro-rated, we will be dragged way down and the teeming billiohns will be dragged a little bit up.

It generates current through the difference in potential, as it were, and once things equalize, there'll be no more energy in the system.

Dan McCosh
07-13-2006, 11:18 AM
It's unlikely to equalize. The ones remaining with the ability to produce goods and food will win.

07-13-2006, 11:21 AM

It seems to me, and I'm neither a social historian nor an economist, that ill-liberal policy and capitalism can co-exist quite nicely.

Keep the worker bees in beans and Toyota Corollas, fifty hour work weeks with basic protections, and there's no need to fear a revolt against the fact they can't speak out, think, dissent.

I fear that's what our corporate culture is aiming toward.

07-13-2006, 11:25 AM
Held's analysis disputes that real equalization will occur. Even including changes from places like India and China, income levels actually dropped for the lowest percentile of the population, and increased only by 1% for the next percentile up. Globally there were gains for the middle class and (unsurprisingly) the rich, but the poor were left even further behind.

Jack, you've described one of the primary conundrums that Marxists argued about throughout the 20th century: why don't the low-wage workers revolt, when they see that their experience isn't changing? Antonio Gramsci talked about the role of the mass culture in that - promoting the idea among the lower classes that they actually could, in some significant numbers, live out a rags-to-riches dream. Gramsci pointed out that this belief served the interests of the richer classes more than the lower ones - it protected their wealth from re-distribution, by holding out the promise that others could get rich too ... and would want the same perks. So the lower classes actually espoused views which were contrary to their own interests.

07-13-2006, 11:31 AM
Equalization withy regard to overall national wealth, perhaps, with wealth distribution within each nation also effected but in less predictable ways.

Dan, it appears we are well on the way to exporting the means of production, Boeing plants in China, GM plants in Mexico.

Now, what of Marx? Some say Marx's miscalculation was in assuming capitalism would not be self-regulating, some would say that Marx failed in not realizing that social and political movements short of revolution could arise which could temper the excesses of capitalism and prevent the revolution. If thats true, though, then the process, of increasing worker discontent associated with the rise of industrialism, is still an accurate description of the process.

In other words, the industrialized third world, is it heading for marxist revolution, or unionization and the adoption of liberal social welfare policies?

07-13-2006, 11:36 AM
Eventually, liberal social welfare, I'd argue. But the least social welfare possible. Their competitive advantage is in labour cost, and they can't keep their advantage without keeping those costs as low as possible.

Creating a strong domestic market behind tariff barriers was the traditional way 'round that, till your economy can sustain the shock of free trade. That's still practiced in some measure by India and China, but less so in other developing nations. Which, as Held points out, typically haven't had the same degree of economic success ... likely due to adopting free trade too early.

07-13-2006, 11:47 AM

No offense, but you're talking in terms appropriate to the ideological conflict of the early twentieth century. Marx? He was writing at the beginning of the industrial revolution.

Some of his ideas are still worthy, but his Hegelian prediction that the thesis of captalist exploitation was going to conflict with the anti-thesis of the suffering worker, and become synthetic in the dictatorship of the proletariat is a bit quaint. Nice, clean, ideas, I can see how he arrived at them, but really, com'on. It's time to move on.

I fear the rise of the corporate, and the complacency of the worker -- because they no longer have so much to be pissed about. Homogenization is the great enemy of this human endeavour.

07-13-2006, 11:53 AM
Dunno, Ish. A couple of places which may ripen into Marxist revolutions are ... China, and Russia. Heavy and swift industrial development, huge populations, disillusionment will creep in with the growing wealth inequalities and exploitation. And enough residual knowledge of Marx to allow their working classes to see their own interests differently than the rest of the developing world's working classes.

20 years time, a revolution of one sort or another in either or each place. You read it here first.

07-13-2006, 11:56 AM
Ish, the countries now being industrialized are now at the state of development our society was at when Marx was writing.

Dispute Marx if you want, but you'll have to do better than simply saying he has an expiration date.

Are you denying the validity of the theories of alienation? Exploitation? They are as real and relevant as ever.

07-13-2006, 11:57 AM
TomF, that'd be interesting, real marxism, not maoism or leninism. A genuine proletarian revolution not forced down from above by cadres of intellectuals.

07-13-2006, 12:02 PM
Real marxism would be such a threat to the West though, that I doubt it would be allowed to happen. The corporate classes would consider war to be preferable, if the revolutions proved resistant to consumerist co-option. Doctrine of pre-emptive war would be invoked and better-dead-than-red rhetoric revived.

Andrew Craig-Bennett
07-13-2006, 12:03 PM
Thank you for the link, Tom; very well worth reading.

This thread bids fair to be the best thing I've seen here in the bilge for a while.

Nobody has mentioned the state of the world 100 years ago, yet.

Globalising like nobody's business, free trade to the fore, world economic growth as the sort of rate that was unseen again until quite recently.

We know what happened last time, of course, and there is no reason to assume that history will repeat itself, but the contention that a globalised economy will of itself yield peace and harmony must be open to doubt.

07-13-2006, 12:15 PM
I'm quite sure Marx holds interest in a variety of circles. I guess I was questioning his global impression, which didn't happen. It was utiopian, and utopian visions always fail in the small circles who deny the human prediliction to be a predator.

People suffering, wanting a Marxist solution, all bets are off.

I'm much more concerned about creeping intrusion into people's thoughts and actions, which is happening, and reinforces any worst of all ideologies. The liberal west has done it, the communists put a fine edge on it, the fascists loved it, and the technology to do it in spades is growing.

There's a presumption the liberal West will somehow be immune, because "they're the good guys" Horse hocky! The desire to control ideas is universal.

Our protections are fading in the face of an overwhelming technology no one really anticipated. Combine it with basic human nature(realized very well when the Bill of Rights was drafted), and you've got a horror.

I'm not sanguine.

07-13-2006, 12:41 PM
Utopias played the role of the rabbit dummy – pursued, but never caught in dog races. Even more that that, progress was a continuous effort to run away from the utopias that failed; a movement away from ‘not as good as expected’, rather than from ‘good’ to ‘better’. Realities declared to be the ‘realizations’ of utopias were invariably found to be ugly caricatures of dreams, rather than the things dreamt of.
- Zygmunt Bauman That's what I'm afraid of, regardless of whichever Utopia is "realized."

I agree with your concern about the creeping intrusion, Jack, and the human predilection for those in power to control ideas. "Oceania has always been at war with Eurasia."

Osborne Russell
07-13-2006, 02:29 PM
the contention that a globalised economy will of itself yield peace and harmony must be open to doubt.

There must be regulation, and regulation has its cost. A domestic free market depends on regulation of money, enforcement of contracts, and many business activities, so that the market may remain free. Internationally, who is going to spend the money to make Guatemala into something other than a banana republic? Bananas give the greatest return on capital. Reasonable minds may differ as to whether this is in the interests of the people, but capital is protected by force, so it's academic. It may a free market in the abstract and highly repressive at the same time.

Another non-liberal capitalist country: Japan, from the restoration of the emperor through WW2.

In college, we were horsing around with an anthropology database which had given numbers to various cultural traits of pre-industrial societies, such as family organization, rules of descent of property, trade with outsiders, and so on. Just for laughs I looked for the traits most frequently found in association with "presence of entrepreneurs". I expected to find: circulating money, trade with outsiders, etc. But by far, the cultural institution most frequently associated with entrepreneurs, in pre-industrial society, is slavery. Makes sense when you think about it. Why should industrial society be different? Could it that the return on capital must fall if labor is not allowed to consume enough?

Osborne Russell
07-13-2006, 02:32 PM
Our protections are fading in the face of an overwhelming technology no one really anticipated.

1. Frankenstein, by Mary Shelley.
2. Brave New World, by Aldous Huxley.
3. 1984, by George Orwell.

07-13-2006, 02:47 PM
Ideology, including religious ideology, may be the pretext, but wars are started for economic reasons. Cut off or unduly limit someone's resources and they will fight. Prosperous, well fed people can't be bothered.

07-13-2006, 03:20 PM
Ishmael, you sound as if you think that marx's predicted proletarian revolution depends for its occurrence on the proletariat reading and following Marx.

Thats basically Lenninism, not Marxism. Marx's prediction of a proletarian revolution assumed it would be a natural, almost organic process; the excesses of capitalism would cause the workers to become so disaffected, that it would become obvious to them that they are left out and exploited (class consciousness) which would lead to demands for change and eventually violent revolution.

Lennin altered the theory, because in theory, Russia was not at the stage where a Marxist revolution should occur; it was not yet industrialized and was still almost a fuedal state. In these circumstances, Lennin theorized that a cadre of intellectuals could jump-start the process using marxist doctrine to lead the masses. A different process entirely.

07-13-2006, 03:24 PM
Back to globalization: at what point are the "haves" going to rebel against their livlihoods being transfered to the "have nots?" Seems bound to happen...

07-13-2006, 03:31 PM
I don't see why you need Gramsci, its all in Marx's concept of class consciousness, people vote contrary to their interests because they are not class conscious, because they are bamboozled into believing their are no barriers, that there is no deliberate effort to hold them back and concentrate wealth among the few.

I've run into plentyb of poor who not only lack class-consciousness, they react violently against the notion. Noone wants to think theat they are lower class. But the rich are very class conscious, that much I know from experience, and regard poor people as subhuman, by and large.

07-13-2006, 05:52 PM
That last line in Pats post hits home.I agree with the "But the rich are very class conscious,that much I know from experience,and regard poor people as subhuman,by and large".I have found in my time on this earth that rich people tend to feel they have more "rights" then poor people.

07-13-2006, 06:50 PM
Yeah, it's that very sense of entitlement they claim welfare recipients are guilty of. ;)

07-15-2006, 05:17 AM

I've read Marx, though it was years ago. My impressions were rather good. A brilliant mind, and he'd thought matters out in elegant ways. But , he, as with so many elegant thinkers, was simply wrong. The thesis anti-thesis of Hegel simply doesn't apply easily to mass movements of people. As evidence I ask, where is this dictatorship of the proletariat his theories demand? Nowhere on the horizon.

No, Marx was writing in 19th century London, with all its class structure and baggage. Interesting, but not terribly relevant to today.

07-15-2006, 08:12 AM
I don't believe the masses will ever rise and take the reigns of power, anywhere. They might occasionally overthrow the old boss and hand power to a new boss, but that is about it.

It is human nature. People like to be led. People feel more comfortable being told what to do. People feel safe within a hierarchy where they don't have to think too much. Most people, that is.

Expecting the masses to run the government is like expecting the lionesses to rebel against the pride leader because he doesn't pull his own weight and always gets the best meat. It isn't fair, but it is natural, and will never change.

07-15-2006, 11:23 AM
He provides some convincing stats, showing sharp drops in the % of the global population living on less than $1/day, which is the World Bank's arbitrarily defined low-income measure.

Ah, the good old World Bank...

Of course they "forgot" to factor in the massive devaluation of the US dollar over the past five years. The dollar denominated income of Brazilians, for instance, has nearly doubled since 2002. Real income has increased by only a few percentage points.

I bet if they used purchasing power parity they might find that the world's population has not benefitted so much from globalization. But of course, that would run against their ideology. ;)

07-15-2006, 12:30 PM
Does anyone think that if the US, with 5% of the world's population, was to reduce it's utilization of the world's resources to 5% that it would make any significant difference in the welfare of the other 95%?

IMO, Globalization = global imporvisment, except for the .001% on top.

07-15-2006, 12:58 PM

Point taken. A few fiction writers did anticipate something hovering on the horizon, and Orwell's work is remarkably prescient down to details. Marvelous, mysterious time travellers, the ones you mention. There's something not easily explainable in the best speculative fiction writers' works. When they're on their game they seem to open to the ocean of time in a way no mere mortal follows. LOL.

I you haven't read Phillip K. Dick...do so. Another brilliant if a bit unbalanced mind. Very readable, yet erudite and prophetic. I'm not a big reader of that sort of work, but Dick is definately worth a look.