Globalisation - the increased integration of the world economy — reveals itself in various ways. One is the prominence of multinational companies, with goods being produced in various parts of the world, often by companies mainly based in Europe or the US. Supra-national organisations such as the World Trade Organisation and the North American Free Trade Association are other reflections of these developments.
Jobs being switched to other countries, where labour is cheaper and/or more pliant, is a further aspect. One result is a world where a few obscenely rich individuals are wealthier than the poorest countries. Along with all this, though not necessarily an intrinsic part of it, are extensions of privatisation and the undermining of state welfare, both part of what is often referred to as the neo-liberal or Washington consensus.
Improvements in transport and communications are sometimes seen as the driving force behind these changes. Clearly, if contact with another country implies time-consuming travel, expensive phone calls and use of an unreliable postal service, then it will be difficult for a multinational company to function. But faster plane travel, e-mail and faxes make it all so much easier. Such factors, though, are best seen as facilitating globalisation rather than causing it. For the simple fact is that capitalism has always looked for markets, materials and cheap labour wherever it can find them. When the Korean company Samsung decides, as it did recently, to transfer a factory making microwave ovens and computer monitors from Teesside to Slovakia, it is motivated by the prospects of lower wages (£1 an hour, compared to the princely £5.70 paid in Billingham). And many ready meals sold in UK supermarkets contain chicken from Thailand or Brazil, where intensive factory farming has driven costs down (but has greatly increased the problems of controlling disease).
The spread of global products and brands is sometimes summarised by the term “McWorld” - a world built on the model of McDonalds, with bland goods, poorly-paid jobs and big profits for a favoured few. Multinational companies often rely on sweatshops, with child labour, temporary jobs, dangerous working conditions and no trade unions but massive profits. At the Formosa factory in El Salvador, for instance, workers have reported how they slaved for twelve hours a day on backless wooden benches, with only one daily visit to the toilet allowed, making clothes for Nike and Adidas. The biggest corporations can dictate to governments and other organisations: for example, the World Health Organisation has been blocked from taking action on obesity because of lobbying from American sugar
producers. But again, there is nothing new about governments and other world bodies doing what capitalists want. Backed up by the threat or reality of US armed force, Western capitalism can usually dictate its own terms for access to oil, cheap labour and so on.
The extension of the cash nexus to practically every aspect of life is a further instance - what Naomi Klein calls the loss of “unmarketed space”. In Bolivia the municipal water supply was privatised, and the new owners ever made it illegal to collect rainwater in roof tanks! In this case, mass protests were able to reverse the privatisation with its drastic increase in costs. When even prisons are run for a profit, it seems that nothing is beyond the evil embrace of capitalism.
World trade came into existence with capitalism, bringing products such as cotton and tobacco to Europe. But the growth of industrial capitalism led to an enormous increase in connections between different parts of the planet as raw materials were sourced from every direction and wars were fought to open up markets in places like China and Korea. Yet companies remained primarily nationally-oriented. Perhaps the first multinational appeared when the US company Singer set up a sewing-machine factory in Glasgow in 1867. By 1914, only 12,000 people in Britain were employed by US companies. So it was the 20th century that was the true era of globalisation, as expansion abroad revealed itself as the best option for companies that had difficulty in increasing their domestic market share.
There had previously been plenty of investment by individuals and institutions in overseas companies, known as foreign portfolio investment (FPI). But the 20th century saw this largely displaced by foreign direct investment (FDI), whereby a company based in one country owner and controlled factories and subsidiaries in another. FDI implies a far greater impact on the economy and population of the “receiving” country, with decisions being taken by people beyond the influence of that country's government.The last couple of decades, though, have seen a comeback of FPI, but this time with a bigger influence given the emphasis on short-term profits and on switching production from one country to another as wage levels and other production costs rise and fall. FPI is often driven by mergers and takeovers, which are designed to cut cost: and have no relation to the needs of workers or consumers.
Some people are wholly in favour of globalisation, Jack Straw for one:
“Since the collapse of the Soviet bloc, there is no longer a coherent alternative ideology on offer. We could take the advice of the Stop the World campaigners, retreat into our national economies and close our markets. But this would put at risk the real benefits that globalisation, and global capitalism, have brought to millions.” (Guardian, 10 September 2001)
(No doubt the workers of El Salvador could enlighten Straw on the "benefits” of global capitalism.) Even most supporters of globalisation agree that some changes need to be made in global governance, though they accept the general idea. Ranged against them is the world-wide anti-globalisation movement, or "movement of movements". It is common, and not just among socialists, to complain that it is clearer what this movement is against than what it is for.This is sometimes seen as a good thing, on the grounds that it prevents too early a consensus on one single solution when so many are in the air. But in fact this movement has many incompatible goals.
For instance. Walden Bello, of the group Focus on the Global South, advocates deglobalisation (probably the kind of thing Straw was opposing above):
"We are not talking about withdrawing from the international economy. We are speaking about reorienting our economies away from the emphasis on production for export and towards production for the local market."
But production for the local market is still production for profit, and what Bello is suggesting is just a less-centralised verslon of capitalism.
However. Another World is Possible should not be simply dismissed. It is free of any nonsense about the USSR or “national liberation movements", which might have disfigured such a collection not so long ago. More positively, there is an emphasis on democracy and on rejecting leaders, and many references to putting people before profit. For instance, a summary of one strand of the discussions in Brazil states:
“The Utopians point out the necessity of understanding that society can no longer be founded on profit and competition, but should be based on the values of equality, equity and social justice.The desired globalization is a human one: profit can no longer be prioritized over human needs.”
It is not clear how widely supported such sentiments are within the WSF. or how many dismiss them as "utopian”. But as a vision of the future this is far more encouraging and inspiring than the blinkered view of Jack Straw.
Socialism will also be a world system, but this does not mean it will involve gigantic centralised organisations. Production will no doubt involve both locally- and remotely-sourced materials, as appropriate, but there will be no incentive to go for the “cheapest" option. Putting the bottom line at the top of priorities is not the way to a healthy and happy world.
Paul Bennett
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