 John Ralston Saul's new book The Collapse of Globalism
is saying what most economists have been afraid to say: The emperor has
no clothes. He painstakingly reviews the mounting evidence from the
past decade that the ideology of globalization has not only failed in
almost everything it has tried to do, but is in rapid retreat in the
areas of the world where the economy is most robust.
Saul is
an excellent student of history, and his criticism of economic theory
is not limited to any one economic ideology. He shows that, throughout
the past two millennia, no economic theory has proved to be right for
all places and all times, and the average lifespan of such theories
before they are supplanted by more appropriate ones, suited to newer
economic realities, is less than two decades. The ones that have died
the hardest and caused the most social damage have been those which
have been elevated to the status of near-religion, and were assumed to
be inevitable and perpetual. Globalization has reached this status
several times before, and each time it has collapsed as nation-states
realized that global solutions were suboptimal for them and have
reasserted national sovereignty, often militarily. Saul excoriates
economists and politicians and their 'adoring courtiers' in the media
for their lack of awareness of the lessons of history. De Toqueville
warned in 1835 about the dangers of economic ideology, of seeing
society through an economic rather than a political lens, asking "Can
it be believed that the democracy which has overthrown the feudal
system and vanquished kings will retreat before tradesmen and
capitalists?" Much of the latter 20th century was a similar retreat,
Saul says, as interest in democracy was subordinated to the ideology of
globalization, and that period's greatest economic 'success' was the
emergence of China, a brutal and repressive totalitarian regime, as a
new economic superpower.
When economic theories become
religions, and grow in power, there is a growing disconnect between the
global system (and its measurements of 'progress'), and the quality of
people's lives. This 'ideology of progress', in its globalist flavour,
manifests itself in several ways. First, global economic entities
inexorably consolidate and centralize and become increasingly
hierarchical and narrowly-controlled, isolating, marginalizing and
under-serving smaller communities and markets in the process. Second,
dumping, which is taboo in well-organized markets, becomes normal
process -- the underpriced offloading of surplus goods, which destroys
healthy competition, is pursued as the ubiquitous means to distribute
product at the cheapest possible cost, which is seen as invariably a
good thing. At the same time, intellectual property is given protection
that allows its owners to overprice
their product. This produces such enormous distortions that, for
example, a Wal-Mart store in upstate New York will sell a dozen pairs
of men's underwear for $10 and a pair of Nike shoes, which costs the
same to make (and may be made in the same Chinese factory), for $150.
Next, a large proportion of so-called 'trade' (as much as half of all
trade today) becomes internal
-- transfers between branches of multinational corporations at
artificial prices that bypass the competitive market and are designed
to further reduce competition and to transfer profits from high-tax to
low-tax jurisdictions. The UK divisions of multinational oil companies,
for example, collectively lose
money by using transfer prices to shift profits to countries with low
tax rates. And as a consequence of this ability of rich multinationals
to avoid taxes, the gap in wealth and power between rich and poor
skyrockets.
The combined effect of all these market distortions,
which make perfect sense to the multinational corporations that drive a
'globalized' economy, is unfair competition, oligopoly, price-rigging,
elimination of small entrepreneurs, devastation to local labour markets
and the environment, an unfair tax burden on the middle and lower
classes, inability of national governments to afford a basic social
safety net for all, and endemic poverty and economic slavery for
workers and for poor nations. Saul points out that there are some
excellent recommendations on how to mitigate some of these
consequences, such as the ILO Fair Globalization Report,
but there is no motivation for the multinationals and the Davos group
to act on them. Why should they? It is in their best interests to allow
these distortions to continue, and mitigating their negative
consequences would also mitigate their profits. So these reports are
ignored.
It is therefore up to national governments to act. But
these governments have been so effectively lobbied by the
multinationals and the neocons that they have come to believe that
globalization, and its distortions, are inevitable,
and that there are no alternative economic models. Their hands have
been tied by layers of 'free' trade agreements that preclude them from
passing and enforcing their own laws to protect domestic workers, their
domestic economy and the environment. So they have become cowards,
apologists for the globalization agreements they have been hoodwinked
into signing, and tell themselves and their citizens we have no choice.
This,
says Saul, is the ultimate lie of globalization's religion of economic
determinism. There is always choice. There always has been, and there
must be. What is needed, he says, is:
- Political leaders with
the courage and foresight to act in their own people's best interest,
and while encouraging trade where it makes sense, not allowing
multinational interests to hobble their ability to protect domestic
interests;
- Realization that the purpose of any economic system
is to serve people, and that human well-being, not economic growth,
should determine what actions governments should take;
- Realization
that simplistic ideological solutions don't work, and that workable
solutions are nuanced and evolving, not static, and certainly not
'inevitable';
- Realization that decision-making and
policy-making must start with recognition and response to local needs,
which are variable and contextual -- there is no one right answer for
everyone and every time;
- A press that thinks critically and encourages its readers to do likewise;
- Self-confidence
of governments and their citizens to believe that they understand what
is best for their country and their people, and active involvement of
governments and citizens to work to achieve that well-being, rather
than deferring to international authorities that promise global
solutions;
- Support for NGOs, which have rushed into the social
and political vacuum during the past two decades as governments have
thrown up their hands and said they have no choice but to accept the
inevitability of globalization and extraterritorial control over their
lives -- these NGOs have been doing the governments' job while the
governments have been, largely, AWOL; and
- Elimination of unrepayable and crippling third world debts.
Saul quotes Nelson Mandela, who understands these needs clearly:
Massive
poverty and obscene inequality are such terrible scourges of our times
-- times in which the world boasts breathtaking advances in science,
technology, industry and wealth accumulation -- they have to rank
alongside slavery and apartheid as social ills. Overcoming poverty is
not a gesture of charity. It is an act of justice. It is the protection
of a fundamental human right, the right to dignity and a decent life.
It
is nothing short of religious delusion to believe that any monolithic
economic ideology is capable of coming to grips with this or any other
social or political problem. And it will take more than Live8
spectacles, evidence of what Saul calls "the decline of Davos from
temple of globalization to circus, open to whatever fashion can capture
fifteen minutes' worth of attention", to address it. Ultimately such
problems must be solved locally, by courageous national leaders with
grassroots solutions customized to the local context.
Saul calls this 'positive nationalism', which he contrasts with the negative nationalism of hate and fear:
If
any confirmation of the seriousness of negative nationalism were
needed, we need only go back to Samuel Huntington's 1996 [anti-Moslem
screed The Clash of Civilizations].
In large numbers, the disciples of globalization read his book and
raised their voices in agreement with his argument that societies were
driven and held together by shared cultures, not economies. They now
understand what was happening around them, why things were not working
out as expected. As for the US, its survival was dependent on
"Americans reaffirming their Western identity". The broad welcome this
argument received in the West revealed how confused and obscure the
vacuum [caused by the failure of globalism] is. But it also told us how
people have become frightened in the growing disorder of the globalist
era, how uncomfortable they are with the broad global sweeps of
inevitability. After all, only a few years ago economic inevitability
was on every tongue. Abruptly, the same people are insisting that
exclusive culture is the key. [When you note that Huntington in his
book hadn't bothered to assign Africa a 'civilization'] you realize how
crudely racial his theoretically sophisticated argument is. The Aga
Khan commented "The clash, if there is such a broad civilizational
collision, is not of cultures but of ignorance", either willful or as the product of fear.
Positive
nationalism, however, is driven by altruism and knowledge, a desire for
service and to see one's fellow citizens thrive, rather than the
ignorance and fear and intolerance of negative nationalism, or
globalism's blinkered self-interest. In a world in which 110 of the
last 120 major conflicts were internal, rather than international, it
is important to focus on bottom-up solutions and grassroots approaches
to problems that are fundamentally local. This is not about values or
civilizations or cultures or economies, Saul concludes, but about
simply serving the public good, for which there are no easy or global
answers:
The common call today is
for an examination of values. I am not clear what this means. It has a
slight ring of 19th century self-serving [negative] nationalism. It
would be better to concentrate on something more real, such as serving
the public good. Adam Smith put it that "he is certainly not a good
citizen who does not wish to promote, by every means in his power, the
welfare of the whole society of his fellow citizens." If people who
know each other well serve the welfare of their fellow citizens, they
may learn something unexpected about each other, perhaps about how
different they are. If people who do not know each other well, perhaps
because they come from different cultures, serve the welfare of their
fellow citizens, they may well discover how similar their values are.
In both cases, this would be the process of positive nationalism.
Photo from McMaster U. prof William Coleman's globalization clippings collection (from a Scandinavian newspaper) |
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