Monday, March 15, 2004

If It's Global It's Bad

The marxist in me has always been a little suspicious of the term 'anti-globalisation'. Of course there's the old line that it's a label invented by the political right. But as anyone who has actually been at an anti-globalisation rally knows, there are a few people for whom the term seems altogether too generous. There really is a rather large cohort of folks out there opposed to anything that looks like trade and economics.

Call me old fashioned, but I still believe that there is really something wonderful about capitalist productive capacity. If only it wasn't run so badly.

On the other hand there are writers like Jane Kelsey who have neatly turned globalisation on its head by working in solidarity with 'third world' groups such as farmers and peasants just coming to grips with corporate globalisation. But I am never quite certain what the object of such an excercise might be. Is the desire to be in 'solidarity' with the oppressed in the developing world based on a sense of despair for the prospect of social change in our own?

Certainly, Kelsey and her mentor Bruce Jesson both appear to have been deeply traumatised by the advent of Rogernomics, and Jesson in particular seemed deeply nostalgic for a kind of prehistoric New Zealand that sounds like it was a pretty awful place to live. Listening to Kelsey deliver the Fourth Annual Jesson Lecture a few months back I was surprised to hear her criticise Labour's neo-statism for doing away with 'declining industries like the clothing sector and supporting new ones, such as export education.'

Kelsey delivered that last sentence with a kind of ironic sneer that elicited a laugh from the audience. It was a very strange moment. A sad nostalgia for a rather tatty past and a smirking disdain for a pretty important new sector of this country's economy. And one that I happen to work in and enjoy.

At any rate, it got me to thinking about how important globalisation is, or at least, how important it is to think critically about what we are gesturing to when we use the term globalisation. From LeftCenterLeft comes this article by the American economist Paul Krugman called In Praise of Cheap Labour. Krugman's thesis is that the growth of export industries with relatively cheap labour in the third world is something that is both relatively new and critical for growth in these very same economies. Understood as merely a growth in the extensity of world trade, Globalisation really is exporting jobs and growth to those areas of the world that have been excluded from progress for much of the last hundred years:

In the mid-'70s, cheap labor was not enough to allow a developing country to compete in world markets for manufactured goods. The entrenched advantages of advanced nations--their infrastructure and technical know-how, the vastly larger size of their markets and their proximity to suppliers of key components, their political stability and the subtle-but-crucial social adaptations that are necessary to operate an efficient economy--seemed to outweigh even a tenfold or twentyfold disparity in wage rates.

Detractors of globalisation often argue that the process has led to a growth of inequality between the developing world and our own. What they mean to say is that while there may be some growth in poorer countries, it is more than offset by the accumulation of wealth in the richer countries. But the evidence for such arguments often comes from a simple comparison of GDP, which may not show us the extent to which social and economic growth has improved in the developing world. Using other measurements, there is some evidence to show that there has been a decline in the overall level of international inequality. Professor of Political Studies at the University of Otago Philip Nel has studied human inequality across the globe. In a paper delivered in 2003 to the New Zealand Political Studies Association called International Inequality: has it increased or not, and so what? he shows how important it is to use the right kind of indicators. As Marilyn Waring has shown, GDP simply doesn't capture all those intangible and invisible relationships and things that underpin real economic activity. Through a critical use of the human development index used by the United Nations Development Programme, Nel has been able to determine that there has been an overall drop in 'levels of human development inequality' over the last twenty years.

What this means is that "globalisation" may involve at least two different processes, and it's useful to distinguish between the two. On the one hand there is an accumulation of wealth in Western countries, while on the other hand there has been a decrease in inequality around the globe.

If we accept that there has been a worldwide decrease in inequality, we still need to ask as Nel does if these findings mean that globalisation is good for the poor? Are the processes of growth set in motion by corporate globalisation entirely beneficial for the developing world? Not necessarily:

Defenders of the neo-liberal, pro-globalisation ideology can get little sustenance from these findings. If we accept for the sake of argument that there is some causal connection between neo-liberal policies to promote globalisation, and the improvement noted in our results, then the obvious question is how come the results are so meagre?

It's a sophisticated and compassionate argument. Nel notes that levels of international inequality are too high as they are, and warns that such disparity will have serious consequences for the co-operative provision of global public goods. Finally, he concludes by emphasising that:

Global equity can be said to be a public good in its own right. In addition, high levels of international inequality, especially when it overlaps with power and cultural differentials, do make world politics more prone to fractionalism and conflict than would otherwise be the case. Most important of all, international inequality of the magnitude that we have in the world today is simply morally indefensible in light of the view that we have the resources to do something about the poverty-related consequences of inequality.