----- Original Message -----
From: Andrej Grubacic
To: [log in to unmask]
Sent: Saturday, November 27, 1999 9:10 AM
Subject: [CHOMSKY] Doug Henwood
What is Globalization Anyway?
By Doug Henwood
If there's one thing that analysts and activists across the
political spectrum agree on today it's that we live in an era of
economic globalization. This is taken by both critics and cheerleaders
as self-evident and largely unprecedented. We should think twice about
this consensus.
The concept that has now entered daily speech as "globalization"
is both exaggerated and misspecified. It's described as an innovation,
when it's not; it's described as a weakening of the state, though it's
been led by states and multistate institutions like the IMF; it's been
indicted as the major reason for downward pressure on U.S. living
standards, even though most of us work in services, which are largely
exempt from international competition; and it's been greeted as an
evil in itself, as if there were no virtue to cosmopolitanism.
Let me expand a bit on each of my opening claims. First, the
novelty of "globalization." One of my problems with this term is that
it often serves as a euphemizing and imprecise substitute for
imperialism. From the first, capitalism has been an international and
internationalizing system. After the breakup of the Roman Empire,
Italian bankers devised complex foreign exchange instruments to evade
Church prohibitions on interest. Those bankers' cross-border capital
flows moved in tandem with trade flows. And, with 1492 began the
slaughter of the First Americans and with it the plunder of the
hemisphere. That act of primitive accumulation, along with the
enslavement of Africans and the colonization of Asia, made Europe's
takeoff possible.
Not only is the novelty of "globalization" exaggerated, so is its
extent. Capital flows were freer, and foreign holdings by British
investors far larger, 100 years ago than anything we see today. Images
of multinational corporations shuttling raw materials and parts around
the world, as if the whole globe were an assembly line, are grossly
overblown, accounting for only about a tenth of U.S. trade. Ditto
trade penetration in general. Take one measure, exports as a share of
GDP. By that measure, Britain was only a bit more globalized in 1992
than it was in 1913, and the United States today isn't a match for
either. Japan, widely seen as the trade monster, exported only a
little larger share of its national product than did Britain in 1950,
a rather provincial year. Mexico was more internationalized in 1913 it
than was in 1992. Exports are just one indicator, for sure, but by
this measure, the distance between now and 1870 or 1913 isn't as great
as it might seem.
Indeed, it's probably more fruitful to think of the present
period as a return to a pre-World War I style of capitalism rather
than something unprecedented, and to rethink the Golden Age of the
1950s and 1960s not as some sort of norm from which the last 25 years
have been some perverse exception, but the Golden Age itself as the
exception.
Another thing that must be rethought is the role of the state,
which we constantly hear is withering away under a new regime of
stateless multinational. While there's no question that the state's
positive role has
been either sharply reduced or under sharp attack, its
negative/disciplinary role has grown. In the U.S., we've experienced a
mad, cruel incarceration boom, accompanied by increased snooping and
behavioral prescriptions.
Elsewhere, the neoliberal project has been imposed by states,
whether we're talking about the Maastricht process of European union,
or structural adjustment in the so-called Third World - states acting
in the interests of private capital, of course, but that's the way
states have been acting for centuries. And, over the last 20 years,
we've seen an almost entirely new role for the state, preventing
financial accidents from turning into massive deflationary collapses -
our S&L bailout of the 1980s, far from being unique, was replicated in
scores of countries around the world, most extravagantly in Mexico
right now, where a massively expensive (and controversial) bank
bailout is underway.
OK, so what about pressure on living standards? We First Worlders
have to be very careful here, since, as I argued earlier, the initial
European rise to wealth depended largely on the colonies, and while we
can argue about the exact contribution of neocolonialism to the
maintenance of First World privilege, it's certainly greater than
zero. It was embarrassing to hear Ralph Nader and the Fair Trade
Campaign describe NAFTA and the World Trade Organization as threats to
U.S. sovereignty, echoing the rhetoric of Pat Buchanan; Washington has
been abusing Mexican sovereignty for over a century - which is why
it's a good idea to stop saying globalization when you mean
imperialism.
But I'm not going to deny that plant relocations to Mexico and
outsourcing contracts in China have put a sharp squeeze on U.S.
manufacturing employment and earnings, and the threat of those things
has greatly reduced the bargaining power of U.S. workers. How much has
this contributed to downward mobility and increasing stress? The
econometricians say that trade explains, at most, about 20-25% of the
decline in the real hourly wage between 1973 and 1994. (The real wage
has actually been rising for the last five years.) That still leaves
75-80% to be explained, and the main culprits there are mainly of
domestic origin. I'd say an important reason that trade doesn't
explain more of our unhappy economic history since the early 1970s is
that 80% of us work in services - and a quarter of those in government
- which is largely exempt from international competition. What did
"globalization" have to do with Teddy Kennedy and Jimmy Carter pushing
transport deregulation, or with Reagan's firing the air traffic
controllers, with Clinton's signing the end-of-welfare bill, or with
Rudy Giuliani being such a repressive pig? What does "globalization"
have to do with cutbacks at public universities or the war on
affirmative action? While lots of people blame the corporate
downsizings of the 1990s on the twin demons, globalization and
technology, the more powerful influences were Wall Street portfolio
managers, who were demanding higher profits - which they have gotten,
by the way, which is one of several reasons why the Dow has done so
well.
And when did internationalization become something feared and
hated in itself? I got a piece of email a few months ago from a
feminist group claiming that globalization was threatening to
undermine commitments made at the Beijing women's conference. But what
is the Beijing women's conference but a kind of globalization? A
couple of women who attended that conference told me that contacts
made there by some Latin American women's groups allowed them to
organize for the first time against domestic violence. Isn't that both
global and good?
Now there's no reason, as Keynes said, why a British widow should
own shares in an Argentine railway. Nor is there any reason why
Bankers Trust should run Chilean pension funds, nor is there any good
reason why GM should be taking advantage of Korea's crisis to buy up
that country's automobile industry. The case is a bit murkier when it
comes to relative peers - what precisely is so horrible about Toyota
running plants in Tennessee, aside from the ecological horrors of the
automobile and the social horrors of capitalist production relations?
Surely there are things being traded now that wouldn't be traded
in a more rational, humane world. The only social gain in Nike's
producing shoes in Indonesia is claimed by Phil Knight and the
shareholders of Nike. Indonesian resources and labor would be much
better devoted to feeding, clothing, schooling, and housing
Indonesians than making $150 running shoes while being paid pennies an
hour. It's a tremendous waste of natural resources to ship Air Jordans
halfway around the world. Export-oriented development has offered very
little in the way of real economic and social development for the poor
countries who've been offered no other outlet.
But does that mean trade itself is bad? Does that mean the
movement of people across borders is bad? I thought the left opposed
xenophobia and embraced intercourse of all kinds among the people of
the world. Why do we find so many people lost in fantasies about
self-reliance, pining away for a lost world that never really existed?
Why, in other words, do so many people treat globalization itself as
the enemy, rather than capitalist and imperialist exploitation?
But we can hardly say "capitalism" anymore, much less socialism.
Instead, we say "globalization," and "technology." And that's bad for
both intellectual analysis and transformative politics.
Doug Henwood is the editor of LBO, author of Wall Street (Verso,
1997) and the forthcoming A New Economy? (Verso, 2000), which has a
chapter on "globalization," that develops these arguments at some
length.
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