The political threats to globalisation

If you had to define “globalisation” with an image, what would it be? A container ship from China stuffed with toys and T-shirts? A programmer tapping at a keyboard in Bangalore? A plane circling gloomily over Heathrow airport?

Most people’s pictures of globalisation are to do with economics, technology and business. But before markets, modems and manufacturers could do their work, political changes had to take place. The foundations of the globalised business world are political – and so are the biggest threats to the system.

The challenge to the globalisation consensus comes from below. Political elites in the US, Asia and Europe are struggling to convince citizens that globalisation is not just a game that benefits the rich. If the argument is lost in any of the major world economies, the political consensus that underpins globalisation could unravel.

That consensus is a recent creation. The political changes that made globalisation possible took place in a remarkably short period of time – from 1978 to 1991 to be precise. The first and most important development was China’s decision to turn from Maoism to the market, with the reforms initiated by Deng Xiaoping in 1978. A year later, Margaret Thatcher came to power in Britain. One of her first acts was the abolition of foreign exchange controls, easing London’s rise as a global financial centre and setting an example that was emulated internationally. Then, in 1980, Ronald Reagan took power in the US on a platform of deregulation and tax cuts – giving a huge boost to market ideology around the world. In the mid-1980s, the European Union committed itself to creating a single market.

In 1989, the collapse of the Berlin wall allowed eastern Europe – and Russia itself – to join the globalisation game. The 1980s also saw the discrediting of protectionist populists in the largest countries of Latin America. Finally, in 1991, came another huge change: the decision by Indian leaders to move away from the regulation and protectionism that had hobbled the Indian economy since independence.

So, in less than 15 years, the political elites in the power centres of the world had come to broadly similar conclusions. They embraced global business and market economics.

The result is a world in which it now feels as natural to do business in Beijing, Moscow and Delhi as in London and New York. But this world has been with us for less than 20 years. Previous eras of globalisation were ended by political upheaval – the outbreak of war in 1914 and the rise of fascism in the 1930s. So could the same thing happen again?

The most obvious threat is a crisis in the most important political and economic relationship in the world – that between the US and China. The Bush administration, despite its bellicose reputation, has been assiduous in avoiding confrontation with China; and the Chinese similarly have no desire for a clash with America – at least, not now. Globalisation has created a web of mutual interests. The real risk in Chinese-American relations is of miscalculation: a clash – whether over trade or Tibet or Taiwan – that escalates into something that does real damage. Combine a looming recession in America, a presidential election and the Beijing Olympics and you have a formula for potential trouble.

Over the longer-term, terrorism and climate change also pose risks to the system. Globalisation depends on ease of travel. But, in different ways, both global warming and global terrorism threaten the ability to hop on a plane at a moment’s notice.

But the biggest risk is that politicians simply begin to lose the argument for globalisation. A recent opinion poll showed that 58 per cent of Americans think globalisation is bad for the US and just 28 per cent think it has helped America. Ten years ago there was a narrow majority in favour of globalisation. Politicians are reacting to this shift. Democratic presidential candidates are taking an increasingly sceptical line on free trade. Republicans rail against illegal immigration.

In Europe, Nicolas Sarkozy, French president, has been arguing for protectionism on a European level. He wants to re-establish “community preference” – essentially higher tariffs against goods from outside the European Union. Mr Sarkozy does not have many EU allies yet. But the re-election of Silvio Berlusconi in Italy could change that.

Outsiders see the Indians and the Chinese as the greatest beneficiaries of globalisation. But the last Indian government lost a general election, largely because poor, rural voters felt left out by the boom. With another election in the offing, India’s politicians are not rushing to sign a new world trade deal. The political climate in a one-party state such as China is harder to gauge. But the authorities’ evident anxiety about rural unemployment, environmental protests and the wealth gap between the rich coasts and the poorer inland regions suggests that global capitalism can be a tough sell – even in China.

The sense that the poor have lost out as a result of globalisation has grown with the rise in world food prices. Hunger – that most traditional threat to ruling elites – is returning to many countries that have embraced globalisation.

Political leaders around the world are struggling to contain all these pressures and maintain the consensus that has made globalisation possible. But their task is getting harder. Globalisation was made possible by political change. But what politics made, politics can take away.

>>>If you had to define “globalisation” with an image, what would it be?

Cartelization.

The first symptom of cartelization is an unblanced exchange between organized industry. The next is the attempt of cartels to control foreign markets. Cartelization is not free market capitalism. Cartelization is an advocated new order of socialists. It is embraced to spread political dictatorship. We owe cartels our failure to expand American industry prior to Pearl Harbor. And now, history is being repeated.

the trouble with these cute articles is that they conflate free trade with things like the NAU. They’re not the same thing. The NAU is a profoundly bad deal for the American middle class. Free trade is a good thing when everyone plays by the same rules. But the USA has negotiated deals that have allowed foreign countries like China that give China profound access to the USA while (unofficially limiting US access to China.)

"A recent opinion poll showed that 58 per cent of Americans think globalisation is bad for the US and just 28 per cent think it has helped America."

I live in a rural area. 15 years ago just about the only places to work were furniture and textile plants. Today, only one furniture factory remains, and we have lost around 3,000 jobs. Our nation's trade policies have been horrible for us here. I'm not sure what it is at the moment, but last year our unemployment rate was at 30%, and I'd say nearly half of all people in my area on are some for of welfare or another. The only time the businesses are busy around here is at around the first of the month when government checks and food stamp payments go out. I don't know enough about economics to judge whether or not globalization is good for our country, but from what I've seen here where I live, it just sucks to no end.

Last year at our local community hospital, 79% of all babies born were paid for by Medicaid. I'm not even going to mention how many of these were illegals having anchor babies, because I don't want to hijack the thread lol.

NAFTA, GATT, and the WTO were going to explode free trade, spread democracies across the world, and lead us into economic interdependence that would do away with war, famine, and poverty. They were also going to set the table for a world government. The elitist intellectuals cheered, the capitalist free traders cheered, the socialist engineers cheered, and the corporate owned media went into a full court press to convice the average guy that life would be better for him in the long run.

Fifteen years later it is an unmitigated disaster as the globalist elitist got richer and the average guy got the shaft. The average guy has seen life get worse (not better) and all the wishful thinking and PR don’t seem to be working anymore. It must be getting really bad if those who are the architects of this mess are beginning to worry that they can no longer keep the masses on board the globalist express to the future of a new world order.

But I know, anyone who mentions this is a gold bug or a closet communist, or is wrong that the average guy is not living a better life. Keep telling us that as the U.S. taxpayer is brought in to bail out the billionaires and make sure that they get taken care of to keep this global free trade system going. Who cares if we are the biggest debtor nation and have gutted our industrial base and our workers are now expected to compete with slave labor in other countries, let’s keep this going as global free trade can do no wrong (sarcasm).

Ditto. Problem with the GOP is they trust the business class to make all the decisions because free markets will somehow sort it all out. Problem is when you ask one of these pro corporation types, don’t they worry how some of their decisions may affect a large region of the US, their response is they are concern only about the bottom line and their stockholders and do not see any connection between causing discontent in their country (assuming they believe in sovereign states) and their ability to do business in the future. Now they are scratching their harvard/yale wooden heads and are becoming concern with the anti business sentiment rising in the US and the possiblity that the Dems may come to power to kick them in the butt??!!!! What were they thinking??? Ironicly they understand the consequences of pissing off Joe customer, but they don’t seem to understand the consequences of pissing off Joe voter.

I believe the thought was correct but two major problems:

1) It 40 years ahead of it’s time. The information exchange and global culture war has just begun.

2) Policies were not put in place to protect the average American (those pesky 95% of us making under $100k a year). We exported all our real wealth and won’t get it back for a long, long time. And yes, the elite politicians and megacorporations got far richer shipping jobs overseas but what really has American gotten back in return?

Globalization has already turned the USA into a Third World Country. We lack jobs, and immigrants are pouring in. People are loosing their homes, and devils are taking over our schools trying to turn kids into perverted people. Lawmakers are accepting bribes, so who do we turn to now?

"Globalization has already turned the USA into a Third World Country. We lack jobs, and immigrants are pouring in. People are loosing their homes, and devils are taking over our schools trying to turn kids into perverted people. Lawmakers are accepting bribes, so who do we turn to now?"

Turn to yourselves. Study Vaclav Havel and nonpolitical politics. Don't use violence, as it's unnecessary. Dig for any signs of fascism or communism in groups that claim to be the answer, especially if they talk a lot in general terms about the Constitution and freedom. Avoid groups that are revealed to have had any fascist or communist opinions/activities/leaders.

Yes, the timing has always been difficult to predict. If nothing changes it will eventually happen and your 40 year estimate is probably pretty good. If we go through a huge financial collapse from the current situation it will be used as an opportunity to accelerate the globalization of America. Either way, the current system in place will continue to erode what is left of the middle class. Without a middle class, we are back to the days of the aristocrats and the serfs.

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