Global-Eye (in the Triangle)-Zation
In DARK AGES AMERICA: The Final Phase of Empire, Morris Berman characterizes the USA: The United States is a belligerent, overstretched empire, saddled with huge deficits and a hollowed-out economy, vulnerable to terrorist blowback and, worse, collapse if foreign creditors finally pull the plug. The rot is cultural and spiritual, too: Americans are cold, alienated shopaholics immured in suburban anomie, each encased in a private bubble of iTunes and media noise and indifferent to the public good. Culprits include globalization, technology and, more fundamentally, the individualism and commercialism that is the bedrock of American identity. Because American civilization is a “package deal,” the author considers it impervious to piecemeal reform and, given Americans’ ingrained “stupidity” and willful blindness, unsalvageable. Berman’s attempts to tie every American dysfunction to an all-encompassing sickness of soul overreaches, leading him to lump together serious issues like poverty and the Abu Ghraib outrages with trivialities like annoying cell phone yakkers or the “freedom fries” phenomenon, which he bemoans as “symbolic of an emptiness at the core.”
Concerned with policies and political issues, one of Athena’s spiritual cries for our generation is “globalization.” The history of globalization is rooted in the marriage of religion, trade, armies, industry, technology, agriculture and banking. Before the Silk Road, long before 1492, people began to link together disparate locations on the globe into extensive systems of communication, migration, and interconnections. This formation of systems of interaction between the global and the local has been a central driving force in world history. Whoever controlled trade controlled the powerbase.
Global means the expansive interconnectivity of localities — spanning local sites of everyday social, economic, cultural, and political life — a phenonmenon but also a spatial attribute — so a global space or geography is a domain of connectivity spanning distances and linking localities to one another, which can be portrayed on maps by lines indicating routes of movement, migration, translation, communication, exchange, etc.
Globalization is the physical expansion of the geographical domain of the global — that is, the increase in the scale and volume of global flows — and the increasing impact of global forces of all kinds on local life. Moments and forces of expansion mark the major turning points and landmarks in the history of globalization
The globalization debate has rightly been called the grand ideological battle of the 21st century. New World Order globalization is equivalent to cultural imperialism. It has pitted student activists against corporate heads, union members against environmentalists, Mexican peasants against officials of the International Monetary Fund. Their main concern: the lack of citizen participation in decisions of international economics and trade policy. Their main enemy: institutions and corporations that work outside of the purview of democratically elected governments.
In essence, globalization is redrawing the old ideological lines of the cold war. No longer do people debate the merits of capitalism and communism. Rather, issues such as international trade, corporate power, national economic sovereignty, human rights and the transformation of indigenous cultures have moved to the center of the debate. And if there is new geopolitical line to be drawn it cuts not the East from the West but the North from the South.
What is “globalization” and why should anyone care about it? There are a lot of different answers to this question, depending on whom you ask. The dominant view among people who write and speak about the issue is that globalization is an inevitable, technologically driven process that is increasing commercial and political relations between people of different countries. For them, it is not only a natural phenomenon, but primarily good for the world, although it is recognized that the process produces both “winners and losers.”
There is a much deeper skepticism about the process among the general population. Most Americans believe that trade had reduced U.S. jobs and wages through Offshoring. This widening gap between elite and public opinion is striking, because it is not difficult to imagine how economic globalization might lower living standards for the majority of people in the United States. The idea that increasing competition from low-wage imports would drive U.S. wages downward seems only logical.
The fact that the real wage of the typical American worker has actually fallen over the past 25 years, as the economy had become increasingly globalized, is also an indicator that something is wrong with the process of globalization. According to traditional economic theory, wage and salary earners gain from more open trade, because they get cheaper consumer goods. But it is clear, according to universally accepted measures of wages and salaries in the United States, that for most employees these gains from trade have been more than canceled out by other forces that have pushed their pay downward.
Debate within the economics profession has yet to influence the agenda of the major policy makers or corporations, who continue to strive for increasing globalization. Who gains and who loses from this process? We can define globalization as an increase in trade and capital flows across national boundaries.
What does the balance of payments include? It is divided into two parts: the balance of trade, and what economists call the current account, because it includes more than just trade—things like foreign interest payments and transfers. While “current account” is the proper term, many people use “trade balance” and “current account balance” interchangeably, since trade is the biggest item in the current account.
The second part of the balance of payments is called the capital account. This measures the purchase and sale of assets across national boundaries. A simple way to distinguish between the two accounts of the balance of payments is that the capital account measures international investing, borrowing, and lending—whereas the current account measures just about everything else.
The international balance of payments accounting is very similar. If we import more than we export, we must either borrow or sell assets internationally, in order to finance that trade deficit. That means we are adding to our foreign debt. (This is not to be confused with our national debt, which is owed mainly to people and institutions here).
Horrific, unsustainable debt burdens raise the question of whether some countries might be better off just defaulting on their debt—that is, refusing to pay it—even if they were punished by international banks and investors. The answer to this question depends partly on how one evaluates thegains that they get from international trade and investment—i.e., increasing globalization. Is globalization progress? Nearly all of the experts and journalists who write about this subject would answer at least a qualified “yes” to this question.
For some, there is a natural progression from the medieval fiefdoms of Europe to the nation-state, to the increasing importance of international institutions such as the UN or the IMF. Others are in less of a hurry to build the institutions of world government, but nonetheless see the increase in trade and commercial relations between countries as a step forward for humanity. And almost everyone views the process of globalization as inevitable in any case, flowing naturally from advances in communications, transportation, and other technological changes.
It is certainly possible to imagine a world in which globalization could raise the standard of living for the majority of the world’s people. It could increase the size of markets and the efficiency of production, allow countries who are short on capital to borrow from those who have a surplus, and even break down some of the barriers and prejudices that have contributed to military conflicts in the past. But the historical record of the current era of globalization is quite another story.
As noted above, the typical wage earner in the United States has suffered a decline in real wages since 1973. It is important to recognize that this decline is at least partly a result of a choice to pursue a particular form of globalization. Our political leaders have chosen to negotiate, over a period of decades, a set of rules that has thrown U.S. workers into increasing competition with much lower-paid counterparts throughout the world. This has had the effect, not surprisingly, of lowering wages for most Americans.
The latter set of problems has been recognized, to varying degrees, by pro-globalization economists and policy-makers. However, these people tend to emphasize the benefits or potential benefits of globalization. For trade, they rely on a simple but abstract economic theory: the principle of comparative advantage. This theory asserts that all countries are made better off by moving toward freer trade. The idea is that different countries are relatively more efficient at producing different things. On this basis it is easy to demonstrate that the world can benefit if each country specializes in the production of those goods that it can produce most efficiently and trades with other countries who do likewise.
There are a number of problems with this theory when it is applied to the real economy. First of all, even the theory itself does not assert that everyone in each country is made better off through reer trade. There are “winners and losers,” and the theory only predicts that for the entire country the gains outweigh the losses.In other words, there is a profound bias against any kind of national economic development strategy.
The obvious problem with this application of the theory of comparative advantage is that it rules out most of the strategies that the developed countries of the world have used in order to attain the standard of living that they enjoy today. The extreme case can be seen in Russia, where industry has been practically dismantled under IMF supervision since the demise of the Soviet Union. The country now produces almost nothing but energy. In the process, Russia’s economy has shrunk by more than half in just a few years, and they have suffered an increase in poverty and declines in life expectancy that are historically unprecedented, in the absence of war or natural disaster.
Indeed, critics of globalization would argue that the experience of the last two decades—in which the architects of the global economy have increasingly re-crafted the economies of most of the world towards their ideal of unified international markets—has been a failure by almost any measure of economic performance. And there is no reason to assume that institutions that are controlled by a small group of people from one or a handful of high income countries would adequately represent the interests of the world’s poor and working people.
For the most prominent policy makers and writers on this topic, “reform” is synonymous with the opening of markets, privatization, and reducing the role of government in the economy. Indeed this has become the standard definition of reform in the media. For most of these people, the recent economic turmoil is just a bump in the road toward a more integrated world economy and the social progress that it promises. They generally favor increased regulation for “emerging market” banking and financial systems, as well as greater “transparency”—that is, better information for investors.
In the United States, whose government has been the most powerful advocate of the current form of globalization, measures to ameliorate the worst excesses of the global economy—either here or abroad—will most likely not be warmly received. If history is any guide, proponents of such changes throughout the world will be dismissed as “trying to turn the clock back,” “protectionists,” and worse. And, as often happens in the real world, some of their leaders or followers—as in Malaysia or Russia today—will have right-wing or authoritarian ideologies attached to them.
But this does not mean that their pro-national, regional, or local economic development policies are misguided. Or that the men who have been working overtime to “write the constitution of a single, global economy” are right. Restructuring of global politics and economics that may prove as historically significant as any event since the Industrial Revolution. This restructuring is happening at tremendous speed, with little public disclosure of the profound consequences affecting democracy, human welfare, local economies, and the natural world.
So far, globalization policies have contributed to increased poverty, increased inequality between and within nations, increased hunger, human displacement, increased corporate concentration, decreased social services and decreased power of labor vis-a-vis global corporations. It looks like Zeus, (the ruling economic geopolitical power), will continue to have a huge headache, until the wisdom of Athena can be born or spring forth. It seems unlikely to be found in the current form of New World Order. If the mytheme prevails, some form of Hephaistus, some technology, will split the whole situation wide open for a new truth to emerge. Could it be cyber-culture?