Worlds Apart

Civil Society and the Battle for Ethical Globalization

John D Clark, John Clark

• Publisher: Routledge
• Year: 2014
• eBook ISBN: 9781136533129
• Edition: 1
• Topic: Biological Sciences
• Subtopic: Ecology
• Index: Biological Sciences

Globalization is one of the most politically charged issues of our time. This book aims to bridge the divide between its advocates and its critics, but, rather than trying to find middle ground, the author looks at globalization through the lens of poor people and poor countries, arguing for a different management of global changes that ensures everyone a share in its opportunities. His is a call for ethical globalization. An influential and globalizing civil society has a great opportunity to be a critical player - but this could be a brief window. Its advocacy largely pillories deficiencies in the system instead of promoting viable alternatives. The author seeks to change this by applying his experience from both sides of the ideological divide - working with NGOs, governments and the World Bank - to analyse the system's faults and suggest a fresh framework for transforming global relations and redressing injustices.

Part One

The Impact of Globalization

1.

Globalization—Agony or Ecstasy? Setting the Scene

Today’s real borders are not between nations, but between powerful and powerless, free and fettered, privileged and humiliated. Today, no walls can separate humanitarian or human rights crises in one part of the world from national security crises in another. … We have entered the Third Millennium through a gate of fire.

—KOFI ANNAN, NOBEL PRIZE SPEECH, DECEMBER 10, 2001

This book tells the story of globalization. Like others already published, it sees the crumbling of national boundaries today as one of the most powerful geo-political forces of our times. Like others, it finds that these forces have brought new opportunities as well as heightened risks—but that the distribution of these increases inequalities in terms of income, wealth, security, and power. Hence, like other books, it argues that what is needed is not a Canute-like bid to turn back the tide of globalization but a Herculean effort to harness its power for the common good.

From this point, however, it takes a different route. It argues that civil society is emerging as the new critical player. Democracy, as we are familiar with it, has been thrown into turmoil—because globalization affects politics as profoundly as it does economics. This book explores the diverse issues of global change through the lens of poor people and the groups they associate with, and it explains why globalization is so controversial. It describes how civil society organizations from North and South¹ could hold the key to changing its course—insisting that it is managed so as to empower the weak and enrich the poor.

Civil society—the collective activities of citizens for purposes of social change rather than individual gain—is far from homogenous, and not always civil. But paradoxically, the same processes of globalization that have made many rich and marginalized others, and that are so fiercely resisted by a growing protest movement, also afford civil society opportunities to grow immeasurably in strength.

New technology and communications enable a global civil society to emerge. The failure of national governments to wrestle effectively with global challenges has exposed the deficiencies of democracy and created a vacancy for new policy actors. The shabby scandals of corporate greed have dented faith in untrammeled markets and opened opportunities for market curbs, independent watchdogs, and codes of corporate ethics. And the proven ability of civil society to “get it right” so often, both in providing services and in advocating change, has inspired public confidence. Civil society, therefore, stands at the cusp of unprecedented opportunity—but this may be just a brief window. Already a major challenge to civil society has been leveled, questioning the legitimacy of the prominent voices in the policy debate.

Maximizing this opportunity calls for a strong vision and concerted strategy. Civil society will never be unified—its strength lies partly in its diversity—but a critical mass of respected activists, working together and with the confidence of a growing support base, could trigger a chain reaction of reform that defenders of the status quo would find difficult to stop. We are now starting to see such a broad coalition emerge.

Our bipolar world is on a diverging course in two senses. First, the gap between weak and powerful is growing shamefully. And second, the faith binding each school to its opposing philosophy and world view is strengthening such that the space for intelligent dialogue is shrinking. The cheerleaders of globalization and their critics might just as well live on different planets; the rich and poor virtually do so. We are worlds apart.

A global civil society coalition—spanning radicals, reformers, academics, activists, faiths, feminists, pressure groups, unions, charities, consumer groups, and others—such a grand coalition could bridge these gaps. It could construct a common ground, combining realism and idealism, that would be compelling to all but entrenched vested interests and the politically comatose; it could generate the political will for a coordinated management of globalization that brings benefits to all; it could create a popular demand for ethical globalization.

CONFLICTING WORLD VIEWS

The protagonists of the globalization conflict do not fall neatly into the left-right spectrum. Indeed the political fissure between internationalism and parochialism is to a large extent displacing old left-right divides (Kaldor 2000). Both the New Left and modernizing marketeers believe in international capitalism, embrace technological change, and think market integration will bring democratic values and human rights on its coattails (see, for example, DFID 2000a). Conversely, the old left and nationalistic conservatives distrust these trends; they think the growing power of global institutions is eroding national sovereignty. Though they see some gains, they are more mindful of the losses and hence want to minimize them through protection (Held 2000). The growth of nationalistic parties, from Netherlands to Thailand, and the clamor for increased import protection are reactions against globalization every bit as forceful as the anticapitalist protests (Hoffmann 2002). Two main schools of thought predominate.

The “agony school” thinks globalization breeds exclusion. It believes passionately that globalization causes misery for the poor in both industrialized and developing countries, widens inequalities between and within countries, heightens risks—particularly vulnerability to job loss and financial crises—weakens the voice and power of ordinary people, leads to a cultural takeover by the United States and the West as local choices are stifled, and threatens the planet through short-term policymaking (Hurrell and Woods 1999).

With less passion but equal certainty the “ecstasy school” holds that globalization is good for everyone—that, through integrating, the prosperity of the whole will become much more than the sum of isolated national economies. It thinks countless opportunities for enterprise and employment are lost due to border regulations and so all would gain from market openness—particularly the poor. It recognizes that there are bumps in this road—for example, risks of currency crises—but these are small compared with the potential benefits. This school sees third-world poverty and dangerous schisms between people not as detracting from their case but as illustrations of the danger of countries being left behind in the globalizing world (DFID 2000a).

There are good arguments and spurious claims on both sides of this debate. Part One of Worlds Apart analyses both cases to seek clarification as well as conclusions. It looks at the issues particularly through the lens of poor people and poor countries.

WHAT DOES GLOBALIZATION MEAN?

The misunderstanding between the two schools begins with the imprecision about what globalization actually means. Most who criticize the current order are angry to be labeled anti-globalization and point out that their movement is as global as capitalism itself. They mostly accept—even welcome—increasing transactions across national boundaries but resent the way this process is managed to serve largely the interests of multinational capital. It is the so-called neoliberal agenda to which they object;² they comprise an “anti-global capitalism” movement.

The kernel of the conflict is that there is not one globalization but many. Hoffmann (2002) describes three dimensions: economic globalization and the growth of capitalism, whose central dilemma is between efficiency and fairness; cultural globalization, whose dilemma is between uniformity (or Americanization) and diversity; and political globalization, characterized by the power of industrialized countries and US hegemony. The impact of these world changes is not just to expand markets but also to transform politics and to give birth to a new type of social and political movement (Woods 2000).

A consistent civil society message is that powerful governments and the international institutions they control should tolerate more diverse approaches to integration. There is a popular view that all developing countries are being pressed to fall into line with a “cookie-cutter style” neoliberal economic management that may not fit the countries’ contexts. The tools to force this conformity are structural adjustment programs; these are commonly portrayed by civil society as hurting the poor and undermining Southern governments’ efforts to protect their vulnerable industries. They are viewed as a hideous intrusion—a sort of “economic cleansing”—that is unconscionable, increases dependence on the global economy, and heightens vulnerability to crises.

There is a parallel in the natural world. The bio-systems that are most resilient to shocks and survive longest are those brimming with diversity. If this is supplanted by a high-yielding mono-crop, the total output may be higher but the risk of calamity is vastly increased. Many in civil society see globalization as courting homogenization: replacing rich diversity with conformity. The world approaching, they say, will have one set of enterprises (the transnational corporations, or TNCs), one set of political principles (liberal democratic capitalism), one dominant culture, and one set of genetically modified crops (Rifkin 2001). It may run faster, but it will often crash; when it does so, the poor will be hurt most.

Is this an overly Orwellian portrait? Globalization needn’t be like this. At its broadest, globalization is simply the elimination or reduction of barriers to human interaction across national boundaries. Barriers can be dismantled through either policy or technological change. Stated thus, all but the most xenophobic would welcome it. Because there are so many forms of human interaction, there are different manifestations of globalization—each with its own set of controversies:

• New technology: the shrinking of the world due to cheaper and less restricted travel, cheaper and more widespread telecommunications, and the penetration of cheap information technology (Castells 2001); most welcome this.

• Political conformity: the convergence around increasing numbers of policy norms where divergence becomes impracticable in an “interconnected global political order” (Woods 2000); some describe this as harmonization, others as the erosion of sovereignty or “forced harmonization”—the loss of ability to pursue national political alternatives (Rodrik 1999).

• Cultural exchange: increased social and cultural interaction is to some an enrichment but is resented by others as unidirectional—the spread of Western (particularly American) culture and the dominance of English as a universal language (Huntington 1993; Barber 1995).

• Global problems: the need to cooperate to tackle global problems, such as climate change, HIV/AIDS, narcotics trade, and terrorism (Hutton and Giddens 2001).

• Economic relations: the removal of government-imposed barriers to foreigners as customers, investors, owners, or suppliers (Hirst and Thompson 1999). There is not one marketplace but many, each liberalizing at its own pace. This is the most controversial and most dominant aspect of globalization.

Box 1.1 The technology drivers of globalization

The cost of transmitting a million megabytes of information from Boston to Los Angeles has fallen from $150,000 in 1970 to 12 cents today.

The cost of a three-minute phone call from New York to London was $300 in 1930 and 20 cents in 2000 (1996 prices).

In 2001, more information could be sent over a single cable in a second than was sent over the entire Internet in a month in 1997.

From 1930 to 1990 the cost per mile of air travel fell from 68 to 11 cents (1990 prices).

The number of international air passengers rose from 75 million in 1970 to 409 million in 1996.

From 1960 to 1990 the cost of a unit of computing power fell by 99 percent in real terms.

Six megabytes of computer memory in 1999 cost about $1; in 1970 it cost about $31,000.

In January 1993 there were 50 sites on the World Wide Web; 8 years later there were 350 million.

Sources: UNDP Human Development Reports; World Bank; The Economist; Financial Times.

It is vital that the two sets of protagonists listen to each other’s views about the direction of globalization, as the current debate is characterized by misrepresentation. Few in the agony school deny that trade is important, but there are different notions of what trade means. The dictionary defines it simply as “buying and selling.” Modern economists tend to assume the words “between nations” follow; they focus only on trade that uses hard currency and is conducted in free markets. We need to dissect such assumptions.

Since all money in an economy ultimately derives from commerce, trade is self-evidently important. But what is often overlooked is that commerce can be internal or external. Western economists often over-emphasize foreign trade—arguing that countries who opened their markets fastest also grew fastest and reduced poverty. They imply that trade must be external if it is to add to national prosperity (yet the world has enjoyed economic growth for most of the last fifty years without trading with a single other planet). In reality, the evidence that foreign trade is better for the economy or for poverty reduction than domestic trade is pretty flimsy. The only clear case is that external trade is much more important for small countries than large ones (see Chapter 3). This is an intuitive result. Trade is simply about matching producers and consumers; you may be able to find all the customers you need in a large economy but have to look outside the borders in the case of a small one. Advice given about opening markets should be more tailored to the country’s situation; perhaps small countries could achieve the benefit of a large internal market by cooperating with one another (Chapter 11).

Globalization is not a new phenomenon. In many respects the world was more integrated one hundred years ago than it is today (Crafts and Venables 2001). There were fewer barriers to trade; the mobility of people was much easier (most countries didn’t even require passports); and there was pretty free trade in currencies, with much of the world using the currencies of their colonial powers. Then two world wars and a severe economic depression evinced protectionist instincts. It took until the 1970s to reduce tariffs to their levels at the century’s start. In the same decade a global communication system arrived that allowed twenty-four-hour global money markets to take off, and today’s era of globalization was born (Giddens 1997).

What is new is that today’s globalization is more selectively and selfishly managed, primarily by Western governments—and principally by the United States. It is not market openness that causes resentment in poor countries or riots at international meetings, but the self-serving way in which some markets are liberalized while barriers remain in others.

WHY IS GLOBALIZATION SO PAINFUL?

Basic economic textbooks talk about the different factors of production—such as raw inputs, labor, and capital—each of which has its own factor market. When any of these is liberalized, it increases the returns to its owners of that factor. The current order emphasizes liberalizing markets for capital, high-tech manufactured goods, modern services, and highly skilled labor but resists liberalizing markets in labor-intensive manufacturing, agricultural products, and unskilled labor, and strictly controls the market in “intellectual property rights” (patents and copyrights) where previously there was a virtual global free-for-all (Chapter 2).

It would be difficult to conceive an approach to globalization more biased toward the rich (who own capital, high-tech manufacturing, and the service giants, or who are Fortune 500 managers) and more loaded against the poor (the laborers and farmers in developing countries). Today’s management skews the relative prices in all these markets in favor of the rich so that the wealth gap between rich nations and poor has grown; within rich and poor countries alike, rich people outstrip the poor (Hurrell and Woods 1999; Wade 2001a). This does little for the popularity of globalization.

A caveat is called for. I don’t believe there is any deliberate conspiracy to hammer the poor. Pro-globalizers strongly bel...

Table of contents

• Cover
• Halftitle
• Title
• Copyright
• Contents
• Figures, Tables and Boxes
• Preface
• Acknowledgments
• PART 1. The Impact of Globalization
• PART 2. How Global Change Affects Civil Society
• PART 3. The Path to Ethical Globalization
• Appendix 1. The Theory of Comparative Advantage
• Appendix 2. The World Trade Organization
• Acronyms and Abbreviations
• Notes
• References
• Index
• Author’s Biography