Sunday, August 15, 2010

Winners and losers

What is striking is that the same groups that emphasize that there are no winners and losers with gobalization; that it is beneficial for everybody, they constantly remind us of how important it is that “we keep our edge”, or “improve out competitiveness”, that we upgrade our society so that we are in the forefront of research and technical development. The columnist Thomas L Friedman writes in the World is Flat that:
“So if the flattening of the world is largely (but no entirely) unstoppable, and holds out the potential to be as beneficial to American society as a whole as the past market evolutions have been. How does an individual get the best out of it? What do we tell our kids?. There is only one message: You have to constantly upgrade your skills. There will be plenty of good jobs out there in the flat world for people with the knowledge and ideas to seize them. I am not suggesting that this will be simple. It will not be” (Friedman 2005)

This is echoed by politician from all kinds of camps and by institutions such as the European Union's vision 2020.
“Our economies are increasingly interlinked. Europe will continue to benefit from being one of the most open economies in the world but competition from developed and emerging economies is intensifying. Countries such as China or India are
investing heavily in research and technology in order to move their industries up the value chain and "leapfrog" into the global economy. This puts pressure on some sectors of our economy to remain competitive, but every threat is also an opportunity. As these countries develop, new markets will open up for many European companies”.(European Commission 2010)

Clearly, if is is so important for the USA and Europe to be ahead of the pack, it must be because the ones falling behind are “losers”, i.e. globalization is actually more of a threat for them than an opportunity. Why can't we just relax a bit, spend our energy on cleaning up the environment, reducing our ecological foot-print and enjoy a good life, instead of being coerced into working harder and harder to keep the edge? This, if anything, is the big failure of the globalized market economy. Especially as the actual benefits of unfettered global trade are fairly small.

Even the free trade oriented World Bank states that the "costs" for the current situation compared to full liberalisation corresponds to 0,7 percent of the GDP (World Bank 2007), hardly a “make or break” situation. This was eloquently expressed by the English worker Frank Owen, a character in Robert Tressel's novel, The Ragged Trousered Philantropists from the turn of the previous century:
"We’ve had Free Trade for the last fifty years and to-day most people are living in conditions of more or less abject poverty, and thousands are literally starving. When we had Protection things were worse still. Other countries have Protection and yet many of their people are glad to come here and work for starvation wages. The only difference between Free Trade and Protection is that under certain circumstances one might be a little worse than the other, but as remedies for Poverty, neither of them are of any real use whatever, for the simple reason that they don’t deal with the real causes of Poverty" (Tressel 1955).

Don't misunderstand me. I am not AGAINST globalization. I believe that free movement of goods and of people are human rights. I believe that, in total, there have been more benefits than bad things coming out of globalization, but then I speak about globalization as more than a narrow economic thing. I think of the globalization of human rights, of the internet, of the fact that dictators all over the world don't get away so easily anymore. There are draw-backs and there are benefits of globalization and depending on how the rules are bent it can be good for one and bad for another one. The current globalization has partly been driven, or should we say hi-jacked as a capitalist project opening up all aspects of human life to exploitation. And in that scenario we all have to continue working harder and harder.

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