Friday, November 18, 2011

Stop pretending there are only winners in the global market

 Obama: "Increase Competitiveness"!
"My principal focus, my number one focus, is going be making sure that we are competitive, that we are growing, and we are creating jobs not just now but well into the future"
What is striking is that the same groups that emphasize that there are only winners and no losers with globalization; 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 in 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 it 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?

There are inherent inequalities that drive the global trade. The global "division of labour" that is the basis for globalisation is as much a global "division of power" as the difference between the capitalist industrialist and his workers. Alf Hornborg shows how, in 1850, when England swapped cotton fabric for 1000 pounds with cotton lint for the same sum, it corresponded to an exchange of 4,000 hours of work in a textile mill with more than 32,000 hours in tropical cotton production, as well as the resource of 58 hectares of land (Hornborg 2006). All factors point to that the patterns of exploitation inherent in globalization are the same today. It is mainly because of the big difference in purchasing power of the "rich" as opposed to the poor that the rich can benefit from the cheap coffee from Nicaragua, the cell phone from China or the service of the call centre in the Philippines. And it is the knowledge of this that makes it so important "to keep the edge".
The text is derived from Garden Earth
"Competitiveness, which is usually measured in terms of unit labor costs, is a relative concept. One country’s gain is another’s loss. Restoring competitiveness in some member countries (Spain, Greece) would require others (Germany in the first instance) to accept deterioration in theirs." writes Daniel Gros in an relevant post, Europe's Competitiveness Obsession

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