Globalization has always been a scam. It has always been a trade of something very valuable for a vague and quite unenforceable promise of enormous benefits for all. What we traded away was sovereignty, our sovereign right to control access to our markets, our right to employ tariffs as an instrument of state policy. And we surrendered that to just whom exactly? Well to corporations, multi-national corporations that have such a terrific track record of honouring vague, unenforceable promises. Now power has shifted, irretrievably, from nation state to corporation. Nowhere is this more evident than in the United States with its "bought and paid for" Congress implementing corporatism at the expense of democracy.
An analysis published in The Guardian reveals that our leaders not only surrendered our sovereignty but abrogated their ongoing but unmentioned responsibility to maintain control of globalization.
After relying on it to deliver years of growth, lift millions from poverty, keep living standards rising and citizens happy, nation states look to have lost control of globalization.
In the short term, that leaves policymakers looking impotent in the face of fast-moving markets and other uncontrolled and perhaps uncontrollable systems -- undermining their authority and potentially helping fuel a wider backlash and social unrest.
..."In times of economic recession, countries tend to become isolationist and retrench from globalization," says Celina Realuyo, assistant professor of National Security affairs at the US National Defense University in Washington DC.
"Given the increased number of stakeholders on any issue -- climate change, the global financial system, cyber security -- it is unclear how traditional nation states can lead on any issue, let alone build consensus globally," she said.
The financial system, the Internet and even the supply chains for natural resources have quietly slipped beyond effective forms of state control.
These instruments of globalization have delivered huge wealth and kept economies moving with arguably greater efficiency, but can also swiftly turn on those in authority.
...It's unlikely that nations can genuinely pull back from globalised systems on which they have become reliant.
"The Net sees censorship as damage and routes around it," computer science guru John Gilmore said in 1993. In the modern, high-speed globalised system, one could say the same of attempts at financial and economic restrictions.
Many areas of the global economy have also become effectively "ungoverned space" into which a host of actors -- from criminals to international firms such as Google and Goldman Sachs to countless other individuals and groups -- have enthusiastically jumped.
International companies and rich individuals move money -- and even entire manufacturing operations -- from jurisdiction to jurisdiction to seek low wages, avoid tax, regulation and sometimes even detection. In many states, that helped fuel a growing wealth gap that is self producing new tensions.
..."For most of the last decade, growth and economic activity in many places has been driven by forces that were inherently unsustainable," says Simon Derrick, head of foreign exchange at Bank of New York Mellon.
"What's happening now is these... are coming under pressure and it's getting to the stage where that can no longer be ignored. But none of these issues are going to be politically easy to do anything about."
And yet we will struggle back against globalization and we will win if only because the result is essentially pre-ordained. Global corporatism, let's call it what it truly is, functions on a construct of assumptions that are increasingly at odds with reality. It is based on economic models well suited to the 19th and 20th centuries that are losing credence in the 21st.
During the 20th century mankind tripled in population but consumption increased six fold. And in the first decade of the 21st century, the consumption footprint of the emerging economic superpowers has added enormously to this burden. For globalization that would be great if only there was plenty to go around, more than enough resources to exploit. But that's not the case. We've run into a wall, actually a succession of walls. In the process we will inevitably shift from growth-based economies into allocation-based societies. Growth has been a powerful salve to soothe the less-desirable impacts of globalization but once we reach the growth limits of our inescapably finite planet, the balance shifts and globalization takes on the visage of a predatory scourge.
The way ahead for global corporations probably lies in global corporatism, the rise of the corporate state. There are eerie signs that the lines are already being drawn with corporatism forging alliances with the political far right, the religious radical right and the emerging political militarism. This has been well chronicled by the likes of Andrew Bacevich, Chalmers Johnson, Chomsky and others. That presents the prospect of an intense struggle to preserve democracy that may be faced by our children and grandchildren even as they're being powerfully conditioned to embrace indifference, apathy and submissiveness.
The growth of state corporatism is rarely recognized for the actual threat to democracy it poses. State corporatism, as in the case of America's "bought and paid for" Congress, seeks to implement, domestically, what globalization has achieved abroad such as low wages, tax exemptions, and gutted labour and environmental regulation. That is precisely what organizations such as ALEC, the American Legislative Exchange Council, exist to achieve. It is the vehicle by which corporatism obtains direct, political power. The corporatist cabal is now actually writing bills for compliant legislators to enact. Public interest is tossed out the window when corporate interest prevails.
A Prophetic Interview with Sir James Goldsmith in 1994 (Free Trade)
Mel Hurtig: The Truth About Canada - He talks about his book, and gives out statistics like that the 30 economic indicators he looked at show Canada was better off pre-NAFTA. Another stat is that only "2.4% of direct foreign investment in Canada created new jobs, 97.6% was for takeover of existing companies which diverted the profits to offshore tax havens." And our wonderful, patriotic, Canadian banks? "55% foreign takeovers financed by Canadian banks."
Do you know what happens to the ordinary Canadian if they don't report off shore bank accounts? What a freaking joke globalization is. It's great for people like the Mellons and PM Harper. ASME
@Anon 10:36 - thanks so much for the links. Goldsmith is entirely right. We outsource jobs, using the unemployment we leave in our wake to increase corporate profits. The notion that value added wealth is to be divided between capital and labour is shattered.
Companies, like Nike, may take their jobs to VietNam but they realize their employees or the VietNamese people won't buy their $100 sneakers. So they're dependent on the same labour force they screwed out of their jobs to keep buying their product. It's nothing short of predatory.
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