Globalisation and World's Poor

Globalisation’ is of course a controversial term, defined in all sorts of different ways. That it has come into use in the last 10 years or so is an indication that something has been happening out there in the ‘real world’ to which it refers. I suggest that the currency that the word now has reflects the perception that the world is more interconnected and supposedly more interdependent than it was formerly, as a result of changes in the global economy – notably rapid movements of large volumes of money and the increased volume of trade – as well as of changes in communications and in information technology. These trends are related in turn and more controversially, with a variety of political and cultural changes, including perhaps especially the ideas of ‘deterritorialisation’, of the decline of the nation state and of a shift to politics of presence.1 There is plenty of room for argument about the absolute novelty of these trends, or about when they began, as Deepak Nayyar has argued, referring to the many parallels between the world economy at the end of the 19th century and the present. But ‘globalisation’ is also a justifying ideology, one that “claims that the world has moved permanently into a new and promising era; that the growing density of market relations allows more stable as well as faster growth (and) that a single set of policies – liberalisation of markets for goods and finance, small government and fiscal discipline – is best for capturing the benefits of globalisation” [Wade 2000]. Thus, globalisation is not the same as ‘economic liberalism’, but it justifies the pursuit of neo-liberal economic policies. Another aspect of this justifying ideology is what Thomas Frank calls ‘market populism’ [Frank 2001] – the views that markets as mediums of consent are more democratic than popularly elected governments, and that entrepreneurs, such as Richard Branson in my own country, or the likes of Bill Gates, are the champions of the common people. In this frame of reference criticism of business is represented as an act of elitism arising from contempt of the common man. It is the trade union leader, or the politician or intellectual who advocates a strong role for the state, who is represented as being the elitist reactionary.

Frank’s arguments recall for me those of Karl Polanyi in his perceptive work on The Great Transformation (originally published by the Beacon Press in Boston in 1944). Working originally in Vienna, Polanyi’s prophetic warning of the perils of the ‘utopia’ of a generalised ‘self-regulating’ market are to be set against Hayek’s libertarianism, also formulated in Vienna at around the same time. Hayek of course provided the ideas that have furnished the globalisation agenda with its ideology dressed in the language of economics. Against Hayek, Polanyi argued that the notion of the ‘self-regulating market’ is a utopia, depending upon the fictions that land (=habitat/environment), labour (=people) and money (a medium of exchange) can be treated as commodities like any others. As these fictions have been sought to be realised in reality so ‘the economy’ has become increasingly ‘disembedded’ from wider social relations, and supposed to have ‘laws’ of its own. ‘Such an institution’, Polanyi wrote, “could not exist for any length of time without annihilating the human and natural substance of society. It would physically have destroyed man and transformed his surroundings into a wilderness”. Some would say that this is exactly what is happening as a result of the renewed attempt of the last 20 years to universalise ‘self-regulating markets’. In practice, in the 19th century, Polanyi shows that “Society protected itself against the perils inherent in a self-regulating market system”. For example: “the labour market was allowed to retain its main function only on condition that wages and conditions of work, standards and regulations should be such as would safeguard the human character of the alleged commodity, labour”. The ILO’s current programme for ‘decent work’ is but the latest manifestation of such a fight-back against the consequences of the attempt to create self-regulating markets. But, Polanyi recognised, ‘protection’ gave rise in the end to contradictions – because the market economy is held to function relatively poorly if there is extensive external regulation, while at the same time the conditions for self-regulation are ultimately unacceptable politically because of their consequences for people. These contradictions, Polanyi argued, underlay the economic and political crises of the first half of the 20th century. It is hard not to see exactly the same contradictions working themselves out in the globalising present. Robert Reich, Clinton’s first labour secretary wrote, for example: “it is a moral precept as well as a policy idea (that) work is the core responsibility. If people are willing to work hard, they should have a job that pays enough for them to live on. In order to qualify for such a job, they should have access to adequate job skills. If that’s not enough, their wages should be subsidised”. In other words ‘labour’ – and that means people’s lives – cannot simply be left to market forces [Cited by Harriss 2000]. And how else are ‘wages to be subsidised’ if not through the intervention of the state? Yet such thinking is diametrically opposed to arguments for ‘flexibility’ in labour markets.