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Post subject: Globalization Posted: Wed Apr 27, 2005 5:05 pm

Globalization: the Choices Before Us

By John Ralston Saul

Perhaps it has always been the case, but there seems to be an inherent tendency in contemporary social and economic theory to mistake fashion for truth and trends for inevitabilities.

I point this out as a possible key to the curious form taken by the globalization revolution of the last quarter century. My own guess — and what more could any sensible person call a view into the future — is that current trends are not sustainable. In fact, the more the academic, administrative and corporate leaders treat these trends as inevitable, the more likely they are to provoke one of those reversals in direction of which all human history is so full. If we find walls going back up between peoples and the current technological tools of globalization turning themselves impetuously into the tools of partition — after all, machinery has the truth you give it — this will be entirely the responsibility of those who have refused a sensible debate over the direction our societies are to take.

The question of debate is absolutely central to what will happen next. One of the curiosities of the globalization revolution has been an accompanying inability to engage in constructive debate without obliging the participants to chose sides. Having to choose sides as a preliminary to dealing with complex questions is a sign that debate is being shut down. The simplistic scenarios of ‘for and against' lead to the fantasies of a black and white world.

This is not choice. It is ideology. The implication that someone possesses clear truth is that the others are wallowing in falsehood or self-delusion.

What I am talking about is one of the most important contemporary philosophical problems, in particular for societies which claim to be democracies. The bases of democracy could be summarized in this way: the existence of real choices; a belief that the foundation of society's intelligence lies in the body of the citizenry, not in its elite, in other words that the legitimacy of the society lies in the citizenry; and a belief that through debate these citizens will make choices among the many complexities of reality.

Is the future inevitable?

And yet the last quarter century and the next have most often been presented by our public and private sector leadership as a long continuum of inevitabilities. Technology is presented as a revolution which shapes society. The idea that society might have a say in that shape is generally presented as ludditism. What's more, the sweep into globalization is presented as a victory for internationalism over narrow nationalism (as represented by the nation-state) and a parallel victory for the free market.

The problem with this whole approach is that it has little internal consistency. And the specific events of the real world tend to contradict the general theory.

Two small examples of the technological leadership theory spring to mind. We were assured by the dominant voices within our society some fifteen years ago that new technology would lead to a service economy. Instead, the precise opposite occurred. The last fifteen years have seen an important shrinkage in real services to the citizenry.

By real services I mean those which individuals want and/or need. Schooling and health care would be two primary examples. And throughout the private sector, the simple ability to speak to actual humans in order to receive real advice has slipped away. None of this has been the inevitable result either of technological breakthroughs or of market place demands. Rather, it has been the outcome of a particular administrative approach towards the use of technology.

Equally, new means of communication such as the Internet were presented as tools of open communication around the world. Instead we are now approximately 30 percent of the way down a road which is reducing these tools of communication to the parameters of commercial activity on the one hand and legally regulated activity on the other.

Truth vs. trend

I point out these two examples only as a teaser to the essential contradiction in our current truths and trends.

First there is the question of the market place. The deregulation and globalization which were supposed to lead to a return to more active capitalism and competition are leading instead to an increasing number of national and international monopolies and oligopolies. Interestingly enough, this is precisely what happened in the late nineteenth and early twentieth century when what could be called the second industrial revolution swept onto the international stage. The result was, on the negative side, a rise of frightened nationalism and, on the positive side, the rise of democratic-based regulations. The fear which that uncontrolled wave incited was one of the central causes of the twentieth century's astonishing levels of violence. As for the regulations, they led to a solidification of healthy market place competition and thus to wealth in the Western democracies. The resulting middle class prosperity has become the most obvious sign of success for the Western model.

What I am saying is that we already know what happens when we leave the market to regulate itself. It slips away from competition to monopoly and provokes fear-filled reactions from the citizenry. The essential question I would ask today is: why wouldn't the same happen this time? Are there not already signs that this is happening?

Which leads me to the essential contradiction in current models. The glory of Western democracies is indeed their democracy, however flawed it may be. Democracy is not the product of the market place. Rather, democracy creates the conditions which render possible long-term market place prosperity. This can be seen throughout the history of the West.

But democracy is a concrete phenomenon. It is tied not to great abstract, romantic theories, but to the participation of citizens within their societies. If you think of it that way, then the idea that globalization is a victory for internationalism over nationalism, as represented by the nation-state, suddenly presents a fundamental problem. Those nation-states are the concrete structures which contain democracy. The real concept of citizen-based legitimacy was developed and is based within those states. What's more, the ugliest aspects of nineteenth century nationalism have finally been more or less evacuated from those states.

So the false debate which surrounds us today is: are you for globalization or against? But the core of the real question is: are you for citizen based legitimacy and real choice?

Citizens will choose

If the current model of globalization denies the central importance of that legitimacy and favors instead great romantic abstractions about inevitable trends, well then, the probability is that citizens will increasingly look for ways to alter the trend. If those in positions of authority do not focus on this reality, the citizens will gradually slip into a more outright opposition. And political movements will adjust to that opposition or be replaced. That is what history tells us.

The key to this rather delicate situation is that for half a century, we have worked hard at globalizing economic regulations. And much of this has been positive. But we have done almost nothing to globalize social and political regulations through enforceable treaties negotiated by the representatives of citizens organized at the nation state level. In other words, very little has been done to balance new economic structures with new social structures. There are those who worry that such a balance would merely be a Western maneuver to remove a competitive advantage from developing economies. If you see these situations in absolutes and inevitabilities that might well be the case. But in a real world there are many approaches which could take into account the needs of all types of economies. After all, on a slightly different plane, that is how the European Economic Community was able first to include Spain and Portugal and now is reaching out to even more fragile societies.

In any case, not to balance social agreements with economic agreements is to sap the power of citizens by removing their power of choice. And it is to encourage a dangerous imbalance within our societies between self-interest and the public good. Let me repeat. We are in a situation not so very different from that of 1900. As then, now we are faced by the resulting dangers and opportunities.

A final contradiction

There is a final internal contradiction in current fashions which will illustrate our situation. We are constantly told that since the world is big and globalization is about the world, therefore it is normal, even natural, that corporations will have to grow through constant mergers and acquisitions.

But the exact opposite makes far more sense. Small markets have difficulty supporting multifaceted competition. They often require one or two large dominant players. Large markets on the other hand free the corporations from the heavy, costly infrastructure of unnecessary size. Indeed, if there is any lesson inherent in new technology, it is that the need for the large heavy international infrastructure is gone. A lighter, more flexible international approach is not only possible, it is probably more competitive.

What then drives the trend towards ever larger corporations and ever weaker competition? One of the central factors is that the core of the larger transnationals is not capitalist. They are essentially bureaucratic or technocratic structures run by administrators who have no real commitment to, or love for what could be called capitalism or risk or competition. Size, domination, control — all three are classic characteristics of management theory; that is, of bureaucratic theory. They have nothing to do with the needs of the market place.

My final guess is that the inappropriateness of these spreading monopolies is already provoking a slow political reaction. Discussions around such tables as the G8 and the OECD are already focussing on the problems this trend is creating for democracies, for governments in general and, very specifically, for tax policy. After all, the social, cultural and political services which citizens have given themselves over the last hundred years must be financed and our slippage into a world of monopolies and oligopolies is threatening that ability.

What's more, market place economics has always been about fashion. These fashions usually last ten to fifteen years. The obvious disadvantages of a market place dominated by gigantic icebergs floating aimlessly about, crashing into this and that, leaving damaged infrastructures behind as they float on, are becoming more obvious every day. That means economic fashions will begin to change within a few years.

Let me come back to two essential points. There is nothing wrong with globalization. However, in the real world, it is not an absolute truth. It is a theory which can take on many forms. The best way to provoke a reversal ending in ugly nationalism and negative protectionism is to pretend that internationalism can only exist in a predetermined and inevitable form. On the other hand, the best way to navigate the complicated period ahead is to come back to the core force of democracy: a system in which legitimacy lies with the citizenry; in which there is a constant belief in the possibility of real choices; in which those choices are dealt with through real debate and a real belief in the intelligence of the citizenry. From that basis it is possible to make sensible use of an ongoing technological revolution. And it is possible to give the market place the long-term stability and competition it needs to serve itself and the societies out of which it grows.

John Ralston Saul is the author of several books. His growing impact on political and economic thought in many countries has been established through the philosophical trilogy, Voltaire's Bastards: The Dictatorship of Reason in the West (1992), The Doubter's Companion: A Dictionary of Aggressive Common Sense (1994), and The Unconscious Civilization (1995).

Posted  11/12/2012

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