The following paper was written and published on September 2001. It’s republished here for the readers of this new blog.
By Con George-Kotzabasis
A tiger is stalking the world the tiger of globalization. Nations and peoples who, gazelle-like, are frightened and take flight before the huge ferocious “life-threatening” leaps and bounds of this tiger, are to be mauled and be eaten, as no swift flight can make them escape from the lightning speed with which globalization pursues its quarry.
For this will be the fate of nations and peoples who chose to be the prey instead of being the “hunter” of globalization. To be the hunter however, does not imply that one has to slay the “beast” of globalization. Instead, it implies that like a consummate broncobuster, one has to mount the tiger and adapt to its fast and sinewy movements while at the same time “taming” it.
This is the only way that countries can save themselves from the threatening onslaught of globalization. More importantly still, to be among its winners. But it’s fundamentally important to be prudent winners, that is, the winner does not take all. No clever country or wise person would desire to be an absolute winner. Only gamblers would crave to be so. But the wins of a casino are ephemeral wins, and soon and inevitably are followed by loses. Hence, if the winners of globalization wish and aspire to keep and to augment their gains, it’s necessary that they look after and take care of the losers of globalization. As the latter can only be politically sustained and continue to succeed and be beneficial to mankind if it’s a “caring globalization”, if its heart is the “make –up” of its robust mien. If not, it will face the freezing winds of a backlash of a ‘winter of discontent’, of all the countries and peoples who are fearful of its storming of the globe. Its losers therefore will be diffident and distrustful of the touted benefits that could accrue to them, and hence reluctant to admit the Lexus into the groves of their olive trees, to paraphrase Thomas Friedman, of the New York Times.
The currently unstoppable revolution in technology, finance, and information, has made all nations vulnerable to the waves of global competition. Only those nations that swim on the crests of these waves will survive and be the winners in this relentless struggle. This implies moreover, that no nation can economically survive in isolation even if it possesses unique and an abundance of natural resources. Nor can it appeal to the bungled remedies of the past, such as the provision of subsidies to defunct industries. Nor can it depend on the invention of new populist nostrums, such as “fair trade” proposed by the dinosaur delegates in a Labor Party Conference in Hobart. On the contrary, only through the process of creative reconstruction in the economic, industrial, commercial, and social structures of a country, is the “waydrome” to success. In this context, to talk about fair trade is to live in dodo fairyland. Indeed, it’s like asking Olympian super athletes, like Cathy Freeman, to be fair to their lesser competitors.
How to Deal with the Challenge of Globalzation
Thomas Friedman in his book, The Lexus and the Olive Tree, argues, that ‘the revolution in technology, finance, and information did three things. It lowered the barriers of entry into almost any business, and it rapidly increased competition and the speed by which a product moves from being an innovation to being a commodity.’ Technology expands production to global dimensions, ‘knitting the world together.’ Finance with the collapse of regulated exchange rates, penetrates all the profitable niches of the world in its avaricious dynamic drive for profit. No raising of granite protective walls or the setting up of any barriers can prevent the ‘ “Electronic Herd’s” ‘ power to move its capital on world markets. Furthermore, information technology ‘brings home to everyone how ahead or behind they are in contrast to other countries.’ This provides a cue and spurs people to invest in countries where lucrative profits can be made by ‘investing through the internet on a global scale.’ Hence, the world is no longer carried on the back of the slow moving Atlas, but on the back of the swift electron-moving Microchip. In such a world all kind of barriers have the strength of a plastic balloon. But even if it were possible to erect impenetrable barriers, the countries that did so would bring upon themselves “the day after”, the consequences of “nuclear” economic and social devastation. That is, the result for these countries would be to throw themselves into the abyss of poverty and squalor, and hence unwittingly deprive their people the opportunity to become wealthier by being on the trajectory of globalization.
It’s by accepting the challenges of globalization with imagination and boldness that countries and their peoples will not only be strengthening their intellectual and moral fiber that will position them on the launching pad of globalization, but will also be transporting them to the land of cornucopia, to material and spiritual abundance. It’s imperative therefore, that political leaders deliberately and consciously decide to prepare their people to enter into this benign circle of feedback. That is, the intellectual and moral strength and knowledge of their people will maximize the benefits accruing from globalization and minimize its disadvantages. And the successes of actively being engaged with the cutting-edge of the globe will in turn further enhance this intellectual and moral vigor and knowledge of their people. In such a brave new world, one has to tell people to ‘remove their belongings’, to use a phrase of Vladimir Nabokov, of moaning. There is no room for resentment and gripe against countries and peoples who succeed. Success itself will be redistributed and will not remain in the same hands. Everyone will have the opportunity, endowed with grit, chutzpah, and entrepreneurial flair, to succeed.
For the first time in human history, globalization has the potential to bring in its wake the “democratization of success”. No scion of elites will be able to capture its benefits and lock them up ever safely and ever after in their vaults. The microchip is sovereign. Hence the corridors of wealth will be accessible to all who have the knowledge and ambition to use it. And if Shakespearian sovereigns could trade their kingdoms for a horse, business scions, like James Packer, will have to trade their wealth and power for a microchip.
Globalization also has the potential to usher in the empowerment of all classes and creeds. Ironically, capitalist globalization might realize Marx’s dream- the fulfillment of the individual who performs his practical affairs during the day, fishes in the evening, and writes and “practices” poetry during the night. And to cap it all, the Communist Manifesto’s slogan, “workers of the world unite”, could be accomplished by globalization. The only difference being that the unity of workers will not arise out of enmity against capitalist entrepreneurs, but out of the benign desire to emulate the achievements of the latter, as every worker with the required training and knowledge will have the ability of doing so.
How to Raise all Boats and Canoes in this inundation of globalization
We need however to be critically aware of the downside of globalization and treat its blemishes effectively. It’s a truism that not all people will benefit from globalization. There will be losers! In all civilizations there have been winners and losers. The human race cannot jump over the shadow of this accursed fact. Either as a result of individual propensities or lack of resilience and ability to adapt to the new, and strenuous circumstances of globalization, many people will fall behind and will be disadvantaged. But because of globalization’s vast production of wealth, it has the capacity to compensate the losers, and indeed, to pull them out of their disadvantaged position. In this task governments will play a decisive role.
First, they will have to deal with the backlash that arises from people who are struck with the dire effects of globalization. While globalization shortens the distances of the world and makes it accessible to many people and improves economically their well-being, at the same time it lengthens the rusty chain of un-economic and defunct industries in many developed and developing countries. Many workers, therefore, who for years worked in these industries, are thrown out of them and find themselves unemployed and unemployable. The direct beneficiaries of globalization therefore, not only have a moral responsibility, but also a vested interest, to take care of the disenfranchised from the advantages of globalization, if the latter are to be prevented from being converted into modern Luddites, and start smashing the machine of globalization, by means of war, terrorism, and computer hacking.
Secondly, to head off and pacify this backlash, governments will have to prise open new thinking horizons, and to transform this resentment into support for globalization. Since inequality among human beings, as well as of other primates, is nature’s regime, governments must contrive clever policies to redress and reverse this order of inequality and bring some sort of balance in this inequity of nature. In the “clever” country, prosperity does not have to be equated with “equality”. People do not have to be equal in certain natural endowments with those who generate wealth and prosperity, to share the fruits of this prosperity. The process of globalization begets such huge wealth that it would not be difficult for governments to impose the burden upon, and indeed persuade, its producers, that it’s to their own interest to share part of this wealth with the disadvantaged of globalization. Especially, when this divestment of wealth will not diminish the capital investment funds of the former, as we will show below.
Thirdly, governments will redistribute this part of wealth by the following international multilateral policy mechanism, by imposing a levy or surtax on the profits of all “globetrotting” corporations, financial institutions, and foreign currency speculators. Once, these funds of the levy are collected by governments, they will be transmitted to an international body set up by these governments. Let us name this body the International Globalization Fund (IGF). The central task of this entity will be (a) to identify those nations and peoples whose livelihood has been affected negatively by globalization, and (b) to subsidize the buying of shares in multinational corporations and world financial institutions, by these nations and peoples. In the case of some people who might not have any financial savings of their own, the IGF will provide them with special securities or bonds, thus enabling them, despite their lack of savings, to be shareholders in this international economy. Moreover, such a policy will not engender any disincentives to private enterprise. As the funds accruing from the levy will not be spend by governments in fuzzy, boondoggle industrial plans or in subsidizing defunct industries, at the expense of the private sector. The build up of a “hydraulic pipe” between the international economy and the disadvantaged of this economy, will allow the funds that are transmitted to the latter in the form of subsidies and securities by the IGF, to be sluiced back through this pipe to the multinational corporations in the form of equity capital. Hence, the investment funds of these entrepreneurial entities will not be diminished.
Thus, the eyes of all, not only of those who gain directly from their engagement with globalization, will be focused on the screens of the computers. Even people who lack knowledge and adeptness to use the modern technology will enter and be denizens of this brave new world of the internet, as equity holders. Sharing the wealth that is spawned by the Midas microchip touch of globalization. The magic flying carpet of globalization will have everyone aboard.
It depends on the creative thinking, imagination and Thatcherite will and determination of governments whether globalization will be politically and economically sustainable. And whether by riding it, the fruits of its wealth will also be distributed to all those nations and peoples whose livelihoods are going to be lost in this process of ‘creative destruction’. Whether the opening of the floodgates of globalization will raise all boats and canoes in this global inundation of its waters.
HIC RHODUS HIC SALTA
The article was written on September 17, 2001, and was first published in the English supplement of Neos Kosmos in Melbourne on the same date