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globalization haters

From the Wall Street Journal blog:

In 1997, 58% of college graduates said globalization had been good for the U.S. while 30% said it had been bad, according to a poll conducted for the Wall Street Journal and NBC News. When the poll asked a similar question this past March, opinion had flipped: 47% of graduates thought globalization was bad and just 33% thought it was good. Respondents with high school educations started out negative on globalization and have become more so.

That opinion was shifting even before recession may be due to how pervasive economic pessimism had become as incomes stagnated for college graduates.

The author also notes that traditionally college graduates are the group in the U.S. that is the most in favor of globalization and free trade. I was reminded in reading this of Karl Polanyi’s take on market globalization. Rather than see the spread of capitalism as an inevitable, natural process, Polanyi mantained that markets must have social approval to work effectively. Markets can’t be disentangled from the social relationships and institutions in which they’re embedded. Without a general sense of approval of global labor and capital markets, their long-term survival may be impaired (as was the global trade market of the 19th Century).

If Polanyi were writing today, he might see a similar kind of “double movement” in the spread of markets. By double movement he meant “the market expanded continuously but this movement was met by a countermovement checking this expansion in definite directions” (130). The countermovement was a direct reaction to perceived unfairnesses, sudden disruptions to local ways of organizing and living, etc. In other words, society continually sought to protect itself from capitalism at the same time that the logic of capitalism impelled markets forward. This double movement allowed capitalism to survive in most places in the world until the disruption it caused locally shifted the balance in favor of those groups who wanted to resocialize the economy and assert more direct control over it. And that is when socialism really took hold as an alternative arrangement.

So what does this have to do with the growing dissatisfaction with globalization? I merely want to point out that the success of globalization largely rides on the perceived benefits that it generates for all. There will always be a double movement in a global market, but if the perceived benefits start to become drastically outweighed by disruption and inequality created by our yielding to market forces, markets may lose their legitimacy and become more heavily contested and perhaps retracted. Free market proponents and highly compensated CEOs ought to remember this when other people begin noticing that the benefits of a global market are not shared by all.

Written by brayden king

July 17, 2008 at 3:05 pm

2 Responses

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  1. If we want to think about perception vs. reality, then let me point out that the costs of globalization that people think about tend to be more concentrated and, hence, easier to identify, than the benefits which are much more widespread. E.g., you notice when a factory closes down in your home town due to “unfair” competition from Indonesia, but you are unlikely to notice that the prices of some of the goods you consume have actually dropped (in real terms). As a result, news agencies will always generate a biased picture of globalization. This statement does not deny the presence of losers in the economy. Just about any change in the economy will bring with it both losers and winners.

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    mikemcbride

    July 17, 2008 at 9:34 pm

  2. It’s a gross error to equate “globalization” to “free trade” and “free markets.”

    Globalization is largely a state-driven phenomenon, and almost the direct opposite of genuinely free trade.

    Most of the dominant players in the corporate global economy follow a business model based either on so-called “intellectual property” [sic] rights (software and entertainment), massive government subsidies (agribusiness and military industry), or both (biotech, pharma, and electronics). “Intellectual property,” in the protectionist function it serves for today’s global corporations, is directly analogous to the role tariffs played in the old national industrial economies.

    In addition, the state subsidizes long-distance transportation costs, externalizes on taxpayers the costs of keeping sea lanes open and corporate-friendly governments in power, and subsidizes the utility and road infrastructure necessary for overseas capital investment to be profitable.

    TNCs, far from being free market actors, are turtles sitting on fenceposts; they didn’t get up there by being good climbers. Real free trade means those engaged in it do so entirely on their own nickel, bearing the full costs and risks, as well as the benefits, of all their activities. If those conditions were met, instead of the current environment of socialized cost and privatized profit, we’d be producing a hell of a lot more of what we consume in small factories close to where we live. And so would the Chinese. What’s more, we’d both be better off.

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    Kevin Carson

    July 20, 2008 at 2:37 am


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