Today, what we call globalization has become ubiquitous. Needless to say, “globalization” has fierce and unrelenting critics; perhaps chief among them is Joseph Stiglitz. Dr. Stiglitz, a professor at Columbia University and the former Chief Economist at the World Bank, won the Nobel Prize in economics in 2001 with two others for his contributions to our understanding of asymmetric information in markets. He has also made what I feel are important contributions to our understanding of the inequities that “globalization” bring about around the world, particularly with his two books, Making Globalization Work and Globalization and Its Discontents. While people like Thomas Friedman may write that “The World Is Flat,” in reality, we know that the playing field is not even but is tilted.
But how can we talk about globalization without first knowing what it is? So, what is globalization? Being an international business major, a lot of my courses have dealt with defining and discussing globalization. Probably the most common definition I hear is “the integration of businesses into world markets,” or something along those lines. That’s one particular way to define it. Used neutrally, however, the term globalization means international integration (that is, of any form). The term is not used neutrality, though. The term, in its current usage, “has been appropriated by a narrow sector of power and privilege.”
The term, as appropriated by the neoliberals, is meant to describe an economic order that favors investor rights over the rights of people. Some people refer to it as market fundamentalism, but I disagree. What is being advocated under this appropriated term really has nothing to do with free markets and is, frankly, and affront to markets. In fact, in incorporates very little of what Adam Smith advocated in The Wealth of Nations, the seminal work that neoliberals are always quick to cite. Take, for example, the free circulation of labor. It’s impossible to talk about free markets without the free circulation of labor. Smith wrote, “the policy of Europe, by obstructing the free circulation of labor and stock both from employment to employment, and from place to place, occasions in some cases a very inconvenient inequality in the whole of the advantages and disadvantages of their different employments….Whatever obstructs the free circulation of labor from one employment to another obstructs that of stock likewise.” This is part of the “perfect liberty” that Smith said would lead to “perfect equality.” Instead, there has been great work to limit the free movement of labor. In fact, in 1994, President Clinton went so far as to militarize the border in what was called “Operation Gatekeeper.” Why 1994? Because that was the year of NAFTA.
What is NAFTA? It is touted as a “free trade agreement” between Canada, Mexico, and the United States (it got the “NA” part correct) whereby barriers to trade and investment are eliminated. What does NAFTA really mean? It means Mexico opens it borders to highly subsidized U.S. agribusiness. This drives the peasants off their land because they cannot compete with this U.S. taxpayer-funded agri-exports. Consequently, they flee to urban slums (what’s called urbanization), driving down wages, allowing for large multinational corporations to exploit their cheap labor. That produces what’s called an “Economic Miracle,” where typical economic indicators like GDP, FDI, and corporate profit soar but the masses approach pauperization. That’s what America means by “free trade.”
What has this particular form globalization brought us? In what is hailed as the era of liberalization and globalization, world GDP growth rates have decreased by nearly 38% over the past 24 years (using the 2003 as the latest year with available figures) compared to the 24 years prior to that (the Bretton Woods era), according to data provided by Angus Maddison. Likewise, Americans have seen stagnated wages. The inequality of distribution of wealth has been simply remarkable, everywhere. Poverty in the U.S. saw a steady decline through the ’60s and ’70s; the ’80s, however, saw an incline in poverty and it has remained relatively unchanged since. Meanwhile, speculative capital flows have erupted, bringing with them destabilization, as Stiglitz has argued. It has also had the effect of wiping out domestic production for domestic needs, as we’ve seen in Mexico. Because local producers cannot compete with U.S.-subsidized agribusiness, many Third World nations must rely on what are called cash crops (as opposed to subsistence crops): bananas, cotton, coffee, sugar, etc. But not all the export crops are as innocuous as bananas; they also include coca, marijuana, poppy, and other drugs that fuel the current-day drug war, with Peru’s president calling the cocaine business the “only successful multinational to emerge” from Latin America in the face of globalization. It has certainly only given more credence to dependency theory.
Naturally, anyone that opposes this particular form of globalization gets called “anti-globalization.” It’s unfortunate because it’s not true, with the exception of very tiny minority who are truly anti-globalization, in the neutral sense of the word. International integration is, in fact, a great thing, as the people at the World Social Forum and other places have been espousing for years. It, however, should not be based on the blind faith in the religion of neoliberal markets, but rather should include more awareness for the rights of laborers, corrections for obvious market failures, and environmental protection as proposed by the adherents of alter-globalization.