Submitted this:
‘Globalisation is intrinsically undemocratic because of the processes of decision-making on social and economic policy issues no longer lie within the control of national governments but with the goodwill of transnational organisations'
Globalisation has seen many benefits bestowed upon a large number of people: International travel, media, communication, access to technology and the ability to purchase international products. This has been extremely advantageous for a minority of people and countries who have reaped the financial benefits and rewards from a world that now embraces individualism, capitalism, corporatism, consumerism, materialism and the idea that a robust economy should precede everything else. Globalisation has also meant that a wide range of people, both from developing and developed countries, have had themselves, their countries and their labour exploited to the point of decimating and destroying all sense of sustainability and autonomy within local communities. With an ever widening gap between those who have access to resources and wealth and those who do not, it has to be asked, exactly who does globalisation really benefit?
This essay will critically examine the above claim by breaking down and deconstructing the ideas around globalisation, the processes around social and economic policy making and what democracy means. It will also argue that transnational organisations dictate from an exploitive top down imperialistic stance which lies at the very essence of critiquing this statement.
Throughout these writings there will be a predominant focus on economic globalisation specifically, due to the prevalent connections between corporations and countries’ economic and social policies. Furthermore, the agendas of organisations such as the World Bank, International Monetary Fund and World Trade Organisation will be focused on to support the premise that globalisation is strongly linked to capitalism and the imperialistic ethos of countries like the United States.
Ife and Tesoriero (2006) believe that globalisation is inherently about an economic process which puts the values of human rights, social justice and sustainability far behind the needs of the economy. The premise is that the economy should always come first and supporting this are the ideologies that the world has unlimited resources, a never ending supply of new markets and an endless quantity of labour to exploit (Anderson, Barker, Goldsmith et al, 2004).
At an international level globalisation can be seen manifesting itself throughout different countries in two predominant ways: Diversity amongst nations has been steadily reduced and replaced with a homogenisation of consumerism where certain global products have infiltrated national borders with corporate marketing focused on a belief that all people should want the same products and lifestyle as the predominantly Western-centric exporters. The other way in which it can be clearly seen is through the capitalist market. The ideology that a robust economy relies on capitalism, which in turn relies on the exploitation of a cheap labour market for the financial benefit of corporations, ensures that people in third world countries as well as developed countries remain in an oppressive state of dependent employment. Internally within countries economic globalisation is also evident from the ever widening gap between the rich and poor. This is exemplified in countries such as the America where company CEOs in 2000 earned 458 times more than the average worker. (Anderson, Barker, Goldsmith et al, 2004).
In 1998, the United Nations Development Program calculated that it would cost $40 billion per year to provide clean water, sanitation, nutrition, health care and basic education for everyone on Earth. (Robbins, 2003). Conversely in 2003 America spent almost $405 billion on military and security not including their expenditure on the Iraqi war. (Pearson Education, 2007). These statistics illustrate a prime example of a minority controlling how and what money is spent on and who that spending will benefit.
Abraham Lincoln (1809-1865) defined democracy as being “Government of the people, by the people, for the people”. The essence of democracy centres on the ideals of equality, freedom, social justice and human rights. One key point is the ability of people to individually and collectively have a voice and the ability to have self determination with their lives. Conversely, undemocratic must be the antithesis of this, where none of these values are adhered to, nor do the majority of people have any real voice about policies or issues which may directly affect them.
The End Of The Free Market argues that globalisation is as a result of a world wide demand by the majority and that it has “… lifted millions out of poverty and into an emerging global middle class” (Bremmer, 2010, p 24). What this statement fails to take into account are the people who have been oppressed and exploited to see this rise be possible for the minority. Bremmer also raises concerns about State Capitalism from governments other than America threatening America’s ability to benefit from free market capitalism. This illustrates an imperialistic attitude where international autonomy and sustainability are not desired as they will not be of benefit to the ideologies supporting an oppressive dictator.
Bremmer (2010) puts forth the argument that America operates from a mixed capitalism paradigm and claims that only countries like China and Russia indulge in laissez-faire style capitalism in which markets are controlled by those with the most to gain from exploiting them. Ironically, this is in complete disparity to Americas own foreign policies implemented by their government.
Globalisation has seen a huge surge over the last 50 years with the worldwide media promoting values which support the production and consumption of certain products worldwide and intrinsically dictate the very values of a Western Centric model where success becomes determined more so by what you own individually, rather than what you give or do for others. It has been repeatedly drilled into societies over time that people are not equal, that they shouldn’t be equal and that it is acceptable for those with power to steam roll over the planet and exploit some for the benefit of others.
Whilst it could be argued that capitalism and globalisation provide employment where there is a demand for it, it can also be shown that the participation in this by groups of locals is intrinsically undemocratic, disempowering and unsustainable. Due to capitalism relying on a minority of people dictating conditions to a disempowered and dependent labour market it is undeniable that this process as it exists is undemocratic in its process and outcomes.
Trade liberalism has removed national barriers, subsidies and tariffs to ensure an even market place for international products. However, the culture of this does not acknowledge the ability of local markets to operate in a competitive, sustainable and autonomous way when in direct competition with a global market. The ideologies directly supporting Free Trade are that there will be prosperity for all, that developing countries will financially benefit as much as developed countries, and that social justice and equality will flow on from capitalism and the development of a vigorous and unregulated global economy. (Ife, Tesoriero, 2006).
By deconstructing the moot point we are faced with the idea that transnational corporations, which operate in multiple countries, control the policy making of governments and that this in itself is done in an undemocratic way due to decisions being made by few, with the voice or concerns of many never being a mitigating factor. Furthermore to this, the “goodwill” that transnational corporations show is almost always to the benefit of only themselves, and rarely sees any real advantages for the vast majority, who are oppressed and exploited by the economic and social policies of their own governments.
Due to Free Trade Agreements between countries and the involvement of the World Bank, International Monetary Fund and World Trade Organisation globalisation has seen social and economic policy issues become entwined with the agendas of transnational corporations. Economic policies implemented by governments always take the forefront to social policies; if an economy has to come first and transnational corporations stand to benefit from the implementation of certain economic policies by governments, it is reasonable to conclude that social policies will become watered down and be of little real benefit to local communities themselves. On the contrary it could be argued that social policies which are influenced by corporations driving economic policies disempower communities and ensure that people remain where they are, do not have a voice and are not able to provide resistance or even be informed about the processes around them. Lin (200
goes as far as stating “The WTO has faced scathing criticism for the free trade policies that have accelerated globalization and the integration of a worldwide capitalist free market economy.”
The IMF, WTO and World Bank all arguably follow pre determined agendas of powerful countries like America and transnational corporations who stand to directly benefit from Free Trade Agreements and money loaned out to poor nations. Two prime examples of multinational corporations dictating policy agendas and benefitting directly from World Bank and IMF decisions are Halliburton and Bechtel winning contracts in Iraqi after the America invasion in 2003 (Anderson, Barker, Goldsmith et al, 2004) and Monsanto having a monopoly over agriculture in America and a desire to “…achieve worldwide market supremacy, regardless of the social cost to small farmers and rural economies.” (Griffin, 200
The WTO was initially set up at the Bretton Woods Conference in 1944 to prevent depression after World War II (Driscoll, 1996). Whilst the idea was to help out countries financially in frugal times the almost immediate agenda of America and transnational corporations was to dictate who received money and under what conditions. Although the IMF, WTO and World Bank may claim that they strengthen countries’ economies and reduce their debt there are rampant examples of countries that have been loaned money falling into serious debt when they have been dubiously advised to spend money on infrastructure that they don’t need. Subsequently a large percentage of their GDP goes directly to servicing the debt rather than being reinvested into their own country or being of benefit to the majority of their citizens. The magnitude of their debt remains such that their exploitation by other countries becomes an expected status quo that they are eventually forced to accept. Over the years there has been a steady move of solidarity by grass roots level protesting and the rejecting of the ideology of these three organisations. WTO talks on Free Trade were disrupted in Seattle in 1999 and Cancun in 2003; whilst Miami in 2003 had the Free Trade Agreement of Americas talks disturbed and stopped (Anderson, Barker, Goldsmith et al, 2004).
Free Trade Agreements between governments were initially set up via the WTO with the intention of opening up international boarders and allowing the flow of produce into countries, without attracting tariffs on international products or government subsidies for local products. Retrospectively, Free Trade Agreements were never going to be prosperous for both countries and certainly would never amount to equality between local markets producing local goods and international markets with lower costs producing cheaper goods. Paradoxically, instead of creating an environment beneficial for both countries the consequence of having cheaper international goods readily available was that local companies suffered and in many instances closed due to not being able to compete with the cheaper products that were now available. These Free Trade Agreements are examples of capitalism and neo-liberialism manifesting themselves through policies that ardently emphasise the importance of economic growth and prosperity at the expense of true equality and social justice. This in itself is an example of transnational companies exerting undemocratic power and control over the influencing of policies which see direct financial benefits to themselves, whilst majority or developing countries, and their citizens, are exploited and oppressed as a result of this process.
An exception we can see with Free Trade is when both countries do not have competing industries. The Free Trade Agreement between New Zealand and Korea provides an example of a lack of competition between industries ensuring that both countries see benefit from such an agreement. Conversely, if we look at the Free Trade Agreement that the Philippines has with other Asian countries we can unequivocally see that Free Trade has resulted in local farmers failing due to not being able to compete with cheaper imported agricultural products. In this sense it is illustrated that Free Trade has reduced the ability of people to live sustainably off their own land whilst being able to generate an income.
The World Bank directly contributed to Panama’s insurmountable debt from the construction of the Panama Canal. This was documented by John Perkins (2004) in Confessions of an Economic Hitman. This project was undertaken in 1914 after advice from America determined that Panama would potentially benefit economically from this new infrastructure being built. Adversely, apart from the construction costs funded by the World Bank going immediately offshore to America who did all the construction, Panama to this day uses a large percentage of the money from their economy to pay back this debt. Current statistics show pre 2004 70% of Panama’s GDP went to cover the debt they had incurred; currently 45% will contribute to this debt until 2014; at which stage it will be reduced to 35% (Sabo, 2010). As a direct result of the World Bank supporting the funding of this, the Panamanian people are some of the poorest in the world, and it can be argued that the Panama Canal is of no benefit to the majority of the people. This provides an excellent example of an undemocratic top down dictatorship from an imperialistic country with direct links not only to transnational corporations but also to the World Bank and IMF. On one hand the Panama Canal is now back in the full ownership of Panama, but the debt related to the construction, upgrade and maintenance of this amounts to 5 billion per year (Sabo, 2010) and will ensure that Panama will be locked in debt and able to be controlled due to this for many generations to come. Even though Panama now retains control and ownership over the canal, it has given America a real opportunity to exploit Panama as a country. This can be observed through the mining concessions that have been granted and the 2003 Debt-For-Nature swap which occurred, passing on 320,000 acres of Panama rainforest to the US for a reduction of Panamas debt by $10,000,000USD (Nature.org, 2010).
Whilst NGOs strive to empower people and address the issues of disparity and equality in local communities there remains a need to ensure that Community Development policies are monitored from independent bodies. Implementing imperialistic top down strategies where communication breaks down between the provider and recipient of the service and a pre determined agenda comes to dominate what the NGOs want to achieve, can only lead to an undemocratic process. Examples of this can be seen in some developing countries where NGOs have a foreign agenda to adhere to which will not lead to sustainable and ecologically sound development (Ife, Tesoriero, 2006).
Evidence shows that an unequal distribution of power and access to resources has seen a minority of people acquire a majority of the wealth worldwide. Consequently, the minority have become financially rich compared to the vast majority of people in the world, and this status quo is maintained by people living subserviently and acting as cogs in the capitalist wheel of the juggernaut which ensures that what they do directly benefits those who control them. Whilst it can be argued that some Free Trade Agreements can be beneficial to some people, this has to be balanced against the conclusion that it has also seen a wider income gap developing between international countries and nationals within the same country.
This essay has defined globalisation and democracy and illustrated how this does (or doesn’t) manifest itself through a democratic process. It has shown how transnational corporations exert a huge amount of power and control over policy making and how there are obvious links between supranational organisations and countries such as the America who have pre determined agendas about their role in the world.
Globalisation and capitalism have created the world in which we live, but the question has to be asked: Is this world any better or are people any happier than in the past? Has sustainability, holism, autonomy and empowerment become the unwanted bastard child of capitalism and globalisation? When such large numbers are living below the poverty line and without access to basic human needs like clean water, food, immunisation and sanitation, while a small minority hugely benefit from the exploitation of other people and developing countries, you really have to wonder if things have in fact got better for mankind as a whole over the last 50 years or if humanity is in fact quickly digging itself an early grave.
References
Ife, J. & Tesoriero, F. (2006). Community-based alternatives in an age of globalisation community development. Australia: Pearson Education Australia.
Bremmer, I. (2010). The End of the Free Market. New York: Penguin Group.
Anderson, S. Barker, D. Goldsmith, E et al. Alternatives to Economic Globalisation. (2004). San Francisco: Berrett-Koehler Publishers Inc.
Licoln, A. (2004). Democracy Building . Retrieved October 1, 2010, from http://www.democracy-building.info/definition-democracy.html
Perkins, J. (2004). Confessions of an Economic Hitman. San Francisco: Berrett-Koehler Publishers Inc.
Driscoll, D. (1996). International Monetary Fund. Retrieved October 1, 2010, from http://www.imf.org/external/pubs/ft/exrp/differ/differ.htm
Sabo, E. (2010). Panama Will Cut Debt by 35%. Retrieved October 1, 2010, from http://www.businessweek.com/news/2010-03-24/panama-will-cut-debt-to-35-of-gdp-minister-says-update1-.html.
Lin, S. (200
. Free Trade and Distorted Development: A Critique of WTO Perspectives. Retrieved October, 2010, from http://www.stwr.org/imf-world-bank-trade/free-trade-and-distorted-development-a-critique-of-wto-perspectives.html.
Griffin, J. (200
. Frightening Food for Thought. Retrieved October 1, 2010, from http://www.canada.com/montrealgazette/news/arts/story.html?id=3f87922f-20eb-4493-8a29-a60a11dea213.
Robbins, J. (2003). The Food Revolution. Retrieved October 1, 2010, from http://www.foodrevoltion.org.
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