Globalisation is a term that covers several different processes that are occurring simultaneously throughout the world. These processes are the consequence of industrial changes over several hundred years, improvements in global telecommunications over the past fifty years and more recently the creation of the Internet. Some aspects of globalisation are positive but many aspects are negative.
The globalisation of information has enabled more ideas and news to be exchanged between more people than at any time in human history. The Internet has resulted in a shift away from geographic isolation towards communication and connection between communities and individuals globally. This has meant, for example, that more people have been able to organise simultaneous protests around the world to combat authoritarianism, injustice and environmental destruction. So far, the benefits have been felt almost exclusively by those who own or have access to a computer, which of course are mainly people in developed countries.
One negative aspect of information globalisation has been the domination of one culture, 'Western culture' and specifically US culture, over all other cultures. The globalisation of language is part of this cultural globalisation, dominance of the English language and the disappearance of many local tribal languages throughout the world. The globalisation of culture has resulted in North American consumer culture displacing a diversity of global cultures. Cultural globalisation is the consequence of a monopolisation of the mass media by the predominantly US owned music, television and film industries. A small number of media corporations have created a massive global entertainment and news industry, which has eroded cultural diversity and is replacing it with uniformity.
Arguably the most negative aspect of globalisation is corporate globalisation. Since about 1980, there has been a growth of government policies aimed at replacing traditional state responsibilities and moralities with the control of 'outcomes' by market forces for which the dominant criterion is financial profitability. Perhaps governments perceive a benefit in reducing expenditures and curtailing spiralling national debts, for example from the enormous future costs of age pensions. Whatever the reason, many bureaucrats and politicians now support a solution which involves handing over state power to the corporations.
The corporations now have more power and resources to dominate government than vice-versa. It is corporations who have the greatest interest in maintaining and directing the world bureaucracies including the WTO, the World Bank and IMF. They are also trying hard to wrest control of the United Nations from nation-state control. Without democratic forms of international agreement and compliance, it will no longer be possible for any government to protect the environment, rights of producers, food security, etc. Any such protection would have to be incidental to the competing interests of corporations, just as it now is to the competing interests of (and within) nation states.
Corporate globalisation follow the principle of market fundamentalism, trade liberalisation or free trade which calls for the removal of all barriers to trade, including barriers which protect fledgling local industries, the environment and human rights. Some commentators argue that corporate globalisation is simply the manifestation of an international trend towards strengthening neoliberal policies of market-oriented reform. From this perspective, increased inequality is the result of neoliberal reform, and globalisation is an overstated buzz-word. However it is important to understand what globalisation is, and what it is entwined with.
As corporations have outgrown nation-states in terms of the financial muscle they wield, they have attempted to consolidate their power by pushing for international laws on trade. All the transnational corporations and many politicians are pressing for trade liberalisation because they say they want a 'level playing field' for trade between all countries around the world. But the idea of a 'level playing field' is flawed because it supposes that all the 'players' or companies in this case, are equal. Small companies cannot compete with large companies like Ford or Microsoft. Corporate globalisation is really just a play for access to more markets in many different countries by transnational corporations.
Trade is the buying and selling of goods and services. Trading affects nearly everything we do and occurs between individuals, companies and governments. Governments use taxes (tariffs), subsidies and regulations to control trade. When governments interfere with the trade system to support domestic industries this is known as 'protectionism'. When rules are in place that prevent governments protecting their own industries this is known as 'free' trade or trade liberalisation.
Governments increase trade to increase the growth and wealth of their country, while other governments do so to increase the power of their country so that it can wield greater influence over other countries. Governments encourage trade as a way of maintaining connections with other countries and others do so as a way of asserting their culture. Not every country can produce all of the goods and services that its population needs or desires.
Free trade is a term that describes the freedom of companies to access all markets including healthy productive local markets, which may be destroyed by cheaper goods and services from outside the region. Market fundamentalism or free trade has the goal of the maximisation of profits by those few transnational corporations who are set up to exploit a global market. Social and environmental issues are seen as an impediment to trade. What many corporations mean by free trade is putting profits before the rights of people and the environment. They see exporting as a right and importing as a duty.
Free trade is only free when there are no government policies and public subsidies restricting market access. Government policies and public subsidies however function to protect the environment, livelihoods and the rights of producers and help guarantee food security.
With 'free trade' it does not matter how a product has been produced. It does not matter if the worker who produced it was paid fairly or if the environment was respected or if the product was produced sustainably. With 'free trade' agreements signatories cannot discriminate between products that are produced justly and sustainably and products that are produced solely for maximum profit. Tariffs cannot be applied for ethical reasons and trade partnerships cannot be made to protect the environment, livelihoods and the rights of producers. The principle of 'free trade' (at least when applied in the most extreme form) is in conflict with the principle of sanctions. Currently economic sanctions are applied against regimes like the Taliban in Afghanistan for its unethical treatment of its people. Trade rule could make sanctions like this illegal when governments are signatories to the trade agreement.
When an individual or company buys into the operations of a company in another country this is known as foreign investment. This may be a small investment or a large investment involving buying a major share in the company. It may lead to a merger or takeover of the company and the investing company may relocate its head office to the country where it has invested. Investment may bring benefits to companies such as access to markets, raw material and cheaper labour but it may harm local economies and small businesses and produce lower labour standards and job losses.
The trade system has tended to favour companies by allowing them to own and control intellectual property rather than favouring the transfer of technology and knowledge into the public domain. Ironically, intellectual property is clearly a trade-restrictive measure!
Environmental and social standards around the world have been forced down by companies threatening to relocate their business elsewhere.
Small companies cannot compete in the global economy with the transnationals but under trade rules are expected to be treated equally.
The influence that the transnational corporations have on global trade policy is huge and it is increasing.
The underlying principle on which the current 'free' trade system is based is fundamentally flawed. The system promotes the unrestricted movement of goods, services and capital, to produce the maximum level of economic growth and consumption as its main goals and as ends in themselves. It does not do enough to ensure that international trade promotes sustainable and equitable development. Free trade as an end in itself causes unsustainable use of resources and inequitable distribution of resources.
Advocates of free market economics say that it increases economic growth. This may be true but it is growth that is unevenly distributed. Furthermore, this type of growth is at cost to the environment and to society.
The standard of measurement for economic growth is the Gross National Product (GNP) or Gross Domestic Product (GDP). While this has risen over the past half century of free market economics, the gap between rich and poor has got wider and the environment has deteriorated.
GNP and GDP include environmental damage and social problems as positive contributions to the economy so GDP can increase while at the same time the health of the environment and people's quality of life can decrease. In fact, this is what has occurred in the past few years. Growth as measured by GDP has resulted in a decline in the environment and quality of life for many people.
GDP is not a good measure of social improvement generally, because it reflects income rather than quality of life. A better measure is the Genuine Progress Indicator (GPI) and this indicates that in most countries the quality of life is actually falling and that economic growth is taking us backwards.
For more information on GPI visit the Redefining Progress web site: http://www.rprogress.org/projects/gpi/
What you can do
Learn more about these important global issues.
Use our lobbying service to write a letter or email your government and ask them to develop local production and distribution, and to support cultural protection and oppose economic globalisation.
Write a letter or email the editor of your local newspaper voicing your opposition to WTO agreements, and drawing their attention to the effects of the agreements.
Ask local councils to pass motions of opposition to these agreements.
Join a local group campaigning on global justice issues or start one yourself.
Try to reduce your reliance on the multinational corporations and their products by buying locally produced products. For example, buy your food from farmers’ markets or food co-operatives where producers sell their food direct to the public and the money goes straight to the person who made it. This guarantees the producer a decent income, encourages face-to-face interaction, creates communities and avoids the destructive effects of the global trading system. Buying local means saving energy as there is less transport required. Your food is usually fresher, too.
Fair Trade provides better trading conditions and security for poor producers and workers in the developing world. Small farmers are given a fair price for their crops, regardless of the changes in global markets. Fair Trade products usually carry a label, a guarantee that the product meets international standards on environmentally sustainable farming practices and sustainable development. Products such as coffee, tea and chocolate are available in shops in many Western countries.
Look for Fair Trade labelled products and ask your local businesses to stock them. By buying Fair Trade labelled products, you can help support small farmers and help to undermine the impacts of unfair trade rules imposed by the WTO.