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<font size="2" face="Verdana, Arial, Helvetica, sans-serif">’Globalisation’
is a word which has come into common use in
recent years. Government policy-makers, political
party leaders, businesspeople, academics, labour
union leaders and the mass media all refer to
the effects of globalisation and how it is changing
our lives. Governments talk about how important
globalisation is. On one hand they tell us that
globalisation is ‘good’ for us, but
on the other hand they say that many of the
problems we face today are because of globalisation,
not government policies. <br>
</font></p>
<p><font size="2" face="Verdana, Arial, Helvetica, sans-serif">However
globalisation has different meanings to different
people. Here is a common understanding of the
meaning of globalisation: a rapid increase in
international trade and investment in the last
20 years which is breaking down national borders
and creating a single global economy –
often called the ‘global village’.
<br>
</font></p>
<p><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Most
people see globalisation as a process of change,
which many have been persuaded as natural and
inevitable. <br>
</font></p>
<p><font size="2" face="Verdana, Arial, Helvetica, sans-serif">This
view indicates that ‘globalisation’
consists of four main points: <br>
</font></p>
<blockquote>
<p><font size="2" face="Verdana, Arial, Helvetica, sans-serif">•
The process of ‘change’ involves
international trade and investment. So clearly
the role of business corporations and their
overseas activities is a key part of this
change. <br>
</font></p>
<p><font size="2" face="Verdana, Arial, Helvetica, sans-serif">•
Based on this international trade and investment,
national economies are tied together in a
global economy. <br>
</font></p>
<p><font size="2" face="Verdana, Arial, Helvetica, sans-serif">•
Changes in the global economy are much faster
now. <br>
</font></p>
<p><font size="2" face="Verdana, Arial, Helvetica, sans-serif">•
Globalisation has taken place in the last
20 years. <br>
</font></p>
</blockquote>
<p><font size="2" face="Verdana, Arial, Helvetica, sans-serif">But
there are three crucial problems with the above
perception of globalisation: <br>
</font></p>
<blockquote>
<p><font size="2" face="Verdana, Arial, Helvetica, sans-serif">•
If we see globalisation as a process of increasing
international trade and investment, then it
is important to realise that the process is
not new. The growth of modern international
trade and investment began 500 years ago as
part of European imperialist expansion. So
the changes attributed to globalisation over
the last twenty years are not just about international
trade and investment, because this has been
going on for over 500 years. <br>
</font></p>
<p><font size="2" face="Verdana, Arial, Helvetica, sans-serif">•
It is not true that national borders are disappearing.
We live in an economic system that is international
or ‘global’, but national borders
are stronger than ever. It has become easier
for corporations to move investment from one
country to another, but in most cases this
involves the active support of national governments.
Governments sign international agreements
and make deals to allow business and capital
to move around the world easily, but it is
not so easy for ordinary people to move around.
National borders are still very strong, so
people need passports and visas as well as
facing tight immigration controls; they cannot
move easily from one country to another like
rich people and corporations. So the ‘global
village’ looks more like a village of
the rich and powerful. In fact, it is not
like a village at all, it is more like a heavily
fortified global garrison where a handful
of powerful and wealthy people are served
by the majority. <br>
</font></p>
<p><font size="2" face="Verdana, Arial, Helvetica, sans-serif">•
Globalisation is not a ‘natural’
process of change because all trade and investment
activity is determined by deliberate decisions
made by corporations and governments. These
decisions are made by corporations and governments
as part of a conscious strategy to promote
their own common interests. To be successful
in promoting their interests, governments
and corporations exercise their combined powers
to force the changes which are taking place
in the global economy. The most important
type of power in the global economy is the
power of corporations whose interest is profit,
purely and simply. This is also not new! And
the process is certainly not natural or inevitable.
So the question remains: if this has been
going on for 500 years, then how has the last
20 years been different? Or to put the question
another way: why is it a common belief that
globalisation occurred only in the last 20
years? <br>
</font></p>
</blockquote>
<p><font size="2" face="Verdana, Arial, Helvetica, sans-serif">To
answer this question, there are three points
to consider. <br>
</font></p>
<blockquote>
<p><font size="2" face="Verdana, Arial, Helvetica, sans-serif">•
Over the last 20 years advances in technology,
especially computer technology, have meant
that communication, information, and transportation
have become much faster and reached more countries.
Corporations have used the technological advances
to increase overseas business activity and
– of course – to increase profits. That is
why some people have defined globalisation
as ‘capitalism in the age of electronics’,
but it is much more than this. <br>
</font></p>
<p><font size="2" face="Verdana, Arial, Helvetica, sans-serif">•
In the last 50 years the rate of increase
in the size of overseas investment by corporations
in Europe, North America, and East Asia has
increased dramatically. In particular, this
involved overseas expansion by British, French,
German, US, Canadian and Japanese corporations,
which have become more powerful and now play
a commanding role in the international economy,
while their products dominate consumer markets
around the world. Big corporations investing
abroad came to be known as ‘multinational
corporations’ (MNCs) or ‘transnational
corporations’ (TNCs) and have increased
in power and size over the last 20 years.
The rising importance of TNCs and their increased
power is an important feature of globalisation.
<br>
</font></p>
<p><font size="2" face="Verdana, Arial, Helvetica, sans-serif">•
Although increased overseas investment is
an important ‘global’ change, we
must recognise that most overseas investment
was to nearby countries – not all over the
world. In general, US corporations invested
in Latin America, Japanese corporations invested
in China and Southeast Asia, and British,
French, and German corporations invested in
Europe. So changes in overseas investment
patterns show that there has been a regionalisation
rather than a globalisation of investments.
<br>
</font></p>
</blockquote>
<p><font size="2" face="Verdana, Arial, Helvetica, sans-serif">In
the mid-1970s, business corporations in industrialised
countries faced a serious energy/oil crisis
which threatened their profits. Of course, they
were still making profits, but they were worried
the profits would no longer keep increasing.
To overcome this crisis they did three things:
(1) increased investment in countries where
labour was cheaper and where workers were more
repressed; (2) created new business activities
to make larger profits; (3) convinced governments
to break down barriers that were preventing
them from increasing profits. <br>
</font></p>
<p><font size="2" face="Verdana, Arial, Helvetica, sans-serif">As
already mentioned, the rapid increase in overseas
investment over the past 20 years was marked
by the rise in the power of TNCs which increased
their impact on our daily lives. Exploitation
of cheap labour overseas was a key strategy
for producing cheap products so that they could
dominate consumer markets around the world,
while still making huge and increasing profits.
Thus when faced with a profit crisis in the
mid-1970s many big national companies in Europe,
the USA, and Japan, turned into TNCs. <br>
</font></p>
<p><font size="2" face="Verdana, Arial, Helvetica, sans-serif">For
other capitalists, new profit-making activities
included putting more money into financial investments
and less money into industrial investment. One
reason is that it meant bigger profits in a
shorter period of time and no worries about
the rising cost of oil, steel, etc. Another,
less obvious, reason is that it allowed capitalists
to escape from the pressure of the demands of
organised workers. Such financial investment,
called ‘finance capital’, does not
produce anything of use and basically involves
moving money around the world quickly, speculating
on currency exchange rates, land prices, and
interest rates. Rather than building, producing
or servicing, finance capital makes profit out
of buying and selling – including buying and
selling money – and making big profits in very
short periods of time. This is a bit like gambling,
and is the reason it is referred to as casino
capitalism. Clearly, new computer technology
played an important role in allowing this new
kind of activity. <br>
</font></p>
<p><font size="2" face="Verdana, Arial, Helvetica, sans-serif">More
important though was the removal of ‘barriers’
that corporations claimed were preventing them
from making bigger profits. These barriers included
international trade barriers like tariffs, subsidies,
taxes on imports, and import controls. <br>
</font></p>
<p><font size="2" face="Verdana, Arial, Helvetica, sans-serif">But
corporations also wanted governments to remove
‘social’ barriers, including labour
unions, labour laws protecting workers’
rights, job and income protection, public services
provided by governments, social welfare, and
social safety nets. In fact, these ‘barriers’
were not barriers at all, but were forms of
‘protection’ for the rights and livelihood
of working people that working people had gained
after long years of struggle. </font></p>
<p><font size="2" face="Verdana, Arial, Helvetica, sans-serif">It
was their collective social right to have this
protection. However, corporations and the governments
supporting them claim that this protection limits
the ability of corporations to make profit and
so it was necessary to have a ‘free market’
in which there was no protection for working
people and less government spending. Of course,
there is nothing ‘free’ about the
market. What it really means is more freedom
for corporations to make profit. <br>
</font></p>
<p><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Of
course, there were other so-called ‘barriers’
which corporations wanted to break down. This
included government protection of the environment
and protection of public health. Again, this
protection was fought for by working people
over many years of organised struggle. But corporations
wanted to remove this protection to allow them
unlimited ways of making profit – and that meant
turning all our natural environment into ‘things’
which corporations could buy, sell, and destroy
for profit. <br>
</font></p>
<p><font size="2" face="Verdana, Arial, Helvetica, sans-serif">So
breaking down ‘social barriers’ to
corporate profit to overcome the crisis of the
mid-1970s, began more than 20 years of breaking
down working people’s collective social
rights. This meant cuts to workers’ wages
and living standards, the loss of social protection
for working people, cuts in government spending
on welfare and education, privatisation of public
services and utilities, and cheaper, unprotected
labour for corporations to exploit. <br>
</font></p>
<p><font size="2" face="Verdana, Arial, Helvetica, sans-serif">This
process of breaking down social barriers included
breaking down those barriers in other countries
where corporations – especially TNCs – wanted
to make profit. In countries where working people
had already won protection of collective social
rights, governments were encouraged or forced
to destroy this protection. In countries where
working people did not yet have this protection,
the ‘free market’ was forced on them
too and their governments refused to recognise
their rights. This often involved violent repression
of workers’ movements and social movements
by governments. <br>
</font></p>
<p><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Two
of the first government leaders to launch this
attack on ‘social’ barriers in the
interests of corporate profit, were the British
Prime Minister, Margaret Thatcher and the US
President, Ronald Reagan. That is why this ‘free
market’ ideology is sometimes called Thatcherism
or Reaganomics. The attack on working people
was carried out in the UK and the US, as well
as overseas. Now nearly all government leaders
around the world have adopted the ‘free
market’ ideology and are destroying the
livelihood of working people and the environment
in the interest of corporate profit. <br>
</font></p>
<p><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Thus
the world-wide changes which we now call globalisation
are actually part of a political solution to
the profit crisis faced by big corporations
20 years ago. By imposing the same ‘solution’
of the ‘free market’ on working people
in all countries around the world, big corporations
and the governments have created these changes
on a global scale. <br>
</font></p>
<p><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Based
on this we can define globalisation as: a strategy
designed by political elites and corporations
to overcome the profit crisis faced by big corporations
in the mid-1970s; this strategy involves an
ideology of the ‘free market’ which
attacks the rights and livelihood of working
people around the world and subordinates everything
to corporate profit. <br>
</font></p>
<p><font size="2" face="Verdana, Arial, Helvetica, sans-serif">By
understanding globalisation in this way, we
are faced with an important conclusion: If globalisation
is not a natural process and if it is a deliberate
political strategy used by governments and corporations
against the interests, rights, and livelihood
of working people, then clearly we workers can
and should create a different strategy. </font></p>
<p><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Globalisation
is not something that fell from the sky. It
was created by the powerful and is being forced
on the weak. This being the case we must dissemble
it and create a new set of ‘changes’
that advance our interests, our rights, and
our well-being.
Address: Wisma MTUC,10-5, Jalan USJ 9/5T, 47620 Subang Jaya,Selangor | Tel: 03-80242953 | Fax: 03-80243225 | Email: sgmtuc@gmail.com.com