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There was globalisation before capitalist globalisation.
People travelled across the Pacific from Tahiti, Easter Islands, Fiji, Marshall Islands, Tonga, Vanuatu, Papua New Guinea, the Indonesian archipelago, Australia, Indonesia and New Zealand using primitive boats. That it was an eminently feasible proposition was shown by Thor Heyerdahl in his Kon Tiki expedition. Chinese, Indian and Arab merchants and sailors carried goods, precious metals and people from northern China and Japan to the East Coast of Africa. They all used ships with wooden hulls and planks.
The largest boats were built by the Chinese. The Chinese admiral and diplomat in his 1405 voyage from Suzhou to the Horn of Africa used a fleet of 317 ships carrying about 28,000 crew members, that is, on an average each ship carried about 900 crew members. In comparison, the caravel Santa Maria on which Columbus travelled to ‘discover’ the island of Hispaniola could carry no more than 300 persons. To get an idea of the size of Zheng He’s ships, for example, the ill-fated Titanic carried 2,224 passengers.
Flemish merchants travelled both overland and on the seas to meet Portuguese, Genoese, Spanish, Venetian and Levantine merchants to link up the Eastern Mediterranean, the Black Sea with the North Sea, the Baltic and the East coast of Africa. They carried Asian textiles, spices, slaves, raw wool, woollen goods and precious metals until the advent of merchants and sailors from the early capitalist states of England and the Netherlands in the 16h century.
The book Six Faces of Globalization: Who Wins, Who Loses, and Why It Matters by Anthea Roberts and Nicolas Lamp is about 20th-21st century globalisation under capitalism. For an overview of the subject it is a very useful book. It is written, however, primarily from the North Atlantic citizen’s point of view. Developing countries do appear from time to time, but they are treated primarily as witnesses rather than as actors.
China does appear as an actor, but China can hardly be treated as a developing country any more, being the second largest economy in the world, threatening soon to overtake the US economy. Unlike most other economies in the world, the Chinese economy has continued to grow under the pandemic, though at a lower rate than before. China is seen as a challenger to the US economically and technologically, and that challenge has created tensions not only among the NATO powers but across the world. China has proved to be a doughty competitor in space as well.
Roberts and Lamp distinguish between six views of globalisation. The first view is that it is a win-win situation. The free trade regime that has prevailed in most countries of the world has delivered more and more abundant consumer goods and goods of a larger variety. It has also provide newer and newer technologies. Who could have dreamed of the internet and the social media in the 1970s? Some goods such as computer chips and associated means of communication have become much cheaper over time. 3D imaging and robotics have made some kinds of surgery possible that have saved many lives and given a new painless existence to many people. True, inequality has grown exponentially over time and old jobs have been destroyed by automation. But newer kinds of service industries are creating new jobs and safety nets can mitigate the effects of inequality and raise the real standard of living for people.
A second view is that globalisation comes at a cost: job losses, skills becoming outdated, causing manufactures of some types to collapse because of foreign competition, whole regions become ghost countries with the shells of factories standing as a mute witnesses to past glory. With the NAFTA coming into effect or even before that, macquiladoras in Mexico, or competition from South Korea and China, forced many steel factories and automobile factories to close down. But in spite of that, US incomes at the upper end of the scale continued to rise. People had to move from declining regions to growing ones such as the Silicon Valley, they had to learn new skills, had to go college or professional schools again – that is, people had to adjust their whole lifestyles. But in the long run everybody gains; that is how Tony Blair, the ex-prime minister of Britain, regarded the unstoppable fact of globalisation.
The right-wing populist view of globalisation, the best representative of which was Donald Trump, focuses on the damaging impact of free trade agreements on manufacturing and the the supposedly ill effects of immigration on the jobs of natives. In a new trade agreement signed between the US, Canada and Mexico, it was laid down among other things that automobiles could be imported only if the value of their components contained 50% parts of US origin. Trump raised the wall separating Mexico and the southern US border and created infamous detention camps for the few who could manage to evade the US border patrol where they were treated like animals, including children being separated from families, and were deported as soon as possible, contravening all UN conventions about asylum seekers. The violence and poverty from which would-be immigrants in Central America sought to escape were created in the first place by US support for military dictators and authoritarian rulers, the families of some of whom were heavily involved in the drugs trade.
The left-wing populist narrative latches on to difficulties with the establishment narrative of globalisation. First, in the face of visibly growing inequality, it fails to redistribute the gains, sticking to the exploded trickle-down theory. Second, the legal rules and institutions such as the WTO, the IMF and the World Bank and the political elite backing them ensure that the lion’s share of the incomes always accrue to the elite and the well-heeled. Third, while the elite protect their emoluments through restrictive licensing agreements (the US medical agreement being a prime example), they throw ordinary workers to the wolves of cut-throat competition. The remedies suggested by the left-wing populists is to end regressive taxation, regulate the banks so that they cannot take advantage of fluctuations in business to make profits, monitor and regulate the salaries of CEOS and substantially increase public investment in education, healthcare and social insurance.
The corporate power narrative analysed by Roberts and Lamp is really a variant of the populist left-wing narrative. In this view, most of the ills of the world are caused by the enormous power of multinational corporations, which have, in Raymond Vernon’s prophetic words, put ‘sovereignty at bay’. When a particular country wants to tax the profits of a large corporation, or wants to regulate its activities, all it has to do is to threaten to leave the country with attendant losses in production and jobs. So far all countries, big or small, have been singularly unsuccessful in either regulating multinational corporations’ activities or taxing them properly. One small step towards taxing them properly has been the agreement of 140 countries to impose a minimum tax of 15% on all multinational corporations.
The final and most radical narrative is of those who think that everybody has lost under globalisation. For a start, globalisation has enormously increased the threat of the rapidity and extensiveness of pestilences. On December 31, 2019, China reported a new form of pneumonia in Wuhan, which was found later to be caused by the COVID-19 virus. By March 2020, it had spread throughout the world, killing several million people globally. When vaccines were ultimately found for the virus, some wanted concentration of research and production, and the anti-globalisers wanted diversification. This applied, according to the latter view, to all spheres of production and research since that would minimise the control of research and production in a few developed countries and also stop the gap between developed and developing countries from widening further.
Globalisation under the control of developed countries has also led to an unfair distribution of the ill-effects of carbon emissions on health and the environment. While the developed countries are the principal culprits for carbon emissions – now joined by China – they have passed on some of the ill-effects to developing nations by transferring smoke-stack factories to them – as had been suggested by Lawrence Summers a long time back – and making unfair carbon exchange agreements with them. But climate change caused by the unlimited burning of fossil fuels has been no respecter of countries. It has led to the melting of Arctic and Greenland ice, the melting of Alpine and Himalayan glaciers, increased the frequency of cyclones, typhoons and tsunamis from Japan through Indonesia and the United State. Recently, record high temperatures in north-west North America has caused uncontrollable wildfires, and caused the deaths of millions of non-human fauna and hundreds of humans.
There have been Greenpeace and green parties advocating green methods of production for some time. Now, Greta Thunberg has been the young face of a global movement, mainly of young people, demanding the immediate cessation of the use of fossil fuels. Green technologies in the form of water power, wind power and solar power have been around for some time. Now cars are running by using hydrogen and lithium fuel cells. They have been joined by green steel – that is, steel produced without using carbon – invented by a Swedish company. The Jodhpur IIT has used microbial cells based on canna to produce electricity.
The obstacles against the use of emerging green technologies are two-fold: One is the greed of fossil fuel producing companies which manipulate government policies with the help of pliant politicians. The other is the attempt to monopolise by big corporations like the Adani Green Energy Limited. The final plank of the egalitarian campaigners against globalisation under the auspices of profiteering capitalists is that they want decentralised governance – such as the three-tier Panchayat system or other kinds of community-based governance wherever possible and bringing all large-scale production under public control. Such measures will, they hope, greatly diminish the power of big companies and bring about a more egalitarian society.
Roberts and Lamp are strangely silent about the role of US imperialism in forcing capitalist-style globalisation down the throats of hapless people. It is well-known that the current neoliberal regime was initiated by Margaret Thatcher in Britain from 1979 and under US President Ronald Reagan from 1980. But in fact, the first neoliberal regime was inaugurated by the Indonesian dictator General Suharto who came to power on the corpses of a million Indonesians, with the help of the CIA. In Latin America, the neoliberal regime was initiated by General Pinochet by assassinating on September 11, 1973, the democratically elected president Salvador Allende, again with the help of the CIA.
Amiya Kumar Bagchi is a distinguished economist whose books include The Political Economy of Underdevelopment, Private Investment in India 1900-1939 and Colonialism and the Indian Economy.