A reflection on GLOBALIZATION

A Reflection on Globalization


                                                             The Reporter (Ethiopia) July 23, 2000

By Asrat Bekele


This paper was presented at a panel discussion organized by the Ethiopian Economic Association recently. It has been shortened to fit the format of the paper.

Part II



 Unfortunately, the wretched are feverishly busy trying to annihilate each other under the pretext of identity politics. Cognitive dissonance such as racism, ethnicism, sexism, fundamentalism, etc. have now become the major preoccupation of the wretched. The incapacity to manage their diversity, commensurate with available resources, initiated the proliferation of "ethnic states," or their look-alike. This has given the political globalization of the day an added impetus to custom-make even more non-viable states or "Banana Republics" (to use a phrase coined by the Americans) out of existing ones.


 Today, power is not multi-polar. The potentiality of creating a multi-polar world, at least in the near future, rests on a politically integrated Europe, China and probably Russia (after massive restoration). The current US hegemony, like its predecessor the British Empire, seems to misunderstand the aspirations of other nations which inhabit the world alongside it.  Whether the US, essentially an offshoot of the British, will increasingly assume a hybrid of the same old aggressive "Anglo-Saxon only" dispensations, is something that remains to be seen.


 So long as identity politics rears its ugly head within the wretched, and has no potential to destabilize the global status-quo, then it seems that the self-destruction can go on unencumbered. If on the other hand, identity politics tries to overreach by projecting towards the outside, in a consolidating manner, then it will be checked swiftly, viciously, and comprehensively. Here, Islamic fundamentalism, with its modern aspirations, comes to mind. The qualities of a confident nation include, the capacity to incorporate, preferably without lingering trauma. But when great nations succumb to the myopic vision of the  village (the

 "them" and "us" logic) then, they threaten to underwrite the important notion of "global village," with their hegemonic ambitions. The result will be a mirage of the desirables and the reaction, utter chaos of frightening proportion. It is my opinion

 that identity politics will not find resolution by closing on itself. It is on a different plane of cognition that satisfying solution might be had. More than anything, I believe, it would require the willingness to transcend our primordial instincts and to

 replace them by new liberating sensibilities. Chrematistic drive will only bring more bestiality, not humanity.


 The ultimate fate of these "mini and micro states" as well as the seemingly meaningful existing states is predicated on the existing globalization, political or otherwise. One option is to go the way of the "Native Americans" (both North and South), silently vanishing from the scheme of things, a la the international reservation system. Highly selective migration from these "states" will continue, alongside their comprehensive de-vitalization. In this category, we can easily place the resource poor, land-locked countries. Other programs might include the possibility of effective (even geographical) incorporation into the system, of whole regions. Here resource rich coastal nations come to mind.


 So much for the political globalization now. The means by which the existing global regime effectively perpetuates itself will be examined later, but for now, we will look at domestic polarity, or domestic inequality which has come to establish itself as

 one of the defining characteristics of modern nation-states.


 For the sake of brevity, I will only state, without numerical justification, the ascendance of extreme polarization within nation-states. The Human Development Report of 1999 has sufficient data and statistics to illuminate the nature of polarizing globalization, both internally and externally, In Russia, Ukraine, and in most CIS states, income inequality has doubled since 1989. In Brazil, the poorest 20% of the population receives 2.5% of the household income, while 20% of the richest receive 63.4%. The case of Africa is so obvious, that we do not need much calculation to highlight its overwhelming deprivation. In most of the OECD countries income inequality increased in the 1980's and 1990's (the hegemonic period of neo-liberalism) with the greatest increase, not surprisingly, being registered in the US & UK, and the lowest in the Nordic countries. Today, barely 1% of Americans own more than 43% of the national wealth, and over 90% of non-residential wealth. In contrast, close to a quarter of the Americans live below the poverty line. As far as distribution of wealth is concerned, the US has become the most undemocratic nation in the developed world. As a consequence, its other democratic pretensions can not be expected to auger well in light of this extreme inequality. Elective democracy (the zillion dollars game of National elections), has become very capital intensive indeed. Unless its poor cousin, participatory democracy comes to the rescue, effective democracy in the US is doomed to remain only the domain of the rich. Another interesting statistics is that 1% of the wealth of the 200 richest

 people would provide universal access to primary education for all of the world's children ($7-8 billion)!


 In both poor and rich counties, whatever accumulation was possible, it has gone disproportionately to profit rather than wages (i.e. capital rather than labor). For example, in the US, the average real wage levels of today are actually lower than the late 1970's. On the other hand, gross operating surplus, defined as a percentage of gross value added, rose form 28% in 1973.2% in 1990.


 Rising unemployment, which is caused by global stagnation and "jobless growth" particularly in the OECD, has taken its tolls. There is no contention that labor is mercilessly devalued by capital, either directly or via technology. What is not obvious, but real nonetheless, is the systematic devaluation of capital itself. This will be our next topic.


 After 1973, (probably the beginning of the prevailing global crisis), the recorded rate of growth of fixed capital formation in the OECD countries started falling below that of GDP, contrary to the experiences of the growth decades of the 50's and 60's.

 Today, OECD alone generates about 2 trillion dollars worth of investible capital per annum, which is equivalent to about 10% of OECD's GDP. The desperation to find outlets for the mountains of cash has resulted in "financialisation" and speculative

 bubble, which the current US economy amply exemplifies. Since the US economy anchors today's globalization, alternative to its preponderance, naturally reside in the critique of the American system, and hence a thorough analysis of it remains a must. For our purpose, I will only site the major distortions. The new paradigm argument which is being parroted by the establishment gurus is very shallow. "The computing and communications-technology sector collectively is only a modest 5%

 of the US GDP. The value added of Internet sales, i.e., its contribution to GDP is probably little more than 1% of GDP," says The Economist, one of the most prestigious mouthpiece of the dominant ideology. In 1999, America had the fantastic

 private net savings of minus 5.5% of GDP, i.e., spending has exceeded income! Given that consumer spending accounts for roughly two thirds of the US economy, this certainly spells a bad omen, not only for America but for the world at large. The

 prominent mouthpiece concluded by alluding to the need for a divine intervention. "If America does pull a soft landing where others have failed, that will indeed deserve to be called an economic miracle." Brave is this statement. All evidence suggests that the situation is not only unsustainable, but is actually a ticking time bomb, whose inevitable implosion will bring a massive devaluation of the asset value of capital, probably unprecedented in recent history! Surprisingly, the knowledge that there is a glut of capital in world today, is one of the best-kept secrets of the global status-quo. The means by which capital postpones its impending devaluation include, privatization, floating exchange rates, very high real interest rates, debting the poor, the US external deficit, etc.


 Since accumulation in the peripheries is becoming the Achilles heel of both the state and the indigenous private sector, other means must be devised for financing development, if earnest progress is to be made amongst the "wretched." In my opinion, the organized private sector has its limited role to play in the development effort, in the meantime, state (ization) (different from parastatals) and community (ization) (different from communes) have to resume alongside  privatization, (the foreignization of major assets, at least in Africa) albeit efficiently and prudently. It is interesting to observe that in the developing countries, privatization usually means de-statization or anti-monopoly, (against the state, and hence anti-accumulation). In developed counties, however, privatization seems to mean increasing monopoly by the privates sector (hence greater chance of

 accumulation). Recent consolidation within the TNC's has given the concept "privatization" a new twist, in the tradition of newspeak. Today the top 100 TNC's account for almost of the goods traded globally! The 1000 largest TNC's account for

 80% of the world's industrial output!


 The question then arises, "Is globalisation, the privatization of the globe?" Provocative as it is, this question is certainly not vacuous and deserves articulated responses from ideologues of the various camps. Granted, since this is not an issue for the faint hearted, or minded, we will not pursue it any further. But the great narratives, as well as post-modernism and other flirtations need to be put to the task of addressing it squarely. This an important matter for the "simple" reason that it is the state of the world which is at stake.


 What are the means the existing global system has (again, different from previous polarization) at its disposal to perpetuate the polarity witnessed  between and within nations? In the parlance of the dominant powers, they are classified under the rubric "National Interests." These monopolies are 1) financial, 2)  technological,  3) the control of the earth's resources, 4) the media and 5) weapons of mass destruction.


 Whether the existing global system can use the above five monopolies effectively so as to impose its will on humanity on a sustained basis is something that remains to be seen. So far, it has been successful in subjugating a large portion of  humanity

 into a pathetic existence. The gap in the level of development, say between the US and Ethiopia is more than two hundred-to-one today. On the average, the gap between the developed and the wretched is about sixty-to-one. Two centuries ago,

 the gap between the centers and peripheries was only two-to-one. What is genuinely surprising about today's globalization is; its polarization, which is without precedent in the entire history of humanity, has been accepted by most of us as the "natural state of things," the way slavery was accepted in Ancient Greece or Rome. To me, it is just one historical formation which is in dire need of transformation. Up to now, globalization has presented itself as a grotesque behemoth of one-dimensional character which is ready to consume both man and nature, only to spew out suffocating monocultures in all spheres of existence. It has yet to prove that it is a thoroughly sustainable, pro-life, human-centered, technologically driven liberating construct, with a capacity to understand and manage the diversity with which the earth is endowed.


 In the absence of a global governance which is equitable, democratic and takes into consideration the diverse reality of today, the future looks disturbingly uncertain! Echoing history, we can ask, "what is to be done?" Who can force such a desirable

 global governance to the fore? Should a globalization imbued with equity, good governance, etc. undermine the "nation-states" amalgam of today's world? I believe these are important issues which need to be reflected upon thoroughly.


 Like many other deeper concepts, globalization has now attained full vulgarization (particularly in places like Ethiopia) thanks to the daft logic of "Understanding by simplification." The popular media and simpletons elsewhere are, predictably, infatuated with its trappings, but to seriously hope that  mere verbalization and parrotisation will bring clarity to this complicated subject is tantamount to abandoning critical reasoning altogether. Globlalization is not only objectives and strategies for the unexamined growth and wasteful consumption. It is not only the aspiration to recapture previous concession; such as liberalization, privatization and even colonization (of course, without its headaches). Nor is it only tools and instruments like the UN, the Internet, WTO, NATO, IMF, Banana  Republics etc. Then, "Is globalization stealth colonialism?" Maybe, at least from the perspective of the South! I think Globlaization is probably the most comprehensive doctrine dealing with the totality of existence, and whose ideological base is at  best suspect. It is being promulgated by the very few, for and on behalf of the very many, so it seems.


 Therefore, given the above prognosis and the all encompassing nature of the phenomenon, what should Ethiopia do? I believe Ethiopia should try to construct its own transformation, however difficult. Its reconstruction project, in the sense of The Meiji, should look at itself from the inside and devise an indigenous vision. It should be positive, proactive and persistent towards it. It should reconstruct (I do not subscribe to the prevailing political gibberish about its past, hence, the word reconstruct), painstakingly but patiently. It should participate the populace. It should prudently manage the systematic offensive of the global system. Most of all, it should persevere! The "why's" and "how's" of the "reconstruction thesis" should be articulated by all concerned, whether they are in or outside of real politics. At the very least, it should deserve reflections in the various civil society organizations (CSO), private sector organizations (PSO), and state institutions. In conclusion, I would like to quote on of Ethiopia's capable leaders, whose attempt in managing the previous offensive was somewhat exemplary, given the circumstances. "We have received the arrangement made by three powers (Great Britain, France and Italy). We thank them for their communication and their desire to keep and maintain the independence of our government. But  let it be understood that this arrangement in no way limit what we consider our sovereign rights," Menelik, against the Tripartite Treaty of 1960 (Dec. 13/1906, London) which was signed unilaterally by the powers, emphatically asserting their interests on and about Ethiopia.


 The foregoing expose is essentially the work of independent and profound thinkers of our time. My job has been simply to cut and paste their findings. If it has helped in illuminating some of the problematic of globalization, then the credit should go to

 these sublime teachers. On the other hand, if it has failed to enlighten, then take it as another case of, "from the sublime to the ridiculous." I rest my case.

                                                       To be continued...