The ideology of globalization as that of capitalism writ large and, necessarily, writ always larger

by Doug Dowd

This is a talk delivered to the conference entitled Reflections on the Social Impact of American Multinational Corporations, in Grenoble, France, January 2002.

It is useful to begin by comparing Adam Smith and David Ricardo with Milton Friedman and his mainstream cohorts; to compare, that is, those who sought to bring a new system into being (for better and for worse) with those now seeking to maintain the existing system — for the worse.

In 1776, Smith was seeking to break down the ubiquitous walls of corruption blocking technological progress in Britain; in 1817 Ricardo was trying to advance the interests of incipient industry by getting rid of the protective agricultural tariffs in Britain which, in raising the costs of subsistence for labor, heightened the landed gentry’s incomes at the expense of manufacturers. Smith anticipated a long period of hard lives for the working class, but (like Marx) thought ultimately it would make possible for them, too, the best of all possible worlds. Ricardo well knew that — in obeying the “principle of comparative advantage”— if no nations in the world could protect themselves from Britain’s rising industrial supremacy they would remain hewers of wood and drawers of water, as industrializing Britain would rule over the world. Although neither was an ideologue, their arguments, taken together, are the alpha and beta for the contemporary mythology of all boats rising on free market tides. Their ancient bones must have been rattling lo! these many years now, as they contemplate the road to hell they helped to pave..

To which it should be added that Ricardo — who, with his abstract theorizing, paved the way for much more than trade theory — set forth his arguments within a framework of assumptions treated as blather throughout the nineteenth century by (among others) the USA, Germany and Japan, the most powerful of all industrial nations. Although mainstream economists seem not to know it, a most critical assumption of Ricardo’s theory took fixed capital as immobile. That assumption is violated every day, everywhere, for almost every industry; indeed the always increasing mobility of “fixed” capital is one of the propelling reasons for capital’s push for maximum access to foreign turf, where they can use the best technology with the cheapest labor and the least environmental constraints. This motivation is most clearly expressed in the infamous (and as yet unachieved) Multilateral Agreement on Investment. (MAI, which, it is pleasing to report, is the word for “never” in Italian; thus, in protests against it in the bel paese, the banners read “MAI, mai!!!)

Perhaps of greatest relevance as regards contemporary free markets ideology, neither in Smith’s nor in Ricardo’s world was it necessary to take into account any”public opinion” other than that of property owners. Today’s globalizers live in a different, formally democratic world. Now it is essential for capital to find ways to deflect attention from the human, social, and environmental costs of globalization. Capital has long been equipped with an effectively servile economics profession which, in recent years has found as its translator and transmitter the technologically always more potent media, The unholy trio of capital, pliant intellectuals, and media technology was neither necessary nor available at the dawn of industrial capitalism.

As with so many other influential thinkers, Smith and Ricardo may be forgiven for not seeing the full future meaning of their proposals, how, for example, an always lengthening rope of interacting technological advances would allow capital not just to invest at home and trade freely abroad, but also (as with the unforeseen nature of industrial capitalism’s imperialism) penetrate always more deeply with their investments into the imperialized/ globalized societies. Which also meant another set of tragedies: the irreversible contamination of the politics, the cultures, the whole of life of the infected peoples — a set of continuing tragedies beyond words to convey.

The excuses we just noted for Smith and Ricardo cannot be found for Friedman and his ilk. One can explain their indifference to the horrors of the past and their indifference concerning even the grosser realities of the present; but to explain is not to excuse. The entire history of capitalism reveals that the very “health”of capitalism has always been accompanied by the spread and deepening and worsening of the plight of people and of nature; for the mainstreamers that record is not history, but the twisted imagination of us unbalanced people. That is, mainstream economists are of the same stripe as “the good Germans”of the Nazi era, seeing only what it is safe or comfortable or gainful — or something difficult to dignify with words — to see. Whether their views are to be attributed to a “vested interest,” to sheer intellectual dishonesty or to the “trained incapacity” that is integral to the achievement of a Ph.D. in Economics is now of little import; what is important is that economists normally function in and outside of the classroom as do their transmitters in the media and in politics: as ideological functionaries.

It is not too much to say that were all that not so, capitalism’s prospects in the past fifty years or so would have been considerably dimmer. For not only are capitalism’s presumed virtues trumpeted daily and ubiquitously, just as important is that those in the general public (and in the classroom) who bear the slightest suspicion that the system’s defects outweigh its virtues find it very difficult, even impossible, to find a sustaining set of sources for their views.

There is of course much more to say, some of which will be said by others at this conference. Let me close on another major point which has long been and still is forgotten. Contemporary globalization, like its colonial and imperialist progenitors, is presided over by the few most powerful nations, and, of course, the power today as ever is pyramidal in structure: The USA, then Germany and Japan, and then the other 4, 5, 12, 30...And today, as ever, those who lead and dominate these processes see themselves as providing a needed service to those in the middle and, not least, at the bottom of the pyramid: the Spanish bearing the Cross and the Sword to various corners of an otherwise benighted globe; the UK carrying the white man’s burden, the French their mission to civilize, the Japanese hell-bent on creating co-prosperity. So it went, and so it goes, with the presumed beneficiaries now, as earlier, complaining or resisting, unable to see the light.

To oversimplify, let us assume the other societies (in Africa, Asia and Latin America) number 100+. Be it noted that — for better or for worse — those 100+ nations, unlike the G7 (or G30), have no other 100+ “others” whose burden they can carry, whom they can civilize, and, not to be impolite, whose resources, cheaper labor, etc., they can use to strengthen their economies. Although radical (and a few left/liberal) analysts have long taken for granted that colonialism/imperialism/globalization have been and will always be absolutely essential to the maintenance of capitalism, mainstream economists have never seen it quite that way. They have seen — without looking at — the global socioeconomy as a some sort of mutual benefit society. And if and when troubles clearly appear — economic, political, social, environmental, etc. — they are seen as existing because the weaker countries have stubbornly resisted the ways of progress: needed is “more transparency,” “fewer barriers,” etc.

Perhaps the most clearly egregious of the disasters is the extreme human and economic vulnerability done to the countries whose agriculture has been “modernized,” and has thus become its sole (or principal) “export platform” (owned or controlled by foreigners). That this has meant the destruction of not only the economic base of largely peasant societies, but also of their villages, their cultures, their families is seen by our contemporary Bigwigs as some combination of temporary and “their own fault.” Mexico, by no means the poorest of such nations is a tragic and large-scale example.

Mexico City in the early 1960s had a population of about 2 million; now it is ten times that: half of the people are unemployed, the air is close to the worst in the world, its people desperately seeking 10-hour a day jobs at the border factories of GE, GM, et al., so they can work for $2 a day, and then be laid off permanently when they have been worn down to skin and bones and exhaustion — their places sought by younger victims. And as many others risk (and many lose) their lives trying to cross that same border. And when such an economy moves into crisis and needs help, it can get it from the IMF...IF. And the IF means buckling down even more to the orders of the Bigwigs. Which is worse, to pay the price for being under the financial thumbs of speculators, the IMF and the TNCS, or to pay the price for losing their “assistance”?

Meanwhile, in the classrooms as in the op-ed pages, the economists’/TNC chorus continues its paeans to the free market, wherein the freedom is that of the powerful to have their way, Period.

To create and to maintain such a system of horrors requires obtaining consent both from the peoples of the powerful and of the weaker countries; in turn, that requires an always evolving ideology that justifies the harm done to those in both areas. Such a task might seem insuperable; in fact it has been simple. Its simplicity in the weaker countries is not difficult to comprehend, for the existence of political democracy in them is on the same level of weakness as their socioeconomies. In the stronger countries, to confuse and oppress and exploit is a more complicated matter; but the very strength of the stronger societies provides them with the facilities to meet the challenge.. Those “facilities” include not just the media, but also the consumerism they have helped to create — a consumerism whose blessings for capitalism are not just “economic” (narrowly defined), but political, for in their hurry to buy and to borrow, the working population has lost its ability to think in solidaristic/social terms.

Without an always growing and spreading and deepening movement of resistance in both the political and academic worlds that both clarifies the present and sets forth alternatives, what is now horrifying will ineluctably become catastrophic.

June 23, 2003