Quick Glimpse at Globalization

[Storm rising over the city]

I'll be covering globalization this week in one of my courses after introducing it last week. Globalization is a really complex issue, so there won't be time to look at all of it. Instead we'll briefly sort through a couple of main themes. Here's an overview if you keep hearing about that term and are curious. I refer a few times to a textbook I sometimes use (though not this semester) because I find the presentation or examples used by the author for certain aspects of globalization helpful.

Brief History

While there may have been (semi-)globalized economic systems in the past, our present version begins with the colonization of various societies by Western European powers from the 1600s through the early 1900s, including the colonization and integration of larger parts of North America by the former British colonies that became known as the United States of America. The exploitation or outright seizure of resources by those colonized or displaced helped to fuel the economies of these emerging Western powers while creating conditions of social, economic, and political tension in the colonies themselves which has in turn contributed to economic and political instability in many former colonies over the centuries, especially during the 20th century. While the United States and others attained liberation in the 1700s, many colonies in what is known today as Latin America weren't liberated until the 1800s. Asian and African colonies remained under European control until well into the 1900s (the scramble to colonize Africa was still going on in the first decades of the 20th century).

Those who favor modernization theory claim that the problems of former colonies are either the natural growing pains of economic development or are caused by failure to adopt certain political and economic institutions favored by the Western powers. These developing nations need guidance and funding to modernize and grow like the US and Western Europe, so institutions such as the IMF (International Monetary Fund) and the World Bank, largely funded and controlled by those same Western powers, provide economic advice and loans to help reduce poverty around the globe. Many countries are unable to pay back their loans and are saddled with debt, requiring that the terms of their loans be renegotiated. This renegotiation frequently comes with strings attached concerning efforts to combat what the lenders see as waste and corruption. 

However, some of these terms follow neoliberal ideals which see any constraints on doing business and making profit as obstructions to economic growth. Under the modern neoliberal view, markets should exist for practically every area of human life, a world in which everything becomes a commodity. This includes things such as fresh air, clean water, and environmental conservation. Markets and the market value of commodities, as determined by consumer demand and the availability of a particular item, are seen as the best guide for human activity since humans are rational actors who will behave according to enlightened self-interest. Anything truly bad or destructive will be weeded out because it is impractical, unsustainable, or offense to a sufficient number of consumers. By increasing the scope of markets and ramping up commodification (turning things into commodities -- things to be bought and sold in the marketplace), economic growth will lead to increased prosperity for all, which is turn is supposed to inherently promote democratic ideals and greater individual autonomy and choice. The best chance for solutions to human problems comes from unleashing the creativity of inventors as entrepreneurs.

Critics of neoliberal policies, such as those who favor development theory, suggest that institutions such as the IMF and World Bank are misguided or inefficient and not addressing the roots of the problems generating poverty but rather are reinforcing them. The stronger critics suggest that while such institutions and their controlling member states claim to be in favor of reducing poverty, their true agenda is to continue the economic exploitation of other nations by colonizing or re-colonizing many parts of the world by economic means. The political and economic instability of the former colonies in places like Africa are attributed largely to continued interference by Western Powers. 

The broad Marxian critique of unrestrained Capitalism is also regularly applied to institutions and laws favoring neoliberal policies. These policies include cutting public welfare or subsidies supporting education, healthcare, and local (as opposed to international) economic activity. Instead, austerity policies are favored to reduce government spending. Economic activity favoring international trade, such as allowing increased foreign investment, lifting environmental protection policies, and producing goods that can be sold on the international market (rather than being used in country) are also promoted. Those opposed to the neoliberal view of economic growth claim that these measures are cruel and frequently counter-productive, making it harder for such poorer nations to get out of debt. Criticisms of such policy call for debt forgiveness, while several governments in South America, for instance, have turned more toward a socialist stance (public or government control or ownership of national resources and spending) by privatizing things such as oil fields and placing heavier restrictions on foreign investment.

The World Systems Theory was developed to try to place such competing views in context. Core nations (also known as first world or developed countries) control most of the economic capital and influence the focus of economic activity, whereas peripheral nations (a.k.a. developing or third world countries) have less influence and tend to provide labor and raw resources at low cost. Semi-peripheral nations occupy the space in between. The issue for this view isn't which policies promote economic growth or the welfare of people, but how the global economy is interconnected.

Anti-Miminum Wage Contra Statism?

[Is the symbolism too subtle?]

I recently had a chance to observe some comments on social media when someone posted something supporting an increase in the national minimum wage in the United States. The reactions included claims of socialism as well as fears of creeping statism in the name of compassion.

Rather than getting into an extended debate over the issue, which rarely has any potential or opportunity for serious or legitimate discussion on places like Facebook, I chose to pose the following questions instead:

1A: Is anything that questions neoclassic economic theory and neoliberal economic policy automatically now labeled "socialist", and, is that supposed to be a warning or fear marker rather than a policy critique?

2A: Is the potential loss of jobs for youth entering the workplace worth more than the well-being and dignity of those who need to support themselves and their families at minimum wage jobs?

2B: As a corollary to the last question, is the only money in play from a low wage worker-vs low wage worker in a zero sum game, or is it OK to look at the money in CEO salaries and corporate profits as part of the equation as well?

3A: Does anyone disagree that the current legal and cultural climate sets up corporations as somewhat amoral "persons" whose primary overriding goal and responsibility is to increase the monetary value of the business to shareholders?

3B: Do the potential employee and employer represent two individuals with equal power who meet face to face to discuss the social and monetary value of the employee's labor, the value of the employer's business, capital, and product, and what a fair and livable arrangement would be in terms of work schedule, salary, benefits, and so on until a mutually satisfactory arrangement is reached and legally bound in a contract?

3C: If not, what forms of recourse should a current or potential employee have to counter the ability of the employer to demand more value from the worker's labor than the worker receives in useful compensation? To arbitrate a fair and livable arrangement?

3D: Is not the goal of immediate, short-term corporate profit and the power of the employer relative to the worker going to tend toward lower wages, fewer benefits, and an unfair and unlivable arrangement?  Do not labor unions and legal protections help to balance out the interests of such myopic profit motives?

3E: Are there not corporations and cooperative-based businesses that pursue long-term benefit to community and worker above the profit motive yet still make money? If so, why shouldn't the legal and cultural climate favoring the less generous and sustainable business practices be criticized, restricted, and ultimately replaced?

3F: For those who favor the libertarian style solution to corrupt and unfair business practice, do you assume that employee and employer have equal power? That the employee has multiple readily available options of equal value to choose from? That these choices, if they exist, do not carry additional burdens? That being fired (for objecting to workplace conditions or questioning compensation) or quitting in protest has no social repercussions and no effect on gaining future employment (especially in the same industry)? And even if these things were true, is there no ethical obligation to those who must suffer until the situation resolves itself by such Laissez-faire principles?

3G: If, based on the last question, workers do not have the social, cultural, and economic freedom to choose their way out of a bad employment situation (either doing so with great difficulty or peril or simply lacking any viable options), or if it is not ethical to let people suffer until Laissez-faire principles eventually intercede and improve working conditions and employment options, does not the government have the obligation to intervene? Especially since the welfare of the people is one the primary duties of government in the US Constitution?

Economies of appreciation and human growth

[What is the value of artistic expression?]

Current economic philosophy is rooted in large measure in debates about human nature that took place between Scottish, English, French, and German philosophers between two and three hundred years ago.

Those individuals were echoing debates that have been going on for much longer, debates about whether humans are intrinsically "good" (caring, empathetic, generous, cooperative, altruistic, etc) or "evil" (indifferent, cruel, selfish, greedy, manipulative, etc), and to what degree external circumstances and choice could draw out or strengthen different social qualities.

Whether intentionally or accidentally evolved or imbued by some unseen force, humans have a capacity for various social states and qualities. In adaptive terms, this can be cast a conflict between gene-centric selection (focused on the immediate benefit of the individual) versus group-centric selection (focused on the benefit of individuals as part of a larger social collective). [1]

Contemporary postmodern industrial societies tend to construct their economic perspective on 1) status/wealth as reward, 2) uncertainty of worthiness, 3) scarcity of virtue, 4) abundance of resources, and 5) belief in meritocracy. I'll review these briefly before challenging their effectiveness at creating a just society full of actualized and productive citizens.

1. Status/wealth as reward has two meanings. One is that the best way to motivate someone is to offer them money or other items associated with higher social status. The other is that those who already possess such forms of wealth in abundance must deserve what they have as a reward for their own efforts or value or that of their immediate ancestors.

2. Uncertainty of worthiness is sometimes applied to those who inherit, but it tends to apply to those who are not wealthy or those who are entering the ranks of the wealthy, especially those who don't have sufficient wealth to insure that their status is secure. In other words, poorer people are seen as suspect in virtue and in any value they might possess or contribute to society. So you have to work hard and make a socially recognized and valued contribution (however that is defined) in order to demonstrate your own personal worth, to yourself and others. If this does not come with a reward of monetary wealth, the worth demonstrated may be in some ways noble but ultimately of a lesser value.

3. Scarcity of virtue goes hand in hand with the idea that humans are basically depraved and need either grace or good works to overcome their baser inclinations. They need to be domesticated, educated, and refined in order prize and acquire virtue and then to demonstrate their worthiness. Again, this is applied most regularly and forcefully against the poor and disenfranchised who must go above and beyond in their efforts to prove themselves to be of value and deserving of increased status and wealth.

4. Abundance of resources is the notion that everyone could become wealthy if their virtue and worth would but allow it. Therefore, the fact that so many people are not wealthy demonstrate their flaws. A slightly more sophisticated version of this blames political efforts at promoting equality for impairing the development of virtue by creating a "culture of dependence". Virtue must be acquired through hardship and overcoming adversity, not through having one's path smoothed out by others. Other political policies are harmful because they limit private ambition in the name of protecting people and the natural environment, thus keeping those who would otherwise be financially successful from demonstrating their worth and acquiring the commensurate wealth.

5. Belief in meritocracy is rooted in a sense that everyone has more or less the same starting resources and opportunities in life and that virtue can trump even unfair advantages held by the less virtuous and unworthy. This is a common trope in contemporary popular fiction.  This belief helps hold the others together, and its unraveling can lead to the rapid questioning of the basic economic assumptions that modern market and workplaces rely upon.

Let's get to unraveling.