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• People do believe that globalization is something that appeared some years ago, but in fact there has already been globalization far before Christ. It is simply natural, because people immigrated, traded, invested and exchanged culture, opinions and behavior since millenniums and not even illnesses or wars stopped this kind of movement.
  In some cases even war was used to globalize. We have to say that globalization, as we know it now, is just more present because of the media; and often they make it look bad. For example Alexander the great – he was one of the biggest globalizers on this planet, while he was conquering one country after the other. He traded, united different ethnic groups and formed a so called globalization movement. We could list some more occurrences out of history, for example Attila the Hun. So also the Migration period is a sign for globalization!
  The discussion about globalization will be a never ending one and if it is good or bad is in the eye of the beholder. What we think is that an African is poor regarding our western standards, but was he poor in his eyes until we told him how much better we are off here in the northern hemisphere? We believe he wasn`t, because it was part of his normal life until the white intruder interrupted his life. Well, we could say we opened Pandora´s box but there is nothing wrong with it, because mankind is on an exploration trip since we have put our first step on this planet.
  We have to say that there is nothing wrong with a global thinking and an exchange of goods and ideas, but there is something wrong by telling others what is right or wrong. This kind of behavior is multicultural and is built on the right of the strongest and has nothing in common with globalization.
  Another point is that in our opinion the fear of a big crash and a world disaster is over accelerated. The world is in a steady move and if something gets too big it finally will not survive, history proved that many times – simply look at the Holy Roman Empire. A crash of the big players in this new World order might slow one thing or another down, but it will not stop a movement that goes on since ages. It will bring us to a stop for a while but then it will go on like there has never happened anything before.

  By
  Florian Gschaider
  Manuela Stoeckl
  Lisa Randl

  Posted 8 December 2009, 06:07 by Florian Gschaider, Manuela Stoeckl, Lisa Randl

• Hi all,

  Thank you McKinsey for promoting this feature to your website.

  As for the world being tied closely together, I happen to think that it is not as tied together as one may want to believe.

  I think information through the media, makes things more closer than they appear. But, in regards to product specialization, this is still a primary hallmark of the triad- Japan, EU and the USA. The statistics prove this, time and time again.

  If we make transport cheaper as well as relax global immigration policies, the world can become a little more nit.

  Best,

  Youri
  http://globalviewtoday.blogspot.com/

  Posted 28 April 2009, 21:50 by Youri_Kemp

• It is nice academically to discuss on globalisation but the best part of it emerges through the combined conciesness of the people of the world.Ofcourse this is influanced by politics,interests of businesses and religion and of the lobbyist.

  Globalisation brings its own merits with it.Imagine an oil field to be identified and refinaries to be set up in an undeveloped African state with mobil or shell working on the project.where the African state gets the best in tecnology to tap thier resourse otherwise not possible and providing an oppertunity for a Global or company belonging to a developed country and a cheaper option for the oil hungry world population.

  Another beauty is that the chances of exploitation are short lived.Any exploitation oppertunity is soon exhausted because there are competing entities who offer a better deal for the exploited.

  Instances of volatility in food and resourse availiablity and prices are less because shortages in any areas opens oppertunities for the other who will fill the supply gaps and bring the arbitrage effect.

  These are nothing but market and arbitrage systems.

  Look how China has emerged.All the developed countries took long time to develop all these technology and then to try and perfect it.But for china it is just a matter of importing these in no time providing oppertunity for the developing and the developed.

  This creates better oppertunities for utilising resources and sharing them.

  Posted 28 April 2009, 11:45 by Bhupesh K

• GLOBALIZATION – GET WITH THE PROGRAMME

  “Poverty, bitter though it be, has no sharper pang than this, that it makes men look ridiculous.”

  (Juvenal (Decimus Junius Juvenalis) 60 – 130 BC Satires Book III)

  During the early part of July 2005 a meeting of the Prime Ministers, Presidents, Chancellors and other political heads of state of the group of G8, established in 1975 and consisting of some of the world’s most affluent and influential nations, the United Kingdom, France, Russia, Germany, the United States of America, Japan, Canada, Italy and representation from the European Union to discuss the main economic problem areas in the world and to offer some solutions, will be meeting in Gleneagles, Scotland.

  As usual there will be tight security in and around the conference site and area and some access roads will be sealed off because of the numerous groups who often seek to cause disruption to the proceedings. Other more influential characters will seek to raise the profile of their particular cause in an effort to change the attitude of more advanced industrialised western economies to the scale of problems in other areas of the world and more noticeably Africa.

  This appears to be based on the assumption that the west is totally responsible for the devastated areas of Africa ravaged by famine, starvation and poverty but more often than not it has been brought about by corrupt and inept leaders, politicians and officials over many decades and by tribal conflict and wars in regions and divisions in individual countries; without transparent government and politicians with integrity these problems will persist. The assumption also appears to be that if you continue to pour money into a cavernous pit, I choose my words carefully, that it will, eventually, close and that poverty can be eradicated by continual handouts. This is naïve in the least!

  Global poverty is a dilemma that must be addressed; global starvation, in this age of over-production, is unacceptable; a lack of access to clean drinking water and, a shortage of medicines to treat disease is criminal; and a lack of education is intolerable The question is how to address this problem and not just by raising money from charitable donations and throwing it into the morass in individual African countries. As Eva Peron said in a speech to the American Congress of Industrial Medicines in 1949:

  “Almsgiving tends to perpetuate poverty; and does away with it once and for all. Almsgiving leaves a man just where he was before. Aid restores him to society as an individual worthy of all respect and not as a man with a grievance. Almsgiving is the generosity of the rich; social aid levels up social inequalities. Charity separates the rich from the poor; and raises the needy and sets him on the same level with the rich.”

  (Maria Eva Duarte de Peron (1919 – 1952) Speech in December 1949)

  Eva Peron was, I must assume, referring to poverty in Argentina; but, poverty has always been with us even in developed nations and not a great deal appears to change. Of course poverty is relative, but even in the United Kingdom there are estimated to be 2.5 million pensioners, in 2005 and at the same level as 1997, living in poverty or living below the accepted income poverty level, unable to heat their houses in winter. Allegedly this is because of the very low level of the basic state pension and the fact that indirect taxation, such as the iniquitous Council Tax, insurance on home and property and the costs of fuel, buys up much of their income. That is, surely, in the 21st century and in the world’s 4th wealthiest nation unacceptable and a national disgrace?

  To begin, the growing global economy is here and has been here for at least two decades; it is not going to go away and is continuing to grow; and, it will continue to grow as nation states realise that in order to compete on the global stage countries must be borderless to the exchange of trade in goods and services. The enormous problem appears to be in making it fairer, without appearing to patronise, by establishing a more level agricultural and industrial field, between developed and developing nations in order to encourage free trade and the movement of goods.

  By that I mean allowing smaller and poorer farmers in developing countries access to world markets for produce and products that they can grow easily and at a fair trade price. I remember some years ago that one particular charity carried an advertisement saying that if you provide a starving man with a loaf and two fishes he can feed his family that day but if you provide him with the wherewithal to grow corn or maize and to fish then he can feed his family for much more than a day. That, to me, is the way to proceed and not through globally publicized handouts.

  One primary area of focus, for individual countries, appears to be in being able to recognise, determine and concentrate on what agricultural, electrical, mechanical, chemical, mineral or other areas of trade and commerce can be traded on the global scale and to put knowledge and effort into improving those areas of business; if that means sitting down and defining industrial and agricultural policies and to provide resources then so be it. There are many advanced industrial western economies that still do not appear to have clear industrial policies allied to economic growth. To misuse a well-known saying, concentrate on those areas over which you can have some influence and do not concern yourself over matters over which you have little or no control.

  In that respect developed nations have a huge advantage for the fundamental reason that they have been trading and bartering on a global scale not for decades but for centuries, and this is particularly true of western Europe and the United States, the former because of their colonization of many areas of the world during the 16th, 17th, 18th and 19th centuries and the latter because of its sheer size and population, global economic influence and industrial and military might. Indeed, because of the USA has a system of federal government that allows individual states to pursue some of their own economic agendas their system of global trade and economics is much more flexible.

  I recently visited, in 2005, the city of Charlotte, North Carolina and was impressed, not so much by the history of that part of North America, which was originally colonized by the Scots and later by the Irish and Germans in the 18th century, but by the growth of banking and financial services, which makes Charlotte the second most important banking city in the USA. If one city in the US can do that then why cannot other cities in other countries invest in a similar fashion?

  I digress. The overall problem of poverty and global trade, therefore, must be addressed by an holistic approach, that is provide the necessary knowledge, information or advice to individual farmers or manufacturers in developing countries to enable them to improve their crops and yield and how best to sell their products on the global stage. If we do not then emerging countries like China and India will invest as a means of gaining access to untapped mineral resources. This requires effort and determination on the part of national and local politicians, and a system of checks and balances to root out greed, graft, bribery or corruption whatever your choice of word, in individual countries and regions and among politicians and businessmen.
  The fact is that without good governance and political stability, not only in advanced nations but also in developing nations, no African nation will ever emerge from the shadows of poverty and disease if money is not being shared; without more open and honest government and the political desire and will to overcome tribalism it will be impossible for the poorer sections in those countries to improve their lot; and, the same can be applied to other emerging countries like India and China where, in many instances, the economic divide appears even greater and is even increasing.

  No commercial company will move into a country or even an area, taking a risk with capital and creating jobs in the process, where there is abject poverty for the fundamental capitalist principle that if the people in that community do not have money then they cannot spend. Therefore, the only way to reduce poverty, because it is well nigh impossible to eradicate, is for governments assisted by international organizations to clear the area, build the infrastructure, provide the housing, telecommunications and educational facilities to encourage companies to invest to get the whole process moving. The opportunities for developed western nations to invest in fast emerging countries like China and India is to get a grip and see what is really needed in those nations.

  So, how do you educate people who are illiterate and have no understanding or knowledge of what foodstuffs their soils will support and how can you help them to acquire that knowledge.

  One area of support that can be provided, after shelter and access to the most basic human requirement for clean drinking water, is to provide the methods and means of trade and communication, that is the road and rail infrastructure and telecommunications, to improve education and thereby increase a hundredfold the knowledge of individuals in developing nations. I sincerely hope this does not sound as crass as some might suggest for the simple reason that we started by discussing poverty and access to foodstuffs and medicines. What I am trying to point out is that education is the beginning of eradication of poverty; it is the method by which people learn to do something for themselves rather than having to rely, totally, on charitable donations and support purely of a financial nature. We are back to the loaves and the fishes again!

  The massive growth in telecommunication networks and systems over the second half of the 20th century means that there are not many parts of the world that do not have access to some form of communication and access to media including radio, television and of course to that massive tool of information, the Internet. The internet can provide so much information, quite literally at the drop of a hat and depending, of course, of the speed of connectivity and access, to world-wide computers with billions of pages of information on most subjects under the sun.

  Perhaps one begins, in fact it would be a sensible starting point, by providing sources of power to all regions of a developing nation; solar power is the system that most easily springs to mind especially in all countries in Africa and the Middle East, indeed in any and all countries that are certainly within the Tropics and Cancer and Capricorn, and where the sun is readily available nations must take advantage of the sun’s rays by building large arrays of photo-voltaic panels to absorb the suns rays and then transfer the energy not only to towns and cities and villages but also to remote areas to provide heating, lighting and telecommunications. Incredibly it seems that most developed let alone developing countries do not appreciate the power that is clearly and freely available to them from the sun.

  But back to the process of making best use of what is available for development and to provide foodstuffs for the people of poor and developing nations. The important thing is to choose the area and the land for development and that must depend on access to sources of water, the stability of the ground and the suitability of the soil for supporting the growing of vegetables and other foodstuffs and for supporting cattle or other forms of livestock. It should not be beyond the wit of man to conduct the necessary geological surveys, no doubt some will already be available, to determine the most appropriate area for development to help to feed individual nations.

  Thinking laterally, once you have provided even the most basic form of fixed solid habitation, provided the peoples involved are not too nomadic and used to wandering around their country as they choose, then other services can be provided reasonably quickly. Electricity, from fixed or rotatable solar panels, can be used to power not just cooking implements and provide hot water but, perhaps in the future, radio receivers and later other machinery including pumps for water. And thinking about rotation, it should also be possible to determine the optimum system of crop rotation so that the fertility of the soil is maintained and does not lead to a dust-bowl scenario; the provision of nitrates of course would help soil fertility.

  Having established the system of communication then one has to address the matter of consumers; that is who will purchase these products and where are the best markets in which the farmers can trade their goods. Immediately one thinks of the United States, which seems to absorb a great deal of the earths’ produce and manufactured products, but also the European Union which, with some 20 or more member states, is another huge market area but do not forget your own immediate market. What do local people need to sustain their daily lives?

  Therefore, it is important to understand your market, know which products the population consumes and wants, for example, coffee, many kinds of fruits especially citrus fruits such as grapefruits, oranges, lime and lemons, and green vegetables. Alternatively, and if the soil will meet the mineral requirements for growing, consider many forms of grain and cereal crops and perhaps cattle as an additional by-product.

  One problem that may arise, as it does in other countries and even developed ones, is the introduction of the middle-man, the man with capital and access to credit who sets up some kind of organization to buy from the smaller producers and then is even able to control prices. Then with his control of resources in a given area he can then negotiate with bigger customers and charge much higher prices than he pays the producers thus exploiting both sides of the equation, producer and consumer. So, it will require some kind of government body to intervene in this process and offer the producer the market price and then negotiate any profit direct with consumer retail companies.

  Start by thinking smaller, not small, before you begin to overextend because another area to address is, of course, capital or credit. To begin any process of development any company, organization or individual needs access to working capital. In developed nations no company can get off the ground without a business plan and therefore it will be essential for developing countries to be provided with financial advice and I feel certain that if there is the slightest possibility of making even the smallest profit, whilst being seen to be doing good on the global stage, that many financial institutions would be willing to provide business advice and support.

  I suspect that is because banks are always looking for the next opportunity and since western advanced industrialised nations are belatedly beginning to realise they have ageing populations, who are not working and contributing through direct as well as indirect taxation and therefore in no position to save, they will have to find other sources of profit generation. It is another reason why some nations are allowing, encouraging even, immigration, legally of course, and the movement of younger peoples from semi-developed and developing nations to their countries. There is a suggestion that having cheap migrant workers helps to keep some richer by paying lower levels of wages and the consumers desire for cheaper goods, but it is not always the case.

  I briefly mentioned technology in the section dealing with communication and access to the Internet. Of course there are other basic areas of technology that can help farmers in developing nations, for example, it is very difficult, time-consuming and backbreaking to till soil in most areas of the world, so instead of scrapping older farm machinery why not provide communities in developing countries with farm machinery such as basic tractors with ploughing and furrowing implements, either new or reconditioned? And, why not do the same with diesel generators and other machinery?

  It is reasonable to suggest that globalization is, in 2005, now moving at a pace and is still expanding as nations and peoples learn to deal with more than just their immediate neighbours although in Africa, because of continuing tribal conflict, the process is still in its infancy. Globalization has improved the position of some individuals in developing nations but appears to have disadvantaged many others and that the situation may well mean even more hardship before it gets better, and that means regulation.

  The important thing to remember is that developing countries are the ones that have to learn how to attract inward investment and not just charitable donations; they have to learn how to deal with the limitations of their peoples and make every effort to improve the general standard and level of individual access to medical advice and support, clean drinking water, to basic accommodation and to knowledge and understanding. It is one thing to reduce national debt but it is something else to remain dependant on charitable donations for the foreseeable future.

  Unfortunately, and very regrettably, this is one part of the global trade process that is beginning to hurt developing nations as qualified and semi-qualified professionals move from developing nation to developed nations in order to improve their individual lot. This is tending to leave the developing nation with a ‘Catch 22’ scenario where they cannot offer the same level of remuneration as the developed nation and so the drain of knowledge and experience continues.

  Perhaps this is another area that could be addressed, one in which developed nations encourage, send or loan their experts in particular areas to help the developing nations deal with shortages? It is an area for consideration and more especially since many jobs in advanced, industrial nations are being transferred to developing nations.

  In some ways this global movement of peoples and personnel is being counter-balanced by the fact that many companies in developed nations have outsourced many of their manufacturing and now service sector jobs to developing nations as a means of reducing overheads and increasing profits because labour costs are cheaper. It means that increasing employment opportunities are available in developing countries but they have been decreasing over the last decade in developed countries.

  In that respect this process is leading to greater levels of unemployment in developed nations because new areas of business and commerce are not being created quick enough to replace the jobs already lost and it is also leading to increased levels of poverty because of increasing pressure on state pension schemes. If governments in developed nations do not wake to the threat posed by an ageing population and one in which many companies deliberately choose not to employ people over a certain age, say 55 or even 50, then pressure on social security and service systems will increase.

  One problem appears to be that as one industry collapses or is no longer supported by a developed nation, for one reason or another, policies are not in place to train or re-train former employees to take up other skills to enable them to find alternate means of employment and provide good social security schemes; and these are mainly western government problems that must not be ignored.

  Regardless, the global economy is, regrettably, not as transparent as one might hope for, that is because many countries still operate a system of tariffs on the import and export of goods and services, and sometimes governments and sometimes financial organizations, like the World Bank and the International Monetary Fund (IMF), insist on or demand changes to trade, markets and the implementation of privatization policies in return for loans. Therefore, it is time that there were global standards to address the quality, reliability and safety of all manufactured products and for all foodstuffs that are exported and imported around the world.

  Whilst the Internet allows people in developed nation’s access to the global market in order to purchase products or services it is not always possible to buy what you require at the same price as in other countries. For example, why are most types of computers and peripheral equipment more expensive, between 20% and 30%, in the UK than they are in the USA; why are most forms of clothing and apparel more expensive, often up to 50%, in the UK than in the USA; why is there enormous differences in the cost of fuel oils; and, why are many makes of motor car more expensive, between 10% and 30%, in the UK than they are for example in many parts of Europe?

  Globalization affects us all in one way or another. In developed nations it is affecting people who once had employment in various areas of manufacturing but whose jobs have now been outsourced or exported to countries with cheaper labour, overheads, transport costs and mineral costs. This gradual but inexorable loss of jobs to developing nations is striking at the very core of life in advanced, industrial nations where relative poverty is increasing as these and other types of service sector jobs, in call-centres, information technology and telecommunications disappear abroad never to return and with them the loss of knowledge, expertise and social mobility.

  In developing nations the question has to be whether the importation of jobs from developed countries will continue and then how can the level of education be raised so that more people can be made available for more jobs outsourced from developed nations. People in developed nations should be aware of the conditions and circumstances of peoples in developing nations and encouraged to think of ways of helping them to help themselves. As a former US vice-president, allegedly, suggested,

  “If we don’t succeed, we run the risk of failure”

  (Attributed to Dan Quayle (1947 – ), US Republican Politician and vice-president)

  Whatever else happens in the world the wealthy and powerful, in developed and developing nations, will remain rich and are likely to become even richer as they take advantage of the opportunities that arise to make a profit, sometimes from their own knack and ability and sometimes from other people’s efforts and suffering. Those who sit in, for example, Wall Street or the City of London press buttons on screens and shovel money back and forth chasing profit margins or urging mergers and acquisitions but to what end? Mostly, it seems, to fill their pockets and that is leading to greed.

  Globalization appears to have degenerated into a system of exploitation that has provided more opportunities for the gulf between the rich and the poor to increase, between those who have wealth and those on the periphery who have not and are not benefiting from any growth in the economies of every nation and certainly not in many advanced, industrial nations and definitely not in the rapidly developing nations of India and China where there are increasing numbers of millionaires and billionaires but near half of the population live in abject poverty. Those nations must find a way of improving the survival rates and raising the general living standards of the poorest levels in society or risk the possibility of increasing social unrest, perhaps even political action; and, developed nations must also make much greater effort to redress the balance between the rich and the poor in their nations or also suffer the consequences of social unrest.

  The fact is that whilst some nations, and a few individuals, are increasing their wealth they are also increasing levels of poverty because the poorer levels in advanced, industrial nations are not benefiting, economically and socially, from the growth in global business and global business opportunities. Indeed many are suffering because of the increasing loss of employment opportunities and so the number falling into relative poverty is also increasing. To make matters worse the UK government, for example, increases the basic state pension and other social benefits at a pre-determined time each year based on the alleged or supposed rate of inflation at that time rather than link increase to the increases in income and wages. This means, because the link between pensions, benefits and income and wages has not been restored since it was broken in the 1980’s, the number in pensioners in relative poverty is also increasing each year.

  The loss of millions of jobs in industry and manufacturing in UK, and those jobs associated with manufacturing in providing utility services, materials, transport and manpower, in advanced industrial nations has also led to a considerable increase in people now classed as “economically inactive”, at the last count approximately 10 million. And an increase in imported cheaper manufactured products from developing nations has led to a growing trade deficit. No matter what politicians or economists may insist no nation can exist simply on the service sector and by borrowing money because at some stage the pressure could lead to a collapse in an economy.

  Of the world’s largest economies, in terms of wealth and turnover, more than 50 per cent are actually large-scale companies; there is a powerful elite group of 100 of the world’s prominent and powerful people who meet on a regular basis to discuss financial and global economic issues and how they can increase their power and wealth; and, that, according to the American Forbes magazine, a ‘chat-show’ host topped the Celebrity Power List for 2005. All irrelevant you might say, but it shows, perhaps, that power remains in the hands of a few, that democracy is not as open or as widespread as many hope or believe and that capitalism and globalization do not often benefit everyone simply because wealth, instead of trickling down and improving the lot of the poorest in societies, always flows upwards.

  Corrupt leaders, dictators and despots will often rise through the power of the gun and it is most unfortunate that monies given to some countries end up in the pockets and bank balances of a few. Some of it may even be used to fuel tribal and civil warfare even to the abhorrent practice of ‘ethnic cleansing’ in some areas, and to land appropriation and even to slavery of sorts. Politicians and international organizations, for example, the United Nations (UN), the IMF, the World Bank, perhaps the EU and the Group of G8, need to get a grip of the whole process of globalization and make more concerted efforts to address political as well as economic and social issues in developed as well as developing countries.

  (4465 words including quotations)

  KENNETH ARMITAGE

  June 2005

  Posted 27 March 2009, 11:32 by Lt Commander Kenneth Armitage

• I believe that its time, given the ‘catalyst’ of recession, for BRIC to emerge as the economic power. US’ economic dominance seems diluting.

  Posted 26 March 2009, 13:29 by Pranay

• GLOBALIZATION – OPPORTUNITY OR THREAT

  “The most vulgar education teaches us to act, upon all important occasions, with some sort of impartiality between ourselves and others, and even the ordinary commerce of the world is capable of adjusting our active principles to some degree of propriety.”

  (Adam Smith (1723 – 1790), Scottish Moral Philosopher. The Theory of Moral Sentiments (1759)

  The simple answer, for which one might be accused of ‘copping out’, is that globalization, or the concept of companies embarking on the pursuit of trade on a global scale as part of the capitalist process, is both an opportunity and a threat. There is always more than one side to any argument and therefore it is paramount to address the issue from every side of the fence, and that includes the top. It all depends whether you are an owner, employer or shareholder in a company or an employee and whether you are part of a large organization in a developed country or living in a developing country and whether you are a small company or a multi-national.

  There are many large companies who operate in different countries and on different continents but none of them can really be called global. There are a number of very large companies whose products or services are widely known, recognized and used by people in the developed nations but they tend to concentrate their marketing activities in countries or on continents. There are a few multi-nationals apart from the likes of MacDonald’s and the Coca-Cola Company, such as General Electric (GE), the Ford Motor Company, ENRON, Daimler-Chrysler, Proctor and Gamble and maybe even Boeing, whose products and services are widely used, advertised and recognized wherever there are media services and networks that advertise to the masses but, again, they do not operate on a truly global scale.

  Besides, there is no such thing as “one size fits all” and what may work in one, two or ten countries will not work in all countries for the simple reason that local culture and tastes must be taken into consideration when designing, manufacturing, marketing or selling products and more especially all forms of foodstuffs. Therefore, it is crass to believe that tastes can be standardized and that all peoples will respond positively to a particular product. Further, as countries improve their economic conditions and people raise their standard of living through increased financial gain then what they tend to want is more competition and more choice and not less.

  But, what is globalization and what is its likely impact not only on economic conditions and circumstances but also on employment and the environment because it affects all three areas in addition to political and social matters. Well, firstly, globalization seems to define as the increasing movement of money, services, information and information technology, goods and often people not just between countries but also between continents. In that respect it is, perhaps, somewhat like religions, for example Christianity, Judaism, Muslim, Sikh or Hindu, that were spread, in previous centuries, first locally, then regionally and eventually globally. And it also explains why, like religion there are clashes between those that believe, those that may wish to consider and those against the imposition of certain creeds or political policies.

  However, globalization provides the ability for companies, mostly in developed western nations but mainly American, to pursue a policy of expansion and more especially into developing markets where the demand for manufactured goods, and sometimes services, is likely to increase as infrastructures improve and economies grow. It allows big companies, big business and big businessmen to move freely around the world and to shift money and resources to whichever country or area will provide the highest profit for the lowest investment. Nonetheless, the process of globalization is allowing some major multi-national companies, mostly American, to grow to the extent that their financial clout is now bigger than many small and underdeveloped countries and this allows them to exert undue influence. It means that some governments have actually lost power and influence in the global theatre. One problem associated with globalization and the growth of multi-national companies dominating the market place is the real possibility of such companies operating cartels, or price-fixing, to the detriment of consumers.

  Globalization, or global trade, is not new. One only has to look back at the trading empires of England, Spain, Holland and Portugal during the 16th and 17th centuries, the opening up of the New World and trading routes to China and other far eastern countries. Exploration and research and investment in Africa and the building of nations and trade were part of the process of globalization. It could also be suggested that during this period of trade that it was, again, the developed nations who pushed the exchange of raw materials, minerals and resources in exchange for finished products but the process was no different than today. That expansion slowed down during the 18th and 19th centuries partly because of regular skirmishes between the countries with empires and partly because of the Industrial Revolution that led to the movement of people from the land to the towns and cities with the growth in jobs in the textile and engineering factories. During the 20th century the First World War led to a halt in world trade, especially in Europe, and led to the great depression in America, during the 1930’s, that also affected developed nations. And, the Second World War much of the developed world was, again, embroiled in a conflict that decimated the growth of business other than in armaments and the raw materials associated with the production of weapons and weapon systems.

  The end of the Second World War saw the rise of the Iron Curtain and an extended period of growth in western countries as capitalism and consumerism hit the market-place and everyone was encouraged to demand manufactured goods such as washing-machines, radios, record players and then televisions as well as motor-cycles and motor-cars. Many companies, using some of the manufacturing, tooling and mass production skills developed during the war years began to churn out products to meet the growing demand in mainly domestic markets. But this national expansion and increase in international trade that is between advanced or developed western industrial nations did not involve the majority of countries in Africa, the Far East, parts of South America and many countries that formed part of the Soviet Bloc in Eastern Europe.

  Indeed, there has been a steady increase in the gap between the world’s richest nations and those at the lowest end where repressive regimes, sickness and poor health associated with poverty and poor or non-existent infrastructures mean greatly reduced political, economic and social conditions. And, since many of those regimes have spent vast amount of their national income on the purchase of weapons, presumably to retain control through threat and intimidation, less monies have been available to provide health and education services and improve transport, sanitation and law and order.

  Critics appear to insist that it is globalization, and the introduction of capitalism and consumerism through the concept of market forces, that is primarily at fault for the continuing inequality between developed and developing countries. Globalization is a process that allows rich people to become even richer by plundering resources by ‘swallowing-up’ local businesses in developing countries. The process encourages poor nations and poor people to spend their meagre resources on products or services that they do not necessarily want and probably do not need. It is suggested that the World Trade Organization (WTO) and other organizations like the International Monetary Fund (IMF) and the World Bank function principally for the benefit of multi-national companies. It is also suggested that these organizations encourage free trade between all nations and that this process is not only under-cutting competition in developed nations but also in developing nations by putting pressure on smaller businesses; and, that the growth in free trade is contributing to increased global instability in financial markets.

  Proponents of market forces, mainly those thrusting CEO’s and other directors and oftentimes politicians, insist that the growth in global products and services is unstoppable and that globalization also helps poorer people in developed countries and poorer nations to improve their lot because, they say, wealth will eventually trickle down to the lower levels. What they do not say is that globalization, and the almost inevitable movement of people to countries where pay is invariably higher than their own, will, inexorably, drive down wages even further and therefore drive down rather than drive up the financial circumstances of many poorer-paid people and pensioners on the lower rungs of the economic ladder and more especially in advanced, industrial nations. This is more a ‘rounding-down’ rather than ‘rounding-up’ economic programme.
  Globalization has, undoubtedly benefited some, mainly at the higher echelons in business, commerce and politics. Politicians, those who purportedly support free trade and free markets but apparently not fair taxation based on income, revenue and the ability to pay, appear fond of supporting the well-spouted rhetoric that globalization is good for everyone. But try telling that to the many millions whose jobs in some western countries in, for example, manufacturing, banking and other financial services, travel and information technology, have been exported to China and India simply as a way of reducing overheads and boosting ‘bottom-line’ profits.

  This is one of the fundamental economic principles of ‘trickle-down’, espoused by Ronald Reagan during his term in office in the United States and vigorously pursued by Margaret Thatcher during her three terms in office in the United Kingdom. The result, as can be seen, is that inequality has continued to increase not only between the richer and poorer nations but also between the rich and poor in developed countries where the gap continues to grow and there is no sign of equality. Therefore, it is reasonable to suggest that it is the pursuit of privatization, coupled with international monetary policies that have and are helping to maintain inequality.

  The 20th century saw unparalleled growth and increases in national GDP but not to the betterment of everyone. And, the expansion of global telecommunication networks, systems and services during the latter half of the 20th century has allowed the transfer of jobs and skills from the higher wage economies of the developed world to developing countries. These countries have much lower labour costs and tend not to include additional benefits such as sick pay, medical insurance and transport costs. The result – a gradual transfer of not only manufacturing but increasingly service sector jobs, mostly associated with information technology in call-centres for banks, insurance and other financial organizations, IT and telecommunication companies and airlines to developing countries like India, the Philippines and areas of Eastern Europe.

  This will, inexorably, lead to not only a shortage of jobs but also a shortage of skills and a shortage of careers as students, sensibly, look to see what professions might be open to them and reasonably secure in their own country. It is completely crass of politicians to suggest that there are jobs available; that people can be re-trained to fill existing shortages and that everyone must be in employment when so many jobs are being exported. What the developed countries do not seem to grasp is that the transfer of jobs will be permanent leading to increasing levels of poverty in developed nations; yet another sign of a depressing-down process.

  Is it realistic, for example, to re-train a chemical engineer to become a nurse or a miner to become a solicitor or an information technology specialist to become a design engineer or a banker to manage a burgher bar? What careers might be created or might be available in the future and how should our state education system, courses and examination programmes be changed, improved or altered to meet possible demands for and from new industries?

  Besides, who will pay for the training? Who will provide the necessary courses to convert mechanical, electrical and electronic engineers to become knowledge people in the new order; who will provide the funding to re-train highly skilled airline engineers to become salesmen, or car manufacturers to become bio-technicians or whatever the latest possible growth area of business is likely to be? Will it be the companies who have outsourced work to India, China, Korea or South America – unlikely; will governments provide the funding – unlikely because their revenue from taxation will decrease as jobs are lost and raising taxation on an annual basis will be very unpopular and will affect the poorest the most. So, we have yet another ‘Catch 22’ scenario.

  The UK government has become frustratingly complacent, one might suggest inept, about globalization and the effects of unfettered immigration. Unless it begins to ‘get a grip’ and adopts a more responsible attitude to the needs and demands of society in this country, to employment and employment opportunities, to careers and professions and to consumers then jobs will continue to move from the higher cost industrialized western countries to the countries with cheaper labour and lower overheads in the emerging countries in the Far East and Eastern Europe and then, eventually, to parts of Africa. This will increase the levels of poverty.
  For developed nations then the outsourcing of work to areas of cheaper labour, as part of the process of globalization, is likely to lead, at some stage, to a backlash as the indigenous peoples of those countries begin to realize that globalization and immigration are greatly affecting their pay, conditions and general economic well-being. Quite what form or how is something else but at some stage people in developed and developing nations may want to call a halt to global expansion especially when it means that workers in one area lose their jobs for one reason or another. People need to feel secure in their country, and if jobs keep disappearing then so will the level of security leading to a demand for greater levels of protection from government.

  For many other western European nations the problem is not quite so critical for the simple reason that they have adopted a much more sensible approach to employment and employees rights in that they have retained and maintained much of their own industrial base. This is born out by the fact that Germany, for example, with its excellent engineering companies, has a trading surplus of some £90 billion or more in 2002 and the UK has a trade deficit of some £50 billion and rising as more and more imports are sucked in to meet consumer demand!

  Indeed, if we examine economic and social policies as practiced by the UK and the USA, the Anglo-American model of capitalism, versus those of much of the rest of western Europe we can see why, perhaps, the UK has yet to join the European Monetary System, the EURO, and why there is still a political gap and a gulf between management practices and procedures. Part of this is the difference in attitude and approach between the liberal, with a small ‘L’, and ‘laissez-faire’ Anglo-American system and the slightly more interventionist model employed in much of Western Europe, by that I mean Germany, France, the Netherlands, Italy, Spain, Belgium and the Scandinavian countries, where greater emphasis is placed on the notion of fairness and much greater importance taken into account for the need for social policies that ensure people do not slip below a certain level of income and the provision of healthcare services and facilities.

  The recent scandals in the US and the continuing loss of confidence in the US capitalist system suggests, to me, that there is a need to re-assess the way it works and that total unfettered capitalism is not in the best interests of a majority of the population of any nation. In my view the Anglo-American model does not, regrettably, take sufficient account of social, moral, ethical and environmental issues in economic and political matters, indeed it somehow attempts to ignore them to the detriment of its peoples and workers. That is not to say that industry and commerce should be burdened with too much regulation and too much taxation but that there is a need to balance the demands of shareholders, financial institutions and trade against the requirements of customers and suppliers and the fundamental needs of employees.

  However, for the multi-national company and multi-national businessmen globalization is an opportunity to reduce overheads and manufacturing costs and expand into new markets; and for entrepreneurs, businessmen and financial institutions it provides a calculated risk that allows them to invest to achieve a higher return. That is because labour costs in many poor or emerging countries is about 1 per cent or less of the sale price of a garment and in the developed nations it is typically 10 or even 15 per cent of the sale price of a garment and that means that free trade translates more into cheap trade on the back of even cheaper labour.

  For the opportunists then globalization translates as a positive programme that, apparently, helps poorer countries by offering some trade with developed nations and the chance to build their economies through choice and access to consumer goods and services. For people in the developing country, provided they have the necessary skills and language abilities, it offers new opportunities for employment and a chance to improve their circumstances.

  Of course poor people with professional skills, academic ability, talent and initiative, in the beginning of the 21st century that translates at the moment to mean primarily medical skills, IT knowledge and ability or musical talent, will try to migrate to more affluent parts of the world to improve their personal circumstances and this can lead to illegal immigration or economic migration.
  What tends to happen is that people with such skills are welcomed by developed nations and helped to convert their particular knowledge and abilities to meet the demands of their country; and that process damages the developing nation because it loses skills that should remain to improve their economy. This process also tends to disadvantage those with lesser ability in the mature nation. Globalization does not allow poor and often uneducated or unskilled people, the two are often synonymous, the same opportunities.

  Besides, and despite the apparent growth in globalization, more and more indigenous peoples are demanding recognition of their land within landmass borders; they appear determined to establish their own country and culture; and, they will, eventually, seek to determine their own futures with whatever natural minerals, ores, metals and other resources they have. The answer to that particular problem is to invest more in developing countries so that they can improve conditions and build their manufacturing and service sectors to provide opportunities and help to reduce global nomads. When developing or emerging countries have a sound agricultural or industrial base then economic or illegal migration might reduce.

  But, if the company is involved in manufacturing it is likely to have an impact on the local environment as rain forests and other areas of land are cleared to provide factories, roads and a transport infrastructure. Therefore, it can be suggested that in addition to providing opportunities in developing nations it also results in the exploitation of millions of workers, often children, in countries that do not allow trades unions or workers rights and where there is no protection under health and safety regulations. Indeed, the United Nation’s International Labour Organization (ILO) suggests that very high numbers of children work in cocoa, coffee, cotton, rubber, sisal, tea and other commodity areas in agriculture, fishing, hunting and forestry in countries such as Brazil, Kenya and Mexico and in the Asian-Pacific region countries.

  There is another corresponding downside. When jobs are exported from the developed world to the developing countries the jobs and livelihoods of people employed by a particular company or a particular area of business are lost and once the skills, knowledge and experience is lost from that areas of industry, business of commerce it is very difficult to get it back. And, second, there is the impact that has on local communities and economies as well as individuals and their families. For example the export of textile and toy manufacturing jobs from the UK, USA and parts of Europe to the Far East and the export of many call-centre jobs, mainly associated with airline bookings, banking, insurance and other financial services again from the UK and USA to India and Eastern Europe.

  The fact that jobs can more easily be exported to countries with lower wages, cheaper utility services and fewer rules on health and safety leads to the loss of worker rights and inequality in earnings. The danger, the real danger to developed countries is that so many jobs will be exported to developing countries that future generations, by that I mean the end of this decade and the next, will suddenly find that industry and commerce has gone and opportunities for employment and careers will diminish. Then what will governments do to raise taxation?

  It can be suggested that globalization best suits the political, economic and social system and attitudes in the USA because most people in America, of whatever creed or culture, are or have become, over decades and centuries, part of the ‘American Dream’ of commerce, competitiveness and copyright associated with capitalism. In fact it is not straightforward capitalism, the private ownership of industry and commerce, but conservative capitalism where those who already own maintain a grip of industry and commerce through their wealth. This why in the richest country in the world, the USA, some 20 to 25 per cent of the population live in poverty and cannot afford to purchase medical and dental insurance to ensure that they are treated by private hospitals when they are sick and nor do they enjoy the same standard of living as in, for example, Denmark, Sweden and Norway or France and Germany. Indeed, as an economic model the one to be found in western European countries appear, despite the growth of globalization, preferable to the model of capitalism found in the US and in the UK.

  The whole conservative capitalist process is retained, certainly in the US and UK, because the sons and daughters of wealthy individuals attend the same private and public schools, go to the same Universities and Colleges, belong to the same clubs and have access to far greater opportunities than the children of those with lesser means and so the cycle repeats itself. If you like, part of their religion is the pursuit of wealth and the trappings of wealth that can be accumulated from business. Thus, the majority tends to focus much of what they do in their daily lives on business and making money. As one US President, Calvin Coolidge, observed,

  “After all, the chief business of the American people is business. They are profoundly concerned with producing, buying, selling, investing and prospering in the world”.

  (Calvin Coolidge (1872 – 1933), 30th President of the United States (1925)

  But, not everyone can become wealthy from business ideas and business ventures. It is one cause of economic and social frustration and why even those who shuffle money around the stock markets appear tempted to find ways of circumventing the process. However, the US does not, allegedly, always agree with or comply with guidelines on world trade. This is re-enforced by the fact that the WTO has repeatedly reprimanded the US government for subsidizing American exporters with tax breaks and for still subsidizing cotton and agriculture. The US has also imposed import trade sanctions against, for example, steel imports, and also provides subsidies to areas of business that are suffering especially farming and agriculture.

  In addition and despite such warnings repeated American failures to respect World Trade Organization rules only raises questions about US commitment to the WTO or whether globalization is only to be embraced when it is in their best interests? What happens when one country imposes protectionist measures like import tariffs or provides subsidies to, for example, its own agriculture, trade and industry is that other countries follow suit and the whole concept of free global trade goes down the pan. And, when the going gets tough, leading to a global downturn, major industrial countries are likely to raise the drawbridge and lower the portcullis and retreat back from whence they came.

  There is one other area associated with the economic side of globalization and that is the subject of taxation. President Ronald Reagan introduced the concept of ‘trickle-down’ economic policy that was strongly supported by the former British Prime Minister, Margaret Thatcher. His contention, allegedly, appeared to be that if you reduced the percentage level of taxation for the wealthier levels in a country, that just happened to include for example businessmen, owners of companies, oil barons, film stars and land owners, that they would become more honest and might be encouraged to pay their taxes without finding ways and means of reducing the amount paid and thus, it was suggested, more would be collected! Has that really happened?

  It that were really the case then how come that during the last two decades of the 20th century, and at the beginning of the 21st century, the pay of chief executives and other directors increased by leaps and bounds, in some cases estimated to have increased by 500 per cent or more, whilst the pay of ordinary employees rose at about the rate of inflation each year?

  How can it be that the top 1 per cent, yes 1 per cent, of the wealthiest people in America owned approximately 25 per cent of that nation’s wealth in 1981 and 20 years later that same 1 per cent group apparently now own almost 40 per cent of that nation’s wealth? How come the stock and share holdings of the wealthiest 10 per cent in the US and the UK increased considerably whilst the bottom 25 per cent in both economies did not improve their financial position; and, a third of Americans and 20 per cent of children in both countries now live in poverty and many go hungry? The jury is probably still out on this case and no doubt the economic facts and statistics are not clear but ‘trickle-down’ is a sort of capitalist Utopia where the rich get even wealthier and the poor remain poor because less money is spent on public services and social programmes and state pensions do not keep pace with the rate of increase of earnings.
  The real problem is that capitalism, through the process of globalization, has created, and continues to create, enormous inequality and a growing imbalance throughout societies and, unless systems are in place to ensure that basic shelter, food, medical services and education are provided for the most unfortunate and disadvantaged levels in society then Marx’s prophecy that capitalism will collapse and be replaced by socialism is still on the cards.

  Mrs. Thatcher’s assertion, following Ronald Regan’s trickle-down economic policy, was, allegedly, that any capitalist society should actually glory in inequality and that only the talented and capable should be well rewarded, through high salaries, share options and other perks, and that those of lesser ability would eventually, receive some improvement in their circumstances when wealth trickled down. We all know that wealth does not really trickle-down and instead of the poorest levels in society receiving a boost what tends to happen is that the rich become even richer and the number of poor in society at best remains static and at worst tends to increase, even in developed countries. Without sound underlying social and moral values and principles ‘globalized’ capitalism relies on the base instincts of profit, greed and selfishness.

  The whole economic system and process appears designed to make the rich even richer whilst the bottom levels remain static. And, that is why there should be a graduated system of taxation and why agreement should be reached between governments on dealing with the subject of tax evasion by wealthy individuals. Thus, unless there is a fair system of gradual taxation based on income and not indirect taxation, as Adam Smith suggested in ‘The Wealth of Nations’, then the level of inequality will increase,

  “The subjects of every state ought to contribute towards the support of the government, as nearly as possible, in proportion to their respective abilities;”

  and,

  “The tax which each individual is bound to pay ought to be certain, and not arbitrary. The time
  of payment, the manner of payment, the quantity to be paid, ought all to be clear and plain to the contributor, and to every other person.”

  (Adam Smith (1723 – 1790), Scottish Moral Philosopher. An Enquiry into the Wealth of Nations (1776)

  Globalization is, more or less, the expansion of capitalism and the capitalist principle of individual ownership of land, minerals, materials and resources such that it is the sole economic system employed throughout the world. It is the pursuit of free-market principles whereby supply and demand is governed by advertising, marketing and, possibly, even single providers of products or services or even through the operation of cartels.

  But, to exist and operate effectively and efficiently capitalism requires trust, a commodity in short supply in many companies and organizations, certainly at the beginning of the 21st century. In that respect there should be checks and balances to ensure that such a system does not operate solely in the interests of one group to the detriment of others.

  Despite efforts to the contrary, through programmes such as the MBA course, academics and business schools have attempted to set a global standard for management practices, management procedures and management attitudes and yet still different cultures respond differently to different management techniques and people respond to different motivational programmes.

  However, is there really such an item as a global commodity or, for example, a global taste, a global colour, a global texture or even a global shape? Given that the answer is no then it can be stated, simply, that one size does not fit all and different people from different tribes, different cultures, different countries and different continents want different products to meet their clearly differing needs and demands.

  Therefore, what global businesses need to do, if they really want to improve the lot of third world nations and reduce poverty and hunger, is to work with governments, the United Nations, other world trade bodies, Quasi non-governmental organizations (QUANGOs) and environmental groups to help to redress the present enormous imbalance in global trade and help countries to develop their resources.

  Globalization, or global capitalism perhaps, teaches us that command economies do not work and that paternalism, the concept of authority, elected or otherwise, limiting individual responsibility in one area or another, is not in the interests of the majority and that it is the individual who must assume responsibility for all his needs and wants and be allowed to own and control resources. Every individual has different preferences whether it is, for example, cars, planes, property, drink, drugs or learning. He satisfies those preferences by not only having access to products or services to satisfy his whim but also, and more importantly, the wherewithal to meet the cost of his demands or needs.

  But what happens when a nation, a people, one section or one group in society or an individual is ostracized because they or he is unable to gain access to the products or services that he or they need? How does one deal with the increasing levels of ignorance in many western advanced nations where employment opportunities in industry and manufacturing have been outsourced or exported to developing countries primarily as a way of increasing the bottom-line and profit margins for shareholders and owners? Sometimes it leads to social and civil unrest and sometimes to considerable loss of life driven by economic frustration and social despair and often to increased crime levels. That is because in any society where there is an increasing gap between the rich and the poor it leads to disenfranchisement and disenchantment.

  So, whilst one man, or woman, may own a business, a company and 2 or 3 houses in exotic locations around the world, whilst another has yachts, planes, helicopters and racehorses, another can purchase quite literally anything he wants and another can pay £15 Million to fly into space, millions of other people die of hunger or die of thirst or disease. No one is their brother’s keeper but surely in any advanced and civilized society it is human nature, or is it, for one human being who has two loaves of bread and six fishes to consider sharing some of his repast with other human beings or has the notion of society been squashed in the capitalist economic model?

  Besides, choice is not always in the best interests of the individual and there is such a thing as society and increasingly a global society; but, when trading conditions deteriorate then countries tend to withdraw and support their own industries and agriculture over global trading that is until the signs of depression deteriorate.

  And, what about the impact that globalization has on the environment? A decade ago it was suggested that in the global economic market that if a butterfly beat its wings in Japan the movement would, eventually, be felt in Europe and America. So it is with the environment. The fact that some developed nations are using more and more fossil fuel oils and increasing emissions of carbon dioxide and other greenhouse gases affects the whole world; China is apparently building more and more coal-fired stations on a weekly basis.

  The demand for oil is driving the price to ludicrously high levels and more greenhouse gases. And the depletion and disappearance of the world’s rain forests in order to provide wood and paper products to developed nations also has a global impact. Worse, the world’s biggest economy, the USA, appears determined to increase, not reduce, its use of fossil fuel oils.

  Climatic change affects all of us and thus far some of the stronger nations, the USA in particular, appear more vociferous in not curtailing harmful gas emissions but rather are trying to find ways of circumventing any possible global agreement on the subject. So, it is not just corrupt politicians, greedy companies and businessmen and unaccountable bureaucrats who are to blame, although they must bear the heaviest burden of responsibility, but also everyone who strongly supports the capitalist concept that individuals and not society that make choices.

  There is no question but that capitalism has brought benefits, through choice, in some walks of life but by and large the benefits accrued by the wealthy have far outstripped those for the poorer levels in society. It may be a fact that the people in very hot developing countries can now purchase fans but do they all have access to electricity or more importantly to clean water supplies? It may be that in China people can now purchase motor-bicycles or mopeds rather than bicycles, have access to a market of personal computers, organizers, televisions, radios and CD players, but does that actually improve health and education facilities?

  It is possible that farmers in Africa can grow flowers and export them to Europe and America dealing on mobile phones with distant buyers but does that actually increase or improve foodstuffs available in their own countries? And, a few people in the Eastern European nations of the former Soviet Socialist Union can now purchase designer label clothes, expensive motorcars, jewellery and other luxury goods but does that actually improve the lot of the workingman?

  What emerging or poorer nations might do, in the first instance, is not to bemoan their economic situation but to determine the quality and type of produce or product they can deliver on a regional or global scale and increase competency and competitiveness in those areas where they might reasonably be able to compete.

  The present backlash against globalization is also a backlash against the excesses of the capitalist system, and probably more especially US-style capitalism, as ordinary people see it at the beginning of the 21st century. A system in which corporate governance has been replaced by corporate greed and numerous examples of selfish, self-centred company policies associated with accumulating individual wealth at the expense of others.

  A political and economic system where politicians of all persuasions are seen by many as being in politics for self-aggrandizement and not necessarily working in the best interests of their country and constituents. A system where most politicians are, or are seen to be, in the pocket off or in cahoots with big business and big businessmen and are tainted by sleaze associated with greed, dissembling and the use of advisors and spin politics to achieve their own ends.

  Already there are areas of the world that are suffering from deprivation and starvation and in some areas from clean drinking water. At the present rate of progress, if it can be called such, the United Nations estimates that a half of the world’s poorest people will suffer from water shortages by 2025. Meanwhile, the pro-globalization lobby insists that in order to improve the lot of poorer countries then richer countries, for that read companies and economies, must become even richer. It is one thing to create wealth but when that wealth is concentrated in a few countries and among a few individuals then the process must be wrong! Besides, in the process of globalization and stripping the earth of resources and minerals much of the earth’s soil is being ruined and when the earth can no longer support communities what will they do?

  On reflection I am increasingly of the opinion that globalization provides even greater opportunities for companies, and more affluent people, to benefit not only from the growth in consumerism, because the wealthy own the companies or the shares that own the companies, but also from cheaper imports. However, whilst globalization offers opportunity it does so only for a few and not many and for those countries that have something to sell or offer, after that it becomes a threat. The simple economic fact is that capitalism is designed to produce only a few winners but a great many more losers; and, that part of the losing process means that money, wealth and power is gradually sucked upwards, not downwards, as suggested and implied in ‘trickle-down economic policy’, and into the hands of the few.

  Large corporations and large businessmen with large budgets and even larger economic influence, sometimes with greater economic power than some smaller developing countries, would not be paying attention to the subject of environmental management and related issues nor on social responsibility unless people were not prepared to put pressure on them and question their moral, ethical and social values.
  There are more than enough examples, the cases of Enron, WorldCom and Andersen immediately spring to mind, but there are doubtless other cases, of how global companies have acted in their economic dealings to re-enforce the notion that business is, basically, about profit, financial institutions, political dealings and businessmen and not about people, environmental and social matters. According to the United Nations Conference on Trade and Development (Unctad), some 30 multi-national companies have a capitalization greater than all but approximately 40 National economies must be a cause for concern because unelected businessmen can exert undue economic influence and more than many countries in the pursuit of global trade.

  Further, globalization means that when national and area economies are more closely integrated it is easier to see that when a butterfly beats its wings in Japan the movement can be felt in London and New York and vice versa and it is possible for economies to fail because of global economic trading conditions and shuffling currencies on the world market. However, no matter how hard we might try to encourage social responsibility many economists, capitalists, company owners, financiers and businessmen appear to support Milton Friedman who wrote in ‘Capitalism and Freedom’,

  “Few trends could so thoroughly undermine the very foundations of our free society as the acceptance by corporate officials of social responsibility other than to make as much money for their shareholders as possible.”

  (Milton Friedman (1912 – 2006), US Economist. Capitalism and Freedom (1962)

  The idea, the suggestion even, that companies exist for no other purpose than to meet the demands of shareholders, the basic principle of US-style capitalism, must, surely be well past its ‘sell-by-date’ for no other reason than the gap between the rich and the poor continues to increase especially in the USA and the UK; and because whilst wealth might, occasionally, ‘trickle-down’ in fact it tends to rush or gallop in an upwards direction and that is why the wealthy become even wealthier. Indeed, the apparent inability of the US administration to respond quickly and positively to the accounting scandals in its own back yard suggest that there is something rotten at the core of US economics and business and the way that their system is policed.

  In addition, the insistence of the present US administration to proceed with its ideological pursuit of tax reductions for the most wealthy in its society, many of whom appear to be direct supporters of that political party, whilst tens of millions have no health insurance cover, twenty per cent live in poverty and 38 million go hungry seems, to me, to be the height of irresponsibility and can only be based on greed and the pursuit of wealth. As Charles Dickens observed in his ‘American Notes’ during his first visit to that country in the mid 19th century,

  “Another prominent feature is the love of ‘smart’ dealing: which gilds over many a swindle and gross breach of trust; many a defalcation, public and private; and enables many a knave to hold his head up with the best, who well deserves a halter; though it has not been without its retributive operation, for this smartness has done more in a few years to impair the public credit, and to cripple the public resources, than dull honesty, however rash, could have effected in a century. The merits of a broken speculation, or a bankruptcy, or of a successful scoundrel, are not gauged by its or his observance of the golden rule, ‘Do as you would be done by,’ but are considered with reference to their smartness………The following dialogue I have held a hundred times: ‘Is it not a very disgraceful circumstance that such a man as So-and-so should be acquiring a large property by the most infamous and odious means, and notwithstanding all the crimes of which he has been guilty, should be tolerated and abetted by your Citizens? He is a public nuisance, is he not?’ ‘Yes, sir.’ ‘A convicted liar?’ ‘Yes, sir.’ ‘He has been kicked, and cuffed, and caned?’ ‘Yes, sir.’ ‘And he is utterly dishonourable, debased, and profligate?’ ‘Yes, sir.’ ‘In the name of wonder, then, what is his merit?’ ‘Well, sir, he is a smart man.’

  (Charles Dickens (1812 – 1870). English Novelist. ‘American Notes’ (1842)

  Perhaps it is more a case that the Anglo-American model of capitalism, with its excesses of wealth, both individual and corporate, inequality between the affluent elite and the lower orders and greed and gluttony, which cause poverty and unrest, that are to blame and not the globalization of trade and competitive trading? Perhaps it is time to take a much closer look at the various economic and social models, Scandinavian countries for example, and see how other models work and could be adopted to the betterment of people and society as a whole rather than pander to a social and economic elite? As the Austrian economist Joseph Schumpeter suggested,

  “Capitalism inevitably and by virtue of the very logic of its civilization creates, educates and subsidizes a vested interest in social unrest.”

  (Joseph A. Schumpeter. (1883 – 1950). Austrian economist. Capitalism, Socialism and Democracy)

  Companies ought, perhaps, to embrace the concept of stakeholders and pay just as much attention to the needs of customers, employers, suppliers and other companies who provide services, as they do to their shareholders. Without the commitment, consensus, contract and co-operation of every group it seems unlikely that companies will flourish in the future. In addition, it really is time that directors and senior managers, as part of their contract, accepted the need for accountability and responsibility to act in the best interests of all the groups and to ensure that business is conducted in an ethical and moral manner.

  The altruistic capitalist is a rare breed, which, at the current pace of globalization, is in danger of extinction for the simple reason that as businessmen make more money their minds become even more focused on the creation of wealth and not on economic, social, moral or global issues. The movement of western economic and political policies and principles, during the 18th and 19th centuries might have influenced parts of the world but during the last quarter of the 20th century the model appears to be more than a little jaded.

  Europe, with its growing burden of bureaucracy and administration and bureaucratic institutes like the EU Parliament and the EU Commission, is now too sluggish to respond to changing global circumstances and tends to focus far more on protecting some of its older industries against the more agile, and cheaper, companies in the Middle and Far East. However, unless there is some form of protectionism then it will lead to yet more job cuts in advanced nations leading to increased levels of poverty in those nations and possibly unrest.

  China and India are rapidly emerging as the powerhouse economies of the 21st century primarily because of the enormous amounts of investment, mainly from western industrial nations, increasing skill and education levels and the movement of jobs in manufacturing and service sector industries from west to east, leading to an increasing loss of manufacturing jobs and more particularly in the UK. As Adam Smith pointed out in ‘The Wealth of Nations’,

  “The capital, therefore, employed in the home-trade of any country will generally give encouragement and support to a greater quantity of productive labour in that country, and increase the value of its annual produce more than an equal capital employed in the foreign trade of consumption.”

  (Adam Smith (1723 – 1790), Scottish moral philosopher. An Enquiry into the Wealth of Nations (1776)

  Globalization is also leading to a transfer of many ‘white-collar’ jobs in banking and finance and in ‘call-centres’ being transferred to countries where there is a pool of educated people who speak, read and understand English (sic) and where costs are much less than in the United Kingdom. But strangely, and as these jobs are being lost, there has been an influx of peoples, from Eastern Europe into the United Kingdom, who are prepared to work for lower wages thus driving down the costs of labour and making like increasingly difficult for those on lower incomes and the minimum wage to exist and this is a fundamental factor in the increasing gap between rich and poor.
  The combination of globalization and immigration is driving down wages and is leading to the gradual growth of an underclass in some western, industrial nations because of low income from poor wages. This group of people is not sharing in the apparent increase in wealth because, in some instances, the provision of public and social services has not improved and also the level at which people begin to pay income taxation has not been raised substantially in an effort to reduce the number in the poorer levels paying income taxation.

  There are some who suggest that immigration is good for the economy of a developed country and more especially ones with ageing populations, but is that really the case? The fact is that some immigrants to developed countries, particularly within the EU, often end up working in the ‘black economy’ for lower wages but do not pay any income taxation or national insurance contributions and those that do register and pay taxation do so at a lower level because they tend to end up in lower paid jobs. However, because they are registered in the country they are allowed equal access to public services such as health, education and housing adding to the already burgeoning strain on some of those systems. Under those circumstances they effectively become an increasing burden rather than a positive input to that economy. Therefore, that strengthens the case for more selective immigration based on the educational and skill standards of the immigrant and the needs of the economy of the developed nation.

  Whilst the ‘wealth of nations’ might actually increase overall the income of many families has, in many instances, actually reduced pushing down the ‘per income capita GDP’ creating wealthy nations but increasing the actual numbers of economically and socially poor people; globalization and new technology has in fact led to greater inequality because of the loss of jobs. Globalization is only good if in the process of increasing trade, increasing the creation of jobs, the transfer of technology, the provision of education and the creation of wealth, that it is shared on a much more equal footing and that peoples of all nations begin to see improvements in their personal lives and in general political, economic, social and technological conditions. If not then again it shows that globalization is not in the best interests of the majority.

  More importantly the inherent danger from globalization is that unelected Chairmen, Chief Executives and boards of directors, the ones who often write into the media and all forms of public press organizations of the benefits of globalization, are increasingly able to exert undue influence on politicians so that the best interests of their company, and its shareholders, are met regardless of any impact on social, economic and environmental matters and on the consumers in that country. That is why it is imperative to remain vigilant to ensure that global capitalism does not exert too great an influence and that checks and balances are introduced and implemented to ensure greater openness especially in corporate governance and in governments.

  The pursuit of privatization and profit, dollars, pounds, euros, yen or shekels or any other currency for that matter is commendable but only if the result of such enterprise leads to greater awareness and more effort to improve the notion of social equality through the provision of social services. As Charles Dickens observed in his novel ‘Martin Chuzzlewit’ in 1844,

  “Dollars! All their cares, hopes, joys, affections, virtues, and associations seemed to be melted down into dollars. Whatever the chance contributions that fell into the slow cauldron of their talk, they made the gruel thick and slab with dollars. Men were weighed by their dollars, measures were gauged by their dollars; life was auctioneered, appraised, put up, and knocked down for its dollars. The next respectable thing to dollars was any venture having their attainment for its end. The more of that worthless ballast, honour and fair-dealing, which any man cast overboard from the ship of his Good Nature and Good Intent, the more ample stowage-room he had for dollars. Make commerce one huge lie and mighty theft. Deface the banner of the nation for an idle rag; pollute it star by star; and cut out stripe by stripe as from the arm of a degraded soldier. Do anything for dollars! “

  (Charles Dickens (1812 – 1870), Martin Chuzzlewit, (Ch. 16 (1844)

  The question is, are global companies and globalization a cause for good or not? To begin, there are those global organizations who concentrate solely on the ‘bottom-line’ as a means of increasing profits without caring much for the global environment or for local social, economic, ethical and moral issues and, there are those who support the notion that companies are in business simply to make as much money as possible for their shareholders.

  That kind of global policy shows, perhaps, that the ‘nouveau riche’ do not understand that there must be, surely, a global social and moral responsibility to be more generous to those less fortunate and instead of a new helicopter, plane or yacht they might contribute a little more to the global community, and especially those more closer to home who always find increasing ways and means of avoiding taxation. In other words it is time that the wealthiest levels in countries and in society, the winners, should make greater effort to compensate the losers, those in the lowest two quintiles in developed countries and even greater numbers in developing countries.

  The fact is that, whilst the richest chant the mantra that ‘globalization is good’, they do not and have not helped to ease the levels of poverty in developed nations because globalization has driven down the wages of the poorest paid and probably unskilled workers making many of them redundant in the process; and they have probably done even less for people in developing nations. If globalization is to succeed, and be widely welcomed, then there must be seen to be clear and definite improvements in the provision of healthcare including hospitals, medicine and drugs, education and access to knowledge and information and in access to power sources whether gas, coal, oil or nuclear powered or through renewable sources like solar and wind power and for the costs of those services to be reduced to avoid capitalist profiteering and greed.

  Other businessmen, probably in the minority I suspect, are, slowly but inexorably, becoming aware that their policies on sourcing material, equipment or foodstuffs, their travel plans or their siting of outlets or headquarter offices is having an impact on the environment and is also impinging on local communities not only through the use and development of ‘greenfield’ land and the infrastructure but in destroying local competition and employment opportunities.

  In time some of these multi-nationals with global expansion plans might come to realize that in many instances they are, and should be, responsible, from a social and economic viewpoint, to their parent nation and could fall foul of the political system back home. Therefore, globalization is not always a force for good or for progress because whilst a few benefit from the process a majority lose out by the loss of employment opportunities; and this is likely to lead to a loss of support for more liberalization of trade, unless there is a change in attitude related to employment and economics, the creation of jobs and raising the poorest levels out of taxation. The latter point is paramount in advanced industrial nations where the poorest levels in society are paying a disproportionate amount of their income and revenue in direct and indirect taxation.

  Mankind, by that I mean individuals, nations and societies, has a choice; globalization and global trade by all means perhaps even the globalization of labour and employment but it should and must be managed and controlled to ensure that it is fair, and is seen to be fair, to anyone and everyone in a country. Thus far it is only the rich, including corporate chief executives and other directors, who are seen to benefit from the notion of totally free competition between nations and that must have a negative impact on the rest of society in developed and developing nations; and, any growth in national economies has clearly benefited only a few creating even greater imbalances within nations and on the global stage.

  Politicians occasionally imply that they listen to public opinion but for the most part any ideas of comments raised by the public tend to enter in one ear and go straight though and out of the other for the fundamental reason that politicians, particularly those in power, listen but do not hear, observe but do not see and follow but do not comprehend. Perhaps that is because they believe that public opinion is not in the best interests of a nation and, one has to assume, that they listen more to business leaders and those with power and influence rather than public opinion and how their policies affect the lives or ordinary working people.

  Ordinary people, those in jobs and not professions and not highly regarded or highly paid, are the ones who will suffer from the spread of globalization simply because companies will always seek to find the cheapest labour market to manufacture goods or even provide services in order to boost their profit margins.

  This is particularly relevant in advanced western countries that operate a capitalist free-market economy and system where the market dictates pay, prices and access to products and that is why inequality, in pay, allowances and taxation, especially for the poorest and lowest paid causes hardship and why relative poverty will continue to increase as lower paid jobs are outsourced or exported to India and China. When this happens unemployment levels begin to rise putting additional strains on public services and social security systems and leading to an increase in levels of poverty.

  But, surely, it is right that politicians in any government will, in the course of praising globalization and even privatization, find ways of controlling, or curbing, the excesses of capitalism, through income and corporate taxation as appropriate; and, by ensuring that any and all of their citizens share in the benefits accruing from globalization, and not just those who own or manage companies and those who shuffle money in the finance sectors, by the introduction of social policies that help to raise the standards and levels of the poorest in their society? If they do not make an effort to protect employment or create new job opportunities for those made redundant when jobs are exported then they are storing up resentment and frustration for the future, areas that could cause increasing instability and perhaps an increase in crime levels.

  We, governments and individuals, must make much greater efforts to reduce the destruction of our natural environment more than we already have in past decades and centuries; and, advanced industrial nations, more noticeably the US and developing countries like China and India and also Russia, must make greater efforts to control the use of the earth’s natural resources. They must also learn to make greater use of the elements, particularly the sun, to reduce the level of global pollution and harmful greenhouse gas emissions and not waste those resources in the pursuit of expansion plans to create a global consumer-driven society where the economy depends on financial dealings and where economic circumstances are too heavily dependent on the value of bricks and mortar.

  And, mankind has a second choice, if it continues with this headlong rush into unfettered globalization and the globalization of labour to support capitalism, without any real and sustained effort to control the ever increasing divide between the richest and poorest levels in societies and countries without providing safeguards in terms of medical, educational, employment and social services, then it can only lead to economic and social disaster for individuals and for individual nations and lead to increasing disenchantment through disenfranchisement and then to a gradual breakdown of law and order. It has happened before and it can happen again. Globalization, just like the free market and capitalism, only works when there are rules and regulations and checks and balances in place to ensure that some, especially in politics and the banking and finance sector, do not use and abuse their position of power to manipulate systems to meet their own ends. Without regulations, and perhaps even global regulations, corruption will fester but at some time it always rises to the surface.

  On the other hand, protectionism, which is not a root cause of poor economic circumstances or a cause of recession or depression, is an understandable response by governments and countries in an effort to protect their industries and their currency against further pressure from global trading conditions in an effort to reduce their trade deficit from imported goods and services. And, when economic circumstances cause a run on businesses and currencies, leading to even further employment difficulties, it is the nations who react and respond the quickest by effectively raising trade barriers and by using interest rates to quash inflation that are the ones who tend to survive and revive the quickest. It is fine to manufacture goods in India to sell in India or China to sell in China but to manufacture cheap products in a part of the EU and then sell them throughout the EU distorts income, revenue and trade.

  The free movement of labour is an overriding demand from those who sit at the very top of companies and organizations because, they insist, it is the fact that peoples from other parts of the world bring different skills and experiences, perhaps even different knowledge and ways of working and sometimes they fill the gap left because of the failure of our secondary education system and tertiary academic establishments to motivate and train our children so that they are prepared, not just academically but also vocationally and perhaps even professionally, for the world of work and to meet the demands of business. Worse, millions of jobs have been exported to boost the bottom line but causing hardship.

  What they, regularly, do not address is the fact that many of their companies have, for the last 3 decades and perhaps even longer, failed to invest in providing academic and vocational training and apprenticeship programmes in order to improve the skills and knowledge of their employees and the young people who join their organizations for the fundamental reason that they have concentrated far more on increasing dividends to meet shareholder demands rather than set aside some of their profits for investment in people, plant, products and services and research and development. Th

  Posted 26 March 2009, 12:19 by Lt Commander Kenneth Armitage

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