Globalisation: Is it really that bad?
Signs: Hans, tell me a little about yourself and where you are in respect to the contentious issue of globalisation?
Hans: I was born in Scotland, of Dutch parents. Although raised in England, in 1969 I came to Australia as a migrant. My shirts are from Indonesia and Hong Kong, my car from Korea and this watch is from Japan. That probably tells you something about where I am—where we all are—in respect to “globalisation.”
I head Investment Markets Research at Colonial First State Investments, in Sydney, NSW. I analyse sharemarkets around the globe, monitor global economic trends and speak with fellow professionals in most major nations.
In fact, I live, work and breath “globalisation,” so you may not agree with all I have to say, but it’s my perspective.
What has been the recent history of globalisation?
Modern globalisation started with great promise in the early 1990s—when the Berlin Wall fell—and communism as a dominant global force was spent. That marked the beginning of an era of freer trade and “smaller,” less controlling government in the West. There were both winners and losers. Old ways were changed and many people were rattled, feeling insecure.
In the industrialised world (including Australia and New Zealand) mines and factories closed and people lost their jobs. Government service standards appeared to fall in areas such as transport, hospitals and schools. Very little good seemed to be coming from the deal. At the same time a fear was growing that large global companies were becoming more powerful than national governments. Add to this community concerns over pollution, some scandals over corporate accounting and corporate greed, and the climate was right for anger and dissent.
Obviously globalisation holds advantages for business, but do they translate to humankind in general, that is, factory-floor workers and non-shareholders? And at both ends of the North–South divide? Should we be angry? Should we be fearful?
Change usually engenders fear. And losing one’s job isn’t pleasant, for sure. Reductions in services are hard to take. But look at the other side of the coin. Employment in the less industrialised nations is growing strongly. Incomes are rising in countries that have bought into the globalisation trade agenda.
Jobs in Australia have been lost to places such as China, Fiji, Pakistan and Indonesia. The factories we have closed are being opening elsewhere. Is this good or bad? We lose a range of jobs and in return we buy back the same products we once made—but usually at a cheaper price. They get more jobs. We get cheaper goods.
But is humankind in general better off with globalisation?
My conclusion is yes. As far as poorer countries are concerned, a low but rising income is better than no income. And lower-priced goods are better than expensive ones if the quality is the same. Access to the markets and technology of the world is better than going it alone. Not everyone can invent and develop drugs or computer chips. A mobile phone in the hands of one villager can save time and lives. It brings information that can lead to many positive outcomes.
But how do we protect and grow the number of jobs in Australia or NZ?
The easy answer is that we do the things we are best at and specialise in the jobs against which foreign labour can’t compete—comparative advantage, it’s called. Jobs are being created in the Australian services sector. We need more nurses, scientists, accountants, tour directors, computer gurus, photocopier technicians etc.
Is there a degree of paranoia surrounding this issue, or is there real reason to be concerned, for example, as corporations grow greater “economies” than many countries?
Have genuine concerns become overstated? The world faces many problems, poverty and pollution among them. Are these caused or made worse by globalisation? Some say yes, others no.
Factories spewing smoke in China and India are a curse to the world and those who live nearby. Some of these factories are run by global corporations and others by locals, but the chances are that standards within the global corporations will be as good as, if not better than those of the local enterprises. But each country has standards that all companies must abide by. Over time there’s scope for standards to improve, as has occurred in most parts of the industrially developed world.
In the light of recent corporate infidelities, many with a global reach, why would we trust any corporation?
There are many, many corporations worldwide. We only hear of the few who have crooks within them. In my observation and experience, most corporations are run by fair and honest people. Those corporations with bad track records lose trust and thus business over time. Communities that accept global corporations do need safeguards. But it’s a mistake to demonise everyone for the sins of a few. If a foreign investor invests in New Zealand or Australia or any other country, they face the prospect (however remote) that their profits may not be allowed to be repatriated or have their capital assets nationalised. Investment isn’t a one-way street.
I guess one of the concerns about the arrival of international companies in town is the loss of local identity or even sovereignty in extreme cases. Obviously nations must put safeguards in place. But change will occur one way or another. You see towns die without investment, and likewise countries. Someone has to create the jobs, and those who do deserve their say. How do you prevent the decline of a “town”? You invest in it from outside. And what is “identity”? Is it static?
Globalisation stands accused of taking much from a country but not giving all that much back in the way of culture or employment in net terms. Is that a fair observation?
What does globalisation “take” from a country? Globalisation sends money to countries—it builds facilities and creates jobs. In the case of mines, it may take out the ore—but only in return for royalties. How else is the material going to get out of the ground? And as I suggested, cultures aren’t static. If people choose one culture over another, is that bad or good? Am I wrong or a bad person if I enjoy an occasional cheeseburger instead of rice?
But how do the companies help those countries in which they do operate?
Let me give you an example, a little extreme, but you’ll see the principle. International companies operate in South Korea. North Korea bans them. Where would you rather live? South Koreans have embraced globalisation. Now, on a per capita basis, they are almost as rich as Australians in just 30 years. And is their culture dying? I doubt it? Didn’t they beat Spain in the World [soccer] Cup? I call that progress! Albania and North Korea stand as extreme models of anti-globalisation. They are run by tyrants who mouth concern for their people. Yet their people starve and their societies are far from civil.
Another perception of multinationals is that they have too much leverage over governments and countries through undemocratic trade and business organisations, and that trade rules are biased in their favour rather than to benefit the countries in which they operate. Is there any substance to this accusation?
The World Trade Organisation (WTO), for example, is not an undemocratic group. It is an association of countries that have agreed to certain principles of trade. It is the governments of the member countries who agree to the principles and send delegates to work on their behalf.
Australia has been at the forefront of the push to get freer trade in agricultural products. If we don’t like our delegate, we vote them out at the next election. The WTO is not run by business for business; it’s run by government [representatives] to help business do business, that is, to create goods, jobs and profits.
Opponents of globalisation use the language of religion to describe its belief system, for example, referring to those who promote it as “zealots.” On the other hand, some proponents treat it as if it were a natural law or an inalienable right, like the free exercise of religion. Is there a religious or, at the least, moral or ethical dimension to globalisation?
There are elements of a “belief system” in the push toward globalisation and free trade. The roots of this “faith” are a belief in the freedom of choice and the rule of law. Its believers prefer constitutional democracy to despots. They tend to prefer less rather than more government controls. This is based on their belief that motivated individuals and groups create better outcomes than “wrongly motivated” government officials.
Most globalisation zealots despise poverty and the corruption that engulfs many poor nations. They also seek to profit themselves, although some [critics] would say without thought for the consequences of their actions.
It is true that globalisation brings change and that the weak in a society can be overlooked. The moral challenge of globalisation is to ensure that the weak take part in the process and their needs are met. This might be through government compensation, for example. But they cannot be ignored. At the heart of antagonism are deeper issues of envy, greed, alienation and hunger for power. Change can bring all these forces into play.
As Christians, we need to be aware of these forces. We must stand up for the rights of the weak, we must resist bullying tactics by those who wield power on whichever side they stand. Neither can we pretend that the status quo is always best. People, relationships, businesses and governments do not stand still. Our role as Christians is to apply a Christian framework to change, with an eye to justice and the needs of the weak.
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