GLOBALISATION: ‘PROBLEM & SOLUTION’

1. THE CRITICS’ VIEW

DEFINITION – Globalisation is defined as the ever-increasing integration of national economies into the global economy through trade and investment rules and privatisation, aided by technological advances. These reduce barriers to trade and investment and in the process reduce democratic controls by nation states and their communities over their economic affairs. The process is driven by the theory of comparative advantage, the goal of international competitiveness and the growth model. It is occurring increasingly at the expense of social, environmental and labour improvements and rising inequality for most of the world.

Or more bluntly:

Globalisation n.1. the process by which governments sign away the rights of their citizens in favour of speculative investors and transnational corporations. 2. The erosion of wages, social welfare standards and environmental regulations for the sake of international trade. 3. the imposition worldwide of a consumer monoculture. Widely but falsely believed to be irreversible. – See also financial meltdown, casino economy, Third World debt and race to the bottom (16^th century: from colonialism, via development).

2. THE OFFICIAL VIEW

The former UK Minister for Trade, Richard Caborn, previously said:

…The government remains firmly behind a comprehensive new round of negotiations in the WTO as the best way forward for the UK, for developing countries in particular, and for the world economy as a whole. We are working for a more transparent WTO which promotes sustainable development and fosters the rule of law in international trade. [Richard Caborn MP (1999) Letters to the Editor, The Guardian, 11 October]

WTO = World Trade Organisation

In extracts of a letter to Alan Simpson MP, dated 19 February 1999, Brian Wilson MP, a former minister of trade, wrote:

Trade liberalisation is not the cause of the problem of the world’s economies, but the answer to them.

“By securing better access to overseas markets for producers, by reducing trade barriers, and maintaining and improving the supply of competitively priced goods and services to consumers, trade liberalisation brings widespread welfare benefits and helps to improve the efficiency with which the world’s resources are used. That is why the Government supports the EU’s call for a comprehensive new Round of trade liberalisation, which has already met with support from a number of developed and developing countries.”

Trade and environment:

“Our overall aim is to work towards sustainable development in accordance with the principles set out in the Rio Declaration adopted in 1992. The Government will work to ensure that trade liberalisation contributes to this aim, including action to safeguard the environment and the interests of developing countries. By enabling developing countries to derive more benefits from increased access to overseas markets and to inward investment, we can help them to increase prosperity which in turn has the potential to enable them to raise their standards of environmental and social protection.

…The Government believes that the evidence shows strongly that trade liberalisation is in the best interests of developing countries as well as developed countries. The OECD has found that in the last decade countries which have been more open to trade and investment have achieved twice the average annual growth of more closed economies. This is of particular importance to those countries which need to grow faster to deal with their greater infrastructure and capacity weaknesses.” [Brian Wilson MP, former Minister of Trade]

Continue reading →