Globalisation: fiction or reality?

February 10, 1999
Issue 

The Global Trap: Globalization and the assault on prosperity and democracy
By Hans-Peter Martin and Harald Schumann
Zed Press, 1997 (reprinted 1998)
269 pp., $24.95 (pb)

Review by Eva Cheng

One of the biggest issues confronting working people today is whether the owners of capital are as powerful and mobile as they and their apologists make them out to be. Is it as easy and profitable for them as they claim to move their production to another country if local workers press for "unreasonable" demands or don't meekly accept attacks?

The capitalists' central thesis is that production can now be conducted across many borders because the roles of each location can be reassigned easily and at negligible cost. And capitalists are fully prepared to do this, they say, if their workers do not accept their working conditions.

If it is true, this means great trouble for workers because most of their struggles for better working conditions would be heading towards a dead end.

The capitalists feel no need to provide evidence for the truth of their thesis. They simply bombard the basic idea into workers' heads using their powerful media.

The thesis is wrapped in the term "globalisation", loosely defined but marketed as the "fact" that, since nearly all essential human activities have been globalised, capitalists everywhere are driven by international competition to stay lean and fit — principally by minimising wages — or their business will not survive and the jobs they "create" will evaporate.

Because of its heavy marketing, the globalisation theory has gained considerable currency. But this has not been unopposed; the debate has generated so much interest that The Global Trap has been translated into some 20 languages (including Korean and Chinese), after the original 1996 German edition sold 250,000 copies in the first year.

However, The Global Trap contributes little to this important debate. Hans-Peter Martin and Harald Schumann's great sympathy for the plight of workers, the jobless and others marginalised by the "globalisation" process does not improve their contribution. Rather than scrutinise the globalisation theory, they take it largely as fact.

They recognise that measures such as massive job cuts and reductions in social spending carried out under the pretext of globalisation have significantly increased social polarisation. But instead of questioning whether such austerity is necessary, or whether there is a possibility for change, they build their book around the assertion that capital's attack on labour will only get worse.

Some recent mass struggles by European workers — such as the French public sector workers' campaign at the end of 1995 and the German workers' June 1996 struggle — are mentioned, but only to illustrate the authors' case that such battles won't make much difference.

From the US workers' unsuccessful efforts to stop Caterpillar's 1991-95 attacks, Martin and Schumann draw this sweeping conclusion: "Caterpillar could ... prove something which is hard to imagine in most industrialised countries: strikes, even if they last for years, can no longer force higher wages".

They go on: "Indeed, for a corporation organised on a world scale, they [strikes] offer a welcome opportunity to save on labour costs and to boost company profits, if the top management acts with sufficient determination". This is typical of how the authors let their unquestioning acceptance of the might of globalisation seep into what appear to be factual accounts.

Get ready for a "20:80 society", they proclaim, suggesting the gradual disappearance of the so-called affluent middle class alongside a large increase in the impoverished population (80%) and those who've made it (20%). In this they seem to accept the general belief in the west that the bulk of the population, until recent years, has been middle class.

Buzz word

There is a great deal of loose definition in the globalisation debate. What does this buzz word refer to: production? markets and sales? productive investments? the circulation of speculative money? or all of them?

For a useful debate, it's necessary for participants to make clear what they mean by globalisation, but Martin and Schumann don't do this.

The closest thing to a definition is their statement that globalisation is "understood as the unfettering of world-market forces and the removal of economic power from the state ...". It is also, they state, "for most nations a brute fact from which they cannot escape".

To add to the confusion, the authors splice into their analysis other forms globalisation, such as that of information, drugs, epidemics, environmental effects and finance. The authors' failure to differentiate between economic activities and their social consequences creates a great deal of confusion.

The pivotal role of the international money markets is suggested through a detailed and useful account of how currency speculation contributed to the collapse of the European Monetary System in 1993 and the Mexican currency in 1994-95. But no space is given to assessing whether and how the monstrous growth of a highly globally integrated money market might have impacted on production and its more or less global organisation.

By illustrating that some businesses conduct some aspects of their resourcing, production, sales and fund and debt management (including tax liabilities) in multiple countries, the authors have added little to the globalisation argument. These are hardly new phenomena in capitalism.

A key question is: do these cross-border business offshoots form mutually dependent elements of a global business, or are they more or less independent units of a network of businesses in different nations controlled by the same holding company? Certainly, those firms with offshoots in tax havens to facilitate "tax minimisation" give the appearance of being globalised, and numerous firms across the world fall into this category.

The nation state

Whether global firms are increasingly free of the power of nation states hinges on just how mighty and globalised these firms have become. Without adequately answering this question, but with reference to business's success in "minimising tax" (which hurts the income of governments), the authors jump to the conclusion that nation states are becoming impotent.

The authors seem to believe that governments are neutral arbiters of conflicting class interests, rather than defenders of the ruling class. This has left them at a loss to explain why so many nation states so readily subsidise businesses "to minimise their costs".

There are no easy answers to many of the questions which are important in gauging the extent, momentum and consequences of the rising internationalisation of capitalist production. They require vigorous analysis and scrutiny — much more than Martin and Schumann have offered.

Despite the authors' pessimism about the ability of workers' struggles to slow or halt the capitalists' onslaught, they have no doubt that the fight at hand is a "distribution struggle which is as old as capitalism itself".

Yet imperialism and its subjugation of the Third World have no place in Martin and Schumann's analysis. For them, the First World is merely "the prosperous part of the world". They have unquestioning respect for the International Monetary Fund, apparently under the illusion that it is a neutral institution which serves the interests of all nations.

European 'alternative'

These authors believe that the United States, as the world's "leader" because of its economic size, has not been living up to its role and that there is a need and opportunity for Europe to fill the gap, to provide an "alternative".

A trans-class European identity seems to have a strong place in the authors' perspective — they are "certain that a huge majority of Europeans will not willingly follow the Anglo-American path of tearing their own society apart".

Japan, despite being the second largest economy in the world, carries negligible weight in their analysis, and their deliberations on Asia are slim and weak (Malaysia, for example, "has long ceased to be a developing country"!). In contrast, the German examples carry exceptional weight (both authors are German journalists).

Their criticism of the non-accountability of the European Parliament is interesting, but they have great faith in parliamentary democracy and believe that the European Union can be democratised through the ballot box.

Their aspiration is a "pan-European civil society", for politics in Europe to be taken beyond national boundaries. But they don't tackle how that can that be achieved in the absence of a unified state power.

The Global Trap is like a long, "colourful" journalistic piece: plenty of non-essential details, but so concrete that it gives the appearance of being factual and reliable. This makes it reader-friendly, but don't expect tight analysis. Its framework is a weaving together of questionable assertions and controversial perspectives, something always to be alert for in "popular" books.

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