John Ralston Saul traces the rise, plateau and fall of globalisation in The Collapse of Globalism and the Reinvention of the World, and explains why it is officially dead. On a similar theme, A Fair Globalisation: Creating Opportunities for Al l, from the World Commission on the Social Dimension of Globalisation, echoes Saul when it states that successful policies, to respond to globalisation, need to start with local communities. Good global reads, says D. Murali.

D. Murali

THE `G' word that most of us are tired of is globalisation. But breathe easy, because "it is now officially dead," as John Ralston Saul assures us in

The Collapse of Globalism and the Reinvention of the World

, from Penguin (

www.penguinbooksindia.com

).

"Globalisation emerged in the 1970s as if from nowhere, fully grown, enrobed in an aura of inclusivity," narrates the first chapter, vehemently titled, `A serpent in paradise'.

Yet, after three decades, it is slipping away, notes Saul. "Much of it is already gone. Parts of it will probably remain."

What will happen if everything disappeared? We'd be regressing to "rampant nineteenth century nationalism combined with old-fashioned protectionism", cautions the author, against any wholesale reversal. Nor is the death too premature. "For economic theories a quarter-century is a good run," he comments. What will linger on as remnants of globalisation depends upon what emerges from the field that is currently too confusingly crowded with `other competing ideas'.

First, what is globalisation? Saul dissects dozens of definitions, such as Thomas Friedman's "the inexorable integration of markets, nation-states and technologies to a degree never witnessed before." Globalisation is "an inevitable form of internationalism in which civilisation is reformed from the perspective of economic leadership," describes Saul.

Trade has burgeoned, as a result; paradoxically, however, there's only modest growth in wealth. "The high percentage of new trade that is merely movements inside transnationals," is only `a matter of shipping and tax planning,' writes Saul. All this is not a revival of capitalism, but `a decline into consumerism', he fears. Are we heading to "the first really synchronised world recession and the risks of economic implosion," as Klaus Schwab warned, wonders Saul?

`The original flaw of globalisation', according to the author, is the hype about `the success of nineteenth-century free trade' and `the determinism of technology and the superiority of rational management systems'.

What happened thereafter? "Global economics came to be presented as a tool to weaken government, discourage taxes both on corporations and on the top bracket of earners, force deregulation and, curiously enough, to strengthen private sector technocracies in large corporations to the disadvantage of real capitalists and entrepreneurs."

Economic debate hijacked

Funds from neo-conservative foundations in the US hijacked international economic debate, and led to a high level of `conformism in departments of economics' everywhere. `A short history of economics becoming religion' follows. Saul cites press releases that spoke of how economic growth reduced global poverty, and how "the number of people living on $1 a day has fallen over the last two decades from 1.5 billion to 1.1 billion."

Our obsession with abstracted measurement is "aggressive on the details, passive on the larger picture," he notes.

"People at $3 a day could be living a life of pure despair in a savage slum of Lagos, a life far worse than that at $1 a day in a stable slum like Klong Toey in Bangkok, where there is a societal structure."

Part II, `the rise' has a chapter titled `the King's Fool', in which Saul analyses the role of the European Management Symposium that became the World Economic Forum. "It proposed viewing society through an economic prism and viewing economics through the prism of the managers of large corporations, rather than through the eyes of capitalists."

It is an organised, concentrated lobby system, comments Saul. The Forum is what he calls "a global expression of the normalisation of unethical behaviour," where those to be courted were the corporate managers, and the humiliated princes were the elected leaders.

A chapter called `Crucifixion economics' nails in with statistics such as the 6.2 per cent fall in Africa's per capita GDP, which had seen a 1.8 per cent rise per year from 1950 to 1980. Forty-one most indebted nations had a debt-to-export ratio of 100 to 260 per cent, in the 1970s. "By the end of the century, it was between 1000 and 2500 per cent." In short, "the globalist era has damaged large sections of the world."

Losses in companies, gains in gambles

Part III, `the plateau', has disturbing truths. For instance, "governments are finding it increasingly difficult to collect taxes from corporations", as if nation-states have `weakened before the large corporations'. Saul explains the common

modus operandi

: "Transnational corporations are very adept at moving their money around according to tax rates.

If they don't like the tax system in a place, they move their money out and run their local subsidiary on debt."

He cites a snatch from a 2004 report of

The Financial Times

: That the UK operations of 20 major non-oil companies with a turnover of almost £100 billion "had managed to organise a total loss of £700 million".

Quite bizarrely, democratic governments are betting on gambling `to raise serious amounts of public funds'. For example, Mexico aims at $3 billion gross. "New Zealand is at $12 billion. In Britain some £25 billion. In India, $7 billion 2 per cent of GDP."

The penultimate part of the book is on `the fall'. The cusp year was 1995, chronicles Saul, reading four events as tea leaves in retrospect: One, the tequila crisis, which brought catastrophe to Mexico.

Two, James Wolfenshohn was named president of the World Bank, and he began "an endless battle with the Bank's bureaucracy and its culture and wrested it away from the abstract, top-down economic-destiny idea of the world toward a more complex path relating to the realities of the non-Western world."

Three, "Ken Saro-Wiwa, the leading Nigerian writer and activist, was hanged, along with eight of his supporters... the underlying reason was his opposition to the activities of Shell." And, four, "Timothy McVeigh blew up a federal building in Oklahoma City, killing 168 and wounding more than 800."

A chapter on `India and China' raises the question whether the success of these two countries is about globalism or something else. "They have done well out of economic modernisation by not following the economic principles of globalisation," reasons Saul. "Whatever market reforms there have been, they have come in the context of nation-state interests."

The concluding part of the book takes the nationalism idea forward. "The desire of people to organise their lives around the reality of where they live is central to the return of nationalism," opines Saul. "Changes that have made the biggest differences have most often been local."

Essential economics, engagingly told!

The current path of globalisation must change

A RELATED read is

A Fair Globalisation: Creating Opportunities for All

, of World Commission on the Social Dimension of Globalisation, from Academic Foundation (

www.academicfoundation.com

). "The current path of globalisation must change," it begins. "Too few share in its benefits. Too many have no voice in its design and no influence on its course."

A paragraph about India highlights the `mixed' message, with both winners and losers. "The lives of the educated and the rich had been enriched by globalisation. The information technology sector was a particular beneficiary. But the benefits had not yet reached the majority."

The report speaks of `significant numbers of non-perennial power'; these people "who had worked hard to escape poverty, were finding their gains reversed."

Reminding one of the `nationalism' theme of Saul, a chapter titled `beginning at home' states that successful policies to respond to globalisation need to start with local communities.

"Their empowerment is a central element in any strategy for making globalisation work for people." Simple it may sound, but the ILO (International Labour Organisation) publication insists that people must have the capabilities to benefit from globalisation.

"The increasing reach of the global media, entertainment, and tourism industry is placing stress on traditional cultures and on the values, sense of identity, and solidarity of local communities," fears the report. It envisions a future global community that accommodates the multitude of local cultures and capabilities, rather than usher in `a tidal wave of homogenisation'.

Good global reads.

Economics@TheHindu.co.in

(This article was published in the Business Line print edition dated February 4, 2006)
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