Neoliberalism and Globalization

Neoliberalism and Globalization Globalization may be an overused word, although the new version of international capitalism is still so recent that the actual system on the ground has outrun the scientific and theoretical vocabulary that describes it. As a system, international capitalism is rapidly eliminating geographical and political boundaries, as Marx predicted in the 19th Century. In the global, postmodern economy, branding also involves relentless synergy and tie-ins between various diverse lines of products.

Films and cartoons market their images to toy companies, fast-food restaurants and cereal manufacturers, generating billions of dollars of revenue annually, as does the commerce in seeds, genetic materials and even human body parts. Western science and technology have been synonymous with modernization and development in India and other Asian nations, even though this paradigm ignores the historical and cultural that has existed in many civilizations over the centuries.

Marx also maintained that capitalism would become a global system that would eventually absorb the labor and resources of the entire planet into itself, and indeed that this process was already well underway in his lifetime. Traditional and tribal societies, old customs, religions and social arrangements, would give way to a capitalist system that broke down all barriers in its search for profits.

Contemporary Marxist theorists like Immanuel Wallterstein and Leslie Sklair have also noted that this has been occurring for centuries and is accelerating today, as an international capitalist class, culture and corporate system now dominate the world, just as Marx predicted long ago. In recent times, Marxist theorists like Immanuel Wallterstein and Leslie Sklair have taken the position that capitalism has now been transformed into a global or transnational system, due to continuing changes in technology, communications and transportation.

A global capitalist class has come into existence, and a global culture and political system is also emerging. Western corporations, culture and images now pervade the planet, in a system characterized by "increasing connectivity and interdependency" (Appelrouth and Edles, 2011, p. 558). Wallerstein agreed with Marx that the process of globalization began with European colonization in the 16th and 17th Centuries and the development of modern capitalism in the 'core' Western nation-states.

Today, through global organizations like the European Union, the World Trade Organization (WTO) and International Monetary Fund (IMF) it has established a form of capital control over most of the world. He and Sklair also maintain that Western capitalism is homogenizing the world, although quite clearly there has been considerable resistance from nationalists, traditionalists and religious fundamentalists to this 'McWorld' or 'Coco-colonization' (Appekrouth and Edles, 2011, p. 563).

As in the past, the peripheral and semi-peripheral areas of the world are still being exploited for their cheap labor and raw materials, while history is being driven forward by capitalism's "never-ending drive for profit" (Appelrouth and Edles, 2011, p. 569). In No Logo, Naomi Klein was highly critical of globalized capitalism and the consolidation of giant corporations and highly standardized brands and chain stores like Wal-Mart, the Gap and Starbucks.

All of these companies are not attempting to become that "one overarching brand under which we consume, make art, [and] even build our homes" (Klein 1999, 2009, p. 130). Even the retail outlets are completely uniform and clone-like, with one Kinko's, Blockbuster or McDonald's looking basically like any of the others. By 1998, Wal-Mart had become the biggest retailer in the world by following these policies, with over $137 billion in sales.

It always builds stores two or three times larger than its competitors and they buys its products in bulk from low-wage countries like China, reselling at prices with rich smaller retailers cannot match. Suburban malls and discount centers have now drained "community life and small businesses out of the town centers," and smaller retailers cannot even buy their products wholesale for the same price that Wal-Mart sells them retail (Klein, p. 134).

In his book The Information Bomb, Paul Virilio provides a more general and theoretical description of the technological underpinnings of global capitalism. He describes "extreme science" as a danger to all science as it has been known up to this point since it is in danger of becoming detached from reality (Virilio, 2005, p. 3). This has created new problems for governments and military and police organizations as well, since the new technology is rapidly abolishing specific political and social geographies.

Just as the modern nation-state replaced the older feudal and monarchic states, so the new global, high technology version of capitalism is going to abolish the nation-state. For example, mobile phones have made drug dealing, terrorism and other illegal activities far more difficult to control than ever in the past. Cable and satellite TV, along with the Internet, have also made worldwide surveillance in real-time possible for the first time in history, all of which reflect the "extreme reduction of distances" that is one of Virilio's central themes (Virilio, p. 13).

Advertising, as Klein points out, is no longer like its 19th Century ancestor that simply informed consumers about the existence of a product but a kind of "universal comparative advertising" that goes far beyond promoting single products or brands (Virilio, p. 60). In "Biotechnological Development" and "Piracy by Patent," Vandana Shiva described the effect that Western corporations and trade patent rules on peasant agriculture in developing nations.

In India, the modern British textile industries were an early example of how advanced technology could displace traditional spinners, weavers and village artisans, while creating a new working class of low-paid wage slaves. Mahatma Gandhi firmly believed that only the revival of traditional spinning and handicrafts could overcome the immense poverty of the cities and countryside in India, where even today 400 million people do not even know how to read and write.

.Even so, the modernizing elites of India and other Asian countries rejected Gandhi's concepts and backward and reactionary, and instead adopted Western ideas of modernization (Shiva, 2004, p. 33). In the contemporary system of global capitalism, large multinational corporations use far more advanced technology to genetically modify the seeds and plants used in agriculture and profit from them though the acquisition of patent rights.

New biotechnologies continue to displace and impoverish traditional subsistence farmers and "the relocation of "seed production from the farm to the corporate laboratory relocates power and value between the North and South" and increases the dependence of farmers on Western corporations (Shiva, p. 36). Once again, Gandhi's alternatives to commercialized and mechanized scientific agriculture were never seriously considered, except perhaps in various Green and back-to-the-land movements. These would have been "based on conserving nature and people's livelihoods, while improving yields" (Shiva, p. 37).

Biodiversity was never an important issue in India until the 1960s and 1970s since traditionally the rights to use seeds, plants and other biological resources were controlled by rural communities. By custom, plants and forest products were simply "understood to be part of the cultural, spiritual, and biological commons," and could not be owned by individuals or capitalistic enterprises and large corporations (Shiva and Hulla Bhar, 2004, p. 146).

Only in the era of the General Agreement on Tariffs and Trade (GATT) and its successor the World Trade Organization (WTO), did the power to control and exploit these resources become a major source of conflict and controversy. Western corporate interests, particularly those that control the United States, have also insisted on new regulations of Trade-Related Intellectual Property Rights (TRIPS) that apply American patent laws to developing countries.

According to these laws, all the traditional and customary rights to seeds and other biological products are now considered a "form of piracy" if international corporations have bought up the patent and trademark rights (Shiva and Hulla-Bhar, p. 147). According to Nancy Scheper-Hughes in "The Last Commodity," global capitalism has combined with the latest advances in technology to create an international black and gray market has developed for transplants in kidneys, eyes and other tissues and organs.

She interviewed donors, recipients, gangsters and physicians, often going undercover in dangerous conditions from Manila to Istanbul in order to obtain a detailed anthropological description of this practice. This traffic is illegal and often under the control of organized crime groups in Latin America, Eastern Europe and Asia, although the donor recipients are thoroughly 'respectable' middle and upper class persons, desperate to save their lives at any cost.

Those who sell their organs are often extremely poor residents of developing nations like India, Pakistan, Moldova and the Philippines who receive only a few thousand dollars, while the surgeons and gangsters involved make millions. In short, human beings and their bodily materials truly have become marketable commodities and human life does indeed have a price -- and often it is very cheap indeed.

Certainly the advances in modern medicine have prolonged life, at least for the privileged few in the Western world -- and the elites in developing nations -- but always within a ruthlessly for-profit context. Kenichi Ohmae's 2005 book, The Next Global Stage: Challenges and Opportunities in our Borderless World, was one of many that trumpeted the new system of global capitalism, the Internet, high technology and open borders, although in light of recent developments it appears that some of his conclusions were slightly premature.

This is a polite way of putting it, of course, since the recent crash of the world economy was the worst since the 1930s, and only massive pump-priming, deficit spending and money-printing by central banks preserved this system from total collapse, at least up to now. Like many other writers of the time, Ohmae proclaimed that the nation state was dead, along with Keynesian economics, redistribution of wealth and Fordist mass production industries.

Instead, the new centers of economic growth and development would be regional and local economies that found new niches within the global system, like the call centers and financial services of Ireland and India. At the moment, of course, with Ireland suffering from bankruptcy, high unemployment and IMF-style austerity programs, his celebration of its great success would also seem to have been somewhat ill-advised.

Even in 2005, though, Ohmae's analysis and forecasting were the conventional wisdom of the day, and he did not see the disaster looming ahead, no matter that there were many warning signs like the Asian meltdown of 1997-98 and the dot.com crash a few years later. Ohmae declared that the new economy began in 1985, when Microsoft developed its new Windows system, Mikhail Gorbachev became head of the Soviet Union, and the Plaza Accords devalued the dollar to lower the U.S. debt and facilitate its exports.

Indeed, he describes the pre-1985 period as Before Gates (BG) and the era that followed as After Gates (AG) (Ohmae, pp. 35-37). In the 1980s and 1990s, China also began to open its door to international trade and investment for the first time since the 1949 Revolution, and the type of capitalism that emerged there was particularly ruthless and exploitive, with economic growth the first priority rather than the environment or labor conditions.

Traditional economists failed to understand any of this at the time, however, or to "make sense of the global economy" (Omhae, p. xx). He praises the pioneers of the new system, such as John Reid who introduced the new technologies to Citibank when he took over there in 1984, although this is somewhat ironic given the fact that the bank nearly collapsed in 2008-09 and had to be bailed out by the U.S. government.

Omhae also admires Akio Morita of Sony Group, who was ahead of his time in regarding the world as "one big market, with few or no barriers" and his slogan "Think Globally, Act Locally" (Omhae, p. xix). In the new global economy, physical location, size, population and domestic markets are no longer important for success, and stock exchanges no longer require a location at all. Platforms are far more important, including telecommunications, satellites, the Internet, ATM machines, and ability to communicate in English (Ohmae, p. 141).

Old-style governments of nation-states are obsolete, and the main role of the new type of governments will be to facilitate the development of specialized local and regional economies, or at least avoid actively hindering and inhibiting that development (Ohmae, pp. 102-03). Central governments were simply "ill equipped to play a meaningful role on the global stage" compared to regions, the European Union or new trade zones the NAFTA (Ohmae, p. xxiii).

This new world system has no borders and is often invisible, connected through cyber-technology and no longer measured in money but by multiples and derivatives. Capital flows control the world today, not central governments, and these move trillions of dollars around instantaneously. In our borderless world decisions are "made in a split second, sometimes by nonhumans," and are no longer under the control of traditional hierarchies, bureaucracies and elites (Ohmae, p. xix).

Regional economies must be allowed to expand freely without centralized controls, and be permitted their own autonomy and decision-making so that they can adjust to the global economy and remain flexible. They have to market and brand themselves in order to find their proper economic niches. Governments often stand in the way of development because they attempt to protect home industries and markets and redistribute wealth rather than allowing regions and localities to thrive on their own.

For example, the Baltic States have excellent potential to become new centers of e-commerce, finance and high technology, as Finland and Ireland already have (Ohmae, pp. 262-63). British Columbia, despite its high taxes and heavy regulations, has an advantage because of its highly-educated, English speaking workforce, its proximity to Microsoft and Amazon in Seattle, and the numbers of Asian tourists and businesspeople that it attracts (Ohmae, pp. 259-60).

Almost everywhere, Ohmae expects these region-states to surpass nations as "the most useful and potent means of economic organization in the global economy" (Ohmae, p. xx). China's coastal regions provide one example of the new type of international economy that Ohmae is describing and the manufactured goods and services which they provide to the international markets. Many of these end up in the U.S., which "worries incessantly" about its trade deficits, while China "seems to voraciously suck raw and semi-finished materials, machines, and robots into its economy" (Ohmae, p. 6).

He finds that such fears and anxieties about China's rise are misplaced, given his assumption that the world system is already unified and nations are relics of the past. Dalian went from being a Communist rust belt to "one of China's most important and dynamic industrial centers," as well as a powerhouse of services and high technology, with shops full of international goods (Omhae, p. 7).

China's central authorities have delegated most authority to regional and local bosses, who are expected to produce annual growth rates of at least 7% or lose their jobs. This is certainly an incentive to cut corners and produce bogus statistics of success, although the development of ports like Dalian has been quite obvious and visible over the last twenty years. Over 3,000 Japanese firms are operating there and the Chinese authorities are eager to accommodate them.

All the coastal regions of China are undergoing globalization, while the interior remains "light-years behind in economic development and prosperity" (Ohmae, p. 10). China is not a homogeneous nation any more, and the regional imbalances and uneven development are matters of great concern to the nation's leadership. Open platforms that are easy to use for non-specialists, interactive and widely accessible are also essential for success in the new economy.

Countries that have a large numbers of English speakers like Ireland, India, the Philippines and Singapore also have an advantage over their competitors, since English is the main language of the Internet and global commerce, and most of the major world brands are American (Ohmae, p, xx). In present-day capitalism, "the drama takes on one enormous stage" which is in "perpetual motion" because on instant communications -- so fast that only machines can keep up with all of it (Ohmae, p. xxii).

Companies will increasingly depend on these platforms for survival, and there are already one billion customers on the Internet actively seeking out goods and services. Corporations will have to become borderless, no longer tied to home markets or domestic economies, and will have to be open to new technologies to better interface with customers and suppliers. With over eight billion Web pages in existence in 2005, business managers, administrators and scientists could "draw a synthesized perspective and knowledge in a split second" (Ohmae, p. xxiii).

Business Process Outsourcing (BPO) was becoming routine in the new economy, especially in the proliferation of call centers, claims processing, and financial and insurance services to countries with large numbers of English speakers like India and Ireland. When it became independent in 1922, Ireland was a mostly rural, agricultural society and had been deliberately kept that way by Britain. For that matter, India was in much the same condition when it gained independence from Britain in 1947 and both had been subject to famines.

Like most colonies, Ireland was left "with a sense of the country being a victim of forces beyond its control," and so it remained into the 1970s. It had very poor communications and infrastructure, and in the old industrial system was "too far away from potential markets." Yet this turned out to be an advantage when the revolution in technology and telecommunications began, since it also had "no rusting industrial plants and no unemployed workforce born and bred to heavy industry" (Ohmae, p. 11).

Ireland found its niche within the EU as a center of finance, insurance and e-commerce, at least until the great boom collapsed like a house of cards in 2008-09. Ireland became a prime location for call centers and financial services, and like any other regional state, it branded itself by offering "something different that sets it apart from the competition" (Ohmae, p. 12). For the first time in its history, it also began to attract immigrants instead of losing population to foreign countries. Thanks to globalization, Ireland's.