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Tuesday, September 04, 2001

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Globalisation and politics

By Supriya RoyChowdhury

IN RECENT months, there has been a fresh spate of public protests against globalisation, in Genoa, London and South Africa. Globalisation's inegalitarian implications are now no longer contested. As such, anti-globalisation politics and discourse have acquired a certain legitimacy. This activism, however, stems from a wide range of affected interests, which are not necessarily harmonious or even coherently related. This politics therefore lacks a paradigmatic framework as an alternative to the seemingly irreversible process of marketisation.

On the other hand, the defensive rhetoric around globalisation is remarkable not only for its coherence but also for its ability to coopt some of the central arguments of its opponent, i.e., the critical discourse, and transform it into its very own. At the same time, the defensive critique remains unshakable from the core grounding tenets of an individualistically oriented-market economy, and the palliatives that it offers for globalisation's imperfections remain vague and unstructured. More importantly, the awesome power of a predominantly consumption-oriented economic model works at multiple levels to create a reconfiguration of popular images of what is a desirable life.

This ideological apparatus obviously did not emerge overnight. And it is indeed a measure of capitalism's ingenuity that the marketisation model has traced a certain line back from the strident rightist conservatism of the Reagan-Thatcher decades to a greatly more nuanced, subtle and reassuring system of ideas that seeks to acknowledge globalisation's excesses while promoting its fundamental precepts. Thus in the 1980s, the scholarly literature that emerged from the United States on the politics of structural adjustment was barely tolerant of the critical challenges posed to liberalisation policies by popular sectors in many developing countries. This literature, reflecting the mood of the moment, focussed on the politics of economic reforms primarily from the perspective of political management. In other words, opposition and challenge to economic reforms had to be politically managed or manipulated. Scholars stressed the need for building supportive coalitions on the basis of groups that stood to gain from liberalisation, playing off such groups against others, which loose out. Another recommended strategy was to ignore protests, which were likely to die out from exhaustion, and so on.

This briskness became somewhat subdued in the 1990s. The reason for this perhaps was that challenges to globalisation could no longer be categorised as only a Third World phenomenon. Increasingly, sections of the working class in industrialised countries began to voice resistance to aspects of globalisation, particularly international trade, that threatened their well being. In the U.S., the low-skilled workforce appeared to have fared the worst out of a process of internationalisation where capital was free to locate in economies which provided less costly labour. Additionally, cheaper imports from cheap labour economies threatened jobs in the domestic economy. There is now a gathering groundswell of bitterness against globalisation as an economic model that is perceived to widen the rich-poor divide between as well as within nations.

Defenders of globalisation now agree that these challenges are frequently based on real issues of deprivation, and need to be seriously addressed. The Institute for International Economics in Washington D.C., which has contributed significantly to the evolution of thinking and policies on free trade and market liberalisation, has recently published a book called ``Has Globalization Gone Too Far?'' The author, Harvard economist Dani Rodrik, answers in the negative. But, his central concern is to admonish ``the attitude of much of the economics and policy community for downplaying the problem''. He locates the sources of tension in a globalising economy in the adverse impact on unskilled labour, and in the decreasing propensity of Governments to provide social insurance. Thus in an open economy, protection for domestic producers is withdrawn, labour becomes vulnerable in the face of increasing competition and fast changing technology; and footloose capital is hard to tax, thus diminishing the state's capacity to provide welfare.

The threat to social stability arising from these imbalances is serious; ``social disintegration is not a spectator sport - those on the sidelines also get splashed with mud from the field''. To prevent such splashing, Rodrik stresses the need for social insurance, on evolving a via media between competition/efficiency and welfare. The bottom line, as Rodrik points out, is that ``social spending is a way of buying social peace''. Without social peace, globalisation may not be able to proceed.

Somewhat interestingly, there seems to be a convergence of conservative and leftist thinking on these issues. Prof. Pranab Bardhan, of the University of California at Berkeley, whose writings are identified with a broadly left of centre framework, in a recent article in the Economic and Political Weekly writes of the irreversibility of globalisation. Acknowledging that globalisation may indeed push the poor towards increasing economic precariousness, Bardhan nevertheless challenges the efficiency-equity trade off. According to him, micro-level solutions, at the level of ``firms, farms, neighbourhoods and communities'', can design ``efficiency enhancing egalitarian measures not all of which are precluded by the forces of globalisation''. Examples that he provides are the Grameen Bank in Bangladesh which uses the community to provide credit collateral for poor borrowers, or Japanese firms in which workers participate in a wide range of decision-making functions which enhance both equality and efficiency. These measures, supposedly, could work around the process of globalisation, providing some safeguards and opportunities for the disadvantaged, thus preserving the broad framework of the market from challenges by poorer sections.

Thus, defenders of globalisation incorporate protection of the poor as part of their discourse. This discourse, however, is largely silent on the politics of social insurance in a context of globalisation. The stress on social insurance harks back to the tenets of post-war welfarism. The essential element of the capitalist welfare state was to provide for the non-capitalist classes access to a minimum livelihood, health and education. Welfarism was widely regarded as the only way to protect the broad framework of capitalism from lower class challenges. To this extent, the present-day defenders of globalisation have not said anything new in underscoring the importance of social insurance.

What is new is the political context in which globalisation is taking place, which is vastly different from the political dynamics which led to the formulation of the concept of the welfare state. The concept of state-provided welfare emerged in post-war western Europe in the background of decades of struggle, led by labour activists and socialist groups, for social and economic justice for large numbers of the population who did not stand to gain directly from the system of capitalist production. The organisational framework of large-scale capitalist manufacturing provided the framework for effective trade union activism. And, democratic political institutions along with socialist ideals empowered political movements for social and economic entitlements.

This context is completely absent now. As production processes are spread across countries, as enterprises take to outsourcing, subcontracting, and as a large numbers of workers are forced to work in the informal sector, the workforce is spread thin, and the conditions for organised labour activism largely disappear. Second, with the collapse of socialism, and the emergence of neo- liberalism as a monolithic ideology, there is no longer a paradigmatic reference point for those struggling to lead movements for social and economic justice. There is now a vacuum in the sphere of politics, which alone could generate and sustain a decisive shift to welfare concerns. Contrary to what the new liberal wisdom would have us believe, there are no ideal formulae for combining efficiency and equity which can be bestowed upon society by clever neo-classical economists whose hearts are in the right place. Nor can equity and justice be a gift from the state. In a market-oriented economy, rights are a question of continuous bargaining and negotiation, of systematic striving to sustain gains and moving on to the next stage of the battle. Ultimately, therefore, we need a new politics of welfarism in the context of globalisation.

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