“The global economy institutionalizes a global ignorance, in which producers and consumers cannot know or care about one another, and in which the histories of all products will be lost. In such a circumstance, the degradation of products and places, producers and consumers is inevitable....” (Wendell Berry)
Since the 1970s a new political economic regime has emerged – the latest phase in a process that began with conquest and colonialism. This process has been given a number of names: economic globalization, neoliberalism, global free market capitalism, corporate globalization, or simply, globalization.
International trade and economic exchange are not new, but today’s global economy is unprecedented in a number of ways, including:
• The immense scale, power and mobility of modern corporations;
• The extent of global economic integration, dependence, and consequent
vulnerability to systemic crises;
• The reliance on supranational structures and institutions – among them the WTO, the IMF, the World Bank and a proliferation of free trade agreements – to organize and promote global trade.
• The use of technologies that allow huge amounts of capital to be moved across the globe, instantaneously;
• Exponential increases in a number of key indicators, including global advertising spending; material and energy flows through the global economy; and speculative investment.
These changes were not simply the product of new technologies or the resurgence of free market ideology: they were also heavily supported by specific government policies. Governments have promoted globalization in numerous ways, including:
• deregulating corporate activities, foremost among them the signing of ‘free trade’ agreements;
• creating and/or legitimizing supranational economic institutions such as the WTO;
• enacting corporate-friendly tax policy;
• upholding corporate charter and limited liability laws;
• providing direct subsidies, including ‘bailouts’, for large corporations and banks;
• providing indirect subsidies for the energy, transport, communications, educational and research infrastructures needed for global business;
• failing to enforce existing antitrust laws.
In this era of globalization, the historical pattern has continued: diverse, human scale, community-oriented economies have been systematically undermined and integrated into a socially and ecologically disembedded global economy. In many ways, the proponents of globalization share the unilinear view of ‘progress’ that was used to justify brutal social engineering in the past. Globalization, it is argued, will ‘lift all boats’, enabling the poorest to catch up even as the wealthy become wealthier still. Yet rather than universalizing prosperity, corporate globalization has created new scarcities and insecurities – made abundantly clear by the current global financial, climate and food crises. While there have been ‘winners’ who have benefited from globalization, inequality has greatly increased, power relations have become more unequal, the gutting of rural economies and the growth of urban slums has escalated, and environmental destruction has intensified.
Democratic institutions have also been weakened, with commercial interests gaining a stranglehold on public policy and discourse. Even where people have the right to vote, corporate influence and money injected into the political process – through campaign contributions, lobbying efforts, and media control – constrain the ability of political leaders to act on behalf of the public. Meanwhile, corporate boardrooms are connected to government offices through a ‘revolving door’ through which policymakers and the corporate elite continually pass.
Despite the intense efforts of governments and supranational organizations to maintain stability, the global corporate economy has become increasingly volatile and vulnerable to crisis. With heightened economic connectivity and the explosion of speculative investment (‘casino capitalism’), it is more and more common for financial turmoil on one side of the world to spread quickly to every other nation. When the US housing bubble collapsed in 2008, for example, bank collapse and recession spread worldwide in a matter of weeks. Since 1973, the frequency of economic crises around the world has increased nearly four-fold over the rate in preceding decades.
Although the costs of corporate globalization are high, our aim is not to demonize the individuals working inside giant corporations. They, too, are trapped within a system that reinforces individualism, greed, competition, and endless growth. Even CEOs must obey the rules of the corporate game: if they put social or ecological concerns ahead of profit and growth, they will be replaced by someone more narrowly attentive to the corporation’s bottom line. By focusing on the system and how it was created – rather than the individuals that fill roles within it – we can encourage creative interventions that might make other worlds, other futures, possible.
For more on this issue, please see the following online articles:
Donate to Local Futures
THE ECONOMICS OF HAPPINESS CONFERENCE 2014
ECONOMICS of HAPPINESS
Book and DVD
Translated into over 40 Languages.