John Robb

Globalization will destroy incomes for the vast majority in the developed world, guaranteed. We’ve been at a plateau for the last thirty years (the average person in the US makes slightly less than he did in 1973). A descent to global norms for similarly skilled/trained labor is inevitable. Work is now globally fungible. Comparative advantage only applies to corporations, not nation-states and their populations.

A descent to the global norm means a reduced standard of living for the US, something which will have unsettling and unpredictable social consequences.

Of course we could reinvent the country with cleantech, thus creating huge numbers of new jobs and technologies. Then maybe the descent won’t happen. But we need to start now.

Robb makes a good point, and one I’ve not seen elsewhere. Yes, globalization doesn’t help counties or people, only corporations. And even then, it’s a race to the bottom, doing everything as cheaply as possible.

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China recently lifted their subsidies on fuel prices because it can no longer afford them and because it will force their businesses to become more fuel efficient. Globalization - and this includes out-sourcing manufacturing to China - is highly dependent on cheap oil. But those days are gone.

One immediate reversal is already happening. Furniture manufacturing is returning to the US.

The economy of China is now at risk.

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In The World is Flat, Thomas L. Friedman discusses how in our flattening, globalized world, determining just who is getting exploited isn’t always that simple.

Consider this. The state of Indiana contracted with an outsourcing firm in India to create a better, more streamlined unemployment claims processing system for them. The firm in India bid $8.1 million less than anyone else. Of course, when the politicos learned about this, they huffed and puffed and blew the deal down, replacing it with a much more expensive and probably worse system.

Friedman asks, ok, who is the exploiter? Indiana for trying to use cheaper (but still highly qualified labor) or India for trying to grab work from the US? Did Indiana exploit their own citizens by deliberately paying too much for something? And who will the traditional Left support here, Indiana labor or the India Third World workers?

He sees a shift in alliances coming. Republican protectionists might align with US unions and anti-globalization activists against Democratic social liberals and the free trade business wing of the Republican Party. He calls this the Wall Party vs.the Web Party. It could happen.

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From Red Pepper

Many socialists look to the state as the decisive instrument of social change. Nigel Harris argues that, on the contrary, nation states, with their priorities and resources focused on maintaining power through military might, hold back the reduction of poverty. He insists that globalisation, despite all of its ambiguities, is essentially a liberation from the shackles of the competing nation state. We have to look to NGOs and social and labour movements to constrain the market, he says.

It seems dicey that NGOs and movements would be able to constrain the market in a globalized world, something they certainly can’t do now. Given the recent credit crisis, it’s clear that governments can’t either. Nor can the markets themselves, for that matter. So where will the control mechanisms come from?

We do not know what structures of governance will emerge, but emerge they must. The left’s role is to ensure they are directed to protecting all equally – to establishing the equality of all in the world, and, insofar as national governments survive, that they are obliged to accept the free flow of people internationally and the protection of all within their territories, not merely their supposed citizens.

A key insight here is that the forces of globalization basically oppose and wish to override the nation states. Thus, rather than oppose globalization (a pointless and losing task), we need to make it work for us. What other choice is there, really?

In essence, the left has to help and lead in recreating a world society that corresponds to the new world economy. Within that poverty really can be conquered and war eliminated.

If globalization takes over as the dominant mode from nation states - and I think it will - then the world will be vastly more decentralized. Therein lies the challenge that socialism hasn’t really thought out. In a decentralized world, there will be no powerful states that can manage things, much less be the owners of the means of production. For socialism to stay relevant, it needs to find new ways to address our fast changing and decentralizing world. This Red Pepper article helps find that path.

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