March 7, 2000
While both parties and all major political candidates are supporting globalization, events in Seattle and Davos, Switzerland, this year should provide a warning that all is not well in the global economy. Those in business who have profited from globalization ignore at their peril those who have not.
From the perspectives of a labor historian and scholar of present and past social movements, we feel it’s essential that the business sector respond seriously to the emerging critique of globalization. Seattle should not be written off as simply radicals smashing windows but seen as a lightning rod, marking a fundamental shift in public attitudes.
This movement is neither a one-shot nor a local phenomenon. As Elaine Bernard, executive director of the Harvard Trade Union Program, put it in the Washington Post, “The (World Trade Organization) meeting was merely the place where these people burst onto the American public’s radar. Social movements around the world had already linked into grass-roots networks, made possible by the astonishing speed at which they can communicate in the Internet era.” This emerging climate will affect the global operations and habits of business at every level.
What was a surprise to everyone — including many planning the demonstrations — was the wide array of interests that came together to form the coalition. According to The New York Times, the thousands in Seattle represented “a wide swath of Main Street America: not just steelworkers and auto workers, but anti-sweatshop protesters from colleges across the nation and members of church groups, consumer groups, the Sierra Club, Friends of the Earth and the Humane Society.
Tracing the history of such broad-based movements, we can see there is the potential to generate far-reaching changes. Business people very well may lose their ability to influence these changes or even engage in constructive dialogue if these social forces are ignored or underestimated. So what’s to be done?
Many defenders of globalization say all it needs is a good advertising campaign to explain its benefits. Before we accept that conclusion, we’d better see whether the problem is in the advertising or in the product.
The promise made on behalf of globalization was that it would benefit all — that it would raise all the boats. Instead, many of them are sinking. According to a recent United Nations Development Report, 89 countries are worse off economically than they were 10 years ago. Preparing for meetings of the World Economic Forum in Davos, James Wolfensohn, president of the World Bank, noted that rather than improving, “global poverty is getting worse. Some 1.2 billion people now live in extreme poverty.” At the same time, the world’s 200 richest people have doubled their wealth in the last four years.
Along with the increase in global inequality and poverty, globalization remains significant for continual crisis, beginning in Mexico and re-emerging in Asia, Russia and Latin America. According to then World Bank Senior VP-Chief Economist Joseph Stiglitz, “Capital market liberalization has not only not brought people the prosperity they were promised, but it has also brought these crises, with wages falling 20% or 30%, and unemployment going up by a factor of two, three, four or 10.”
Indeed, for many people and communities around the world, the promise of globalization has translated into a race to the bottom. As corporations move their operations around the world, they pit workers, communities, and entire countries off against each other to see who will provide the lowest wages and cheapest environmental and social costs. Each community and country seems to be getting ahead, but in fact, all are being driven down to the level of the poorest and most desperate.
So how should the supporters of globalization respond to the voices heard in the streets of Seattle and Davos? Some, like Massachusetts Institute of Technology economist Paul Krugman, writing in The New York Times, suggest that “Davos Man” needs to rectify an image problem, recognizing “how serious a public relations problem now faces the global economy in which Davos Man flourished.” Those who follow this dictum believe globalization merely needs new packaging and more effective advertising slogans.
But the problem is globalization is being experienced by consumers as a bad product. Workers and communities were promised that if they downsized, deregulated, eliminated social services and generally became more competitive, the benefits of globalization would materialize. They kept their end of the bargain, but the global economy did not.
Instead of new advertising slogans, the global economy must reflect needs of people and communities around the world. As John Sweeney, president of the AFL-CIO, stated in Davos: “Understand the message of Seattle. It was not an isolationist rejection of open markets. It was a call for new global rules. Workers from the North and South marched together. And the many different voices made one clear statement. Fundamental reform is needed.”
As opposed to presenting trade and open markets as an end in itself, reform of the global economy must include human rights for all people, environmental sustainability worldwide, democracy at every level from the local to the global, economic advancement for the most oppressed and exploited groups, and protection against the wild cycles of boom and bust.
The upcoming April 16 International Monetary Fund and World Bank spring meetings in Washington will provide cheerleaders of the global economy an opportunity to address the problems raised in Seattle and Davos. Thousands are expected, once again, to march in the streets. The open question is if the meetings will be used to make globalization live up to its promises or for the unveiling of a new, flashy advertising campaign. Surely, consumers will let us know the answer.