Economic Globalisation
“The global economy institutionalises 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.”
- Wendell Berry, Author & Activist
Globalisation as we know it today generally refers to economic globalisation: a system built on the deregulation of capital and trade. Under this model, large banks and corporations have near total freedom to extend worldwide, without legislative barriers.
It has created a single, global market in place of local economies, under which transnational corporations (TNCs)—not citizens—effectively reign in democratic countries, able to further dismantle community independence and individual autonomy in their bottomless pursuit to extract more money and more power.
Despite the narrative of worldwide “connectivity” and “convenience” spun by its champions (and beneficiaries), economic globalisation is really about disconnection: chopping and changing supply chains, stretching them past all reason so that an elite few can monopolise the market, whilst diminishing access to wealth and resources for the masses. Amid all the abundance, we now lack resilience and sustainability for the future – an increasingly volatile prospect as profits increase.
How Did We Get Here?
Beginning in the late 1970s, laws limiting the ways that banks and other financial organisations operated were gradually removed by governments, so that profitable industries would be better able to compete in the world market and stimulate the national economy.
However, this unleashed global corporate monopolies, which stifle small-scale producers and independent commercial endeavours, while equally failing to prioritise consumer interests. Now businesses can commit fraud more easily, and even falsely represent their environmental impact as governments willingly provide carbon subsidies to hide corporate emission levels. This allows them to continue making profits unimpeded (without barriers like visibility… and ethics).
It also established the “too big to fail” concept, which saw governments spending vast, publicly funded sums to bail out banks after the 2008 market crash for fear of setbacks to the global economy, while the general population itself faced financial devastation, a housing crisis, and mass unemployment. In effect, the economy has become a breeding ground for injustice and dishonesty at home and abroad in the name of GDP, and at the cost of both people and planetary well-being.
Why It’s a Problem
Another glaring falsehood is that the proposed financial growth isn’t even real – not really: GDP doesn’t represent true quantities of available resources that can readily provide capital, but debt capital is instead created out of thin air according to the promise of returns in the future. We are seriously getting ahead of ourselves, writing cheques we can’t cash, making projections based off loans, based off more loans.
Today’s global society expects—or commands—the ecosystem to follow human will, rather than ourselves giving over to its needs. This means the world is forced to catch up to an evermoving, impossible target with no basis in material reality. As such, we continue to create endless debt cycles just to maintain the momentum as nature degrades and quality of life declines.
Why We Need Change
Economic globalisation has led to instability, as well as susceptibility to financial crises around the world; to dependent, powerless local communities with diminished land rights; to exploitative outsourced labour systems that target poorer nations; to modern imperialism propelled by aid packages (i.e., debt) and the capture of weaker foreign governments as well as their local resources; to the global commodification and resultant degradation of nature; to mass pollution and ill-health, as well as pandemics.
And far from creating widespread wealth as the system claims to, the spoils are fixedly concentrated among a minority. Surging GDP relies upon continued cycles of impoverishment in far-off communities, which provides the pliant workforces and vulnerable resources necessary to sustain such massive growth. Although globalisation is helping to create more wealth in poorer countries, it is also creating far more poverty, while not closing the gap between the world’s poorest and richest people. In fact, quite the opposite.
According to a 2017 Oxfam report, the world’s eight richest men are now wealthier than the poorest half of the world’s population combined; their riches growing by $500 billion from 2010-2016, while the poorest 3.5 billion people became £1 trillion poorer. As a result, many citizens of the global South become forced refugees under the combined strain of poverty and climate degradation, while others turn to fundamentalism or fight civil wars. Even 13 percent of Americans, one of the world’s richest superpowers, are themselves impoverished. Yet theirs is the economic model that globalisation seeks to export around the developing world.
Our global economy permits human rights abuses, exploits Native populations , and devastates the biosphere, each combining to weaken community resilience, right when climate change, health crises, and resultant conflicts intensify – themselves all interrelated outcomes of the current financial system. TNCs are attracted to less economically developed countries (LEDCs) for their cheap raw materials, cheap labour supply, transport links, and—perhaps most importantly—their co-operative governments, who seek a profit injection to point to as a success despite the harm it does to their populations.
Relationships between people and their local environments (and the natural resources therein) are severed by vast supply chains; and between themselves, as the inequality and injustices bred by mass production and the free-market deepen socio-political divides. But also, as the media idealises lifestyles just beyond our reach; images that don’t reflect reality yet compel us strive towards them at whatever cost.
The true face of economic globalisation is not so pretty, as the (probably outsourced) packaging pretends. But there is an alternative that could bring self-sufficiency back to communities and restore relationships with the land, re-establishing local economies; a solution built around local production networks and visible supply chains. Here we explore how localisation can change our economy and our world for the better.
