COPING WITH GLOBALIZATION
Daya Varma and Vinod Mubayi
In the December 2006 issue of INSAF Bulletin, it was argued that contrary to an earlier assertion by Prime Minister Manmohan Singh, Maoists were not a major threat to India. The other two threats mentioned in that issue were globalization and Hindutva. Here we claim that contrary to the assertion of left parties and individuals, social activists and a great many NGOs, globalization does not pose a major threat to India either.
Unlike slavery, capitalism and feudalism, globalization has different meanings for different people and no meaning at all to some. Because of the vagueness of its definition, any real or perceived adverse development in the economy has been automatically attributed by leftists to globalization and neo-liberalism. Globalization is popularly understood to mean an unrestricted flow of capital or rather an “increasing international integration of economic activity” over which the state has no control. The key phrase is the lack of state control. Whether or not the above definition is correct is subject to one’s understanding of the role of the state and the operative mode of capital.
Since there is overwhelming evidence, now and in the past, that states do play an important and, in some cases like India, a decisive role in the economy, some globalization experts like Walden Bello now argue that globalization is on the retreat (Third World Quarterly, vol. 27, No. 8, 2006). The truth is that what is called globalization is as much present now as it ever was; perhaps, only Bello’s thinking has retreated.
It is true that some of the organs overseeing globalization such as the World Trade Organization (WTO), the International Monetary Fund (IMF) and the World Bank (WB) and their subsidiaries have become less able to dictate their terms to the developing world. However, none of these organizations are determinants of the world economic order; rather they are its vehicles. If they fail they will become irrelevant and something else will eventually replace them.
The role of the state is to protect the dominant economic order; the present order in almost all countries, barring a very few, is based on private property and capitalism – more developed than ever before. Capital respects no barriers to its growth and development and the state functions in accordance with its dictates. Some Marxists, who maintain a distance from Leninism and Maoism, go on to say that when capitalism cannot expand, it must give birth to socialism. That time has obviously not come and capitalism has devised ways and means of overcoming many barriers; for one, the inter-imperialist contradictions have become largely non-antagonistic and have given rise to a sort of inter-imperialist cooperation in waging wars, not against each other as Lenin earlier predicted and as happened in the world wars of the 20th century, WWI and II, but against the countries of the South. Although the existence of a single hegemon, the global super- power, has a lot to do with that, the other advanced industrial countries have mostly collaborated, silently or otherwise. The wars against Iraq, Afghanistan and Somalia and threats against Iran, Venezuela and North Korea are glaring examples of that collaboration. Likewise, state-owned monopolies have largely been replaced by multinational corporations.
One of the features of the present day capitalism is the immense role of intellectual property and speculative capital. New corporate giants have emerged without any previous history of operating capitalist enterprises. Microsoft and Intel are not offshoots of General Motors or General Electric and the Ambanis are not descendants of the Tatas and the Birlas.
The high technological content of modern day capitalism favors some countries but not others and affects the population within a country more unevenly than it did in the past. Consequently there is an increase in disparity between rich and poor countries and between the emergence of a richer, consumer class and the marginalized population within a country. For the same reason, some countries such as India and China can take advantage of globalization while others such as many African countries cannot. The modern form of capitalism generates well-paid jobs for those with access and resources to higher education, who can become higher-paid technocrats and professionals, and in turn increases the number of people in the consumer middle class. The most obvious change of this type is the emergence of over 200 million “middle-class” consumers in India with tastes, habits, and income rivaling those of the population of western countries. Since poverty cannot be alleviated by the trickling down of wealth, a situation is created where abundance uneasily coexists with deprivation. As well, the relative ease in the international flow of goods, services and capital takes its toll of small entrepreneurs, who are abundant in India.
At the same time, the poverty of the South cannot be attributed to globalization, which is said to have been ushered in, at least in India, in the 1990’s. Poverty has existed since the beginning of history; the advent of globalization and a global market occurred as a consequence of colonialism of which three distinct features are clearly marked. These are: (1) the genocide of the native American population and the growth of a settler colonialism in North America, which ultimately produced the menace of the USA; (2) the use of relatively developed economies such as India as intermediaries in colonial expansion and exploitation; and (3) the use of the African people as slave labor both within and outside Africa, mass murder, forced Christianization of the continent and unrestricted loot of their natural wealth.
Because advanced technology as opposed to giant manufacturing units is an important, if not the cardinal, feature of globalization, the challenges which it presents are directly related to the level of technological expertise and macroeconomic indicators within a country. This may be why some economists claim that globalization is to the advantage of India as evidence mounts that some Indian private companies are well on the way to becoming significant multinational corporations themselves.
In one sense, the advent of neo-liberalization and capitalist development in India is not imposed by some invisible outside force called globalization but may be considered rather as a consequence of its own post- independence economic policy. The conditions for it were laid by the Nehru-Mahalanobis model of economic development followed by the nationalization of the banks by Indira Gandhi. While the former gave rise to a reasonable industrial base and a trained industrial labor force, including engineers, as a result of direct state intervention and investment, the latter created conditions for rural capitalism. The current Indian computer software industry, widely considered as the flagship of Indian capitalist enterprise today, is itself the direct consequence of the investments made by the state in higher education and the creation of relevant infrastructure in the 1970s. Further expansion of the economic base by allowing a greater role to the market and private enterprises, both internal and external, was initiated by Rajiv Gandhi and his finance Minister Dr. Manmohan Singh (the present Prime Minister) in the 1980’s. The expanded role granted to liberalization in 1991, during the Narasimha Rao – Manmohan Singh regime, was thus more a continuation of an already established policy rather than a sharp break with the past.
Notwithstanding the above, even in a globalized era, sharp differences between countries will continue to exist and guide policies regarding the integration of national economies with the international economy has both merits and demerits, which are recognized not only by India and China but by imperialist countries as well. Take for example the case of Canada. The present Canadian government, which is perhaps the most conservative and servile to the USA government than any in Canadian history, is strongly protesting the agricultural trade policies of the US government. Earlier, India had been in the forefront along with Latin American and East Asian countries in opposing agricultural subsidies in Europe and North America. A similar problem is felt by India and African countries regarding patents especially in the pharmaceutical industry.
No doubt some of the provisions engineered by WTO adversely affecting India and even China, the Uruguay trade agreement, for example, were very unfair to the developing countries. At the same time, they also allow India and China access to foreign markets and technology more than before. The WTO-imposed provisions in India are said to be the cause of the agricultural crisis in India. But the crisis in agriculture, which has led to a large number of suicides, is not caused, at least so far, by an inflow of subsidized agricultural products but rather by risky and hasty ventures into capitalist farming that are an inevitable, and unfortunate, consequence of rural capitalist development. Drugs are still far cheaper in India than in the western countries; though they should be even cheaper, and TRIPS (Trade-Related Intellectual Property) restrictions do not affect drugs deemed essential by the WHO.
For socialists, perhaps the most deleterious effect of globalization is that it has blunted or even negated the fight against capitalism as an economic order. Whether or not one uses the term globalization for the present phase of capitalism, the key issue against which the struggle should be raised is capitalism. What that means at this point of time, especially taking into account the history of the last two or three decades, has not been articulated by any relevant political formation. While it is necessary to articulate immediate demands such as developing mechanisms for a more equitable distribution of goods and services, raise consciousness on such issues as requiring drastic steps to improve nutrition especially child nutrition and universal healthcare, it is important to develop an understanding of why the actually existing socialisms failed. Of course a different world is possible but what is that world and how does one propose to get there?