Another Review by Jeremy Agar

“GLOBALISATION AND THE WEALTH OF NATIONS”
Brian Easton, Auckland University Press, 2007


Globalisation, Brian Easton suggests, is best seen as the falling cost of distance. This has in turn allowed for greater economies of scale. Starting at the dawn of the 19th Century (steam, rail) the world’s technologies have developed exponentially. The globalised world has become a more efficient producer and distributor of goods. This, an inevitable process, has all sorts of historical and cultural consequences.

Being the most distant (from Europe) and isolated of all, New Zealand has never lost its British migrants’ keen awareness of the economics of distance. Now that we’re no longer so far away (most obviously these days because of computer technology) we’ve been hugely advantaged by globalisation. Like Chris Trotter and Michael King, Easton locates the origins of modern NZ in the invention of refrigeration and the opening of an overseas market in mutton following the first shipment in 1882. So globalisation is the product of technological improvements. These have made our lives easier, richer and more fulfilling. Surely we can agree. Well, yes, we can. But, Easton continues, as though to acknowledge the carping of the critics of globalisation, we might well have become a bit more alike, but that’s a small price to pay.

Here, at the start, Easton invites disagreement. Of course communication has been a benevolent trend. If it rescues us from isolation and ignorance, so that we can share experience and overcome insular narrowness, then how can there be any problem with globalisation. What’s the beef? Do groups like CAFCA want us to let our farms revert to gorse, to turn off our computers, to close our airports (after expelling the foreigners)? This, the standard line of the globalisers, reverses the real attitude of critics, who have inherited an internationalist outlook. Surely a moderate like Easton is not about to endorse the nonsense.

As a guide to the world economy, this book is fair enough. It’s way better than the pulp pumped out by the unblinking devotees of neo-liberal fashion. Yet it’s an often annoying account. The first, less significant difficulty is that, in order to put things into neat context, Easton breezes past all sorts of messy detail. For instance, addressing the question of whether globalisation means a loss of national identity, he looks at Canada. If anyone is going to be absorbed by the global (that’s American) culture, it’s Canada. It’s next door to the US, sharing a lot of history and culture.

Easton’s Sketch Of Canada Would Surprise Canadians

He observes that “most Canadians are bilingual” when in fact there are whole provinces where French is spoken as often as it is in Akaroa. Neither would they recognise their origins as including, as an afterthought, just “some Europeans” whose ancestors were neither British nor French, nor from the First Nations. Easton discerns a “vigorous” Quebec separatist movement, whereas separatism has been dormant for decades. In the context of his analysis, this apparently superficial and dated account matters in that Easton says that the separatist impulse has to do with “cultural identity”. Another influence can be assumed in the context of “colonial legacy”. It’s all so NZ, so much cultural baggage.

In its glory days, perhaps, separatism was about culture, especially language. But by the 80s, Quebec nationalism was to a large extent the ideology of a rising business class anxious to sever ties with English Canada - the real, unannounced enemy being social-contract Keynesian Canada - so that it could tag itself to the US “free market”. When Easton notes, correctly, that Canadians often define themselves as having a better, because public, health system than the Americans, this is not mere cultural preference. Besides being a resistance to American ideology, the advocacy for public health is a response to the North American Free Trade Agreement, to globalisation. Similarly, you could argue that, rather than being a response to globalisation, Quebec separatism has been an expression of it.

The part of Canada which most resembles the US is Alberta, but it does so now no more than it has for the last half century. In Alberta the French language is virtually extinct and much resented. It’s the only province where a candidate like George Bush would have a chance of not running last in an election. This suggests that Tory support, both federally and in Calgary, for Quebec nationalists was not motivated by culture. Alberta is staunch for the southern neighbour because its economy has been based on beef and, vitally, oil.

Easton’s scope is wide, but, as with his peremptory chat about Canada, he begs as many questions as he answers. If globalisation is a term to describe economic relationships, then North America and Europe are Rich Club partners (Easton’s phrase), and the relationship that matters is the one that exists between them and the Poor Club. And if we want to think about social trends (which are the stuff of most political policy) we could ask, also, whether relationships between people within the Rich Club have been affected by globalisation. Of course Canadians seem untroubled by the American fact. They host American sports leagues; they cross the border to shop. Americans and Canadians own holiday homes in each other’s countries. To what meaningful extent could globalisation affect the surfaces of middle-class people’s daily lives?

Cultural convergence has a hidden meaning, a code that, wherever we live, we can all decipher. Becoming alike means becoming American - more exactly, mass consumerist American. Yet individual Americans, depending on age, class and geography, are as likely to reject this image of themselves as the rest of us. Thinking primarily in terms of nations and their cultures doesn’t help an understanding of how the global economy works. The world’s bad neighbours live in economically messed up places, but they will almost always say that they had been living in peace. It would be condescending and inaccurate to offer cultural explanations for the difference between the present condition of North America and, say, the Balkans. According to the mass media the crumbling of Yugoslavia was the result of old ethnic scores being settled. A more careful explanation would note that globalisation itself has been a catalyst for the recent turmoil in Serbia.

And throughout the really poor world. Easton is wise not to offer thumbnail sketches of any of the many lesser known countries enmeshed by global neo-liberalism. Which ones to pick to be representative? Which facts to highlight and which to ignore? Selection can allow, albeit accidentally, for as big a bias as intentional misinformation and Easton is not intending to beat a drum for the marketeers. However, the result is that he can’t show us globalisation at work in the bulk of the globe, where the effects are both more directly and more severely the consequence of the policies he’s endorsing. Despite the shrinking of distance, the sweatshops of Thailand and China and the farms of Mexico and Sri Lanka are still far from Canada.

Easton almost notes that the rejection of a harmonised European Union in a couple of national referenda was a rejection of the more-market ideology. He prefers an oblique suggestion. There “seems”, he writes, “to be a fear that the social market economy itself is under threat”. Put this way, the opposition is rendered quaint, a Luddite anachronism. Yet Easton abandons hesitancy as he continues his discussion of the contemporary Rich Club. He maintains that the increasing importance of women in the workplace is not an outcome of globalisation. No, not in itself, not in the Rich Club, not if we have in mind executives or managers or chief justices, but the types of jobs in the “free trade” economies certainly are. Had he considered women’s jobs in the Poor Club, Easton could not have reached any conclusion that did not begin by looking at World Trade Organisation (WTO) rules. Insufficient contributions to public health systems in the Rich Club, he goes on, have “nothing to do” with globalisation (in the Poor Club they won’t either, because the effect of WTO rules is that in many cases public health systems won’t begin). Also - the list is long - it is “inevitable” that present pension levels will be cut.

Where’s The Proof?

Just a moment. You have to prove these things. It’s not enough to assert that it’s not possible for a society to provide well paid jobs, good hospitals, and secure pensions, not without addressing the many cogent arguments for seeing the cuts as the direct consequence of globalisation - as its purpose even. Increased job insecurity and the eliminating of jobs “could have occurred, in principle”, without globalisation, Easton points out. In principle, the critics might concur, if they’re right that globalisation is nothing but domestic neo-liberalism exported, joblessness and insecurity are the goal (a suggestion for readers: after you’ve gone through this book, get Naomi Klein’s “The Shock Doctrine” and make up your own minds).

Then Easton again undermines his own narrative. “Given the mobility of capital”, he begins a new section, “there is not enough money around for governments to fund infrastructure and promote trade”. Here are three more major and barely examined assumptions. Easton takes it for granted, first, that it is the role of taxes paid by citizens to subsidise the costs of private business; second, that governments can’t act to stop tax avoidance by transnational corporations (TNCs); and third, that mobility being ever faster, the money will keep on withering away. On the contrary, anti-globalisers might say, the rules of globalisation were invented so that finance could be irresponsible.

When it comes to the traditional role of governments (at least since the early 20th Century Seddon era, in our case) to provide health, education and other social goods, Easton says that Rich Club countries could tax corporations a bit, if they insisted - and if their profits grew as a result of deregulation - but we have to realise that the “traditional Left dream of plundering corporations to fund the Welfare State is fading”. Plundering? In an avowedly dispassionate textbook?

Anti-globalisers have looked at the Doha Round of WTO talks and seen its failure as a victory for the little guys, who were resisting the drive of transnationals to entirely replace public governments. Easton sees it differently. In his view, the Rich Club saw restraints on corporate power as holding back the poor. He presents the negotiations as the defeat of a benign nice guy US side by petty self-interest. The US, he breezily maintains, wanted development for the poor world. The WTO is characterised as wanting the rule-of-law to replace the “law of the jungle”.

It’s better seen the other way round, as the rule-of-nation-states being replaced by law-of-the-jungle corporates. Yes, they work by rules, but the laws are made so that they’ll get what they want. That makes WTO law the law-of-the-jungle. The big “predators” would limit their powers, Easton says, in return for “increased certainty” for their transnationals. Who are the predators? Easton says that according to the new thinking they are our elected public representatives. They should hand over their responsibilities to Big Business so it can be “certain” that it can do what it wants. In this - the bottom line, we might say - he’s right about what’s going on. But that’s the problem. Globalisation’s critics don’t see democracy as predatory. They don’t see why ordinary people should live in doubt and insecurity so that Big Business can live in confidence and security. They can’t see that the result of transferring authority from governments to corporations will result in a shift in influence “towards the poor and the weak”. All the evidence suggests the opposite: that WTO policies make the poor poorer; and that they do so in order to make transnationals richer. As Easton himself is emphasising, the big neo-liberal states like Bush’s America are all about downsizing public government. On this, both sides of the debate are agreed. The remaining question is whether this is a good idea. The American electorate seems to be grumpy.

Neo-Liberal Theory Does Not Match Reality

Easton must know that the real world does not work the way neo-liberal theory hopes it does. Profits, he writes, following the letter of the WTO documents as if they reflected their intent, might flow from Poor Club factories to Rich Club boardrooms, but that’s only because of local savings deficits, not the “‘wickedness’” - another loaded “joke” - of TNCs. Had the locals put aside a few billion, they could have bought shares in the transnationals to offset the outward flow. True enough. And there’s no law that compels the poor of Paris to sleep under bridges and the rich to live in mansions.

This misleadingly bloodless approach enables Easton to claim that “transnationals are but global extensions of local companies”, but they’re not different merely in degree; they’re different in kind. Karl Marx, an economist admired by Easton, explained change as a fluid process. At a certain stage, a critical mass is reached, a tipping point, and things become something other than what they had been. The self-styled revolutionary neo-liberals share this outlook. They hope that the WTO rules are the lever to tip power to the transnationals.

Easton feels able to say that the people he dubs the anti-globalisers want to return to “a vague Arcadia which has never existed”. In doing so, he bashes a very straggly straw man. If there’s anything that marks the anti-imperialist and internationalist movement (a more accurate designation of anti-globalisers) it’s a hostility to exploitation and a championing of social progress. It’s the deniers of past and present injustice, neo-liberal free traders and their predecessors, who live in an imagined Arcadia of freedom loving maidens punching out from the shoe factory and lining up at the local McDonalds. Easton reverses history to imply that the opponents of WTO are against trade. It’s a gibe favoured by neo-liberals, but Easton does himself no favours by borrowing it. It’s a farcical misrepresentation, but if believed it would be especially potent in a country like NZ which depends more than most on the outside world.

It’s a pity that Easton, who introduced his book as being middle of the road and objective, borrows some of the cheap shots of the globalisers and endorses all the key aspects of their programme. In his Listener columns and talks on current events, Easton has been informative and balanced. It’s his big picture that’s ugly. As though belatedly striving for this moderation, he concludes by observing that the definitive member of the Rich Club, the US, does not enjoy “a good record of delivering” services that benefit its people. These include the “administrative services of government, police and justice, and - more arguably - education, health, social welfare and cultural services” (arguable for the extreme libertarian Right, maybe, but not for - to borrow a phrase - the mainstream). Thus “it is possible that [the] market-state, unconcerned for the welfare of its people, may descend into fractious class warfare”. Fractious trouble ahead? Class as relevant, and not just “culture”? Where did that come from?