Global Capitalism

Global Capitalism

E-mail debates of newsworthy topics.
March 11 1997 3:30 AM

Global Capitalism

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Dear John Judis,

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       Let me respond first to your most serious charge--that we "child[ren] of the British empire" have lost our sense of irony. A friendly discussion really won't be possible if you hurl accusations like that around. We British do take our duties as colonial oppressors and latter-day champions of global economic exploitation seriously. No doubt our views on India and other subjects can therefore be dismissed without examination, as you suggest. But never say we no longer take pleasure in the incongruous and the absurd.
       For instance, I love the way our correspondence, beamed around the planet by this marvelous new technology, has drawn us back to the age of manual typewriters. It's been about that long since I was last lectured so solemnly on the need for "organized movements," the "prerogatives" of multinationals over the "rights of workers," and the balance to be struck between "the needs of capital and those of labor." There's irony.
       It isn't my view that globalization will make everybody better off, only that it will make each participating country better off in the aggregate. You frame the issue as one of capital against labor, implying that the gains will be concentrated (among the idle rich, I suppose), leaving workers as a group worse off. But the losers will, in fact, be a small minority of workers (and some capitalists, for that matter). Most of those who gain will be workers. That's good, isn't it?
       Agreed, governments should address themselves to the plight of those who lose. But it is quite another thing to say, as you do, that the broader case for integration is in doubt until that matter has been satisfactorily resolved. Would you say the same of economic growth? That too is a process that raises living standards overall, with losers along the way. Would you therefore argue that the case for growth turns on how shrewdly governments and "organized movements" distribute its benefits? The gains from growth are so big that we say, "Let's have more, and then decide what to do with it." We don't say, "Not everybody benefits, so let's stagnate until Congress, the White House, and leaders of labor unions have designed a new social contract."
       Of course this parallel between growth and integration would be wrong if closer integration might make America, say, or India (forgive me) worse off overall. In your review of Greider--though not in your letter to me, where the emphasis is on inequality--you seem to endorse this larger pessimism. Incomes are being pushed down everywhere, you say. The reason? This new world economy suffers chronic excess supply, because workers in developing countries are paid less than the value they add to the goods they make. I had always supposed that, for there to be any such thing as profit, workers must be in that position (except in Eastern Europe before 1989, where very organized movements had workers subtracting value from raw materials). Maybe I'm wrong on this--but then it's odd, on your view, that out of 25 emerging economies shown in the handy table at the back of the Economist each week, 19 have run external deficits (i.e., have demanded more from the world than they have supplied to it) over the past 12 months.
       What you and Greider say about global excess supply would be very important if it were true, but it strikes me as literally nonsensical. Am I missing something?

Clive Crook