Global Capitalism

Edited by Will Hutton and
Anthony Giddens

The New Press, New York, 2000,
241 pages.

By Roger Bybee

On October 4, 1996, long-time workers at Johnson Controls’ valve plant in Milwaukee were rewarded with a lavish dinner and plaques and pins for their years of service to the company. For workers who had reluctantly accepted severe economic concessions and labored hard to make the plant "competitive," the company’s gesture was a long-overdue but still very welcome gesture of gratitude.

However, on October 9, the workers received another, more frank token of this Fortune 500 corporation’s appreciation: official notice that the company was closing the highly profitable plant and shipping their jobs off to a site that beckoned with even higher profits: Reynosa, Mexico.

The 180 workers at Johnson Controls became more victims of a particularly ruthless form of globalization: a political regime where U.S. corporations are free to shift work to nations where thinly veiled dictatorships hold down wages as a means of attracting investment. Wages at the Johnson Controls Reynosa plant start at 72 cents an hour, "far below what most people would considerable a sustainable wage for the workers and their families," as a Milwaukee priest complained to distinctly unimpressed Johnson Controls stockholders.

U.S. News & World Report once approvingly described Ree- bok’s strategy as one of "global hopscotch," detailing how this footloose shoe manufacturer continually relocated to ever-lower wage sites, abandoning plants in Asian nations whenever democracy and labor unions sprouted up. When the workers in Indonesia or elsewhere rise up to push wages to a subsistence level, executives from corporations like Nike warn them, "there’s concern what this does to the market—whether or not Indonesia could be…pricing itself out of the market," as Nike spokesperson Jim Small sounded the alarm in April, 1997 when the minimum wage hit a stratospheric $2.46 per day.

Or when Mexican border communities, almost afloat in sewage and chemical wastes resulting from the doubling in the number of "maquiladora" plants since the signing of the North American Free Trade Agreement, they encounter corporate executives making threatening noises about relocation. Even the right-wing Wall Street Journal once described the border haven for U.S.-owned factories as "a sinkhole of environmental degradation and miserable living conditions."

Such a suggestion that corporations bear any social responsibility instantly triggered alarm among U.S. executives. "I think you will see a slowdown in the growth of maquiladoras until we see how big the increases are," warned one U.S. corporate consultant.

General Electric CEO Jack Welch, whose corporation gobbled up hundreds of millions of U.S. tax credits in the name of job creation while downsizing roughly two-thirds of its U.S. workforce since 1980, outlined the new philosophy of corporate globalism in stark terms: "Ideally, you’d have every plant you own on a barge."

Given the massive inequities and social dislocations produced by a dedication to maximum profit, one would expect that a book entitled Global Capitalism would be brimming with moral outrage and crammed with detail about the human consequences of unalloyed avarice spreading across the planet. But instead, editors English sociologist Anthony Gid- dens and economics writer Will Hutton offer up a remarkably arid defense of the basic pillars of corporate globalism, suggesting only that its most brutal edges be softened by tepid compensatory programs. The stunning inability to either comprehend the searing wounds inflicted by corporate rapaciousness or conceive of more humane systemic alternatives is baldly stated in the book’s concluding chapter: "The task, surely, in the absence of alternatives, is to keep the current system going and improve it."

Most strikingly, Giddens in particular seems to be uninterested in the fate of global capitalism’s victims, like the workers at Johnson Controls who lost stable jobs in Milwaukee and those in Reynosa and elsewhere laboring long hours for multinational corporations in the Third World for below subsistence wages. Displaying utter blindness to the vast evidence of suffering caused by the NAFTA hurricane afflicting Mexican workers and peasants, Giddens blithely pronounces, "The Mexican economy seems to be doing pretty well out of the deal." If by "the Mexican economy," he confines his measurement to mean the swelling ranks of billionaires, he is correct.

In the same vein, Giddens is nothing but enthusiastic over Russia’s embrace of the market, despite the appalling human cost as measured both in plummeting incomes and sharply falling lifetime expectancy. Russia‘s privatizers have truly pulled off a remarkable achievement: rare in human history has massive misery been so intensified for so many people so rapidly. A new Russian proverb expresses the brutal story, which Giddens misses: "Everything the Communists said about communism was a lie but everything they said about capitalism turned out to be the truth."

With the exception of a few chapters authored by critics of the global economy, Global Capitalism is a non-stop violation of the great sociologist C. Wright Mills’ dictum in The Sociological Imagination that no one should ever write more than two pages without a specific example in mind. Giddens and Hutton’s sections of the book span dozens of pages with hardly a meaningful case being cited.

While an ardent defender of a Clinton-Blair "Third Way" that departs both from neo-liberalism and any form of socialism, Giddens is positively giddy about the achievements of the new global economy. The absolute nadir of the book comes when, in a dialogue with Hutton, Giddens declares, "capitalism without communism isn’t as wild or as dangerous as you make it seem, and is more resonant with positive possibilities." It is difficult to determine where, if anywhere, he would actually separate his policies from those of what has come to be called "savage capitalism." He jovially swallows the North American Free Trade Agreement despite its evident failure to reach any goal except expanded profits for U.S.-based firms. He passionately embraces the World Trade Organization and mourns its train-wreck of a gathering in Seattle. Giddens seems untroubled that "A constitution for the world economy" (in the words of the WTO’s founding president) somehow managed to utterly exclude any representation from the subject classes in shaping that constitution.

Bizarrely, the book includes a discussion on how Richard Sennett relates to his Korean dry-cleaner in New York, but nothing on how Nike CEO Phil Knight—worth at least $5.3 billion—connects with his vast global workforce. Nor does Global Capitalism deign to explore what Charles Bowden calls the "Experiment for the Future" along the U.S.-Mexican border, where First World technology is paired with dire Third World exploitation in "maquiladora" plants to enrich transnational corporations in a nightmarish new world of acute suffering, brazen pollution of the air and water, and appalling official corruption.

One almost gets the picture of a book assembled by editors who never bothered to read the contributions of some of the authors. In the case of pieces by financier George Soros and former Federal Reserve chairperson Paul Volcker, the reader is left to wander through a thicket of international bankerese without any assistance from the editors. Meanwhile, sociologist Manuel Castells, who has made immense contributions to urban theory, is clearly adrift in a rambling discourse on the new information economy.

Still, there are some good pieces in this collection: crisply written articles by Lawrence Mishel and Jeffrey Faux on the inequality which is the distinct trademark of the new globalism; Robert Kuttner on the vital role of government action in protecting citizens from the corporations devoted strictly to maximizing stockholder value; and Vandana Shiva laying out the frightening stakes entailed in the emerging domination of world food supply by giant corporations who seek to tighten their grip through dangerous genetic modifications. An essay on global culture by Polly Toynbee captures the complexity of the interaction between Western and Third World cultures and also offers a powerful critique of the increasing concentration of media power. But despite these contributions, one gets the sense that the editors remain oblivious to the anti-democratic essence of the corporate-dominated world.

Here are some of the most crucial points missed by Global Capitalism’s editors:

1. The global corporatism represents a repudiation of any bond except to maximizing profits. Linkages to loyal workers, communities, and even nations have all become irrelevant. As economist William Tabb concisely explains, "Companies that do not aggressively maximize shareholder value had been taken over by those who will throw out the old managers and downsize the workforces. The momentum has been relentless and hardly limited to restoring past profit margins. It has been about maximizing returns to owners, regardless of the impact on workers and communities" ("Labor and the Imperialism of Finance," Monthly Review, October 1999). In the new global economy, all the advantages lie with those at the top of the pyramid, as outlined by Faux and Michel: "People at the top of the income distribution in all counties not only have deeper financial reserves; their income is almost more likely to be generated from capital that is more mobile and therefore more able to avoid being trapped in depressed economies. People at the bottom, however, whose income is generated by their labor, are tied much more tightly to their immediate economic surroundings."

Constraints on corporate conduct such as union contracts, labor laws, and pledges made to communities in exchange for tax breaks are all regarded like antiquated treaties with Native Americans, which need not be taken seriously since they have long out-lived their usefulness and the other party seems destined for extinction. Thus, while countless major corporations promised to increase their U.S. employment as a result of increased exports to Mexico under NAFTA, a Public Campaign’s Global Trade Watch studied 66 corporations making such pledges and learned that 61 failed to live up to their public statements. But apart from marginalized labor unions and publications of the Left, no mainstream voice in U.S. politics seems to have noticed.

2. The global economy is not a force of nature like gravity which is naturally bound to drag down conditions, as Wisconsin AFL- CIO President David Newby puts it. The global economy is a political structure premised upon institutions like the IMF, World Bank, World Trade Organization, trade agreements like the North American Free Trade Agreement, subsidies for exports, and insurance against expropriation of overseas investments.

Moreover, the impacts of globalization vary widely, particularly in terms of the political constraints, which labor and other democratic movements have placed on the absolute freedom of corporations to relocate work without regard to social costs. Thus, wages in Western Europe have consistently been much higher than U.S. workers’ pay, with a differential of roughly 40 percent in 1993. Similarly, the number of hours worked by U.S. employees now exceeds even the Japanese, once mocked in the U.S. as robot-like workaholics.

As noted by Gary Teeple in Globalizaton and the Decline of Social Reform, there is no mistaking that the full-blown emergence of global capitalism has considerably shrunken the space for reforms benefiting the majority of citizens. "The decline of the powers of the national state in the face of the global economy has lessened the leverage for enacting reforms and diminished the jurisdictions in which reforms could be enacted and enforced."

Still, the global economy’s structure varies enormously from nation to nation. The key variable is not an immutable economic force, which is like some mysterious deity, which we primitives must worship with offerings of pro-market reforms. Rather, the global economy is the product of specific policy choices made by elite forces in society with markedly decreasing concern for those on the bottom rungs.

3. The architecture of the global economy has been shaped by enormous political investments by elites, especially in the U.S. where 1 percent of the people provide 80 percent of the contributions to federal candidates. While 56 percent of Americans surveyed in 1996 felt that trade agreements like NAFTA resulted in job loss and dislocation for Americans, fully 65 percent of large donors (those providing at least $5,000 to federal candidates) approved of such trade deals "even when jobs are lost." In a telling coincidence, the U.S. House passage of Permanent Normalization of Trade with China—opposed by 79 percent of Americans—was followed quite fittingly the very same day by a record-setting Democratic fundraising event that raked in $26 million. Obviously, the opinions of the donor class are the only ones worth considering in the current political environment.

4. The political investments of elites have been paralleled by a media offensive in support of unfettered "free trade." The propaganda blitz for "free trade" on the nation’s editorial and news pages harkens back to Eastern Bloc journalism’s lockstep obedience to the party line during the darkest days of Stalinism. With most journalists far more conservative than average Americans on economic issues, both news coverage and editorial content have reflected a stunning imbalance in praise of corporate-style globalization. Even supposedly liberal publications like the Washington Post and New York Times have not editorialized consistently in support of "free trade" in the face of damning evidence that it fails to live up to its claims, but they have largely closed their op-ed pages to critics of the global economy. During the NAFTA debate, Sen. Byron Dorgan (D-North Dakota) documented that the Washington Post gave NAFTA proponents nearly seven times as much op-ed space as that afforded critics of the trade deal. Most dramatically, by my count, exactly 2 of America‘s 1,300 daily newspapers editorialized against NAFTA. Such 99.99 percent uniformity of editorial opinion is usually witnessed only in the most repressive of nations.

While there have been notable outbursts of revulsion against globalism, as with the anti-WTO demonstrations in Seattle and the anti-IMF and World Bank actions in Washington, popular resistance is still small in proportion to the scope of economic, social, and environmental disruption brought on by transnational corporate forces. The new global capitalism has severely eroded key long-standing institutions and social networks (eg., urban neighborhoods and labor unions) that were the backbone of resistance to earlier abuses by the system. As Frances Fox Piven and Richard Cloward write in The Breaking of the American Social Contract: "Changes in the location of production, as well as changing patterns of consumption and settlement, are also transforming the communities and culture of even those who remain industrial workers…As industrial capitalism has reorganized domestically and dispersed globally, a primary impact has been disorganizing the working class and escaping its leverage."

Those distressed by the damage wrought by global capitalism will need to grapple with the implications of this disruption of community, which severely hampers the ability of working people to respond collectively.

Equally daunting for progressives is the lack of political imagination, both in dominant circles and among the subordinate classes, which makes it impossible to seriously contemplate and debate any alternatives. The very notion of an economic order designed to serve human beings—rather than the intensified distortion of human existence in order to fit the demands of the global marketplace through low pay, longer hours of work, and a loss of democratic voice in both the workplace and larger society—is rarely discussed. The crumbling of bureaucratic Communism in the East and the capitulations of social democracy in the West have left many without the capacity to envision any other course than the current race to the bottom.

Unfortunately, Global Capitalism will not help to restore a vision of a democratic, humane set of institutions not subordinated to capital’s demands. Hutton, at least, mourns the passing of what he calls "stakeholder capitalism" where executives recognized the existence of considerations other than maximizing value for shareholders. But concrete structural reforms, which might empower workers and stabilize communities, are totally absent.

Ultimately, Giddens and Hutton seem to be writing about a wastebasket fire that can be easily doused with a fire extinguisher rather than a raging inferno, which threatens to engulf fundamental living standards, consume the environment, and incinerate any meaningful concept of democracy on truly a global scale.      Z

Roger Bybee works with the Wisconsin Fair Trade Campaign

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