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What is Globalisation? #2

PART 2
New International Division of Labour
The so-called ‘old international division of labour’ reflected the colonial and immediate post-colonial realities that the industrialised societies of the West produced manufactured goods while the rest of the world tended to produce one or 2 primary products per country.

However, the Neo-Marxists Folker Fröbel, Jürgen Heinrichs & Otto Kreye (1980) state that, from the 1970s onwards, there have been substantial movements of industrial capital from the ‘advanced’ industrialised world to the developing world. This movement has been driven by rising labour costs and high levels of industrial conflict in the West which reduced the profitability of transnational corporations.  With globalisation, the tendency is for the Western industrial societies to export capital and expertise while poor countries provide cheap labour for manufacturing.

According to Dawlabani, this destruction of homeland jobs in the West is justified by economists and financial  leaders via Joseph Schumpeter’s (1942) theory of Creative Destruction. In this paradigm, in a free market entrepreneurs will always introduce innovation which is disruptive to the current economic model but which improves productivity and, thus, economic growth. The cost to those impacted by the ‘destruction’ is not important. Thus, manufacturing is outsourced to low wage countries in Asia, North Africa, etc, while new highly-profitable financial services are developed in the West – though these employ a relatively small proportion of people compared to the huge numbers made redundant by the outsourcing of manufacturing. (See also: Underclass: the Excreta of Capitalism.) Dawlabani attributes these changes to unhealthy manifestations of the ORANGE vMEME with its sole fixation of ever-increasing profits.

Many developing nations in the 1970s and 1980s set up export-processing zones (EPZs) or free-trade zones (FTZs) in which TNCs were encouraged to build factories for export to the West. By 2016  Stephen Moore et al reckoned there were some 5000 EPZs or FTZs in the world. Even Communist Cuba had become part of one! Millions are employed in China’s Special Economic Zones.

Developments in manufacturing have meant that labour could be partitioned into a range of unskilled tasks that could be done with minimal training while computer-controlled technology enabled production to be automatically supervised. Naomi Klein (2000) claims that, “…to lure TNCs into their EPZs, the governments of poor countries offer tax breaks, lax healthy & safety regulations and enforcement, a low minimum wage and the services of a military willing and able to crush unrest. Integration with the local culture is kept to a bare minimum.”

This ‘new international division of labour’ (NIDL) is thought by Hyperglobalists to benefit world consumers by enhancing competition and thus keeping the prices of goods reasonably low. However, Frobel, Heinrichs & Kreye view the NIDL as merely a new form of neo-colonial exploitation. As well as exploiting peasants to grow cash crops for Western consumption, they argue that TNCs are now exploiting wage labourers (especially women) throughout the world. Klein supports this view, adding that “…entire developing countries are being turned into industrial slums and low-wage labour ghettos.”

An example of such exploitation comes from Annie Phizacklea (1990) who notes British company Polly Peck (formerly Wearwell), based in London’ East End, was shipping out 15,000 readycut women’s and girls’ dresses per week to Cyprus. The company, owned by Turkish-Cypriot millionaire Asil Nadir, paid their Cypriot homeworkers – numbering between 500 to 1,000 – 22p per dress. The finished products were then shipped back to London for export mainly to Arab countries. Ironically, Polly Peck, which declared a profit of £4,200,000 in 1982, has twice received the Queen’s Award for Exports! (Polly Peck collapsed in 1990 and Nadir was eventually jailed for fraud in 2012.)

Pessimisitic Globalists share such concerns. They point out that, as TNCs relocate production in their search for lower costs, the prospects for employment in the West decline. Wages in the UK will need to be sufficiently low for TNCs to perceive investment in the UK as an attractive option. In the long term EPZs benefit TNCs more than developing countries. In 2009, according to Stephen Moore, Steve Chapman & Dave Aiken, there were more than 70 countries seeking to make their EPZ more financially attractive than their neighbours’. Elwood (2001,p62) comments: “Corporations have the upper hand, trading off one nation against another to see who can offer the most lucrative investment incentives. Tax holidays, interest-free loans, grants, training schemes, unhindered profit remittances and publicly-funded sewers, roads and utilities are among the mix of ‘incentives’ that companies now expect in return for opening up a new factory or office.”  In 2010, Elwood is explicit that more economically powerful TNCs bully less economically powerful countries to open up their economies to private investment. Effectively the RED/ORANGE vMEME harmonic of the TNCs undermines and restricts BLUE regulation of the way businesses should work.

Jeff Silverstein (1992) described EPZs in Mexico: “The companies, whose plants are known as ‘maquilndoras’ or simply ‘maquilas’, were enticed by a Mexican government that allowed foreign firms to import parts and raw materials duty-free, provided the finished product was exported. Since the programme was introduced in 1965, more than 2,000 manufacturing and assembly plants have been built along a 12-mile band on the Mexican side of the border, thriving on tariff exemptions and wage rates lower than in Taiwan and Korea. The programme has pumped millions of dollars into the Mexican economy. But years of unchecked industrial growth have transformed the entire border region into an environmental nightmare, where companies operate outside the constraints of the US Environmental Protection Agency and the Occupational Safety & Health Administration….”

Women and Children
One result of the exploitation of cheap labour in poor countries has been the increasing employment of women. According to Swasti Mitter (1986), 80% of workers in the FTZs are women.

TNCs prefer to employ young female workers because they can be paid less and are perceived to be easier to control than male workers. Additionally, making them redundant, when the employer needs to shed jobs, is seen to be less of an issue as women can simply return to the household. (Partly TNCs can get away with this cavalier attitude towards laying off women because, in societies where there is still a very strong element of traditional PURPLE thinking, gender roles tend to be sharply defined and there is much resistance to the employment of women anyway as being the ‘breadwinner’ is generally seen to be the man’s role.)

Western stereotypes of the docility and dexterity of oriental women are said to be a factor in attracting TNCS to the Far East. Mitter cites examples of Asian  governments reinforcing this image in their efforts to draw in foreign capital.

Child labour has similar advantages and is widely exploited in poor countries. The attraction of cheap child labour is all too tellingly indicated by this admission from the Director-General of the Pakistani Workers’ Education Programme: “There’s little doubt that inexpensive child labour has fuelled Pakistan’s economic growth. Entire industries have relocated to Pakistan because of the abundance of cheap child labour and our lax labour laws.” Around the same time Caroline Lees & Simon Hinde (1996) reported on a particularly galling example of children being exploited in this way: “The children, often engaged in a modern form of slave labour, spend long hours in workshops around Sialkot, a Punjabi town near the border with India…. Sialkot is the source of most of the world’s hand-stitched footballs, its produce snapped up by household names such as Adidas, Reebok and Mitre. Many of the children are unable to attend school because their families need the 10p an hour they earn…. Many of the children in the Sialkot workshops are bonded labourers, working to pay off loans taken out by their parents…. Mudassar, 11, has worked for two years making footballs alongside three of his brothers. ‘I wanted to go to school but I have to work so I will probably never go,’ he said. Two-thirds of the 1,500 children in his village make footballs.”

The problem with cheap labour…?
Clearly the exploitation of cheap labour/vulnerable people in the developing world is a major problem. However, things are not quite as simple as is sometimes made out.

Firstly, the new division of labour has only partly replaced the old division. Although the old industrial societies have lost substantial manufacturing to the newly-industrialised countries, they still have important exporting industries. Additionally, poor countries are still focused on producing  food and raw materials for the rich countries.

Secondly,much of the cheap labour carried out in poor countries involves little investment – especially if it is done in small workshops or at home. (One example of this is teleworking where the supposed call centre may be simply be in a shed – or it could even be a ‘virtual network’ linking people working from their own homes.) In such cases, there may be very little transfer of capital to the the poor country where the goods or services are produced.

Thirdly, most transnational investment is between the rich countries. Europe and Japan and the United States are the main sources of international capital. There is  tendency among these to invest in each other, rather than Africa, Latin America or the poor countries of Asia. In fact, from the 1960s through to the late 1990s the share of global investment going to Africa and Latin America has fallen. Development in Asia took a different turn as investment (especially from Japan) fuelled the so-called ‘tiger economies’ of Singapore, Malaysia, South Koea, Thailand and Taiwan. However, John Allen (1995) notes the tigers were a very select group of Asian countries.

Finally, rich countries too attract capital by providing cheap labour. Eg: in the id-1990s Korean capital was drawn into Britain, particularly Wales where the closure of steelworks and coal mines had depressed wages levels.

Western economic and cultural imperialism?
McDonalds and  Coca-Cola are seen as ubiquitous symbols of the West. Mass advertising of Western cultural icons like McDonalds and Coca- Cola has resulted in their logos becoming symbols to people in the developing world – especially children – of the need to adopt Western consumer lifestyles to modernise.

This is seen as undermining local cultures and even threatening to destroy them. George Ritzer (1993) referred to this effect as ‘McDonaldisation’. Some other commentators have called it ‘Coca-Cola-isation’.

Ritzer (1993) defines McDonaldisation as “the process by which the principles of the fast food restaurant are coming to dominate more and more sectors of American society as well as the rest of the world”.

There are 4 ways McDonaldisation has effected economic production and consumption:-

  1. Efficiency: McDonalds had demonstrated that assembly line production techniques can be applied to the efficient production of almost every product and service.
  2. Calculability: McDonalds has demonstrated that maximum quantity (and profit) can be achieved with minimum costs such as wages.
  3. Predictability: McDonalds has demonstrated that product, service and environment can all be standardised.
  4. McDonalds has ensured that it has total control over the work process and workforce through the de-skilling and simplifying of tasks and the deployment of technology. This ensures that workers can be trained quickly and effectively. Low wages can be justified because jobs are, to all intents and purposes, only semi- skilled.

Ritzer sees McDonaldisation as a form of US economic and cultural imperialism which is dehumanising both for workers and consumers. As a measure of of American domination of the world, Michael Pakko & Susan Pollard (2003) note that it is possible to buy a Big Mac in 120 countries across the globe.

H0wever, Tony Spybey (1998) points out that McDonalds accommodates local customs wherever it sets up business. For instance, McDonalds in India do not sell any beef products as Hinduism holds cows to be sacred nor do they sell any pork products as Muslims consider hooved animals to be ‘unclean’. Instead they sell dishes such as Chicken Maharaja Mac. In Singapore customers can order a Chicken SingaPorridge; in Hong Kong some Seaweed Shake Shake Fries.

Spybey contends that true globalisation is a combination of global and local influences – what he calls ‘interpenetration’ between the 2. Roland Robertson (1992) has popularised the term ‘glocalisation’ – thought to have first been used informally by Japanese economists.

Technology and the role of the media
According to Hugh MacKay (2000), the presence of so many televisions in the developing world is creating a globalisation effect as people the world over are given insight into lives in other countries – though so much of TV is dominated by Western memes – especially in Hollywood productions – that Western culture becomes the norm.

The Commission for Africa (2005) noted similar effect with mobile phones. The Commission found that mobile phone use is increasing much faster in Africa than anywhere else. More than 75% of African telephones are mobile. People use them to keep in touch with friends and family. However, they have other uses such as helping poor people in remote areas find employment. Mobile servers on motorbikes are being used in some parts of rural South Africa to provide telephone connections. In Uganda the use of mobile phones in pilot schemes has brought efficiency savings of up to 40% in health budgets. Prepaid phone cards have become a form of electronic currency. Africans in the developed world buy prepaid cards to send back to relatives back home who then sell them on to others. In this way money is sent from the richer nations to African nations without incurring the commissions charged on more conventional ways of sending money across national boundaries.

The mobile phone is reshaping African culture and politics. Studies show that, once 20% of a population has the ability to exchange news and ideas through mobile calls and text messaging, it becomes very difficult for authoritarian regimes to control what the people are talking about. Mobiles played a major role in disseminating news and arranging anti- government activities in the Arab Spring uprisings of 2011.

Hyperglobalists tend to be positive about global media, saying that it diffuses different cultural styles around the world and noting new global hybrid styles in fashion, music, consumption and lifestyle as evidence that pluralism is becoming the newglobal norm?

However,pessimistic globalists and Neo-Marxists dislike media conglomerates. They object to American conglomerates such as Disney, Microsoft, Time Warner and AOL and the Japanese Sony having achieved near monopolistic control of newspapers, film archives, news programmes, TV and radio programmes and satellites. This means that media moguls influence business, international agencies and governments, undermining Democracy and freedom of expression.

The media disseminates Western forms of culture as a form of ‘cultural imperialism’.

Steven  writes: “For the past century, US political and economic influence has been aided immensely by US film and music. Where the marines, missionaries and bureaucrats failed, Charlie Chaplin, Mickey Mouse and The Beach Boys have succeeded effortlessly in attracting the world to the American way.”

Seabrook argues that global norms are defined by the West and that, by definition, makes all other cultures local and, by implication, inferior. The very concept of ‘globalisation’ suggests a superior, civilised  way of living – with the implication that it is the only way to achieve universal prosperity and security. This has the effect of diminishing and marginalising local cultures. Seabrook goes on to say “spreading this message of good fortune sweeps aside all other preoccupations, all existing interpretations of the world, the multiple meanings human societies and cultures have derived from or imposed upon their environment”. He says: “…it is not only the economies of countries that are reshaped, but also the minds and sensibility of the people. Their value systems are re-formed in the image of the global market….this is how global terrorism is bred; not by poverty, according to the common wisdom, but as a consequence of the supposed miracle-working, wealth-creating propensities of globalism.” Seabrook sees integration into a single worldwide economy as a “declaration of ‘war’ upon other cultures and societies”. Thus, some religious and ethnic groups oppose globalisation because they perceive the West as having declared an ideological war on local cultures.

Kingsbury et al postulate that the concept of a ‘global community’ in reality means that global norms are interpreted and enforced by a small coterie of states  – especially the USA. The Americans argue that, by acting as ‘global policeman’ since the demise of the Soviet Union, they are looking after global interests.

However, some cultures see the economic and cultural dominance of American-born TNCs and brands as an attack on the ‘purity’ of their own cultural and/or religious beliefs. There is some evidence that this kind of rationale underpins the anti-Western attitudes of some fundamentalist Islamist groups such as al-Qaeda and UnIslamic State. In Gravesian terms, this is a values conflict of BLUE/ORANGE Modernity vs PURPLE/BLUE Pre-Modernity.

Transformationalists tend to dispute the above arguments as over-simplistic. They say people are not just ‘consumer dopes’ and that the flows of culture are not just one way. Involvement in global culture might actually result in people having more choice.  The Globalist assumption is that the flow of culture is just one way – from the West to the developing world. However, this perspective fails to acknowledge how Western culture is enriched by taking in aspects of other cultures and religions.

Local cultures are often  resilient too. Cohen & Kennedy (p243) write: “On occasions, some inhabitants of Lagos or Kuala Lumpur may drink Coke, wear Levi 501 jeans and listen to Madonna records. But that does not mean they are about to abandon their customs, family and religious obligations or national identities wholesale even if they could afford to do so, which most cannot.”

Responses to Globalisation
Seabrook identifies 3 main responses to globalisation:-

  1. Fatalistic – globalisation is inevitable and irreversible’
    Most Western leaders  adopt this position, demonstrating what Seabrook calls an ‘impotence of convenience’ – as this apparent powerlessness disguises the fact that the forces of globalisation economically advantage their own countries
  2. Welcoming – globalisation represents hope for all humanity and the development of a techno-scientific culture that will liberate people from poverty (Amartya Sen, 2002).
    Mario Vargas Llosa (2002) argues that much war and conflict arises from local cultural differences. Therefore, the sooner local cultures are meshed into a single global culture the better.
    Robertson postulates that global and local can work together and suggests that local people tend to take from the global only that which suits them – which they modify to fit in with the local anyway. Cohen & Kennedy call this ‘indigenisation’ – ie: the local ‘captures’ from the global and turns it into a form acceptable to the local. An example of this is the way the Indian ‘Bollywood’ film industry combines Western ideas on entertainment with stories based on traditional Hindu myth, history and culture.
  3. Resistance – forms of which include:-
    – Reassertion of local identities through attempts to preserve local folklore and language, driven by PURPLE’s resistance to change and reverence for tradition
    – Commodification of local cultures, making it saleable and packaging it up for tourists – the work of a PURPLE/ORANGE vMEME harnonic
    “Vehement” reaction in the developing world to what is perceived as ‘violation of identity’ – Seabrook argues that the rise of old nationalisms and fundamentalisms are not arbitrary but the the RED/BLUE zealotry response of people under overwhelming pressure

Of course, the traditionalists tend to deny globalisation, as portrayed by the globalists, is happening at all. So is it?

Certainly there is economic activity on a worldwide scale, with global consequences, and certainly there is a some considerable homogenisation of culture across the world – eg: from its early days, the English language dominated the internet (Jukka Korpela, 2003).

However, evidence tends to suggest that hybridity – eg: Jan Nederveen Pieterse (2004) – cultural borrowing and mixing – is occurring, creating something new, rather than blanket homogeneity. An example of this would be the way World Music fuses Western dance beats with traditional styles from North Africa and Asia.

Arjan Appadurai (1996) extends the ideas of Robertson and Pieterse to undermine the concept of a homogenous ‘globalisation’. Instead he talks about globalisation in terms of 5’scapes’:-

  1. ethnoscapes: the migration of people across cultures and borders
  2. mediascapes: how media shapes the way we understand our imagined world
  3. technoscapes:  cultural interactions facilitated by the development of technology
  4. financescapes: the transfer of capital across borders
  5. ideoscapes: the global flow of ideologies

Each of these scapes can be be integrating or following different trajectories at slower or faster paces. Appaddurai (2001) uses China as an example: embracing industrial and information technologies and global economic expansion (BLUE/ORANGE) while still exerting strong authoritarian control over its people (RED/BLUE). This concept fits well with the Gravesian notion of different vMEMES or vMEME harmonics dominating in different domains of life.

Is Globalisation starting to decline?
Heather Stewart (2015) is just one commentator who is pondering whether globalisation has peaked and may now be starting to retreat. She argues that the 2008 global banking crisis has led to transnational banks becoming reluctant to lend across borders and TNCs pulling back from some foreign investments due to what Stewart terms “the ebbs and flows of the international system” symbolised by the 2015 Chinese stock market crash. Increasing areas of tensions between Russia and the West do nothing for globalisation and the ongoing and near-continuous jihad waged by various violent  Islamist extremist groups makes some parts of the world no-go areas for conventional trade and business.

The rise of right-wing nationalism, with xenophobic and anti-immigration tendencies, and populist politicians in the West – most significantly the 2016 election of Donald Trump to the US presidency – are attributed by many commentators to the effects of globalisation – especially the New International Division of Labour taking jobs away from the traditional white working class. Daniel Bell (1974) saw fewer blue-collared workers in homeland manufacturing and more white collar workers in finance, communications and science a economic and social progress. However, as Dawlabani notes, uplifting a population from one way of thinking to another is a mammoth and lengthy process. (Especially when  when there aren’t enough jobs in the new service industries anyway!) The ‘left behind’ are clearly not OK with being put on the employment scrapheap. What is puzzling, then, is that many of those funding and promoting the populist campaigns are themselves major influencers and drivers in TNCs – eg: News International’s Rupert Murdoch. Trump himself is a multi-billionaire businessman!

It is far too early to do more than speculate what the effects on globalisation of these populist movements may be. It could be that there are some major shifts in power amongst the global elite, with the perceived populists manipulating vulnerable electorates as part of their power plays. Or it may that globalisation will be in part rolled back to accommodate the so-called ‘left-behind’ populations. Or it may be that local cultures demand and achieve more glocalisation as concessions from the TNCs. Or a mix of all 3 and more….

Go back…

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