Globe Enters Age of 'Tiger'

24, July 2000
IT IS always interesting to examine the views of people who tend to be comfortable with fashionable "buzz" words, which, most times, prove meaningless, depending on who uses the terms and what indeed may be his or her unspoken agenda.

The latest "buzz" word is "globalisation". Everyone seems to feel what they are saying suddenly acquires new depths and profundity the moment the words "globalisation" or "global" are stuck in somewhere in the flow of their speech or writing.

Now we are hearing: "Globalisation brings growth that is good for the poor of the world". Or "How on earth will it benefit destitutes if governments try to strangle globalisation by stemming the flow of trade, information and capital - the three components of the global economy?"

But globalisation is not a new phenomenon for capital, as a socio-economic force has from its very early formation and dominance always sought, by nature, to be a global factor.

For capital and capitalism to survive it must continuously sell what it creates on a forever expanding market.

Not to mention, it must be able to diversify what it creates so as to deepen the existing market, injecting new tastes, new preferences and new needs into people's lives.

In other words, provide new and expanding markets for surplus "old" goods or discover new sources of raw and "exotic" materials that can be utilised to diversify production.

Globalisation, then, in context of 15th century nascent capitalism, prodded by the Papal Bull in 1494 which divided the world into spheres of influence and, according to Oliver Cox in his book, Caste, Class & Race, put "the heathen people and their resources at the disposal of Spain and Portugal to exploit as seen fit".

It could only have meant then the conquest and brutal control of territory and human resources the world over to facilitate greater extraction, transportation, processing and refining of minerals, raw materials and new commodities.

The point is in the 16th and 17th centuries capitalism found its best expression within the parameters of the democratic nation State. Its philosophy of mercantilism and ideology of nationalism informed the establishment of a concrete closed-shop economy between mother country and her colonies.

Each mother country jealously guarded its colonial territorial markets for surplus goods and raw materials. The aim was to eliminate foreign competition because nascent capitalism required protectionism.

We, in the Caribbean, are, of course, familiar with the Navigation Acts of the 1650s and 1660s that sought to guarantee that all trading between Britain and her Caribbean colonies would be handled by British cargo ships manned by British crew at the expense of all foreign rivals.

The Spanish and French did likewise to protect their trade and their "armadas" laden with precious stones and commodities.

That led to the vicious trade wars and the sanctioning of pirates and privateers. The Caribbean Sea and the Atlantic Ocean proved to be theatres of open warfare between competing nation states.

What this served to do, according to Joel Colton in his book History of the Modern World, was to "re-orient Europe and create a global economy... the first to profit being the Portuguese and the Spanish, and they retained their monopoly through most of the 16th century, but their decline paved the way for the triumph of the British, French and Dutch..."

The first phase of globalisation that was based on the closed-shop economy came to an end with the age of reason and enlightenment. It ushered in the Industrial Revolution, parliamentary democracy and the idea of society as a social contract between free citizens with free will, all of which had a bearing on the way people were organised to produce.

Joel Colton says "the use of steam engines and power-driven machinery and the growth of large factories and great manufacturing cities expanded the global economy and made Europe, at least the Atlantic region north of Spain, incomparably wealthier than any other part of the world." This second period of globalisation is demarcated by the debunking of mercantilist philosophy and the closed- shop economy.

The closed-shop economy had served its purpose and now could only be a hindrance to a greater level of profits, expansion and capital accumulation. The time had come for the concept of free trade. Free trade opened up all the existing markets to every single enterprising capitalist or group of capitalists. It meant competition would be more extreme, would cut across national boundaries, prices would be forced down and products would be more affordable to a lot more people.

It meant labour had to be made more productive quantitatively and qualitatively, that the production process itself had to be continuously revolutionised through technological application so accumulation could be increased tenfold and a greater percentage of re-investment could be actualised.

Furthermore, the intense competition and demands of the free trade scenario demanded tighter and more centralised capitalist organisations. The initial "chartered joint-stock companies", that brought slaves to the Caribbean sugar plantations, by legal definition could no longer suffice in this new free trade environment.

Eventually, it gave way to corporations, trusts and consortia, as "big fish ate up smaller fish" and centralised to fortify themselves to own and control interrelated areas of production, monopolise markets and face each other on the international front.

Unlike the joint-stock companies, the corporations, as legal entities, bound their member shareholders firmly to their mission and provided the organisations with rights and privileges as that of a single individual.

The corporations could buy, sell, and inherit property and did not allow scope for the whims and fancies of individual investors. Yet, at the same time, the company was legally protected from the liabilities of its individual members.

They moved from being family-owned and managed businesses to being professionally managed. Professional managers were driven only by the dictates of profit accumulation rather than any subjective considerations.

When such corporations began themselves to globalise their organisational structure across national boundaries, the multinational or transnational corporations emerged but not before the professional managerial class had become, via the educational system, a truly international critical mass available everywhere and with the same mind-set.

What is evident in the two periods of globalisation described and in the genesis and development of multinationals is the tendency not only to centralise and concentrate capital, but moreso the tendency to depersonalise it altogether.

Thus, capital becomes a truly objective social force beholden to no one and nothing but the maximisation of profits and wealth accumulation. When you embrace that force it is akin to riding a tiger.

That takes us to the third and present phase of globalisation. continued