The doom merchants used to predict that race wars, nuclear holocausts or ecological disasters would finish off the 20th century. Now the fashion is to make our flesh creep with the consequences of a return to "unfettered" global capitalism-the predatory 19th century beast supposed to have perished in the conflagration of the first world war.
This new literary sub-genre cannot be simply dismissed; it seems to offer solace to a surprisingly large number of people trying to come to terms with the speed of change in the modern world. The Global Trap, the latest offering by two journalists on the German news magazine Der Spiegel, is especially interesting because it reveals the extent to which the political classes of mainland Europe have become affected by the extremes of the globalisation argument.
Hans-Peter Martin and Harald Schumann's book, in which they describe globalisation as "an assault on democracy and prosperity," has been remarkably successful. Not only in Germany and Austria, where it was first published, but also in France, Sweden and Switzerland, the book has climbed high on the bestseller lists. More than 250,000 copies have been sold. It will be interesting to see whether the new English translation does as well.
Its popularity has not been confined to the reading public. Many of the continent's leading politicians have also showered it with their praises. An "astonishing book," declared former French prime minister Michel Rocard. "It is lying on my bedside table," said G?ran Persson, Sweden's Social Democratic prime minister. "An interesting work," remarked Romano Prodi, Italy's premier. Luxembourg's prime minister Jean-Claude Juncker claims: "I even bought the book myself."
The authors' portrait of globalisation is relentlessly gloomy: "The pace of change and the redistribution of power and prosperity in the world are eroding the old social entities more rapidly than the new order can develop." At the same time, "the countries which have so far enjoyed prosperity are now eating up the social substance of their cohesion even faster than they destroy the environment." We face the G?tterd??mmerung of a future "20-80" world: while 20 per cent of the population will have work, the "superfluous" rest must make do with "tittytainment."
"The world race to achieve maximum efficiency and minimum wages is opening wide the gates to irrationality," scream the authors. If "the powers of the transnational economy are not successfully brought under control (we) may be" on the road to "military clashes." Unless politics regains primacy over economics, "the dramatic fusing together of humanity through technology and trade will soon turn into its opposite and lead to a global crack-up. Our children and grandchildren would then be left with nothing but memories of the golden 1990s when the world still seemed orderly..."
The political consequences of this frightening future are clear enough. More and more voters across the western world are apparently turning away from traditional parties and moving to the political right-to Jean-Marie Le Pen in France, J?rg Haider in Austria, Umberto Bossi in Italy and Ross Perot in the US. (Unfortunately for the authors, recent events-the victory of New Labour in Britain and the Socialists in France-indicate that the larger European industrial countries are moving in a quite different political direction.)
The unspeakable horrors which lie ahead stem from that familiar bogey of the continental imagination: the US and its brutish individualism. The authors point not only to the US's economic dominance, but also to its cultural imperialism, which they find repulsive.
"US politics, marked as it is by populism and demagogy, can hardly be expected to show the world a way out of the global trap," conclude the authors. But don't worry, there is still hope. Step forward the EU, which can seize "a historic opportunity such as it has never had before." If only the EU member states could "find their way to a common economic and social policy, the distribution of roles on the world arena would permanently change," argues the book. A revitalised EU could "insist that tax havens be cleared, demand the enforcement of minimum social and ecological standards or raise a turnover tax on capital and currency trading... The aim should be to counter destructive Anglo-American neo-liberalism... A united Europe resting upon a market of some 400m consumers would have the capacity to develop a new economic policy first internally and later externally too, one that was closer to the principles of JM Keynes and Ludwig Erhard than to those of Milton Friedman and Friedrich Hayek... providing for greater social balance and ecological restructuring."
But, alas, the authors admit that the "current EU project is an undemocratic monstrosity in which technocratic rule appears to be replacing nation states." It is a Europe of "big corporations, in which anonymous officials, advised by ubiquitous industrial lobbyists, pour a market programme of US-style social division into the cast of EU legislation." Moreover, having Britain-that US Trojan horse-in the EU means that brakes are being applied to the project. The EU can move ahead "only without Britain."
Apparently "worldwide free trade cannot be sustained unless it is underpinned by a socially responsible state." And who will deliver that? "Helmut Kohl's Europe will deliver free of charge the monetary union that is the key to European construction. The possibility will therefore open of imposing social rules in the control centre of globalisation, the international finance market."
This artful mixture of anti-Americanism and European integrationist sentiment may explain the book's success in Germany. It touches a raw nerve among many Germans who are puzzled by their country's mass unemployment and believe that its causes lie in globalisation rather than in the difficulty of integrating East Germany into their social market economy. Continental leaders' enthusiasm for the book is also understandable. It points to the key role they can play in seizing back political control of the global forces allegedly overwhelming the EU.
Hostility to globalisation is not confined to mainland Europe. A similarly grim view is emerging from sections of the marginalised American left. William Greider, a national editor of Rolling Stone, has produced another overheated potpourri which proclaims on its dust jacket that global capitalism is "sowing creative destruction" and reviving "forms of human exploitation that characterised industry 100 years ago."
Greider presents a satanic vision in the best of the American paranoid tradition. Multinational corporations and finance capitalists are "no longer guided by the national interests of their home countries but by the imperatives of the free market," he declares. Naturally he sees this global capitalism riddled with contradictions. But, he asks, will these lead to "world depression and the rise of violent fascism?" Greider fears that we will "experience a series of terrible events-wrenching calamities that are economic or social or environmental in nature-before common sense can prevail."
Greider's prescriptions reflect the blinkered world of the American east coast left. There is more than a hint that protectionism-disguised as "regulating the world's players"-is the best answer, alongside a global tax on share transactions and protection for workers' rights and living standards through social clauses in trade agreements.
These sprawling, anecdotal books fill an emotional as much as an intellectual void. Many centre-left thinkers, on both sides of the Atlantic, seem to need a single enemy. As with 1980s Thatcherism-turned by its enemies into the coherent and all-conquering ideology it never was-US-led global neo-liberalism has become a diabolical force.
But as serious analysis the books are inadequate. They lack any sense of proportion or historical perspective; and they are surprisingly bereft of statistical information. Merely stitching together handfuls of newspaper cuttings with the authors' own highly subjective and selective reportage does not provide a reliable basis for any serious discussion of globalisation and its uneven impact on the world economy.
Fortunately there is more thoughtful literature on the subject, which should be considered before we indulge in sweeping generali-sations. Such books-most notably Globalisation In Question by Paul Hirst and Grahem Thompson (Polity Press) and National Diversity and Global Capitalism by Suzanne Berger and Ronald Dore (Cornell University Press)-are grounded in the comparative international data which is readily available from independent bodies such as the World Bank, the IMF, the International Labour Organisation and the OECD. Statistical information from these organisations does not make even a token appearance in the books of either Martin/Schumann or Greider.
And yet the salient facts give a much more nuanced picture of the world economy than anything we find among the alarmists. In no particular order of importance, it is worth noting the following:
In 1970 the industrialised nations accounted for 85.4 per cent of the world's manufacturing output, excluding communist countries. By 1987 the same nations accounted for 81.6 per cent of such output.
The UN estimates that the share of manufacturing output of developing nations rose from 11.7 per cent in 1975 to 15.4 per cent in 1993. China, with a fifth of the world's population, produced 2.2 per cent of world manufacturing output in 1993.
Trade accounts for only a small share of GDP in the industrialised countries; as little as 12 per cent (less in Japan, the US and the EU). About 90 per cent of national production is consumed by domestic markets. It is intra-regional, not global trade which is rising. About 62 per cent of EU trade takes place within the EU. Between 1986 and 1992 intra-Asian trade (between China, the Asean countries and Japan) rose from 32.4 to 47.7 per cent.
As much as 81 per cent of the world's foreign direct investment is located in the affluent industrialised nations of the US, Britain, Germany and Canada. "The stock of foreign direct investment in the UK and the US exceeds the stock in Asia and the entire south," argues Linda Weiss in the current edition of New Left Review. Her forthcoming book, The Myth of the Powerless State: Governing the Economy in a Global Era, from Polity Press, should provide a sobering corrective to the messianic approach to globalisation.
It is time to acknowledge the benign face of globalisation, too. It is not ideological blindness to believe that as restrictive barriers to world trade are pulled down, more consuming power can be enjoyed by people everywhere. A commitment to open trade and the assertion of individual consumer choice can go hand in hand with workers' freedom and democratic values. It is clear that globalisation, however limited, provides a useful incentive to the modernising of state and society.
Furthermore, there is growing evidence in the industrialised countries that the state, far from fading away, is returning to prominence in public policy-as an enabler rather than a provider. Public policy makers are shifting again from a belief in pure markets to a more subtle view about the virtues of selective state action, as this year's World Bank report on governance in the global economy indicates.
There is also a fresh emphasis on social cohesion as part of a successful open market economy. The development of a highly skilled workforce has become a commonplace slogan in renewal strategies at nation state level. Efforts to cut registered unemployment through flexible and deregulated labour market measures are no longer seen as sufficient, unless they are accompanied by the modernisation of tax and welfare benefit systems and by assistance to the jobless as well as the working poor through incentives to work. There is also growing concern to ensure, through social partnerships of capital and labour, that technological innovation can transform work organisation without completely undermining employment security. In all this we can see the first hazy outlines of a more progressive approach to globalisation, balancing the needs of economic competitiveness and those of social equity.
The modest, piecemeal social adjustments to the world of opening markets made by most western economies are not only carried out by a new breed of modern political leaders such as New Labour's Tony Blair. They are also becoming an integral element in the evolution of EU strategies. The emphasis on enterprise creation, employability, workplace innovation and lifelong learning, coming from the EU's social affairs directorate, is symptomatic of this pragmatic approach.
Of course much of this may seem boring and mundane when set against the apocalyptic visions of the global doom merchants. But enough is happening to suggest that nation states can respond, and are responding, in a variety of ways, to the significant shifts in the world economy. The global hysteria which appears to have captivated German audiences needs to be confronted with vigour. The restoration of European self-confidence, based on a commitment to economic freedom, social equity and democratic pluralism, requires an end to introspection and the search for populist scapegoats such as US neo-liberalism. The Emu project could be the start of a new beginning for Europe after the stagnation of the 1990s. By calmly coming to terms with the limited and uneven process of globalisation, we can avoid the alarmism that encourages only passivity.
The Global trap
Hans-Peter Martin/Harald Schumann
Zed Books, ?37.50
