On Globalization: Part 2, Economics Trumps Democracy

Globalization is big word.  You hear it a lot, but few take the time to understand it.  So bear down.  Read closely (this second of four posts), and I bet you get it.

At the heart of economic globalization is the freedom of foreign investment from regulation, a freedom worked out by bilateral and multilateral national agreements.  So goods, services and capital (think money), that is, trade and investment, flow ever more easily across international borders.  But in order to ease that flow increasingly democracy – that is, the informed  will and action of the people – gives way to unaccountable economic power.  More and more significant decisions about life are removed from public discussion and influence and left to an elite few.  A growing portion of the global economy is now planned and directed in ways that are unaccountable to the public as a whole.  People elect governments, but not corporations.  So decisions made in a boardroom in New York or London may affect the people of, say, Bangladesh a whole lot more than those made by the elected government of Bangladesh.

And increasingly goods and services needed by everyone (such as water, electricity and education) are privatized; that is, they are owned by corporations and individuals usually not accountable to the people most impacted.  For instance, a foreign corporation can purchase the water supply of some impoverished South American country and export it at whatever price the market will bear to California.  Meanwhile, more and more life forms (for example, genetic materials or seed strains developed over centuries by indigenous people) and life experiences (experiences related to spiritual growth and happiness) are being commodified and marketed.  Western consumer-oriented ways of life spread around the world.  And money is increasingly commodified; that is, more and more wealth is created by speculative trade in money for short-term gain rather than by trade in goods and services and rather than by investment in long-term production of goods and services.  So sudden shifts in capital may dramatically affect the well-being of millions.

O.K. that was the hard part.  We can ease up just a bit.  But just a bit because perhaps you have detected that there may be some real problems associated with globalization.  And there are.  Local and regional systems of agriculture and other production may be crippled.  Transnational corporations that grow beans, beef and bananas for North American tables may dislocate many Central American farmers from their family plots.  And who knows where the dislocated may show up.  

Then there’s the issue of accountability as democratic political power gives way to unaccountable economic power in the hands of relatively few economic players.  There are also issues of sustainability as short-sighted economic interests assault the Earth’s life-support system.  And there is the matter of the richer nations dictating inequitable terms of trade to poorer nations. 

Having said all this, I am still optimistic.  More to the point, because I am Christian, I am hopeful.  But do I have reason to be?