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Globalism is a conspiracy against First World jobs.
It is the process by which capital extracts surplus and appropriates the
earnings of labor. By moving offshore the production of goods and services for
the home market, corporations benefit from labor arbitrage. Because of large
excess supplies of labor, corporations can hire employees in China, India,
Indonesia, and elsewhere at wages below the value of the marginal product of
labor, thus raising the returns to capital.
If globalism reverses, it will have little to do
with capital adequacy, deregulation, and sovereign debt. It will have to do
with the fact that corporations, by offshoring jobs in pursuit of short-run
profits, have undermined domestic First World economies by moving countries'
GDP, tax base, consumer incomes, and career opportunities to developing
countries.
The extraordinary debt leverage and fraud made
possible by financial deregulation produced the financial crisis. The crisis of
globalism is the inability of First World economies to produce new jobs other
than in domestic non-tradable services.
As Michael Hudson has shown, the response to the
debt crisis is to shift the costs of the mistakes made by banks and governments
onto the backs of ordinary people. Thus, the large and persistent protests in
the streets of Greece and Spain against allegedly "representative" governments
for implementing the bankers' policies that reduce the living standards of
people in order to protect bankers and their shareholders from
losses.
It was ever thus. In his classic history, The
Rise And Fall Of The British Empire, Lawrence James writes that the
Anglo-Egyptian War of 1882 was perceived "as having been foisted on the
government by a clique of investors. Sir William Gregory, a former Tory MP and
governor of Ceylon, argued that, "We are the only nation which had an honest
sympathy with the unfortunate peasants of the Nile Valley, and yet we are forced
to be the n-word-drivers, the administrators of the lash to exact the last
piastre from these poor wretches for the benefit of bondholders.'"
Today economists are allied with globalists to drive
wages to subsistence levels and to privatize for the benefit of the banks and
their customers the remaining areas of public domain. To quote Hudson,
globalism and financialization (the drive by the financial sector to absorb the
entire economic surplus in the form of profit, interest, penalties, and fees)
are "economic warfare by non-military means."
This article originally appeared in the summer 2011 edition of The International Economy
This article originally appeared in the summer 2011 edition of The International Economy
