Ironically, the tenets of modern economic globalization were established during a reign of relative hope and optimism. The Allied powers had just won the Second World War, Germany and Japan were being rebuilt as democracies, and the United Nations had been founded. One lesson learned in relation to all of these events is that economic integration and the reduction of trade barriers can be a mutually beneficial proposition for all parties involved, as the economies of Japan and Germany began to flourish and the United States became a superpower. Two lessons that weren’t learned, however, are that (1) the relations with and economic integration of Third World Countries would be different than that of former world powers, and (2) a certain measure of relativism should be taken into account as all nations differ culturally, politically, economically etc. Soon the growth of neoliberalism as an economic theory and the establishment of the World Trade Organization (WTO), the International Monetary Fund (IMF), and the World Bank as international institutions would facilitate economic globalization.
Globalizing is the extension of the local into the global. In economic terms it is the integration of national economies into the global economy through free trade, foreign investment, migration of labor, and the spread of technology. Such pursuits are supposed to promote even distribution of wealth, economic prosperity and opportunity, as well as the extension of civil rights and political liberty through structural adjustment. While the worthy aspirations set forth by globalization are feasible and beneficial to the world community, the reality is that globalization has been a failure. In practice, none of these goals have been realized and globalization has done far more harm than good to developing countries particularly in need.
In Globalization and its Discontents Joseph Stiglitz particularly blames the IMF for “flawed economic theories, lack of transparency and accountability to the public, and the pursuit of special corporate interests.” The WTO has similarly been criticized for managing the global economy impartially, with a systematic bias toward rich countries and multinational corporations, harming smaller countries which have less negotiation power. In addition, the World Bank has given out loans to countries that burden the poor, while benefiting the rich.
World Bank
Other issues have been raised concerning the fact that globalization depends on slave labor and has resulted in the rise of numerous sweatshops worldwide. The subcontracting system has resulted in woeful pay and subhuman working conditions for laborers. In order to win contracts, subcontractors have to offer the lowest bid which leaves little money for the workers. The multinational corporations that exploit such labor assert that they are blameless as they have no control over the subcontractors. Female laborers are especially harmed by sweatshops, where the myth of “nimble fingers” is used to rationalize low wages and intimate their intellectual inferiority. All of this takes place, while international institutions and transnational corporations claim that decreased regulation and the removal of trade barriers are creating better jobs. Obviously this is not the case.
Examples abound of globalization practices in the past that have solely benefit the rich leaders of countries, while harming its citizenry through sweat shops, slave labor etc. In detail I will go through some of those cases in future posts to show how these policies have hurt and exactly what effect they have had.
