Myths about globalisation

By Tunde Obadina

On July 8th 1853 the American, Commodore Matthew Perry steamed into Japan's Edo (now Tokyo) Bay and ordered the country's rulers to drop their barriers and open up the country to trade. Japan's Tokugawa shogun rulers, faced with the apparent military might of the intruding white men in black ships, conceded and ended 250 years of their country's isolation. One hundred and fifty years later Japan is today one of the world's biggest economies and trading nation - an envy of all Third World nations struggling against underdevelopment and poverty.

The question is would Japan and the Japanese people have been better off today had their rulers resisted the American intruders and maintained their reclusive feudal state? I suspect that 21st century Japanese are glad that the imperialist Americans and their black ships arrived at their shores 150 years ago.

However, the debate about globalisation continues to rage with supporters and opponents adamant on the righteousness of their respective positions. The ideological conflict is now being largely carried out with reference to the impact of globalisation on poor nations, especially in Africa. Anti-globalists contest that economic integration is a new form of imperialism that enables rich nations to benefit at the expense of poor ones, while globalists insist that it is the only way that poor countries can transcend their underdevelopment.

Which is right? One of the difficulties in arriving at an answer are the myths surrounding the concept of globalisation, which at its simplest means cross border movement of people, capital, companies, commodities, ideas and any other creations of humans. In this regard, globalisation is hardly new. Goods, people and ideas have crossed borders for thousands of years. However what makes the interaction more special today are the improvements in technology that make the linkages considerably easier and open up the possibility of global federation.

Adversaries in the globalisation debate have tended to present the process of integration in the current era in absolute terms - to the anti-globalists it is synonymous with free trade and unfettered capitalism, while neo-liberal advocates see any form of protectionism as anti-globalisation and bad. However, in the real world there are no completely closed societies (not even North Korea) or totally open ones. All nations relate to the outside world, it is a question of degree. Conversely, all nations place limits on this interaction. Even the United States - the champion of free market economy, maintains some barriers to international trade and implements policies that protect selected industries. Concepts such as free trade and closed economy are theoretical constructs that do not reflect reality in their absolute form.

Globalisation is not synonymous with international neo-liberalism as many anti-globalists claim - it is not the preserve of the International Monetary Fund or other international finance institutions pushing free market policies as gospel. Countries can interact with the international economic system without pursuing free market policies - China is an obvious example of a country that has embraced globalisation without swallowing IMF-style prescriptions. One of the remarkable features of modern Japanese economic history is how that country mastered the art of opening up on its own terms. Third World countries can protect their young and vulnerable industries and pursue policies that advance their economic interests and still vigorously pursue international trade and investment. Globalisation does not mean subjecting your national interests to some global interests as defined by powerful nations.

Another myth is that globalisation means the minimisation and eventual disappearance of the state. People on both sides of the divide push this idea, which does not reflect reality. The US is a free market nation, yet the American state is not less powerful within its terrain than is the state in a closed economy. With the state in the west accounting for between 35% to 55% of their nations' GDP, it is nonsense to say they are weaker than corporations. As rich as Microsoft is its power cannot be compared with that of the US government - the software company does not control the security and armed forces nor can it alter national policy. The state in a liberal democracy like Britain exercises more actual control on the behaviour of individuals and corporations than say the state in Nigeria. The difference is that in Britain regulations are open and the rule of law is maintained, whilst in Nigeria there are many regulations that give the impression of government control but they are meaningless because the state lacks the capacity to enforce them.

Another common myth is that globalisation invariably leads to cultural domination of poor countries by rich ones. More specifically, it is believed that globalisation means acceptance of American culture - symbolised by the global spread of McDonalds and Hollywood films. There is no denying the global spread of western culture, especially American, but the adoption of new and foreign ideas and styles is voluntary.  No one forces people in developing nations to buy a 'Big Mac' and nothing prevents an enterprising local entrepreneur from creating and marketing his own form of beef burger.

The movement of ideas across borders does pose a challenge to local cultures to remain relevant to the people. Culture is not something that is fixed and sacrosanct. It is the knowledge, values and taste shared in a society at a particular point in time. People everywhere in the world should be free to choose how they want to dress, dance and play; what to hear, read or eat.

Globalisation has served to widen the cultural choices available to people in both rich and poor nations. Today, it is difficult to describe British culture in a way recognizable to somebody from the nineteenth century. The country's favourite dish is Indian curry and the most popular music is Afro-American in origin.

Globalisation can be culturally challenging for societies that are not conducive to cultural creativity and only hold on to pass achievements. Many Third World societies find themselves overwhelmed by western cultural productions because their own environment is no longer conducive to individual or group creativity - the cultural styles and ideas that they defend against imports are often at least a century old. The solution to this is not to lock out foreign ideas but to establish a political, social and economic order in which people's creative energies can be released rather than suppressed.

The prospect of integration in the international economic system may seem daunting to poor Third World nations, but the risk involved have often been exaggerated. For instance, the notion that by opening up their markets to trade poor nations will be deluged by imports from rich countries and find their exports commanding only low prices is too often overplayed. Leaving aside debt and aid, a nation can only import as much goods as it can pay for, so a poor country's import will be limited to the sum of its export. There is nothing in international trade that dictates what a nation imports - it is its decision whether it spends its scarce foreign exchange buying champagne or machines. Poor nations will not be better off by stopping exporting because the activity sustains employment and augments production for local consumption. The solution to the low world prices for primary products produced by poor-nation farmers is not for their countries to cut off links with the global economy but to seek ways to boost prices. In the long-run the answer is to increase the productivity of farmers and also move up the value chain by selling process or manufactured goods.

Vanguard Sept 2003

Date Uploaded 1/23/2008
Copyright Africa Economic Analysis 2005