IT IS a very great privilege to be able to address this group and to speak in memory of a considerable Christian thinker. Not only his Catholic faith but also his long commitment to the peoples of Africa has inspired me to reflect with you on an issue currently under the most intense discussion in a good deal of the media.
It'll be obvious in some thirty seconds that I don’t speak as anything resembling a trained economist, and I hope you will bear with my naivety; but I do speak as a member of a worldwide fellowship, committed to a vision in which all have an appropriate voice -- and, I hope, as a moderately literate follower of the moral debates of our day around the theme of the global market.
My aim is not to offer a full analysis of a vastly complicated phenomenon, let alone a prescription for (forgive the word here) global reform; simply to look at some of those areas in which a Christian moralist might want to identify central ethical questions about our present practice. A long conversation lies ahead for business, governments and (I hope) moralists; this is at best a beginning.
Globalisation is the creation of 24-hour markets, 24-hour instant communication, the opening of the world to financial markets, and the spread of the leisure-entertainment-news industries almost to its very corner. It is also the huge expansion of transnational institutions such as the United Nations, the International Monetary Fund and the World Bank, the growth of non-governmental organisations and the creation of the anti-globalising movements themselves. All these overlap and depend on each other’.
This succinct definition comes from John Lloyd, always a fascinating and shrewd commentator, writing in the New Statesman of 22 October this year. It is helpful in its relative neutrality: the anti-globalising networks who disrupt international consultations so often use a starkly dualist language that assumes globalisation is a single and unmitigated evil, an interlocking system designed to enslave the poor and to defend the USA’s interests; Lloyd observes the way in which protest itself depends upon the very technology of easily marketable communication against which it rages (e-mail, the cell phone), and rightly sees the central phenomenon not primarily as a strategy but as a set of methods for communicating.
Economic change both grows out of and stimulates change in means of communication; and of all changes, those in communicative technology are the least reversible. From that point of view, anti-globalisation protest in its most wilfully naïve forms is not only a doomed but a self-contradictory enterprise.
But before passing on, it’s worth noting that the way Lloyd describes the globalising process is very much in terms of the “opening’ of what was previously closed to outside influence, the penetration of information to the ends of the earth. The energy of the process is driven, it seems, by movement “outwards’ from a centre, claiming access to new territory. Some of the moral trouble has its roots here.
There is no way of stating this that is entirely free of a kind of colonial’ imagery. The apologists of the global market respond, reasonably enough on the face of it, that it is about the access of the margins to the centre: economies in the so-called developing world need a door into world markets if they are to flourish, and globalisation is also a name for the process of opening the world to the small, developing economy.
I shall want to spend longer on the question of the degree to which this is true; but for now I merely note the shadows around even a fairly neutral account of what is going on. It helps a little to see where some perceptions are coming from.
But assume for the moment a basically benign model: the flow of capital means that local enterprise can be stimulated. A minimal regulatory regime guarantees that quite labour-intensive projects can play a significant role in transitional periods within economic development (too much outrage about sweatshops and child labour may misunderstand how local economies have to function if they are not to pauperise the majority).
Prosperity spreads, and with it education, democratic accountability and appropriate influence. The free global movement of capital has liberated a nation and given it the international voice it should (morally) have.
It is a lucid and an admirable ideal. Unfortunately, it does not seem to work quite as the theory suggests. The initial moral questions I want to raise have to do with two hidden assumptions here.
The first is that capital mobility is always a benefit because it means easy entry into a local economy; what can be overlooked is that it also necessarily entails easy exit. The South-East Asian economies, which seemed to be lone of the success stories in the adventures of mobile capital, illustrate something of this problem, and they are not alone.
The drainage of investment capital -- which may be the result of many factors, not only failure on the ground -- doesn’t simply leave an economy where it was before. Earlier forms of economic activity may have become unsustainable; demographic patterns will have altered.
Globalisation not only promotes urbanisation, it also creates urban underclasses, because of the irreversible nature of demographic shifts, even when economic collapse has occurred.
The American writer Barbara Garson has recently produced a witty and sobering book chronicling her own attempts to trace the movement of money invested by her in a local bank in the USA (Money Makes the World Go Round: One Investor Tracks Her Cash Through the Global Economy, from Brooklyn to Bangkok and Back, Penguin 2001).
Here she points to what has happened in the Thai economy over a brief period, illustrating it with the story of one woman she met in Thailand. An industrial development (an oil refinery) assisted by investment from Garson’s bank had begun to generate a service economy around it; the woman in the story had moved from the country, from backbreaking labour in the fields, first to a sweatshop making textiles, then to work as a street vendor selling rice dishes outside the factory.
At this point, the globalisation story seems to be working according to plan. Then, as a result of some complex currency trading, the Thai currency undergoes drastic revaluation; debt increases (being measured in dollars), various development projects are aborted, the price of Thailand’s main indigenous product, rice, is pushed up.
The street vendor has to pay more for rice and sell it for less; she disappears from the new economy, presumably becoming part of the developing urban sub-proletariat.
Whatever the long-term issue for Thailand, the immediate effect of highly mobile capital, combined with the perennial problem of debt induced by currency instability, guarantees that the native economy has failed either to enter a global market or to create new markets in its own territory.
The story can be reproduced scores of times in various countries: capital comes and goes, but labour doesn’t; currency fluctuations create debt; irreversible social changes occur without the economic stability that might cushion their destructive effects. We begin to see one of the focal problems in this whole discussion, which is the uncoupling of the economic and the social, a theme to which we shall be coming back more than once.
A second assumption is that there really is an unregulated market in the world economy, that everyone, once they have become a producer, is competing in a fair and open field.
The vicious circle of currency vulnerability already, of course, skews such a picture; but the plain fact is that old-fashioned protectionism is alive and well in the wealthier nations.
Exports from the less economically developed countries into the EU -- let alone the USA -- are up against the most severe restrictions, despite agreements reached in 1994 in the Uruguay Round of tariff discussions. Governmental subsidy in the developed countries combines with protectionist tariffs in maintaining a radical inequality in access to the fabled open market of globalising theory.
Textile manufacture is a particular victim, but raw materials and foodstuffs often compete on similar unequal terms (you will recall debates about trade in bananas a year or two ago, when the US’s protectionist instincts were much in evidence).
More recently, controversy has surrounded the pharmaceutical industry, one of the most fiercely protected and powerful interests in the USA. There is the problem within the terms of NAFTA (the North American Free Trade Agreement) that all participants are bound by the US’s patent law regarding pharmaceutical drugs, so that the manufacture in countries other than the US of certain drugs has to cease -- with the tariff implications of that decision.
More famously, we have seen this year the struggle between the South African government and some pharmaceutical companies over the availability at manageable prices of drugs needed in the battle against HIV/AIDS in South Africa. The large companies have consistently sought to block the manufacture of local and affordable versions of the relevant drugs.
The narrow application of patent laws in this area above all has done a huge amount to discredit claims about the commitment of the developed countries to genuine free marketing, and contributes further to the wide perception that the instruments of international regulation or consultation are either ineffective or manipulated by OECD nations.
Even in the much less dramatic environment of industry in this country, similar questions are provoked. When (to take an example very immediate to me) the major closures in the Corus steel plants in South Wales were announced early in 2001, the suggestion of an employees’ buyout was firmly quashed by the senior management of Corus in a fashion that caused many to believe that there was a desire to pre-empt competition because of the vulnerable state of the international steel market. Rightly or wrongly, this was seen in South Wales as an attempt by an existing large interest to protect itself at the expense of its (former) workforce. The factors involved were a great deal more complex than this suggests, certainly, but my point is simply that this became another instance in the minds of many of a kind of corporate doublespeak: because of unavoidable competition, the workforce has to be reduced; but the company as such has to be protected from fresh competition.
There is just one other aspect of this weighting of the dice that deserves mention here, since it still has to make much impact in the popular mind. The growing trend towards the patenting of organisms by transnational interests is now a significant threat to agricultural producers in the developing world.
Once a life form -- say a particular kind of rice or fruit -- is bought up by a transnational and patented, native producers are, of course, unable to market it independently. This is problematic quite apart from the related but distinct set of issues around patented GM foods, which, as we are often reminded, may well solve nutritional crises in poorer countries, but may also generate new crises in food production and marketing in those countries.
Since the whole area is covered by international agreements about intellectual property rights (TRIPS), it is very difficult for producers in smaller and poorer nations to contest what is often a kind of piracy in respect of indigenous organisms.
So these are my first area of moral challenge to the current workings of the global economy: capital mobility can be a factor in creating disastrous and irreversible social changes; lip service to free trade is precisely that and no more.
And, as I have hinted several times, the varied phenomena of debt play a crucial role in the continuing immobilisation of local economies. I don’t want to elaborate on a theme that is now, thankfully, fairly familiar; but we have begun to wake up to the cyclical nature of the deprivation produced by international debt.
The servicing of debt overtakes the level of the base sum involved, countries become more deeply unattractive to investors, the World Bank steps in with Structural Adjustment Programmes, requiring devaluation, restructuring of public spending, sometimes privatisation of public services, prices soar as currency plummets.
And while these and kindred programmes regularly these days call for changes that will modernise and democratise national government, the effect of SAPS has just as regularly been a freezing or even worsening of political dysfunction.
The result may be militarisation (the role of debt and imposed economic restructuring in the background of the Rwandan genocide has not been widely enough recognised) or simply political meltdown.
We have made really significant progress in the last few years towards cancellation of unpayable debts; but, with due respect to present governmental thinking, we are still using some very blunt instruments in specifying the conditions for debt remission by deploying these 'political' requirements in the way we do.
It might be considered that political instability is simply not likely to resolve itself before major economic recovery begins. Ironically, it is precisely the principle so ardently maintained by globalisation enthusiasts that should be borne in mind here: the entry of a country into the international markets on fair terms is essential to political modernisation and social emancipation.
These challenges are about inner contradictions in the globalisation philosophy, about the coherence and even integrity of any apologia for the global market that refuses to deal clearly with these hidden assumptions.
What ought to be done to counter this is a matter for a good deal of disagreement. Some -- notably Peter Jay, in another essay in the same New Statesman symposium of October 22nd -- would say that the solution is to promote the mobility of labour alongside the mobility of capital. This would mean a major scaling down of migration controls.
The point is worth pondering; but it suggests a very abstract conception of how 'labour' moves. In the nature of the case, people cannot move at the same rate as capital; and the problems of social/demographic devastation caused by mobile capital are hardly likely to be alleviated by a colossal increase in rootless working populations.
I have no great problem with the general principle of less restricted migration, and I am dismayed by the xenophobic anxieties that still surround it in Europe. For areas deeply affected by long-term economic dysfunction, there is no alternative to migration. But actively promoted as a solution to the issues around capital mobility, it seems to miss the mark and even to invite worse distortions.
Jay himself agrees that the regulation of capital flow would still be necessary even if mobility of labour were promoted; and most critics of globalisation will stress this rather than anything else as the cornerstone of a response to the less attractive results of the system.
This is, confessedly, a difficult area. If states are not to be encouraged to pursue ruinous Soviet-style protectionism and fiscal fraud as a way out of inner economic incoherence, regulation has to be administered by international agencies; and at the moment there is little indication that the existing agencies are working from anything other than a perspective assuming the need to preserve the economic hegemony of the developed countries and the US in particular.
The best candidate for stepping in here is, naturally, the World Trade Organisation; is it possible for this to be reimagined as a policeman of capital movement?
It has been proposed that it could be given a remit for positively considering the impact of capital movement on a local economy’s development and for monitoring the effects of international agreements.
It would also, I suggest, need to address the timescale of investment, to avoid the pattern of short-term low returns leading to rapid exit. An investment might need to be thought about in terms of what a reasonable expectation might be of financial return within a specified period.
This will not happen unless the governments of the wealthier nations make it happen; which requires them to act in ways that may not serve their immediate interest. Why and how a longer-term interest comes into play is a question I want to come back to later.
But the moral case for some such change is a strong one; and it is so, I believe, because of a wider consideration, to which I wish to turn next. This is, very broadly defined, the issue of the connection between the economic and the social.
The effects of unregulated globalised economics as currently practised involve a variety of ways in which economic activity becomes more clearly divorced from other aspects of the life of a community; or rather, economic activity comes to have a disproportionate and distorting force within that life. It is inevitable that the extension of markets and the availability of technology and skills will destroy traditional means of production; that has always been the case, and nothing is gained by being sentimental about this.
Barbara Garson’s Thai rice seller is quoted (in an interview with Jane Slaughter, The Witness, November 2001) as saying 'that sitting in front of a sewing machine, no matter how long, didn’t bother her when she thought back to standing in the paddy fields with leeches on her legs' -- a sentiment which has probably been echoed by many first generation escapees from the over-romanticised countryside all the world over, as Thomas Hardy will confirm.
But the mercurial nature of mobile global capital makes it harder for enterprises to 'bed down' in their wider environment; they become separated from the areas in which people act and choose, form relationships and build loyalties.
Globalisation works with an assumption about the priority and isolation of homo economicus, that laboratory creation of nineteenth century economic theory. By the end of the twentieth century, reflective economists had come increasingly to recognise the role of non-economic factors in effective economic life -- trust, stability, the sense of 'ownership' in enterprise (hence the 'stakeholding' ideal which has so curiously disappeared or been unrecognisably revised in recent years).
In classical liberal economics -- including, for these purposes, Marxism -- economic instinct or egoism is laid down as the foundation of life itself’. The phrase comes from a very distinctive writer on these matters, the Russian Christian socialist, Sergii Bulgakov, writing in 1917 (see Sergii Bulgakov. Towards a Russian Political Theology, ed. R. Williams, Edinburgh, T. & T. Clark, 1999), who struggled in the early years of the century to resist both the Marxism that had originally commanded his loyalty and an uncritical adoption of European “political economy’ in Russia (a pity more Russians didn’t read him in the 1990’s).
His target is consistently, in a series of books and essays written over nearly twenty years prior to his exile in 1922, the notion of an integral, intelligible set of economic motivations that can be isolated from other human concerns. Economics is problem solving; the definition of the problems can’t be done by economics alone, even if the economic process has its own autonomy.
Here, then, the moral challenge is to resist the assumption and to deal with the consequences when it has been allowed to become dominant.
If we can consider the kind of time-link I mentioned in relation to investment a few minutes ago, we might also connect this with incentives for investment based on willingness to contribute to specific local needs -- to infrastructures that will outlast any move away, or to social priorities such as day-care in the area, particularly when a large part of the workforce is drawn from a relatively limited radius.
There is a reasonable amount of good practice to look at here in some regions, but this surely needs to become a more generally agreed goal. When this happens, an enterprise is recognising that the dissociation of the economic and the social is undesirable. If people’s economic activity is practically and emotionally isolated from the other patterns and commitments of their lives, all elements of common and individual life suffer.
Economic activity fails to generate trust and personal 'investment' in the wider sense; social bonding and leisure have no points of contact with wage-earning activity and may feel threatened by it. The atmosphere of insecurity that can be created by enterprises that overlook these concerns will undermine working morale.
Again, a small-scale example from the Corus crisis of 2001: the deepest resentment against management was felt less by those losing their jobs than by those retained, because the latter had lost a great deal of trust in the decision makers; the effect in quality of work, absenteeism and so on was briefly noticeable in the days after the initial announcements.
A reconceived World Trade Organisation, then, would be looking at questions around the whole social ecology of a possible recipient of investment, and encouraging or enabling government in the host country to offer incentives based on “social investment’.
Tax-based incentives or the rather dubious but pretty dominant incentive of weak organised labour will produce (do produce) patterns of short-term involvement; and some of the failure of an enterprise to “take off’ in a limited timespan, the sort of thing that encourages the draining away of capital, can be ascribed to a lack of consideration of non-economic factors in a situation. There is an obvious vicious circle here, which only new and imaginative international regimes can break out of.
The danger is of reinventing one of the more ambiguous aspects of some nineteenth century capitalism -- the paternalist company, providing a total environment that stifles initiative and (these days) actively misleads people about the nature of the global market.
Japanese companies, with their astonishing concentration on bonding and company loyalty, are not the model every society would find attractive or appropriate. But they are a salutary reminder of the complexities of motivation, and the foolishness of trying to understand what makes economies function constructively without engaging with non-economic factors.
Because global capital can move so fast, we can be easily misled into supposing that its operations are intrinsically independent of human agency and thus of motives -- just as we have been so much misled about the market as a thing-in-itself, with its habits and judgements discussed as if it were an agent itself.
If religious understanding is significantly about declaring where mythology has replaced faith by ascribing life to things that have no life, in the scriptural phrase, some demythologising of the market is a sensible religious task.
But my final question to the globalised economy is another variant of the kind of question I began with. Is globalisation what it says it is? Because at present there are areas of the globe which appear to face quite long-term exclusion from almost any imaginable market.
You don’t have to agree with everything Noreena Hertz says to agree that exclusion is an ineradicable part of global economics as we now know it; and exclusion, because it reinforces political as well as economic dysfunction, becomes harder and harder to break.
The great test case is Africa. You hear from time to time the reported comments of American strategists, economic or political, saying that Africa can be written off for the foreseeable future as regards markets. Colossal political volatility, near-total fiscal collapse in many areas, the decimation of population through the AIDS pandemic -- all this lends some plausibility to the idea that Africa cannot be counted in a 'global' conversation.
I’ve called it a test-case, though, because at least some of this chaos is not simply self-generated or ascribable to poor or corrupt leadership; it has been pushed forward by both the banking policies of the fourth quarter of the twentieth century (incentives to take out lavish loans, with the consequent fantastic levels of unpayable debt we have already remarked) and the slowness of the international community to respond intelligently to the pandemic.
It is not that the devastation of Africa is the calculated result of neocolonial manipulation, as the crude mythology of anti-globalisers might claim; but no one should be allowed to suppose that the wealthy nations and their financial institutions (including the World Bank and the IMF) are without responsibility.
But if Africa is going to be economically dysfunctional for the foreseeable future (which doesn’t have to be conceded but has to be contemplated), the global system will be no such thing. It will be a relation between the inhabitants of a limited portion of the globe.
If globalisation carries, as we are told, the promise of universal access to market prosperity, what are we to make of this large gap in its provision? No Jew or Christian or Muslim is going to be happy accepting the morality of a system that disenfranchises a continent.
To the degree that the globalised economy offers a voice to all, it is an ideal that people of faith may well give their allegiance to, with whatever criticisms of details in its workings; but if it settles down with, normalises, economic exclusion on this scale, the questions become correspondingly more unsympathetic.
All I have said earlier about the possibilities of removing protectionism around pharmaceutical production, about regulation, social incentive and debt remission has a peculiarly strong focus where the fate of Africa is concerned.
Peter Jay in the article referred to earlier observes that without good government Africa cannot move: economic aid alone will not save it, and movement towards good government demands attention given to just those non-economic factors mentioned a little while ago — the creation of some kind of stability through education, developing infrastructure and health care. Do we need, asks Jay, a “Marshall Plan”for Africa? Without major international initiatives, the future is terrible.
Religious people, we may say, have reason to protest about the pauperising of a continent; does anyone else? Should anyone have to listen to these anxieties if they approach the situation from a purely secular point of view?
The answer in general is to point to what is already happening in urban America, as in many third world cities: heavily protected enclaves of extreme wealth growing up in the middle of what’s seen as a threatening underclass.
Individual countries are made insecure by this kind of juxtaposition; what if the whole world were an inflated version of such a picture? For the dispossessed and hopeless don’t disappear conveniently; they have to eat. At whose expense?
If not at the expense of our voluntary help, then at the expense of our security. If at the expense of our security, then, ultimately at the expense of our prosperity, as we have to devote higher budgets to small and large-scale defence. If at the expense of our prosperity, then at the expense of a shrinking market.
Once again, the irony enters in: precisely what globalisation presents as an ideal and a guarantee of safety is what the exclusion of a large part of the world’s population imperils. Universal access to markets is indeed, in the world of modern communication, the guarantee of everyone’s security; no state can be prosperous alone, in the long run.
The collapse of the old eastern bloc revealed the horrific social as well as economic cost of struggling for prosperity in isolation; it produced that tyranny of the black economy which still governs so much of what was the Soviet empire.
And suddenly, in the last two months, this has become more than academic. The globalised economy and its information highways have become the site of unprecedented fury and violence. It is not just that no state can have security alone in a general sense; the dispossessed world has arrived on our doorsteps, using sophisticated instruments of global communication, to threaten us.
We have demanded access to all corners of the globe for economic expansion and information sharing, and the world has shown that it has 'access' to what we thought were safe places. The shock has been greatest, of course, in the USA, so accustomed to thinking of itself as immune from 'invasion'; but we have all, in the developed world, sensed that the safety of our imaginations has been breached.
This is not to subscribe to the satisfyingly tidy explanation that terrorism is simply generated by poverty. That in fact tells us little or nothing that is useful.
But, remembering where we began, the telltale imagery of advance and penetration, we have to acknowledge that areas of our world feel they have been invaded by our culture all over again, conscripted into enterprises they have not chosen, and had their values disregarded, sometimes casually and unthinkingly, sometimes, they believe, with active hostility or contempt.
This is no explanation for the horrific decisions of some individuals to cause anguish and death, but it tells us why there is a seedbed in which such decisions may grow and why cutting off the head of this particular hydra in Afghanistan is not going to be much of a solution.
Global interaction does not stop with global markets; that’s one of the lessons of this appalling last two months. Rapid communication transmits not only share prices and currency levels but the images of wealth and power relayed to those who lack those things. The technology of communication allows long-distance planning of atrocity.
Globalisation -- to use an overworked locution -- has lost its innocence (if it ever had it). But these events have reminded us that the breakdown of barriers to the flow of capital and information has also been, without our quite noticing it, a breakdown of barriers of rivalry, aspiration, resentment and much else. The insecurity that globalisation exports to so many weaker countries has come home to roost with a vengeance.
So the urgency of making globalisation work, as it likes to think it works -- for the sake of access and equality -- is suddenly very urgent.
The Prime Minister’s speech to the party conference was seen by many as a characteristically somewhat overheated bit of messianism, aimed at justifying the looming conflicts abroad. But he did in fact diagnose correctly the salient features in our situation.
No military action is going to restore security to the world, nor even a major step up in intelligence or surveillance; we are faced with the demand to make the universal marketplace work for the world’s citizens -- an agora, as in ancient Greece, an open space for negotiating and arguing. If the global economy simply silences millions --and that is what it is seen as doing -- there will be no safe places to retreat to in the long run.
Because that vision of an unrestricted citizens’ assembly is central to the imagination of Christians, we have some real interest in pursuing whatever makes our world look a little more like that. This is, after all, the meaning of ekklesia: a 'church' is the assembly convened in the marketplace for public business.
If we are, as Christians, to play the role we could in our present situation, we can properly welcome much in the aspiration and philosophy of globalisation; but we need to ask hard questions.
So much defence of the style and effects of our economic assumptions seems doubtfully honest or doubtfully clear, evasive about the human costs and sometimes positively fundamentalist about the market’s ability to deliver, independently of human choice or agency, results that will be for the good of all.
This belief is not true; there’s no point in concealing this. The global economy will have to confront its failures and the contradictions of present practice. Accountability must enter in, and that means certain forms of regulation and of tilting the process towards what reinforces instead of dissolving the bonds between economic and non-economic life in a society.
There is no obvious solution to some of the intrinsic uncertainties of global economics; we shan’t be able to go back to pre-modern production or communications. But to go forward purposefully requires some vision and decision, above all in our present crisis.
If global economics is to work, it needs global institutions -- which in turn requires unprecedentedly high levels of international co-operation and trust. And this is where, surely, the transnational church, the universal citizens’ assembly, can play its part.
It will need to be imaginative itself about practical measures, and to avoid sloganising; but it will also have to go on asking awkward questions about the ethics of transnational trade and commerce -- and its own experience on the ground of the effects of global greed and injustice give it some purely human authority in this.
Finally, though, it isn’t human authority alone that animates this, but the uncomfortable conviction that, in God’s assembly, all are called to participate; and no version of economic aspiration that ignores this is going to be tolerable for long to the Christian who seeks to be a disciple in this curious and complex world of business.