Massive Changes Unleashed by Globalization
The Horrible Impacts of Capitalism Hidden under the Garb of Globalisation
The ruthless emergence of market forces
Increased exploitation by the multinational corporations
The diminished role of the state with respect to delivery of basic services
Shameless tax evasion by the business elite
Increased level of alienation and marginalization among the masses
Rising level of poverty
Unfair labour practices in developing countries
Developing countries over-reliance on foreign aid and loans
Marked rise in consumerism
The threat of environmental degradation
Increasing brain drain from the developing countries
The emergence of global terrorism
What is the Way Forward?
Increased government’s interference in the public service sector
Adherence to protectionism in order to save small local level industries
Increased checks on the flight of capital from third world countries
Greater level of transparency in policies of international financial institutions
If one analyses the history of capitalism, one comes to know that capitalism has been present in all societies under different garbs. The latest shape of capitalism has appeared in the form of globalization, which, with the advent of 21st century, turned into the juggernaut leading to the elimination of socio-economic borders among various countries. However, over the last couple of years, there have taken place many events, which have transpired that the fruits of globalization are reaped only by the elite class in the developed as well as developing countries, while majority of the masses bear the brunt of oppression and exploitation. The most prominent among such events is Brexit, the British departure from the European Union, which has exposed the overwhelming flaws of capitalism hidden under the garb of globalization. On one the hand, it has shown that the dream of globalization is in fact the nightmare of capitalism, which has reached such an inpasse where its potential for growth has exhausted, thus becoming a fetter on the further development of society; while on the other, it has not only exposed the horrible fact that globalization is merely rhetoric of the business elite, used by them only to further their own business interests, but it has also shattered the myth that increasing international integration of economic activity would lead to prosperity and peace for all. It has revealed that globalisation is an ideological construct used by the contemporary capitalists to conceal the crisis-ridden nature of the capitalist system and its perpetual failure to ensure a just and egalitarian society. In other words, the benefits of globalization have been enjoyed only by the business elite, while millions of people suffer under the harrow of poverty and socio-economic inequalities. The system has not only failed to achieve an integrated, balanced development that could eventually lift everyone out of poverty and deliver prosperity for all, but it has given birth to global hunger, illiteracy, homelessness, preventable diseases, war, and poverty, which continue to ruin the lives of billions across the world.
Before we resort to exposing the horrible impacts of capitalism facilitated by globalization, it would be quite pertinent to take a brief look on the changes spawned by globalization. There is no denying the fact that globalization has triggered large scale changes on the global horizon. Changes have specifically appeared in terms of daily lives of people. The inhabitants of one country are more likely now than they were fifty years ago: to consume the products of another country; to invest in another country; to earn income from other countries; to talk on the telephone to people in other countries; to visit other countries; to know that they are being affected by economic developments in other countries, and to know about developments in other countries. Mankind today is far and further ahead of where it has ever been and there are the seeds of innovation from biology to the Internet for better and richer lives even beyond our wildest dreams. This century, and in particular the last three decades, have witnessed just that as the nation-state has been dismantled in favour of a global economy. Anyone who says impossible finds himself interrupted by someone who just did it. As regards economic globalization, which has accelerated the process of greater economic interdependence among countries, is reflected in the increasing amount of cross-border trade in goods and services, the increasing volume of international financial flows, and increasing flows of labour.
The fact remains that globalization has proved a mixed blessing. If it has facilitated lives of millions of people with respect to science and technology, it has also added to the miseries of an overwhelming number of people across the world. And, this has been done through the promotion of capitalism, which has assumed global proportions, thanks to globalization. The phenomenon of global capitalismı has great to do with globalization. No one can deny the nexus between capitalism and globalization. In fact, globalization is a tool employed by the capitalists to blunt the effects of capitalism. However, recent events like Brexit, a referendum in Catalonia for secession from Spain, the election of Donald Trump and his policy of isolationism based on his slogan ‘America first’ and rising of anti-globalization political parties in France have exposed the ruthless nature of capitalism and its ruthless effects on the majority of the masses. It would be quite pertinent to shed light on the ills perpetuated by capitalism under the garb of globalization across the world.
One of the most horrible effects of globalization is that it has turned market forces into such juggernaut which has not only diminished the role of the state as the guardian of marginalized and economically vulnerable segments of population but has also given free hand to the capitalists to perpetuate exploitation and oppression in order to preserve their business interests. The rise of globalization has been directly proportional to the emergence of free trade across the countries. With the hegemony of free trade, the role of the state to protect its citizens against the worst excesses of the market and to guarantee employment opportunities and welfare has been compromised. With the state’s diminished role in the market, the capitalists are in better position to ensure the maximization of their profits by the free movement of capital and people. They either bring cheaper labour into the country or shift their capital in countries which are favourable for their business interests. Such free movement of capital and people results in the threats of unemployment or lower wages, triggering waves of poverty among the local people. This phenomenon is on rise in the western world, and Brexit is a textbook example of such phenomenon. Conclusively speaking, the more market forces under globalisation will become strong, the more capitalism will be ferocious and harder on majority of the masses.
Another horrible ill-nurtured under the umbrella of globalization is the rise of multinational corporations, which are nothing but a tool of exploitation in the hands of capitalists. The exploitation by these corporations mainly appears in the economies of developing countries where they are so strong that they not only hinder the growth and expansion of local industries by taking over the local resources, but also establish their monopolies in developing economies. Due to low prices and better quality products by these multinational corporations, local small companies prove poor contenders against them. However, once the monopoly of these corporations is established, they set prices of their choice without any restriction. With the state’s decreased role in the economy, these corporations control the market opportunities to such an extent that their hegemony and dominance is unchallenged, inhibiting the development of local companies, which ultimately results in the increase of poverty among the local masses. Briefly speaking, globalisation benefits small privileged elite, while majority of the masses bear the brunt of poverty.
Along with hegemony of multinational companies, globalization has given rise to tax competition. It has been seen that in order to attract investment, governments of especially developing countries are compelled to reduce tariffs and taxes, which severely undermines the capacity of governments to raise revenues, thus leading to a dismal decrease in the public sector expenditure. With the government’s diminished capacity to invest in the public sector, the vulnerable segments of population are deprived of the basic services like health, education and security, leaving them at the mercy of capitalists. Adding fuel to the fire, the shameless tax evasion on the part of capitalists leads to further decrease in the revenues at the disposal of the government, which makes the picture of public sector further depressing and alarming. The recent Panama Papers and Paradise Papers are testimony of the shameless tax evasion of the capital class. Thus, the erosion of welfare provision coupled with the elimination of labour market protections are among the horrible repercussions of liberal trade nurtured under the umbrella of globalization.
A state’s decreased capability to invest in the public sector results in many socioeconomic implications. Most importantly, it gives a severe blow to majority of masses ability to participate in the socio-economic mainstream. With no help from the state, most of the people remain constantly trapped in the vicious cycle of poverty, which becomes the root cause of alienation and marginalization among them. This gives birth to such system where beneficiaries of economic system are only a privileged few, while the rest of the masses are left out of the socio-economic mainstream. In an environment replete with alienation and marginalization, people are unable to realise their true potential, hence ceasing to be productive members of the society. In this way, such unjust system turns them into social burden rather than social asset.
Perhaps the greatest impact unleashed by capitalism on the world is the rising level of disparities and inequalities. Although the basic expectation behind embracing globalization was that once global markets were freed of narrow national interests and inhibiting regulations, they would gradually establish international economic balance, unleashing waves of trade. And these waves would in turn lead to a broad economic tide of growth, which would in turn raise all ships, including those of the poor, whether in the West or in the developing world. However, the same has not happened. Instead of leading to egalitarian society, free trade has resulted in extreme level of socio-economic disparities and inequalities among the large segments of population across the world. It is a harsh truth that globalization has increased the concentration of wealth in a few hands, that is, the capitalists, while the rest of the masses are under the harrow of nurseries and wrongs inflicted by unequal distribution of wealth. From this, it can be implied that globalization is the ideological tool of the capitalists aimed at preserving their own vested interests.
Undoubtedly, the phenomenon of unequal distribution of wealth has naturally led to massive increase in global poverty, which is perhaps the main cause of backlash against globalization. Even developed countries have started falling prey to poverty, thanks to globalization. For instance, most industries have started moving from the rich countries, where labour is expensive, to the third world countries, where labour is cheaper. In such conditions, people in rich countries are compelled either to accept low wages or lose their jobs. It is this grim scenario which is the main cause of emergence of poverty in some rich countries, especially Western ones. And, it is against this backdrop that anti-globalisation political parties in some western countries, especially Britain and France, are getting popular among the masses hit hard by poverty due to shifting of capital. It clearly reveals the fact that globalisation is the honey-coated tool of the capitalists meant for exploitation of the poor segments of the society.
The phenomenon of poverty takes heavy toll on the majority of masses especially in the developing countries. It has been seen that poverty has been compounded in these countries especially through the prevalence of unfair labour practices. In order to be competitive with the international companies, the local companies are compelled to come up with competitive prices based on the reduced cost of production. And it is quite unfortunate that such reduction is primarily based on resorting to unfair labour practices. Not only are wages lowered, but the labourers are also subjected to extended hours of working. Needless to say, such unfair practices further the interests of capitalists, exacerbating the poverty challenges in the developing countries.
It is also an undeniable fact that poverty remains entrenched in the societies of developing countries because governments have miserably failed to perform in the public service sector. And, to be sure, such failure is the result of lack of revenues at the governments’ disposal. Due to crunch in revenues, these governments are compelled to take loans from international loan sharks, that is, MF and World Bank. The loan conditions are so stringent that most of revenues of developing countries are consumed in debt servicing. The trap of debt gets stronger and stronger with each subsequent year, This explains the fact why most of the economies of developing countries are unable to come out of the heavy burden of foreign loans. Needless to say, the curse of loans is the creation of capitalism aided by globalization, which is taking heavy toll on the economies of the third world countries.
Coupled with foreign loans, increasing brain drain from the developing countries also creates unfavourable environment for them. Undeniably, the educated and enlightened people of a country are national asset. Their migration towards the developed countries is a huge economic injustice to the developing countries. Such brain drain obviously causes deficit of bright minds in the countries. It has been seen that due to lack of local people equipped with specialized skills, the developing countries are forced to import foreign minds, which of course causes the national exchequer extra burden. Brielly speaking, the role of globalization in increasing brain drain from the developing countries cannot be negated.
Furthermore, globalization has also given rise to the alarming trend of consumerism. With the rapid increase in means of communication, the capitalists are in better position to encourage the increased consumption of their goods with the help of advertisements. Masses have been turned into consumers. The gravity of the situation can be gauged from the fact that favourite hobby of people is shopping nowadays. Such alarming trend not only gives a severe blow to the creativity of people but also adds to the psychological anguish of the down-trodden segments of population, especially in the developing countries.
Apart from humans, the impacts of greedy capitalism are also visible on the environment. The fact remains that rapid industrial expansion by the international and national corporations has increased the pace of environmental degradation. In most of the countries, a variety of ecosystems have been destroyed. Needless to say, the menace of climate change currently threatening the very existence of humanity is the creation of global capitalism facilitated by globalization.
Last but not the least, the ruthless emergence of global terrorism also constitutes main reason for backlash against globalization. One conclusion from the 9/11 attacks on New York and Washington in September 2001 was that it was not only trade and financial markets that had gone global. The communications and transport systems that have accelerated the pace of globalization are also at the disposal of terrorists and international criminals. It is beyond doubt that global terrorism is a huge obstacle in the way of international peace. It is an equally detrimental to both developing as well as developed countries.
At this stage, it would be quite appropriate to shed light on the measures to curtail the negative impacts of globalization. Without an iota of doubt, globalization is an unstoppable force. The need of the hour is that ways must be crafted to adapt to the new realities posed by globalization. One of such ways is to increase the governments’ interference in the public service sector. Leaving this sector at the mercy of private sector is a huge injustice to the poor and down-trodden masses, especially in the developing countries. It is indispensable that the key areas of public service like education and health care should be at the disposal of the government as they have direct impact on the poor. If necessary, there should be publicprivate partnership in order to increase efficiency in the public-service sector.
Apart from increased role of the government in public service sector, policy of protectionism is also necessary to save the small and medium level local industries from the clutches of multinational corporations. Once these industries are in competitive position, protectionism can be removed. Coupled with the protectionist policy, imposing checks on the increased capital flight especially from the developing countries is also necessary in order to save the economic sector.
There is also need to examine the representation, transparency and accountability of multilateral institutions. Some policy options to move these institutions towards greater equity and legitimacy are increasing the voice of developing countries in multilateral organizations, improving transparency in appointing heads of multilateral organizations and increasing coordination and effectiveness to achieve people-centred goals.
All the above discussion drives us to the conclusion that globalization is a doubleedged sword. If, on the one hand, it has resulted in massive breakthroughs in science and technology, increasing connectivity among people and bringing them together; on the other, it has also accelerated socio-economic disparities and inequalities among millions of masses. To be sure, jobs, living standards and welfare states were all better protected in the heyday of nation-states in the 1950s and 1960s than they have been in the age of globalisation. It is against this backdrop that that shifting away from the earlier emphasis on globalisation has now become a political priority in the western countries. Britain’s rejection of the EU is more than a protest against the rising level of poverty. It is a protest against the economic model that has been in place for the past three decades. It needs to be seen against the backdrop of capitalism hidden under the garb of globalization. The capitalist forces aided by globalization have not only eroded the welfare provision in the areas of basic services, but they have also stripped away labour protections, adding to the miseries of labourers. The gradual compounding of problems faced by the general masses reveals that globalisation has benefited small privileged elite, that is, the capitalist class, Briefly speaking, there is far too much misery in the world, that there are many wrongs to be righted in the global economy.