The Common Good
April 2004

Worldwide, Inc.

by Vinoth Ramachandra | April 2004

When global meets local, who wins?

Globalization, like every other historical process in a fallen world, shares in both the goodness of human creation and the distortion of creation by sin and evil. Its benefits and threats are equally real and are intertwined in a complex variety of ways. For every benevolent aspect of globalization, there is a malevolent side that threatens to overwhelm the good. It is thus a Janus-faced entity, a paradoxical phenomenon that reflects the paradoxical nature of the human condition.

In the utopian vision of globalization, transnational corporations are led by rootless investors who can move freely and effortlessly around the world to maximize their profits. Kenichi Ohmae, an oft-quoted advocate of this view, writes, "in a borderless economy, the nation-focused maps we typically use to make sense of economic activity are woefully misleading. We must...face up at last to the awkward and uncomfortable truth: The old cartography no longer works. It has become no more than an illusion."

Similarly Robert Reich, Clinton's former labor secretary, wrote of the "coming irrelevance of corporate nationality" and counseled that "as corporations of all nations are transformed into global webs, the important question - from the standpoint of national wealth - is not which citizen owns what, but which citizens learn how to do what, so that they are capable of adding more value to the world economy and therefore increasing their own potential worth."

The reality is that there are still few truly transnational corporations. Most retain strong roots in particular countries and business cultures. Ownership, executive boards, management styles, and corporate ethos remain thoroughly national. The key functions of firms, such as research and development, remain under tight domestic control. According to a recent study by Alan Rugman (of Indiana University and Oxford) on behalf of the Economic and Social Research Council in the United Kingdom, we are in danger not just of underestimating the good that business can do but of overestimating just how mighty multinationals have become. Rugman concludes that the vast majority of multinationals are not pursuing a global strategy, and that only a handful, such as Nestlé and Unilever, cut it as genuine global players. Many are struggling to make decent profits from their foreign operations, and some of the world's biggest companies are concentrating on their tried and trusted markets at home. Moreover, as the historian Paul Kennedy observes:

The idealized picture, in which hyperefficient multinational corporations compete to bring their latest products to discriminating consumers across the globe while governments become all but invisible, makes seductive reading; but it ignores the fact that what most poorer nations need is not simply the liberating effects of free-market economics, but also enormous investments in social improvement.... In other words, huge public funds are required - whether in Central Africa or Eastern Europe - before conditions become attractive to investment managers of Japanese and American companies. But how such public funds are to be provided is rarely if ever touched upon by the fans of globalization.

Globalization is not the homogenization of world economies. On the contrary, economic globalization thrives on differences between economies. If risks and conditions were the same everywhere, no profits could be made by investing abroad. Large regions of the world simply do not attract mobile capital because they lack infrastructure, a skilled workforce, or political stability, and these tend to remain poor in comparison with others. But as new technologies enter countries from which they were hitherto shut out, or which lacked market institutions that could exploit them effectively, the indigenous economic culture is strengthened and new varieties of capitalism flourish.

East Asia has offered recent examples of this. Chinese capitalism, like the entrepreneurial activity of the Chinese diaspora, is very different from American or German capitalism, indeed even from Japanese capitalism. The size of firms, wage differentials, and the holding or diffusion of capital reflect the relationships of trust that obtain in a particular society. When the Korean economy was in danger of collapse in 1997-98 following the currency crisis in the region, workers from the lowest to the highest paid took voluntary pay cuts and worked overtime to see their companies recover. That would have been unthinkable in the United States, Britain, and most developing nations.

Cultural Diversity. The globalization of economic activity brings in its wake cultural transformations, by a process that is called "cultural globalization." Several popular writers have expressed what is called the convergence of global culture thesis. The key word here has become "McDonaldization." According to this view, as the entire planet is being wired into music, movies, news, television, and other cultural products that originate primarily in U.S. film and recording studios, local cultures are uprooted and replaced with universal cultural symbols from the publicity departments of multinational corporations. There is an ever-greater uniformity of personal tastes and lifestyles. Whether in Manila, the villages of Tuscany, or the favelas of Rio de Janeiro, people watch TV reruns of Baywatch or the Cosby Show, wear Levis, and smoke Marlboro cigarettes. From Mickey Mouse to Madonna, certain cultural icons are instantly recognizable and brand names have become part of a global stock of images.

However, this widespread view does not capture the whole picture. It fails to appreciate the paradoxes and ambivalences that globalization spawns. Roland Robertson, one of the founders of cultural globalization theory and research, has argued that globalization always also involves a process of re-localization. Those who are at the receiving end of globalizing processes are not passive, docile absorbers, but are selective in their responses. After a while novel hybrids of the foreign and the local emerge in an unpredictable pattern of cultural and political responses. Thus the local becomes an aspect of the global, rather than its opposite. Robertson proposed replacing the concept of cultural globalization with that of "glocalization," through a combination of the words "global" and "local." A nontraditionalist renaissance of the local occurs when local traditions are reinterpreted in the light of global critique or threat and then re-located globally. Global symbols acquire new local meanings, and local meanings are expressed as globally relevant.

Consider the rise of religious nationalism (or fundamentalism as it is sometimes, misleadingly, called). It is a child of globalization, which it both reacts to and utilizes. Militant groups everywhere have made extensive use of new communications technologies. Al Qaeda exploited the global banking system to launder funds for its terrorist attacks in the United States. Before he came to power in Iran, while he was in exile outside the country, the Ayatollah Khomeini circulated videos and cassettes of his teachings. Hindutva militants have made extensive use of the Internet and e-mail to create a sense of a worldwide Hindu "church." They want to develop India as a nuclear and economic power and to attract foreign capital. The aspects of modernity that fundamentalists most resist are the equality of men and women and the equality of all religious communities under the law.

Positively, globalization has the powerful potential to encourage genuine dialogue across cultures. No cultural, religious, or ethnic group can shut itself off from others. In the presence of the "other," things that used to be taken for granted are now open to question. Even where traditions assert themselves in the face of perceived external threat, loyalty to traditional ways of life and thought has to be put on a new footing. However, given the huge inequalities of economic power between cultures, the tendency is for the more powerful cultural images, icons, and practices to dominate the less powerful in a largely one-way traffic. So, while Americans and Europeans enjoy the best cuisine from Asia in their restaurants, most Asians have access only to American fast-food chains.

Consider, too, the music scene. A variety of American pop genres are mixed now with zouk, rhi, and jit from Africa, salsa from the Caribbean, and Indian bhangra to produce a blend that is promoted around the world as "world beat." Local musicians of course welcome the larger audiences and money that the international record companies can provide, but some are concerned that their cultural traditions are being mined to make an international product. The recording companies, though much agitated about protecting their own intellectual property from pirates, feel no compunction about uprooting the music of indigenous peoples and treating it as a free commodity.

Social Mobility. New barriers are being erected between peoples even as other barriers come down. The control of immigration is the last great bastion of the old order of national protectionism. Capital and consumer goods can cross borders more easily than can poor people, including political refugees. So draconian has the regime of control become that it is ever more difficult even to enter a country legally in order to plead for sanctuary.

At the same time, many classes of skilled and professional workers are recruited from poor countries by companies and governments in the West. So the majority of relatively unskilled workers who seek work and incomes abroad have to do so illegally. This has led to a massive international traffic in men, women, and children by criminal networks that is as lucrative as the international traffic in hard drugs and small arms.

Globalization creates a footloose techno-managerial elite, connected more with their counterparts elsewhere than with people in their own country and more interested in making money than in national well-being. This undermines the sense of common belonging that is vitally necessary to hold a country together in the face of fragmenting forces. This is especially true in those countries that are ethnically diverse and have huge income gaps between rich and poor.

According to the sociologist Zygmunt Bauman, there is now a new stratification of the world population into the globalized rich, who overcome space and never have enough time, and the localized poor, who are chained to the spot and can only "kill" time. The only mobility the poor possess will take the form of dangerous journeys undertaken in the hope of escape. Bauman writes:

The shrinking of space abolishes the flow of time. The inhabitants of the First World live in a perpetual present, going through a succession of episodes hygienically insulated from their past as well as their future. These people are constantly busy and perpetually "short of time".... People marooned in the opposite world are crushed under the burden of abundant, redundant, and useless time they have nothing to fill with. In their time "nothing ever happens." They do not "control" time - but neither are they controlled by it, unlike their clocking-in, clocking-out ancestors, subject to the faceless rhythm of factory time. They can only kill time, as they are slowly killed by it.

Reliance on the Poor. Ironically, many of the rich economies are heavily dependent not only on skilled labor from the Third World, but also on illegal immigrants. In the top six U.S. states to which immigrants head, three-quarters of waiters and tailors, 78 percent of cooks, and more than half of taxi drivers and textile and garment workers are immigrants. Immigrants make up 18 percent of the Los Angeles construction workforce. In Washington state, 70 percent of those employed in the peak harvest time are said to be illegal immigrants. For the United States as a whole, one estimate has it that without a ready supply of illegal workers, fruit and vegetable prices would rise by at least 6 percent.

At the same time, the exodus of semi-skilled and skilled workers to the rich nations has meant that more and more Third World nations are heavily dependent on foreign exchange remittances from migrant labor, whether legal or illegal. Many South Asian, Indonesian, and Filipino workers, including women, are employed as construction workers and housemaids in the Gulf states and in richer East Asian nations. Latin American migrants in the United States tend to have low incomes, and often live in poverty, yet they remit billions of dollars to their home countries. The remittances such folk send home is clearly needed and beneficial to the families that receive this help, but the downside is that many children from lower middle-class and working-class homes are growing up without parents. The long-term social costs are potentially devastating.

Also, when remittances are used to support development needs, it means that the poorest residents of the wealthy countries are bearing the brunt of assisting people in developing countries. World Bank figures show that last year, for the first time, more money flowed from relatively poor migrant workers in rich countries than the combined total of government aid, private bank lending, and IMF/World Bank assistance. The total value of these remittances to developing countries reached $80 billion, double the aid provided by rich nations to the poor. (Meanwhile, total foreign direct investment, still the single biggest category of financial flows, has been falling rapidly since the economic slowdown in the United States, Japan, and Europe that followed Sept. 11, 2001.) While beneficial to the families and societies at home, it is well to ask if the remittances come at a cost to those settling abroad. What trade-offs are they making to save sufficient resources to remit? Are they unable to make investments in education and skills upgrading, for example, in order to send the billions home?

These sometimes paradoxical aspects of globalization all testify to a central truth: Neither technology nor global capitalism are the world's saviors, and unmasking their pretensions by putting them in their proper place is an important aspect of Christian witness today.

Vinoth Ramachandra lives in Sri Lanka and is secretary for dialogue and social engagement (Asia) for the International Fellowship of Evangelical Students. The second of this two-part series will appear in our May 2004 issue, and will focus on biblically guided, collective responses to globalization. These articles are excerpted from Ramachandra's presentation at the Micah Network International Consultation, "Globalization and its Impact on the Poor," held Sept. 22-27, 2003, in Mexico. The complete text of his presentation is available by clicking here (MS Word format - .doc) .

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