Globalisation’s greatest challenges are its own contradictions

1 May 2017

Across the western world, support for free-trade, open borders and an international community has faded as its adverse effects have bred discontent and disillusionment. Nestlé, the owner of the chocolate-based biscuit Blue Riband, are moving production from Yorkshire to Poland at the expense of three-hundred jobs.  Marine Le Pen, the presidential candidate for FN, listened to a group of disgruntled workers at a tumble-dryer factory in Northern France, facing closure as Whirpool, the American-based company wants to outsource to Poland. Once considered inevitable, the process of globalisation has come against its most strenuous and crucial challenge to date.  

 

Le Pen had been canny. Emmanuel Macron, a centrist independent and Le Pen’s rival, was holding talks with the factory’s trade unionists when she arrived unannounced and stole the show. Le Pen promised a patriotic economy: jobs would be defended, communities supported and companies like Whirlpool punished. Le Pen galvanised support among working-class voters and painted Macron, who had celebrated a successful first-stage campaign with champagne and oysters in a Parisian restaurant, as the representative of the oligarchy and the elite.

 

Globalisation makes economic sense. Companies that can trade easily across borders can lower prices, sell more, produce more and therefore employ more. Those who oppose globalisation are the troglodytes of the twenty-first century, who insist on imperial measurements and fervently campaign for VAT exemptions on fish and chips.

 

Although globalisation should work in the interests of all, does it? Workers at the Blue Riband factory in Halifax and Whirpool factory in Amiens probably don’t gain much from losing their employment; the prospective workers in the new plants in Poland benefit to some extent but only because real wages are so low that companies can manufacture their products  and then ship it across an entire continent for less than they do now. Similarly, their jobs are secure insofar that their wages remain low, increases or tighter regulations may make a new site in a state with laxer regulations and cheaper labour more viable and ergo, the attractive option.

 

So who does benefit the most? The employers and companies, who can shift production abroad, re-allocate resources freely, keep costs down and increase productivity and profits. It is considerably cheaper to mass-produce textiles in Bangladesh than in Manchester. Avoiding arduous dealings with unionised labour, companies can easily contract out to local suppliers who produce the clothes for a fraction of the price. Working-conditions are often Dickensian, in 2014 a Bangladeshi textile factory collapsed, killing over one-thousand workers and injuring a further 2,500. An investigation later found that the company who supplied clothes to companies such as Matalan and Primark, had already been informed that the building was in a near-state of collapse, but had ignored calls for drastic repairs.

 

Globalisation has allowed companies to exploit unregulated labour markets, to maximise profits and take advantage of low wages and lax regulations, whilst foregoing or exempting themselves from their responsibility for the welfare of their employees. It has polarised society and minds; Le Pen has targeted supporters of the hard-line socialist, Jean-Luc Mélenchon, who criticised globalisation as a process that disproportionately benefits high-income workers at the expense of the poor. Whereas Macron is more popular amongst voters in the highest-income bracket, Le Pen enjoys greater support amongst voters in the lowest-income bracket. For those unable to stomach either candidate, ‘Ni Patrie, Ni Patron’ (‘neither fatherland, nor boss’) has become a popular slogan.

 

Economies have to be able to adapt, but brutal as it may be, progress comes at the expense of someone. In economic history, globalisation will be considered one of the greatest revolutions mankind has ever experienced, the root-cause of cheaper products, wider availability (who in the west heard of quinoa until this century?), and an international order safeguarded peace via economic incentives. That said, globalisation will wipe out many traditional working class communities; whole regions have and will continue to lose out from international, monolithic edicts to move goods and services from one area to another.

 

It is a question of tempering progress, to ensure that most, if not all, benefit from globalisation rather than a select few. Companies that relocate to cheaper or exploitative labour markets need to face punitive measures, like tariffs. Similarly, areas which have lost or stand to lose their main employer need state-help to alleviate mass-poverty and unemployment. Those who live in deprived areas cannot be expected to eke an existence on ever shrinking handouts when there are no jobs. It is the responsibility of the state and employers to facilitate greater employment, via assistance, financial or otherwise, in relocation as well as to show an interest and directly invest into local employment schemes.

 

This is not just an appeal to our common humanity, it is within our best interests to ensure that the process of globalisation is tempered and balanced. Though deprived and disaffected, all citizens can vote. Ignoring protestations has allowed new parties and movements to attribute the ill-luck of their supporters to scapegoats, like immigration or the prosperity of foreigners. Whatever the rhetoric, the lack of job security, cheap imports and regional deprivation continue to impact on the lives of many of Europe’s poorest citizens. By capitalising on the disparity new figures have exploited the disparity between the rhetoric and the actuality of globalisation; the rise of nationalist parties like FN or Germany’s AfD are the direct products of the contradictions that exist within globalisation.  

 

Globalisation naturally engenders human cooperation, as nationalism does the opposite. However, globalisation has to be tempered, its negative aspects controlled. We have to be mature and balanced: many more across the world and especially the young, will greatly benefit from globalisation but there will continue to be those who lose out. Addressing globalisation’s contradictions is not about stopping international cooperation and free-trade, it is about maximising its potential.  

 

More by this commentator. 

 

 

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