The trend of economic ‘globalisation’ has been the focus of heated debate and protest in recent months. Bodies such as the World Bank, World Trade Organisation (W.T.O.) and International Monetary Fund (I.M.F.) are the subject of much criticism for their role in the globalised economy. Here we shall view the policies of these institutions within the context of the development of global capitalism since World War II. A study of the economic forces that lie behind globalisation will demonstrate that we need to do more than simply call for the abolition of the World Bank, W.T.O. or I.M.F. There is, in fact, little scope for countering the negative effects of the global market economy within capitalism which is why we should seek an end to capitalism itself rather than somehow seek to reverse the tide of globalisation.
Protests, such as those in the year 2000 at Seattle and Prague, often claimed to be about opposition to capitalism but they were actually much more focused upon a particular trend within capitalism—what they refer to as ‘globalisation.’ The International Monetary Fund (I.M.F.), World Trade Organisation (W.T.O) and the World Bank are global bodies that are viewed as the agents of this globalisation process. The so-called ‘free trade’ agreements, such as the General Agreement on Tariffs and Trade (G.A.T.T.) and the North American Free Trade Agreement (N.A.F.T.A.) are seen as catalysts for increasing globalisation. Here we shall explore how these institutions and agreements arose within capitalism, how they have impacted upon the global economy and whether there are alternatives to the policies they embody.
Firstly, it is worth considering the meaning of this ‘globalisation’ that they are often said to be pushing us towards. The term is often used in a general way to refer collectively to a set of economic trends. One aspect of ‘globalisation’ is the greater maneuverability of capital around the world. Another related element is the removal of restrictions to global trade. ‘Globalisation’ is also about the diminishing importance of national frontiers as far as the operations of companies are concerned. In short, globalisation means that the economic activity of companies is to be increasingly understood as taking place on an international , rather than a national stage.
In response to this kind of definition, it has been pointed out that globalisation is nothing new. There has, after all, been a general increase in international trade since the middle ages when trade in goods such as spices and wine grew. Still, as shall be shown below, there is a justification for the current ‘globalisation’ debate, focusing as it does upon certain post-war trends within the global economy.
Indeed, the key debate is not whether globalisation has occurred or not but what the significance of it is and whether there are alternatives. Defenders of the ‘globalised’, or ‘free market,’ capitalism claim that it provides a level playing field from which all nations can gain. Opponents view ‘globalisation’ as biased towards the interests of corporations from the large industrial nations, such as the U.S.A. and Japan, at the expense of poorer countries.
(Here the collective term of ‘The South’ shall be used to refer to the poorer countries of Africa, Asia and Latin America, that have often been referred to as ‘developing countries,’ or the ‘Third World.’ This is the word used within much of the current literature on the global economy. Again, to adopt a commonly used convention, ‘The North’ shall be used to refer to the advanced industrial nations, including Western Europe, North America and Japan.)
An exploration of two key trends within this ‘globalisation’ enables us to build a picture of the forces lying behind globalisation. The first of these trends is the rise of what is widely referred to as ‘free trade’, as defined by international trade agreements—most notably the G.A.T.T. rounds (from 1947 onwards.) The second trend is one that has taken place in countries of the South and is termed ‘structural adjustment.’ This is a process, initiated by the I.M.F., which sets out criteria for countries of the South to become participants in the ‘globalised economy.’
The anti-globalisation lobby rightly point out that the global market economy is a cause of many social and environmental problems. Their assumption is often that these problems could be resolved by modifying global capitalism. The viability of some of their proposed solutions to the ills of a ‘globalised’ capitalism are considered in context of our analysis of its causes.