2000s >> 2006 >> no-1225-september-2006

Globalisation – what does it mean?

The second part of our article analysing capitalist globalisation. Last month we
looked at how this affected capital. This month we examine its impact on the
world’s population at large

  The continuing surge in globalisation has had profound human and social effects on vast numbers of people, the fundamental nature of these effects depending on their class position in society, i.e. whether they are capitalists or workers. On the one hand the opportunities for the capitalist class to accumulate wealth has increased multilaterally with, for example, politicians and civil servants in the poorer states quite happy to find the funding for trade fairs, economic surveys, development studies, and visits by heads of state in an effort to increase the profits of that class from the global market.

 On the other hand this global frenzy is resulting in upheaval for whole communities, while the transition from rural to urban living is in turn altering human geography radically with rural areas either becoming human deserts or concentrated industrial sprawl. Likewise most global housing areas resemble one another to such an extent that even the shantytowns are becoming uniform in the type of building
materials used.

 When these social transformations are combined with factors like the increasing mobility of labour – mobility from the peasantry to the modernity of wage slavery – they come with well known costs for the disempowered majority: misery, destitution, family breakdown and homelessness. The most visible aspects of this are to be seen with thousands of families living on the streets of Calcutta, or those families forced to scrape an existence by living on a waste tip in San Paulo, or perhaps a PhD from Addis Ababa University driving a cab in New York city, let alone those staffing a call centre in New Delhi alongside a wall full of useless diplomas.

 Such potential human resources being wasted to further the interests of profit maximisation cannot but have an impact on rising social expectations and aspirations. These then come into conflict with people’s sense of achievement. Consequently, we are witnessing a sharp rise in the incidence of mental health problems. And the resulting increase in cases of anxiety, depression, insomnia, mood swings and stress, are to be evidenced in the packed waiting areas of the mental health clinics, along with the expanding appointments for the services of psychotherapists. Add this to the overcrowded waiting lists for the physically sick in the developed and developing countries and many global health services there are in crisis management mode.


Whilst this human tragedy unfolds our political masters are still chanting the mantra that some of the wealth created will eventually ‘trickle down’ to those 2.8 billion people living on less than $2 a day and also to those 1.3 billion living in even more extreme poverty. Unable to solve the problem of absolute and relative poverty, the global politicians have now agreed in their misguided wisdom to try
and tackle the problems and issues of extreme poverty only. By this they mean those 1.3 billion people who have to their cost found that the system of

wage slavery holds no guarantees of the provision of a living wage, and subsequently finding it impossible to exist on less than a dollar a day. And where the material difference between relative, absolute and, and if you so wish extreme poverty, is so profoundly stark that it creates a sense of inevitability and disempowerment, it is invariably accompanied by disillusionment. This is especially so in cultural terms, with millions being forced from the rural poverty of subsistence living into becoming a landless peasant within an urban environment dominated by the tyranny of wages and surrounded by the advertising of mass consumerism.

 The WHO, UN, World Bank, and Jubilee 2000 have reported many of the indicators of global inequality in recent years, and summarised they are:

– One-fifth of the world’s population is living in extreme poverty.
– 100 million children live or work on the street.
– Half the world’s population are lacking access to the most essential medicines.
– The combined wealth of the world’s 200 richest people reached $1 trillion in 1999;
the combined income of 582 million living in the 43 least developed countries is $146b.
– 70 per cent of the world’s poor and two thirds of the worlds illiterate are women.
– An estimated 827.5m people are undernourished. Of which 647m, or over one third (37 percent) consist of theworld’s children.
– More than 30,000 children die each day from easily preventable diseases.
– The top fifth own 86 per cent of the world’s wealth, while the lowest fifth own just one per cent.
– The wealth of the world’s three wealthiest billionaires is more than that of the GNP of all the least developing countries and their 600 million people.
– When Argentina defaulted on its debts, 300,000 people were forced to live off the garbage dumps surrounding the city of Buenos Aires.
– The number of people living in extreme poverty has actually risen by 28m.

Yet it is not only developing and undeveloped countries who are experiencing issues of inequality; even in the major developed countries, like the US, income inequality is now on the increase with one report claiming: “The gap between rich andpoor in America is the widest in 70 years, according to a new study published by the Center for the Budget and Policy Priorities The research, based on newly released figures from the non-partisan Congressional Budget Office, shows that the top 1 percent of Americans – who earn an average of $862,000 each after tax (or $1.3m before tax) – receive more money than the 110m Americans in the bottom 40 percent of the income distribution, whose income averages $21,350 each year. The income going to the richest 1 percent has gone threefold in real terms in the past twenty years, while the income of the poorest 40 percent went up by a more modest 11 percent” (BBC News Online, 25 September, 2003 :http://news.bbc.co.uk/2/hi/business/3138232.stm ).

Much the same picture is painted in the UK with the figures from the National Statistics Office and Inland Revenue for 2002/3 showing that the richest 5 percent owned 43 percent of the wealth, while the poorest 50 percent owned just 6 percent; similarly the top 2.4m households owned assets worth around £1,300b, while the bottom 12m owned assets of around £150m. Also according to a Policy Institute report last year, 22 percent of the UK population are still living below the poverty line, including 3.8m children (or 30 percent of all children), 2.2m pensioners, and 6.6m working age adults.

In effect a total of 12.6m people in the UK population are confronted with higher mortality; lower education outcomes; less decent homes; and financial exclusion, due to surviving on, or below 60 percent of median income after housing costs.

On a much more local scale the Child Poverty Action Group revealed in their publication ‘Poverty – the Facts (5th edition)’ that over 80 percent of the children living in the Townhill district of Swansea were defined as poor; benefits make up a larger proportion of total income in Wales than in England or Scotland, with a higher proportion of children living in households claiming income support – 18.9 percent – compared to the UK-wide figure of 13.5 percent; and 32 percent of pensioners in Inner London were affected by income poverty, and children in London are even worse off than those in Wales with 24 percent of households in receipt of income support, or other means tested benefits.

Socialist Outlook

These are just some of the facts and figures that are considered normal to the modern workings of capitalism. They help to serve the purpose of illustrating that the globalisation of capitalism has masked a growing polarisation both within and between countries and that local circumstances are merely a reflection of the global situation where ‘trickle-down’ economics has in reality turned into a flood of inequality, destitution and instability. This confirms what Marxists have consistently stated that the prosperity for the few is dependant on the deprivation of the many. Indeed, despite the huge amounts of abundant wealth created by workers within capitalism, the system is incapable of accounting for the fact that the cases of millions of people dying through malnourishment, or because they lack clean water, adequate shelter, and health care is on the increase. This alone serves as a damning confirmation that there hasn’t been any fundamental shift in the ownership of wealth. It also reaffirms our position that this state of affairs is likely to continue, besides endorsing the contention that the capitalist class will use either system of trading – protectionism or free trade – when it suits their purpose to accumulate wealth.

 Failure to grasp the revolutionary challenge this analysis poses has led to the formation of the anti-globalisation protest movement which campaigns on the issues of extreme poverty, world debt and the adoption of protectionist measures for those developing and undeveloped countries who have found that the reality of ‘free trade’ only applies primarily to the G8 nations. Whilst there is no denying that such campaigns have made tremendous strides in highlighting the effects of globalisation, when it comes to outlining proposals for viable alternatives to capitalism, their mindset is locked onto the belief that a ‘fairer’ global society is possible within the framework of capitalism.

 Their main tactic is to bring mass protest to bear on politicians and on institutions like the G8, WTO, IMF and World Bank, despite the fact that such a mindset of working towards a ‘fairer’ global society has a long history of failure, based as it is on the false assumption that capitalism can be made to work in the interest of all – rich and poor alike.

Although the effects of globalisation with the human suffering it brings can lead to bleak and negative conclusions about the future, it is also possible to draw different conclusions, ones that are far more positive and meaningful. For what comes out of this rather gloomy picture is the certainty that capitalism has outlived its usefulness as a progressive mode of production. For it reached its early retirement at the turn of the 20th Century – once it had established itself as a global system consisting of integrated and interdependent productive units. As soon as it reached this point it had fulfilled its purpose and turned into a global monster of uncontrollable destructiveness.

With capitalism failing to deliver for the majority it has become more obvious that now is the time to move on to a system of common ownership that is capable of meeting the self-defined needs of the great majority and not just the interests of a wealthy minority. In order to attain such a system of free access an essential prerequisite is for a majority of the global working class to reach an understanding that their sense of social achievement can only be fulfilled by becoming conscious in class terms that capitalism can never be made to operate in their interests. Once they have reached this revolutionary conclusion – and only then – will capitalism lose its basis of support and be replaced by socialism.


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