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John QuigginAlvin Toffler, Future Shock , Alvin Toffler &Heidi Toffler Creating a New Civilization: The Politics of the Third Wave, Hans-Peter Martin and Harald Schumann Global Trap , Thomas Friedman, The Lexus and the Olive Tree:Understanding Globalization.
In every era, there are 'vogue' words that suddenly become ubiquitous. They are used in all sorts of contexts by all sorts of people. They seem to promise understanding of the ills and hopes of the day, and yet no one seems to know precisely what they mean. In the 1960s, 'alienation' was such a word, while 'systems' and 'structural' had their vogue in the 1970s.
Undoubtedly the word of the 1990s is 'globalization'. It has been used to explain everything from the fashion for baseball caps worn backwards to the decline of the welfare state. It has been represented both as the culmination of human history and as a regression to the 19th Century. Not surprisingly, there is a ready audience for those who promise to help us understand this phenomenon and tell us whether we should welcome it or fear it.
At the extreme optimistic end of the spectrum are those who see globalization as the technologically inevitable product of the Internet. Within this group, comparisons with the Industrial Revolution are considered cautious. The preferred view is that the Internet represents a whole new civilisation.
As is appropriate given their views, the techno-globalists tend not to read or write books. The best places to keep up with their latest ideas are Web sites such as Wired. However, most of the supposedly cutting-edge techno-rhetoric is a reworking of themes that have been pushed by Alvin Toffler ever since his best-seller Future Shock in 1970. Even the new civilisation theme was anticipated by Toffler well before the rise of Internet mania. First published in 1994, his Creating a New Civilization: The Politics of the Third Wave, co-authored with his wife Heidi, is the best available guide to the theory of techno-globalism.
The Tofflers argue that the shift from a manufacturing-dominated industrial economy to a service economy represents a 'Third Wave' comparable to the earlier replacement of agricultural civilisation (the First Wave) by industrial civilisation (the Second Wave). The core institutions of industrial society - the nuclear family, the mass education system, the giant corporation, the mass trade union, the centralized nation-state and the politics of pseudo-representative government, are being broken down by a wave of individual empowerment, in which mass markets will be replaced by products tailored for individual consumers, social conformity will be replaced by individual lifestyle choice and mass democracy will be replaced by electronic 'town meetings'.
Toffler's work has always been characterised by a mixture of naive enthusiasm and surprisingly acute analysis, mixed with the inevitable howlers that accompany a penchant for bold prediction (his suggestion in Future Shock that the children of the 1970s should be prepared for life in underwater cities is a prime example). Similarly, some elements of Toffler's current argument seem bizarre, at least to Australian readers. For example, he presents the proliferation of identical 'Starbucks' coffee-shops as evidence of 'demassification' because Starbucks offer various kinds of capuccino as well as regular American coffee. If this is the brave new world of limitless choice, Australian coffee drinkers can do without it.
More importantly, the claim that the lumbering corporate behemoths of the Second Wave, based on ownership of physical capital, are being replaced by 'minimalist' Third Wave firms, based solely on knowledge, looks like wishful thinking. It is true that both private firms and governments are engaged in large-scale contracting out, but this has more to do with driving down wages than with the reinvention of the corporation. The global merger wave of the last few years, affecting banks, airlines, pharmaceutical companies and many others, suggests that the day of the mega-corporation has not passed.
Moreover, the new world of technology, is, if anything, even more massified and monopolised than the old world of the Second Wave. With 80 per cent of the market Microsoft offers Third Wave knowledge workers a choice of two operating systems, Windows 98 and Windows NT, and these are soon to be merged into one. Even when Henry Ford offered his buyers "any colour you want as long as it's black" they had a lot more choices open to them. Moreover, Microsoft's market dominance is based not on technical superiority but on the 'QWERTY factor' - since Windows dominates the market, most software is written for Windows, which in turn maintains market dominance.
It is easy enough to poke holes in the Tofflers' analysis. However, their breathless enthusiasm is so infectious that it's hard to read their work without being convinced that there must be something in it.
Hans-Peter Martin and Harald Schumann's Global Trap offers a similarly breathless style, but this time in the dystopian mode. Globalization is presented as an unmitigated disaster, replacing the social-democratic prosperity of postwar Europe with a plutocratic nightmare. They see globalization as producing a '20:80 society', in which the benefits of change are captured by transnational corporations and the highly skilled 20 per cent of the workforce they need. For the remaining 80 per cent, Martin and Schumann foresee a life bouncing between unemployment and insecure employment, with the potentially restive masses being kept quiet with a mixture of (increasingly inadequate) welfare payments and televised pap, described by Zbigniew Brzezinski as 'tittytainment'. (The reference is to the pacifying effect, rather than to the pornographic component, of the TV diet. ). Although Martin and Schumann make some strong points, it sometimes seems as if globalization is being blamed for all the ills of the world. Lester Brown's alarming (or maybe just alarmist) predictions that the world will soon run out of grain are given a lengthy hearing, but it is hard to see what globalization has to do with the problem.
Like most critics of globalization, Martin and Schumann view it as the result of policy decisions, most importantly the deregulation of the international financial system, rather than the inevitable product of technological change. Their proposed responses are interesting, since they involve, not a reassertion of the nation-state, but an increased level of international co-operation. The two prime examples are a 'Tobin tax' on international financial transactions and a full-scale European political and currency union, based on the defence of social democracy against 'market dictatorship'. Although both policies involve transcendence of national boundaries, they are anathema to soi-disant supporters of globalization.
These examples illustrate the point that the discussion of globalization in terms of the supposed irrelevance of national boundaries misses the point. Most supporters of globalization do not want 'one world, ready or not'. Rather, they want to keep governments and trade unions confined within national boundaries, while allowing capital to move freely around the world. They are opposed to international co-operation, except where it takes the form, as in GATT or the now-aborted Multilateral Agreement on Investment, of governments agreeing not to do things. In large measure, the debate over globalization is simply an extension to the international stage, of the debate between the defenders of the Keynesian or social-democratic welfare state and the advocates of free-market reform.
With extreme views being presented on both sides, it is tempting, though not always accurate to suppose that the truth must lie somewhere in between. Thomas Friedman presents such a middle view. His enthusiasm for globalization, symbolized by the robot-produced Lexus car, is tinged with regret for the inevitable passing of the local traditions and communities, symbolized by the olive tree. Friedman presents what is, for the moment, the conventional wisdom. Globalization is an inevitable process driven on the one hand by the technological revolutions that have diminished costs of transportation and communication and on the other hand by the proven superiority of the free-market model.
To his credit, Friedman confronts head-on the most damning objection to the technological theory of globalization, the fact that on many measures the world economy was just as integrated in the 19th Century as it is today. Friedman correctly points out that the globalization of today is very different to that of the 19th Century. While the transatlantic telegraph allowed rapid communication between major financiers, governments and the like, cheap telecommunications now offer everyone (at least, everyone with a telephone and a computer) instant access to the world. Friedman's 97-year-old mother, he tells us, plays bridge with Siberians on the Internet, something which would have been inconceivable in the 19th Century.
This is all very well, but Friedman talks as if there were two separate eras of technological globalization, one in the 19th Century and another today. In reality the revolution in transport and communications continued throughout the 20th Century, even as flows of capital were subjected to increasingly stringent restrictions and governments intervened more and more in the market. The first telephone connection between Australia and Europe was made in 1930, when the international financial system was in a state of collapse. The 1950s, a period when Western countries routinely employed dual exchange rates and import quotas, saw the rise of the 'jet set'. The phrase 'the global village' was coined by Marshall McLuhan in the 1960s, when the Keynesian Welfare state, allegedly doomed by globalization, was reaching its peak of self-confidence.
Whereas the technological trend towards a shrinking world has been advancing steadily for the past 100 years, the move to free capital markets and market-oriented reform has taken place in the past 25 years, after three-quarters of a century in which the world moved mostly in the opposite direction. It is far from clear that these reforms will deliver the goods as promised. Friedman's case rests almost exclusively on the 'miraculous' performance of the US economy in the late 1990s, but that may prove as ephemeral as the Thatcher miracle of the 1980s and the New Zealand miracle of the early 1990s.
Friedman uses lots of cute catchphrases in an effort to make globalization comprehensible, but the central metaphor is that of the 'golden straightjacket'. To fit into the Golden Straitjacket, a country must adopt the following (rather redundantly expressed) golden rules:
making the private sector the primary engine of its economic growth;
maintaining a low rate of inflation and price stability;
shrinking the size of its state bureaucracy;
maintaining as close to a balanced budget as possible, if not a surplus;
eliminating and lowering tariffs;
getting rid of quotas and domestic monopolies;
increasing exports;
privatizing state-owned industries and utilities;
deregulating capital markets and the domestic economy;
opening banking and telecommunications to private ownership and competition; and
allowing citizens to choose from an array of competing pension options.
In other words, adopt the Thatcher-Reagan agenda or face the wrath of the 'Electronic Herd' of global financial traders.
Granted that both domestic and international financial markets constrain governments to some degree, the critical question is how much. At this stage, the evidence is that financial markets have raised the cost of pursuing inflationary policies (or, if you prefer, encouraged the adoption of deflationary policies), but that their power to impose their policy preferences in other areas has been greatly overstated.
Oddly enough, having spent most of the book emphasising the rigidity of the golden straightjacket, Friedman ends by proclaiming himself a social democrat and advocating substantial government intervention, not merely to provide safety nets for the losers from globalization but to ensure equality of opportunity. Correctly enough, Friedman argues that without a social safety net the losers from globalization will eventually generate a backlash that will kill the entire process. But the question of how the 'Electronic Herd', motivated solely by considerations of market value, is supposed to muster the enlightened self-interest to countenance such a policy is not broached. Experience so far suggests that there is no level of slash-and-burn welfare cutting too deep to win the approval of the markets. If they are as all-powerful as Friedman suggests, the prospects for the social safety-net are bleak.
Contradictions abound, then, but an essential feature of 'vogue' words is that they can encompass many contradictory elements. The result is that argument based on such words is almost impossible to refute. In the few months since the publication of Friedman's book, a surprising number of his claims and predictions have turned out to be erroneous, and yet the force of conviction that it carries is scarcely diminished.
Friedman (writing in February 1999) devotes quite a few pages to Compaq Computer and its CEO Eckhart Pfeiffer, whom he presents as the beau ideal of the fast-moving global entrepreneur. By April, Compaq was losing money and Pfeiffer was history. But that just shows how fast-moving the world of globalization really is.
More seriously, Friedman presents his 'Golden Arches' theory of conflict prevention - that no two countries rich and market-oriented enough to possess a MacDonalds outlet will ever fight a war. Once again, February's prediction was invalidated by April, when CNN could film MacDonalds customers in Serbia surveying the damage from NATO bombers whose crews were doubtless munching on Big Macs as they approached their targets. But of course, Friedman can invoke the 'olive tree' part of his thesis, to explain this lapse - the Serbs and the Kosovars both wanted to plant their olive trees in the same place.
Finally, almost every reviewer of the book has noted Friedman's relentless name-dropping and self-reference. On every second page, the reader is treated to 'As I observed to Prince X ..' or 'As Prime Minister Y confided in me ...' But history is always written by the winners, and theories of history, in most cases, are simply explanations of why one group or another (the Prussian State, the British Empire, the working class or whoever) will inevitably triumph. Globalization is all about the triumph of an elite that transcends national boundaries, its members moving around the world with the same ease with which they transfer information and capital. Friedman's transparent self-identification with that elite simply reinforces his message.
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