Sunday, October 17, 2004

Just When You Thought You Could Sleep At Night

I’ve been doing a little reading lately to remind myself of the really big problems we face. It’s easy to get wound up about how George Bush is fucking up the relatively simple problems of international relations. We could easily think that we just need to flush out the idiots in high places and we’d have clear sailing from then on. Sadly, this is not so. And I’m *not* talking about the environment (which is a whole different can of worms).

One World, Ready or Not by William Greider

This is an introduction to the problem of globalization, which is not just that it benefits the rich at the expense of third world countries. You got a teeny glimpse of the problem in John Kerry’s boilerplate about the issue of “exporting” jobs. In fact, there is no unemployment problem in the US (the rate is under 5%). The problem is that entire industries are being “shipped overseas”. To listen to Kerry, you’d think the US companies who “outsource” are somehow to blame. He talks about making US jobs more attractive by policies that the US routinely complains about when Canada implements them (for example, universal Health Care is a “subsidy”).

This misses the point. The problem is that the labor market is now global, which means that $30 per hour Tennessee metal benders are competing with $12 per month workers in Shanghai. This is an unstable situation and it’s hard to see how it will settle down without the elimination of the US metal bending industry (not just the downsizing, reorganizing). There’s no way the US workers will allow their benefits to be cut fast enough to avoid “outsourcing” the industry to Asia. This applies to all industries, including my own (computer programming), which is being “outsourced” to India at a heady rate.

The book gets deeply into the Global capital market and takes us on tours of the "sweatshops" in China, Mexico and Thialand. What emerges is a comprehensive picture of globalization. The book paints a pretty scary picture. Predictably, it ends with a long list of recommendations for fixing things. Also predictably, the recommendations are less impressive than his analysis of the problem. However, in the course of explaining his program to save the world, he makes one crucial point. Our statistics of economic "growth" ignore substantial hidden costs, such as the cost of declining non-renewable resources, the cost of environmental destruction and so forth. It's as if we have a golden goose and we're cheering the golden eggs but ignoring the fact that we're killing the goose. A practical example: where, in the accounts of the nation, did we account for the destruction of the Cod fishery? When Canada was young, this fishery was once the backbone of our economy. When we cheerfully counting revenue from the fishery, where did we account for the fact that we were destroying the fishery? On a similar subject, where do we account for our declining oill and gas reserves? We pretend that we're just pulling money out of the ground, when, in fact, we're selling our inventory. This way of thinking encourages us to "cash in" all that "free" oil and prevents us from thinking that it might be smarter to leave it in the ground for 50 years when it will probably be worth $500 a barrel.

Greider suggests that, if we accounted for these types of cost, we would see that our "gross national product" is actually declining.


World on Fire by Amy Chua

The thesis here is simple but fatal to the basic assumptions of Western foreign policy. The orthodox view is that we should be promoting democracy and economic development in the “third world”. The problem is that economic “development” almost always amounts to creating a rich, privileged (and heavily armed) class. “Democracy” means the poor folks should have as much clout as rich folks. This spells revolution and bloody oppression. Amy Chua argues convincingly that that the twin aims of democratization and economic development are spreading bloody revolution around the world.

The bottom line is that we’re headed for a big mess in the 21st century with or without the “War on Terror”, “Weapons of Mass Destruction”, the collapsing environment, pollution, global warming and all the rest. If New York is still above water 100 years from now, it might look a lot like New Delhi.

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