Globalisation’s dark side
Although concerns about immigration appeared as factors in Britain’s exit from the European Union, the Brexit vote was also a referendum on the failures of globalisation. Traditional economists promoted globalisation based on the theory that nations can best compete in capitalist markets by specialising, exporting resources for cash, often sacrificing local manufacturing, culture and self-reliance.
In 1957, European nations formed a “Common Market,” allegedly for economic protection, but the deal primarily protected the corporate elite. By the 1980s, Margaret Thatcher in the UK, Ronald Reagan in the US and François Mitterrand in France, presided over a neoliberal takeover, privatising economies and eradicating public power. They claimed that the benefits of enriching the rich would “trickle-down” to the peasants, but of course, this did not happen.
Guarani citizen Noemi Cruz bears witness to forest destruction by industrial soy farming in Argentina for the international market. Photo: Greenpeace / Julio Pantoja
European and American manufacturing declined as corporations moved to sweat shops in poor nations with cheap wages and corporate-friendly laws. A leaked World Bank memo, signed by Chief Economist Lawrence Summers, openly urged rich nations to export pollution and ecological destruction. Poor nations sank into debt and suffered from plundered resources, cultural disruption, war, loss of security and a rising income gap between rich and poor.
The harsh impact of these policies finally sparked riots at the 1999 World Trade Organisation meeting in Seattle, and an anti-globalisation movement emerged. By 2008, the free-wheeling investment banks, enriched by swindles and propped up by debt, collapsed, then demanded bail-outs from the working poor and middle class taxpayers.
The Brexit movement in England was, in part, a rebellion by those for whom globalisation’s “trickle” never arrived, the working poor, who suffered unemployment, austerity policies and degraded social welfare. Nations in the European Union lost economic sovereignty to the banks and corporations, who punished small nations such as Greece and Cyprus for defying their orders. Former Greek Finance Minister, Yanis Varoufakis, blamed “the EU’s anti-democratic institutions,” that made it “impossible to stay in the single market and keep your sovereignty.” Italian Finance Minister Pier Carlo Padoan told the Guardian: “Brexit [will have a] domino effect with anti-European parties gaining a lot of support”.
Globalisation and neoliberalism eroded public health, education and social security, replacing local self-reliance and common decency with an industrial corporatocracy that undermined family and community. Globalisation appears now as a privatisation scheme, designed for the rich to seize control of economic and political power.
In 1987, the Brundtland report introduced the idea of “sustainable development,” suggesting that market economies could continue to grow, and that market forces could be used to regulate the environmental impacts of globalisation. However, the market-driven environmental policies hastened consumption and resource depletion, increased fossil fuel consumption and global warming, enriched the rich and left a trail of toxins, dry rivers and depleted soils in the world’s poorest nations.
The real costs became evident in 1984, when a methyl isocyanate gas leak at the Union Carbide pesticide plant in Bhopal, India killed about 4,000 citizens immediately, some 20,000 over the next two decades, and left over 100,000 people suffering from respiratory dysfunction, deformities and blindness. In 1991, Bhopal courts charged Union Carbide’s CEO, Warren Anderson, with manslaughter, but neither the American nor Indian government helped extradite him for trial. The practice of corporations exporting their environmental impact became known as the “Pollution Haven Effect.”
In 2013, a ten meter sperm whale washed up dead on the coast of Spain with 17 kilograms of plastic garbage in its stomach. Annually, human enterprise adds some 15 billion kilograms of garbage to the oceans from consumer waste and container ship spills. Fish and marine mammals eat the plastics, which cannot be digested, their organs become blocked and they perish from starvation and gastric rupture.
Globalisation has encouraged, and in some cases forced, nations to relax environmental laws. The result has been deforestation, the spread of harmful invasive species, a loss of global biodiversity and a diminished genetic diversity among agricultural crop varieties.
In 2003, David Ehrenfeld, at Rutgers University in the US, published “Globalisation: Effects on Biodiversity, Environment and Society” in the Conservation and Society journal. “The market cannot be relied on to control the environmental and other costs of globalisation,” he concluded. “The architects of globalisation have ignored the social, biological and physical constraints on their system.”
Social and economic impacts
Warfare has been the most destructive social cost of globalisation. The suffocating global arms trade, driven by transnational corporate profiteering, undermines real security around the globe.
Globalisation enriched a few elite in poor nations, but the net effect has been a wider income gap between the rich and poor, lost jobs, low wages, sweat shops, union-busting and diminished human rights. In debt, and under pressure from the World Bank, nations cut public services.
The economics have proven predominantly one-sided, favouring westernised corporations and plundering the poorer resource colonies. Building a national economy on a single resource export has proven disastrous. In the 1970s, the UK and Dutch economies experienced the North Sea oil and gas boom, giving the illusion of prosperity while eroding local manufacturing and economic security. Britain’s corporate-friendly Prime Minister, Margaret Thatcher, used the oil revenues to subsidise corporate expansion, wage war and enrich banking empires.
Resource exploitation can make a nation’s currency appear stronger for a while, but this makes their exports more expensive, undermines manufacturing and local economy and leaves working class citizens without jobs or security. In 1977, The Economist magazine coined the term “Dutch disease” to describe these effects.
In The Paradox of Plenty, author Terry Karl explains that oil is a “resource curse” as experienced by Nigeria, Indonesia, Venezuela, Iran, Canada and other nations. Oil rich nations attract oil industry patrons, who finance friendly political candidates. These resource colony nations suffer human rights atrocities and see their environments devastated. In Canada, the petroleum-backed former government handed out over CND$14 billion in subsidies to fossil fuel companies, while losing over 340,000 industrial jobs.
Globalisation put pressure on nations to privatise public assets, devalue their own currency to keep exports prices “competitive” and to abandon tariff structures that protect local economies. Neoliberal policies shifted taxation away from corporations and onto working class citizens. Finally, centralised global banking made the entire world vulnerable to the schemes of a few banks, as the world experienced in 2008.
None of this appears as an accident of history, but rather as the design of neoliberal corporatocracy.
The North American Free Trade Agreement (NAFTA, 1994), the Trans-Pacific Partnership (TPP, 2016) and other trade deals were designed to serve corporate profits. NAFTA and TPP allow corporations to sue governments — in private, secret tribunals — for enforcing environmental or human rights laws that limit profits.
In 2013, when the Canadian province of Quebec passed a moratorium on oil and gas fracking to stop the contamination of land and water, US oil and gas company Lone Pine Resources filed a $250-million NAFTA lawsuit against Canada, claiming that the moratorium was an “arbitrary, capricious, and illegal revocation” of the company’s right to mine oil and gas. When the province of Ontario passed a Green Energy Act, Texas energy company Mesa Power sued them. When the Canadian government banned MMT, a neurotoxin linked to Alzheimer’s disease, the Ethyl Corporation demanded and won US$13 million. Canada has been sued by S.D. Myers, a US toxic waste disposal company for banning PCB exports; by the US Sun Belt corporation for passing water protection legislation; and by other corporations, for hundreds of millions of dollars. When the US rejected the Keystone XL Pipeline, Canadian company TransCanada sued for $15 billion.
Exxon Mobil, Dow Chemical and other corporations have launched over 600 similar lawsuits against governments around the world. Economists Joseph Stiglitz and Adam Hersh wrote in Marketwatch that these trade deals “restrain open competition and raise prices for consumers … applied even where rules are nondiscriminatory and profits are made from causing public harm.”
This is the face of globalisation, a corporate coup d’etat against democracy. Smart nations can reverse these trends, localising rather than globalising. In 2008, Iceland presented the model by taking criminal bankers to court rather than bailing them out. They established new boards and management in the banks, capitalised them and regulated and supervised the banks to safeguard public interests. They devalued the currency, the Krona, by 60 percent, which kept wages high, limited imports and encouraged a renaissance in local manufacturing, fishing and tourism.
Localisation is the cure for the sickness of globalisation, a first step in restoring human rights and protecting a nations’s ecosystems.
Rex Weyler is an author, journalist and co-founder of Greenpeace International. The opinions here are his own.
Notes and sources:
“Globalisation: Effects on Biodiversity, Environment and Society”: David Ehrenfeld, Conservation and Society journal
“Globalisation’s Direct and Indirect Effects on the Environment,” Carol McAusland, 2008: Global Forum on Transport and Environment in a Globalising World
“Twelve Reasons Why Globalization is a Huge Problem”: Gail Tverberg, 2013, Our Finite World.
“The Trans-Pacific Partnership charade: TPP isn’t about ‘free’ trade at all”: Joseph E. Stiglitz, Adam Hersh, 2015, Marketwatch
“Environment and Globalization: Five Propositions”: Adil Najam, et.al, International Institute for Sustainable Development
The Paradox of Plenty, Terry Lynn Karl, University of California, 1997.
“Four reasons to reject TTP”: Greenpeace USA
“Trans-Pacific Partnership Would Harm Our Environment,” Sierra Club
“TPP in Depth,” Council of Canadians
“Brexit, Globalization and the Bankruptcy of the Globalist Left,” Global Research
“Brexit is a rejection of globalisation,” Larry Elliott, Guardian
Source: Green peace