Globalization: An Engine of Inequity

GlobalizationThe history of all hitherto existing society is the history of class struggles. (Marx, 1847).

I choose to start this article with what, at first at glance, may look like it has nothing to do with the subject. I am, however, of the opinion that this phrase is, not just relevant, but vital to the understanding of Globalization. Let me first define my concept; my framework of understanding Globalization. Globalization is not a new concept; indeed the concept of a unified global society has been around for some time now. This concept can be seen in the understanding of Internationalism in Communist literature; of the Ummah in Islamic literature.

What makes Globalization a novel and specific approach towards carrying out this ‘global unification’ is the precept on which it is based; a precept of neoliberal economics – of laissez faire Capitalism. In order to understand Globalization, as a dynamic process, we have to understand and identify Capitalism in its ugly reality.

Capitalism advocates the private ownership of the means of production. These means of production are run not by the Capitalist but by the labor required to make the machinery – ownership of which brings the Capitalist his wealth – work is provided by the laborer. It is through this process that society can easily be segregated into classes; those that are in ownership of means of production – the Bourgeoisie – and those that sell their labor in order to receive meager sustenance – the Proletariat.

The interesting historical dynamic of this relationship is such that the capitalist, by virtue of ownership of the means of production, is the sole heir to the fruits of production i.e wealth. This wealth is acquired at the cost; at the expense of the majority – those that made the fruit of production possible through their toil and sweat – the working class. It is clear, in this admittedly over-simplified summary, that the relationship of the Capitalist with the Laborer is a parasitic relationship; that Capitalism is, an admittedly sophisticated but, nevertheless, a system of exploitation.

Having a basic understanding of the root of Globalization itself, i.e. Capitalism, one is in a better position to transpose this model onto a global setting. The world as it exists today is divided – not just into nations – but also into Rich and Poor nations; the First World and the Third World. Globalization represents the will of the First World to institute a very similar dynamic; a very similar relationship between the First World countries and the Third world countries – a relationship exactly like the relationship between the Capitalist and the Laborer – a relationship of exploitation.

This exploitation is brought about my several means. It is brought about by the Brain Drain of third world nations (Human Capital); it is brought about by Debt and Credit lending through IMF and World Bank (Financial Capital); it is brought about by stealing the resources of the relatively defenseless third world countries (Resource Capital) and through establishing military bases and military presence in Third World countries (Power Capital).

Now that such a framework has been identified it is much easier to establish the statistical proof of the matter. Advocates of Globalization quote impressive figures; show a drastic fall in poverty. They say that due to neo-liberal reforms and the efforts of the World Bank; indeed due to ‘globalization’ nearly 201 million people have been lifted out of poverty in the East-Asian and Pacific region. What is not mentioned is that the analysis is based on an arbitrary assumption; the myth of the ‘non-poor’ dollar man. It is based on the assumption that he who earns a dollar a day, without consideration for the material reality that individual occupies; without adjustment for the real-terms that that single dollar signifies in his local economy. He is labeled as ‘non-poor’ against his will; against his reality; against all facts. There is no doubt, therefore, that the analysis of the cases of individual counties, compensated in ‘real’ terms will lead one to believe that poverty has increased rather than the converse – that poverty is the irresistible result. Let us examine the case of India; India’s population of 1048.6 billion people in 2003 (16.9 percent of the world population), with 35 percent of its people below the national poverty line and with 34.7 of its population below the international poverty line of $1 dollar a day, has a large weight age (together with China) in overall global figures. If $2 dollars a day were considered as the international poverty line, 86.2 percent of India‘s population –around 859.9 million— would be below the poverty line.

The Pro-Globalization squad alleges that the developing world is experiencing increased rates of growth. What they fail to mention is that the countries where individual earnings are between $375 and $1121 per year were had a positive growth of nearly 2.0% in 1960 to 1980 – a figure that went down to -0.5% in 1980-2000. They do not account for the fact that countries where individuals earned $1121-$1826 per year saw a decrease in real per Capita GDP of nearly 1.4%. Indeed that ALL countries saw a fall of in their real per capita GDP with institution of neo-liberal reforms. Growth has, without a doubt, decreased due to Capitalism – due to Globalization.

Inequality is the natural result of Capitalism; indeed the system of Capitalism conspires to create inequality; to create misery. It is a system based on the unjust division of wealth; of the concentration of wealth into an ever-shrink class of ‘elites’ – the Bourgeoisie. This coupled with the manner in which Capitalism has to maintain a reserve army of the unemployed for purposes of coercive leverage compounds its crimes. One does not need to venture far from the United States of America – the bastion of Capitalism – in order to gauge the nature of Capitalism. Daniel H. Weinberg, in his article A Brief Look at Post-War US Income Inequality says;

Since 1968, there has been an increase in income inequality, reaching its 1947 level in 1982 and increasing further since then. The increase was 16.1 percent from 1968 to 1992 and 22.4 percent from 1968 to 1994.

There is, for this reason, no doubt in my mind that Globalization is a new stage of Imperialism; a new tool at the disposal of Imperial powers; a new method of the same old exploitation.

Mobeen Chughtai