This fear, expressed today by the FT’s editorial, will not be shared by some, who see globalisation as ”another version of colonialism or imperialism – with Amazons, Facebooks and Googles, Nikes and the garment industry in many aspects of their conduct as more acceptable looking British or Dutch East India companies” (reader’s comment).
Manila port ‘bursting at the seams’ in the Philippines on Tuesday, March 31, 2020. Read more here.
Following an FT report of drops in rail freight and containerised exports from the UK of as much as 50 to 60% while imports are also declining, its editorial points out that supply chain disruptions and struggles to obtain medical supplies, have accelerated calls for countries and trading blocs to ensure they have sufficient capacity at home — prioritising resilience over producing goods where it is cheapest.
The US trade representative, last week hailed the end of “reflexive offshoring” (NY Times, log in) and in the EU Thierry Breton, the EU’s internal market commissioner, wants government grants, loans and direct intervention to build up European supply capacity.
The FT editorial points out that, in shifting manufacturing jobs out of rich countries and into poorer ones, globalisation reduced poverty in the developing world and prices in the rich ones.
But those working in these sweatshops (a small section of a sweatshop in Karnataka is shown above) still live in poverty and cramped conditions, working far from home in unhealthier conditions than the subsistence agriculture (Karnataka below) which was formerly their lot.
The low prices for their products in rich countries have encouraged a wasteful throwaway culture there, which has added to the waste mountains
The editorial also admits that millions in the ‘rich countries’ lost their jobs in the process, and lost the sense of pride and ownership people felt in their once thriving communities.
But the FT asserts that global supply chains and co-operation are a source of resilience, allowing countries to focus on their strengths and share expertise.
“Spreading people and factories around the world allows companies to guard against risks by diversifying”:
But it has also broken family circles and communities, increased deforestation and reduced the amount of land available for food production
“There will be higher prices and lost export markets”
But higher prices (due to higher wages) will mean a greater market for local goods and better tax revenues. A reduction in exports will lead to a great reduction in transport-related greenhouse gases.
“The direct cost to the taxpayer of subsidising domestic production . . . will make (economies) more fragile, not less”
But huge subsidies are currently given by government to foreign water, energy and transport utilities (including nuclear projects and fossil fuel producers) working in this country, to arms manufacturers and other exporters. That money could be redirected to domestic production which would reduce welfare payments and transport-related pollution.
It can be argued that a knockout blow is long overdue and that purposeful employment created by import substitution and Green New Deal projects might, in time, bring about an environmentally aware, low-crime, harmonious and employment-rich society.
President Emmanuel Macron’s translated interview with the FT’s new editor and its Paris bureau chief
“In this crisis enter a humanity where everything is fragmenting, where what we thought was worthless, becomes scarce and must be produced in other countries, and where we tell people they can’t even cross the street. It’s a profound change, from which we will all come out different”.
Global trade and the use of container ships increased from the 1960s to the 1990s, followed by the globalisation of finance and the digital economy from 2000 onwards and it’s obvious that it’s starting to overheat, creating three major problems:
Globalisation has created inequalities in developed countries the middle classes and workers are saying “I don’t see myself in this globalisation. I am sacrificed to it.” I can buy cheaper things but I don’t have any work, because there is no more space for me in this society, it’s society for the super-talented, and what I can do is no longer valuable.”
It’s clear that economy is no longer the priority. And when it’s a matter of humanity, women and men but also the ecosystems in which they live, and so CO2, global warming, biodiversity, there is something more important than the economic order.
This problem is being joined by the rise of a power game in which people rediscover the grammar of sovereignty – the idea that the people are not just consumers or producers, they are citizens, and they want to start controlling the choices they make It puts the human back in the middle.
Macron explained: “The basis of sovereignty is that it structures our balance, and you actually see that during shocks, like an epidemic. When you are afraid, you don’t turn towards Amazon, Google, globalisation, you don’t turn towards the secretary-general of the United Nations, the European Commission etc . . . You turn towards your country”.
The third major phenomenon is the matter of climate which goes hand in hand with the health agenda
In 2019, more than 77 leading American medical groups signed a policy agenda calling for climate action
Macron believes the climate agenda must come back to the foreground, because it goes hand in hand with the health agenda: “We will exit this crisis, and people will no longer agree to breathing polluted air. You’ll see something that was already rising in our societies, people will come out and say “I don’t want to breathe this air. I don’t agree to make such choices which will result in me breathing that type of air, where my little baby might catch bronchitis because of it, because choosing that type of society makes it so. And you have accepted the idea of shutting down everything to stop Covid, but now you are ready to let me go on breathing bad air.”
He adds that we will have to rethink production according to a just balance of CO2 emissions and of biodiversity and so of the safekeeping of our ecosystems. By agreeing to re-fragment things in a non-conflictual way, to reduce emissions, we will rethink logistics, in order to avoid importing a component from across the globe, because we will produce it on our territory to reduce its carbon footprint, commenting, “In my opinion that is what we are heading towards”
Last week, Emmanuel Macron said in an interview with the FT that delocalisation (offshoring) had become “unsustainable” and that the EU should regain industrial sovereignty.
He believes this shock we are currently going through will force us to review globalisation, and bring us to rethink society’s terms. The approval of a fluid world where everything is worth the same, produced anywhere, exchanged neutrally, is no longer universal.
In another speech this week he spoke of a new economic model, of the need to rebuild an agricultural, health, industrial and technological independence. “I believe that we are about to exit a world . . . where there was financial hegemony and hegemony of the non-co-operative military powers, and we can enter something which will enable us to reshuffle the cards. When people are scared of death and come back to these deep existential subjects, they co-operate”.
We have seen that we needed to reconsider goods and services we sometimes believed were worthless.
“We thought a mask or a medical overall had no value on a global commercial level. But it has value since it protects caregivers, and we acknowledged it during this crisis. It’s worth only 40 cents, not even a euro, but it becomes immensely valuable when we start running out of them and unable to produce enough”.
Regarding matters of the common good, military, health, technological, industrial, education, ecological, climate and other matters, we must decide what we must relocate, in our own country or region, in order to co-operate with others without being totally dependent on them.
We must become resilient, possessing the ability to say how we can prevent a risk of serious heatwave, another epidemic, a deterioration of our biodiversity which will affect our lives.
Earlier this week, Commission president Ursula von der Leyen and Charles Michel, president of the European Council, issued a paper saying there was a “pressing need to produce critical goods in Europe, to invest in strategic value chains and to reduce over-dependency on third countries in these areas”.
Thierry Breton, an EU trade commissioner also suggested earlier this month that “globalisation has gone too far”, not just in medical equipment but all strategic industrial sectors and agriculture. He acknowledged, in Le Figaro, that “the question posed to us by this crisis is that we may have gone too far in globalization and globalisation”. The question, he added, arises not only on health (drugs and medical equipment) but also on “strategic industrial areas” and on agriculture, saying “I am convinced that our relationship to the world after this crisis will be different.”
This crisis will enable us to invent something new for our humanity, as we have been discussing — that’s to say a new balance in interdependence between men and women in order to consider what it means to be in the world and which is built around education, health and environment.
Most of this summary was drawn from these two main sources:
Some shortening of global supply chains is inevitable . . . the pandemic has exposed just how far even the richest nations are from strategic self-sufficiency (associate editor, FT).
Certain vested interests are increasingly un-nerved by the Government’s acknowledgement of the crucial role played by food producers
As the Food and Drink Federation (FDF) notes: post-COVID-19, politicians have learnt to celebrate ‘more than four million hidden heroes’ who work in Britain’s farm‑to-fork supply chain (but not yet to insist that they receive a fair price for their heroism, we add). There is a growing recognition in political circles that food security requires a return to post-war levels of production.
Processors, export/importers and commodity speculators call to arms . . .
The FDF said – in a letter co-signed by 30 trade bodies this week – that ministers must fight to keep goods moving around the world after the pandemic has shown how essential global supply chains are for feeding consumers. On 18th March it launched a survey (above), hoping to gain support for its cause.
In a Telegraph article FDF warns that long supply chains must continue, stressing that ‘free trade’ is critical to economic recovery – aka their profits?
They write: “The British food and drink industry is an international success story. The country exports more than £23 billion worth of high-quality products each year”. This ‘success’ depends on exporting British produce and importing not only tropical fruits but beef, lamb and apples, easily available here – see The Great Food Swap, Lucas, (research: Hines, Hurd, Jones). And who profits from this polluting activity? Certainly not the average British farmer.
The alternative: more local, accountable and inclusive
As huge numbers of small suppliers are currently left stranded by the closure of local cafes, hotels and restaurants and vulnerable households can’t even get onto the telephone or internet queues for supermarket deliveries, Alan Simpson (right) – in a recent paper – notes that we grow only half of our own food needs.
“Internationally, buffer stocks of food are getting caught up in siege mentalities. Domestic needs will come before international trade . . . It won’t stop there. Floods and drought across Europe and beyond will cause mayhem with global food supply . . . food security is not going to be delivered by any compact between government, the army and the big supermarkets. The alternative needs to be more local, accountable and inclusive”.
William Sitwell’s (British) sheep farmer friend seethed
“Freezing lamb, putting it on a ship and sending it on a 12,000-mile journey to a country that produces the best lamb in the world is simply ridiculous . . . Supermarkets would retort that they stock the best cuts, when in season – which suggests there is not enough British lamb currently available”.
Not so, Sitwell points out: “Breeds such as the Dorset, for example, can lamb in November, but a lack of grass in winter makes the meat more expensive as farmers have to pay for feed”. Supermarkets have failed to invest in farmers rearing these types of animals in favour of cheaper meat from, say, New Zealand, causing a vicious circle: less British lamb available, so demand remains low and prices stay high.
Arch-exponent Helena Norberg-Hodge (left) addresses the issue of local, accountable food production and distribution in the latest episode of Russell Brand’s podcast, ‘Under the Skin’
Pre-COVID-19, Pantheon Economics recorded that world trade had already fallen “sharply,” dropping 1.4% in the year to June 2019 (text & photo: Business Insider). Arjun Kapur, New York Investment strategist, asserts in a letter to the FT’s editor that “2020 will go down as the year of ‘deglobalisation’ “.
He suggests, “Company leaders and world leaders would be wise to ditch their reliance on vulnerable supply chains in favour of more resilient, self-sufficient means of delivering health, economic, and business outcomes for their constituents and shareholders. The ship of globalisation is sailing away”.
“And the children of Iraq, in their graves, disabled, cancer ridden from DU weapons, disabled, deformed, homeless, displaced, Mr Blair?”
Blair’s Grand Delusion: “Whom the gods would destroy, they first make mad”
Tony Blair has announced plans to set up a new centre-ground institute to combat the “new populism of left and right”.
This new body would provide answers to anti-business and anti-immigrant views which share a “closed-minded approach to globalisation”.
In a characteristically self-congratulatory statement published on his website, he said his new not-for-profit organisation would deliver policies based on evidence rather than the “plague” of social media abuse.
It would be a response to the political shocks of the last year, such as Brexit and the election of Donald Trump to the US presidency.
It aims to support practising politicians – such worthies as John Mann, Jess Philips, Simon Danczuk and those former colleagues still waving the New Labour flag?
He ends: “I care about my country and the world my children and grandchildren will grow up in; and want to play at least a small part in contributing to the debate about the future of both.”
Felicity Arbuthnot asks, on behalf of millions: “And the children of Iraq, in their graves, disabled, cancer ridden from DU weapons, disabled, deformed, homeless, displaced, Mr Blair?”
What could be more extremist than Blair’s deadly collusion in that country’s destruction?
In July Peter Hitchens wrote: “Globalisation hasn’t worked but our elite have not yet been held to account”. As he said, the EU referendum result was a heartfelt protest, but is Brexit likely to enhance the lives of those who made that protest? He continued:
“There is nothing good (or conservative) about low wages, insecure jobs and a mad housing market which offers nothing but cramped rooms and high rents to young families just when they need space, proper houses with gardens, and security”.
But people are re-engaging with politics
Hundreds of thousands have joined Labour. Tens of thousands have joined the SNP, Greens, Tories and, since the EU referendum, the Lib Dems – and this, in an age when we have been told that people no longer want to get involved in politics. The growing adherence to Sanders, Corbyn, the SNP and radical parties in Greece, Spain, Italy and Iceland suggest that the existing order is being challenged and new hope is emerging.
In a different article Hitchens said: “If (like me) you have attended any of Mr Corbyn’s overflowing campaign meetings, you will have seen the hunger – among the under-30s and the over-50s especially – for principled, grown-up politics instead of public relations pap. Millions are weary of being smarmed and lied to by people who actually are not that competent or impressive, and who have been picked because they look good on TV rather than because they have ideas or character”.
Is it just a matter of time before parties regroup?
Some Conservative and Labour voters are moving to UKIP, some to the Liberal Democrats – and others are listening to calls for a cross-party progressive alliance.
In July there was a “Post-Brexit Alliance” meeting with speakers including the Liberal Democrat’s Vince Cable, the SNP’s Tommy Sheppard, Labour MP Clive Lewis, Green Party MP Caroline Lucas, Amina Gichinga from Take Back the City and the Guardian’s John Harris. This month, a statement calling for progressive parties to work together for electoral reform was published; it is signed by Nicola Sturgeon, First Minister of Scotland, Jonathan Bartley, co-leader of the Green Party of England and Wales, Caroline Lucas, co-leader of the Green Party of England and Wales, Leanne Wood, Leader of Plaid Cymru, Steven Agnew, Leader of the Green Party of Northern Ireland, Patrick Harvie, Co-convener of the Scottish Green Party and Alice Hooker-Stroud, Leader of the Wales Green Party.
‘Principled, grown-up politics’ indeed.
American blue collar workers are angry (The Times); Martin Wolf adds a growing and widespread sense that ‘elites are corrupt, complacent and incompetent’
Today the Times interprets unusual polling results in the United States. Like many American media commentators, it predicts that “blue-collar workers who are worried about the effects of globalisation on American jobs promise to shape the November election”.
In the Financial Times, analyst/economist Martin Wolf expresses a belief that the ‘native working class’ are seduced by the siren song of politicians who combine the nativism of the hard right, the statism of the hard left and the authoritarianism of both.
’A plague on both your houses’?
He writes: “The projects of the rightwing elite have long been low marginal tax rates, liberal immigration, globalisation, curbs on costly “entitlement programmes”, deregulated labour markets and maximisation of shareholder value. The projects of the leftwing elite have been liberal immigration (again), multiculturalism, secularism, diversity, choice on abortion, and racial and gender equality . . . As a recent OECD note points out, inequality has risen substantially in most of its members in recent decades. The top 1% have enjoyed particularly large increases in shares of total pre-tax income”.
David Cameron responds to church leaders’ attacks by saying that the reforms are part of a moral mission
Wolf continues: “In the process, elites have become detached from domestic loyalties and concerns, forming instead a global super-elite. It is not hard to see why ordinary people, notably native-born men, are alienated. They are losers, at least relatively; they do not share equally in the gains. They feel used and abused. After the financial crisis and slow recovery in standards of living, they see elites as incompetent and predatory. The surprise is not that many are angry but that so many are not”.
Wolf sees the electorate turning to ‘outsiders’ to clean up the system in Britain, the US and many European countries and advises ‘the centre’ how to respond:
- People need to feel their concerns will be taken into account, that they and their children enjoy the prospect of a better life and that they will continue to have a measure of economic security.
- They need once again to trust the competence and decency of economic and political elites.
- Disruptive mass immigration needs to be brought under control; refugees must now be the priority.
- There must be a fundamental questioning of its austerity-oriented macroeconomic doctrines: real aggregate demand is substantially lower than in early 2008.
- The financial sector needs to be curbed. It is ever clearer that the vast expansion of financial activity has not brought commensurate improvements in economic performance. But it has facilitated an immense transfer of wealth.
- Taxation must be made fairer. Owners of capital, the most successful managers of capital and some dominant companies enjoy remarkably lightly taxed gains.
- The doctrine of shareholder primacy needs to be challenged. With their risks capped, their control rights should be practically curbed in favour of those more exposed to the risks in the company, such as long-serving employees.
- And, finally, the role of money in politics needs to be securely contained.
Wolf concludes pragmatically: “western polities are subject to increasing stresses. Large numbers of the people feel disrespected and dispossessed. This can no longer be ignored”.
Self interest rules OK! The threat to the status quo is paramount – the ethical dimension totally ignored.