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The Globalization Myth

by Alan Shipman
236 pages,
ISBN: 1840463597


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Faster, Must Go Faster
by Jeremy Lott

If I were to give an award for the breeziest book on globalization, it would go to either Thomas Friedman's faddish, The Lexus and the Olive Tree, or Alan Shipman's new offering: The Globalization Myth. The lingo in the latter is happening, the jokes are targeted at the pretentious and it almost manages to make a subject that defies readability entertaining. Some, however, may mistake this breeziness for a lack of insight or imagination, which would be a miscalculation. Shipman is the author of two serious books on economics (The Market Revolution and Its Limits and Transcending Transaction) whose "good times" persona masks a much more subtle thinker.
The "myth" in the title is meant to refer to a set of misunderstandings about what globalization is and what its effects are, but it also takes on a double meaning. The chapter-length introduction begins, "Life on earth was global from the outset, as one fragile planet huddled for comfort against a cold and empty space." Localization, Shipman explains, "came later, after manners began to fragment over space, and memories over time." Readers of a religious background probably just heard echoes of the opening of the book of Genesis and the story of the Tower of Babel, and their ears were not playing tricks on them. Creation myths are marvelous tools for imagining how the world should work, pinpointing the precise point at which everything went arse-over-teakettle and charting a course back to our designer Eden.
In order to specify just where the world went wrong, Shipman has to put down several stereotypesłmythsłthat have been reinforced through repetition by the critics of globalization. The largest misconception is what we might call the Myth of the Unchecked Rapacious Corporation. It's a rather complex myth, which holds a) that corporations are corrupting the political process by showering it with cash; b) that cheap overseas labour has created a "race to the bottom," where Multi-National Corporations (MNCs) play one government against the next to keep wages and taxes low, as well as to exact other special perks; and c) that bought politicians are either too corrupt or powerless to do anything about it.
Not so, argues The Globalization Myth. Globalization is "a political creation" through and through. And: "Far from inflicting their expanded presence on an unsuspecting world, big businesses grew to fit a role in which others had cast them." The decisions of governments over the last 30 years to relax trade barriers were, he argues, not about caving into corporations but disciplining companies that had grown too big within their own domestic markets for the good of the frustrated consumers.
Because of the fragmentation of the world into a hundred some odd countries, large companies were able to dominate local markets and manhandle customers, and they were too well entrenched or too politically connected for other locals to be able to compete. Enough of this monopolism could create sluggishness of whole national economies and significantly drag down the collective standard of living. By negotiating agreements which mutually lowered trade barriers, governments were able to sell enough locals on the idea, or at least to mute the criticisms. However, the implicit goal of trade liberalization was to force the dominant local big fish into a much larger pond.
Thus was the project launched that has come to be known as globalization. The Globalization Myth admits that it didn't exactly work as planned. Big fish are big fish regardless of the pond. In order to survive, they became more efficient and also more ruthless. The idea of lifetime employmentła real possibility in my grandfather's generation and even in my father'słhas largely ceased to be a real option for young workers. Investment capital now sloshes about the world this way and that, helping to build developing countries up, but then plunging them into currency crises and recession just as quickly. And the lowering of tariffs has not been kind to heavy North American industries.
While a frozen frame snapshot of the world isn't necessarily pleasant to look at right now, Shipman says the solution is more globalization, not less. He argues, rather ingeniously, that to give into the protests of anti-globalizers would be to freeze that ugly portrait in place. The goal of reformers should be to "think globally, transact locally," by moving government power where it can be most effective in setting universal standards. The G8, the World Trade Organization, the World Bank: All of these world bodies are objects of scorn and derision, but they could, conversely, help to usher in a less fragmented world.

Jeremy Lott is a columnist for Books & Culture.
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