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Globalization - Fate or Challenge

The elevation of economic competitiveness as a strategic goal of large economic actors (transnational corporations) opposes the interests of employee organizations since increased competitiveness is connected with wage renunciation or leads to job losses thorugh increased productivity. In every case, adaptation to practical necessities signifies a narrowing of citizens' possibilities of democratic participation. Translated from the German
Globalization - Fate or Challenge

By Elmar Altvater

[This statement is translated from the German on the World Wide Web. The symposium organized by the Petra Kelly foundation was held on November 15, 2002.]

Globalization is both a fate and a practical necessity that cannot be evaded by national governments, economic actors or civil society organizations. Dealing with this "practical necessity" world market is a permanent challenge for all actors. Actors react with the resources available to them, always following their own opposing interests. The elevation of economic competitiveness as a strategic goal of large economic actors (transnational corporations) opposes the interests of employee organizations since increased competitiveness is connected with wage renunciation or leads to job losses through increased productivity. In every case, adaptation to practical necessities signifies a narrowing of citizens' possibilities of democratic participation on the local, regional or national planes.

Globalization emphasized for more than a decade can only restrictedly be reduced to the new technical possibilities and the changed communication structures (Internet). The technologies of communication and transport make an indispensable contribution in enormously accelerating all economic, social and political processes. The principle of acceleration is inscribed in the globalization dynamic. Vast capital moves in the shortest time on the financial markets to take advantage of the profit differentials in space and time. The principle of acceleration operates differently in social areas reflecting the different mobility, flexibility and volativity. Financial assets may be transferred very quickly. As a result, the financial markets are particularly volatile for short-term invested capital. Capital fixed in means of production can also move but hardly with the volativity of short-term financial assets. The fluctuations of commodity prices are less than the fluctuations of prices of interests and exchange rates on globalized financial markets. Labor markets are less volatile. Labor is the least mobile among the "production factors". This has consequences for the hierarchies of power in societies opened to the world market. Capital can seize "exit options" not available to labor. Capital doesn't know any Fatherland or employees. However employees are citizens of a given nation state and not only "production factors".

Globalization of the markets, above all the financial markets, leads to competition over the attractiveness of the "financial site". This produces very high interests since the liberalization of financial markets in the 70s and as a result gags the real economy (financial repression). Economic policy as clearly expressed in the Maastricht criteria is committed first of all to monetary value- and currency stability. This leads to conflicts with other economic goals like increased employment.

Financial crisis occurs when debtors are overstrained through high interests. This happens in several countries as a result of the globalization of financial markets (infection effect). The costs of the financial crises in the 90s in Mexico, Asia, Russia or at the beginning of the new century in Argentina, Turkey and Brazil are enormous. Up to 60% of the gross national product is lost. Poverty rises and unemployment increases. A whole society falls into the chaos of social misery as the case of Argentina shows very clearly. The inequalities in the world grow on account of the globalization of the markets, not despite that globalization. Even the "millennium goals" of the "community of states" cannot credibly put things right.

Acceleration as a basic principle of globalization requires a fuel to convert this principle into reality: oil. However the oil supply is limited, particularly when mammoth countries like India and China are integrated in the globalized markets and all economic processes must be accelerated for reasons of competitiveness. On top of everything, burning oil causes emissions that are stored in the earth's atmosphere because they cannot be filtered out. This is particularly true for carbon dioxide whose enrichment in the earth's atmosphere produces the greenhouse effect. Humanity felt its first consequences with the abnormal weather conditions of the past years. If the fossil foundation of the global accumulation model is not questioned, neither CO2 emissions nor consumption of the resource petroleum will be reduced. Considered under this aspect, the conduct of the US government is consistent. The US government attempts to monopolize access to the oil resources of the Middle East and central Asia and refuses the necessary reduction of CO2 emissions through non-cooperation with the Kyoto protocol. This demonstrates firstly that the tendency of globalization and acceleration cannot be understood when the ecological foundations are not included in the analysis and considered in political projects. Secondly, globalization doesn't mean the production of a "geo-economy" but can be regulated geo-politically and geo-strategically by the most powerful nation even against the wills of other nations and against the will of a majority of humanity. The US develops into a greedy hegemon damaging all other nations that given its military power cannot be stopped from the outside.

Globalization has undoubtedly brought advantages for many people. Opening formerly closed societies and the diversified offers of goods for those with monetary purchasing power correspond to the hopes awakened with the "theorem of comparative cost advantages" underlying the WTO's free trade logic. Still there are too many losers of the globalization process for the course of globalization not to be controlled. What could be the guidelines of a re-regulation of global space? Human rights must be defended first of all and in every case, including the social human rights of 1966 and 1993, not only the individual human rights charter of 1948. Justice is also a goal that is not realized by itself as a by-product or spin-off of globalization. Justice must take into account the diversity of human living conditions in the world and allow the most extensive realization of human abilities. Human security is a goal that threatens to be lost in the globalized world. How can security be guaranteed with economic, technical, political and military acceleration? Security implies reducing and adjusting the speeds. Acceleration of food production has reduced food security. The attempted acceleration of evolution through genetic engineering, biotechnology and cloning could lead to the evolutionary maximum credible accident.

As a result, globalization must also be re-regulated under the sustainability principle. What is crucial is not only that the spheres of the earth are overstrained both on the resource- and on the emission sides. The greenhouse effect, the impairment to fresh water resources, devastation of the soil and destruction of forests are evidence of non-sustainable relations of people with nature following the capitalist principle of acceleration, of an unsustainable social understanding of nature. Sustainability requires de-acceleration. Economic cycles and market relations must be regionalized instead of globalized.

Ultimately, new political forms of democratic participation of citizens must be developed to avoid the existential angst of a "thrown existence" considering the practical necessities of the world market. Democratic participation can be organized easier on local, regional and national planes than on the supra-national or global plane. Nevertheless the global plane cannot be completely dismissed. The social forums in Porto Alegre and the continental social forums in Europe and Asia are beginnings.

If principles are not successfully implemented, "globalization will devour her children" one will probably have to say retrospectively.



Poison for a Peaceful Development

Interview with Prof. Elmar Altvater

[Elmar Altvater, born in 1938, is professor at the Otto-Suhr Institute for Political Science in Berlin. He was a guest professor at different universities of Brazil, Mexico, the US and Canada and has published numerous publications in the areas of globalization and financial systems, crisis and state theory and development policy. He is coordinator of the study group Financial Markets of the Enquete commission of the German Bundestag "Globalization and the World Economy, Challenges and Chances". This interview is translated from the German on the World Wide Web,  http://www.ippnw.de/frieden/altvater.htm from IPPNW Forum 73.]

Forum: Prof. Altvater, you have critically underlined the consequences of globalization. How do transnational financial streams affect the question of resource distribution?

Prof. Altvater: Globalization has led to the rich becoming ever richer and the poor becoming ever poorer. Whoever has much money has an easy access to resources. Unequal distribution of assets and incomes reflects the unequal distribution of access to resources.

Forum: Theoretically doesn't globalization also offer the chance that more people could have access to resources like water and energy?

Prof. Altvater: Globalization obviously includes chances for providing drinking water. However we are very far removed from the goal of two billion water faucets. This supply of drinking water cannot be guaranteed when water is privatized because purchasing power is too small in developing countries for private suppliers to invest. Thus the worldwide supply of drinking water can only be guaranteed through public institutions. Still the necessary funds are not present on account of the crisis of finances. In my opinion, provision with the resource water must be financed globally, perhaps through taxation on currency transactions as the Nobel prizewinner Tobin proposed or through an emissions tax.

Forum: An emissions tax would burden sources of fossil energy more than regenerative emission-free energies. Is this the transition to the "solar revolution" that you urge?

Prof. Altvater: I believe we must get away from the sources of fossil and nuclear energy in the long-term. In 50 to 100 years, our sources of fossil energy will be used up. Energy consumption in the developing countries increases. Therefore reconfiguring to regenerative sources of energy as a kind of "solar revolution" is sensible in the long-term. While revolution is understood as a temporal popular rebellion, it is a tedious arduous process in this case away from the sources of fossil energy to the regenerative. We cannot responsibly continue as before because of the greenhouse effect alone.

Forum: In your opinion, does the question of worldwide resources also dominate military conflicts as for example the operation of the so-called `anti-terror coalition' in Afghanistan?

Prof. Altvater: This question has a very central influence since sources of fossil energy become more expensive and transport ever more costly. If petroleum from the Caspian basin must be transported through the Suez canal at the horn of Africa, securing the sea routes by the German army from Somalia makes sense. The "Strategic Concept" of NATO resolved in April 1999 referred explicitly to the threat to western security interests by the "interruption of the supply of vital resources". Access to petroleum and natural gas can only be assured through out-of-area actions. In other words, dependence on sources of fossil energy is poison for a peaceful development.



Globalization of Insecurity

Interview with Elmar Altvater

[The book Globalization of Insecurity: Work in the Shadows, Dirty Money and Informal Politics (Globalisierung der Unsicherheit) appeared in July 2002. The authors Elmar Altvater and Birgit Mahnkopf show how human security is lost in times of globalization. Elmar Altvater has been a professor at the Free University of Berlin. This interview is translated from the German on the World Wide Web,  http://www.scheinschlagonline.de/archiv/2002/11_2002/texte/15.html.]


Who of the different actors of globalization - nation states, multinational corporations, financial institutions and civil society - is responsible for the increasing insecurity?

Responsibility should be ascribed more to the structures that arose through globalization than to the actors. Today everyone must sell their labor power and depend on buyers. Security of income, jobs and social cohesion fall by the wayside. These are all consequences of constant deregulation.

Do you feel insecure?

I am a civil servant and thus extraordinarily privileged, at least financially. However I feel very insecure when I consider war policy or ecological development.

Don't you regard Saddam Hussein as dangerous?

Hussein isn't an orphan lad. He committed grave human rights violations. Democracy doesn't exist in Iraq. It would be good if democratic powers existed in the country. The Pentagon gathers Iraqi exiles to take over affairs. I doubt whether they are the true solution. A political solution is necessary if Hussein really has weapons of mass destruction. With what do Americans fight? Not toy pistols. If cruise missiles aren't weapons of mass destruction, what are they?

Do you consider NATO an authority of conflict resolution?

There were widespread debates about dissolving NATO at the beginning of the nineties when the Soviet Union dissolved. No one speaks about this today. I regret this very much. NATO forces its new security concept. What is central is securing the national interests of the alliance partner, no longer national territories. On the other hand, NATO seems to lose significance...

Do we still need the German army?

Our "youths" are now at the horn of Africa. They may support the struggle against terror there. Firstly, they secure the sea routes for our energy supply. Security of transport routes is only possible militarily. This is economically irrational. When the costs are no longer acceptable, we will hopefully find renewable energies and solar sources of energy.

You say "the `financially-driven' accumulation regime increases the importance of informality for human survival. Is this statement also true for the situation of Berliners?

Berlin is not comparable with the third world. However many persons in Berlin are also thrown out of formal working conditions because the businesses are no longer worthwhile under shareholder-value aspects. The discharged must organize their survival. They must seek for alternatives and sometimes find them in informal working conditions.

You are against dismantling institutions that should limit insecurity in the name of deregulation and flexibilization. Are you convinced that the Hartz proposals should not be converted?

The labor market shouldn't be left as it is. However the Hartz proposals do not lead in a good direction. The individual aspects must be considered differentiated. In general, Hartz urges more deregulation and more flexibilization. As a consequence, wages go down. A redistribution from the bottom upwards occurs. Hartz promises the creation of jobs. However this turned out to be an illusion.

In 1996, your book Limits of Globalization (Grenzen der Globalisierung) written with Birgit Mahnkopf was published. Are these limits now in sight?

The limits are clearly brought to light. Nature has her limits. The abnormal weather movements are a sign that acceleration can not continue endlessly. Limits are also visible in other areas. The policy of the US is an attempt to flank neoliberalism by aggressive control of undesirable opponents. Limits of globalization are visible through social or civil society movements. In groups like attac or de-globalization, people who no longer join in consumismo organize and seek alternatives. This tendency is very widespread.

You wrote your new book with Birgit Mahnkopf without ascribing articles to individual authors. What was the division of labor?

Each writes individually and corrects the other. In the book, not a single sentence was not read and corrected by both of us. This is really a collective work. We have our emphases. While Birgit writes more on the labor market and working conditions, I write more on finances.

You are leaving the Free university in 2003. What are your plans?

I don't know. I don't have any concrete plans. I will do much reading. I also have many invitations. Perhaps I will go to another Uni for a short time.

homepage: homepage: http://www.mbtranslations.com
address: address: mbatko@lycos.com