"We're in the business of making money for our shareholders. If we have to put jobs and technology in other countries, then we go ahead and do it." -- President of McDonnell Douglas operations in China, NY Times, 2/25/1995.
Any display of a quaint notion like national loyalty, much less any show of sentiment toward workers and communities that might check the emigration of capital, would result in any soft-hearted CEO being instantly ejected -- minus a golden parachute -- from the cockpit of any major global firm.
Even amidst the flag-waving frenzy following Sept. 11, more and more corporations are relocating their headquarters to Bermuda through paper maneuvers in order to hold down their US taxes. The "more advantageous employment for wealth in foreign nations" is the very driving force of the global economy.
Where 19th-century free-trade theorist David Ricardo envisioned exchanges between nations based on "comparative advantage," with investment largely confined to one's own home nation, the current globalized economy is driven heavily by shifts of resources within corporations across national borders. Strikingly, the US now has some 60% of its international merchandise trade composed of such internal transfers. These "intra-firm transfers" typically involve General Motors US "exporting" unfinished parts to GM de Mexico's low-wage operations and then "importing" the finished products back into the US for actual sale to a mass consumer market.
The global economy has developed into what William K. Tabb calls "the amoral elephant," an infinitely stronger version of capitalism than anything seen heretofore, a beast seemingly free to roam across the globe, stomping down wages, environmental protections, and any institutions and values that are not market-driven, most particularly democracy itself. Tabb's depiction of this mammoth in The Amoral Elephant: Globalization and the Struggle for Social Justice in the 21st Century [Monthly Review Press, 2001], is one of the very best in a raft of new books on the global economy.
Tabb argues that global capitalism is now "so large a presence in our lives that we are like the blind men (with their elephant) who each grasp some seeming local truth ... And of course those who ride atop the elephant have a different experience of its nature than those who are trod beneath its feat. The elephant itself is amoral."
Now the impersonal workings of the market are acted out on an international level, and often operate like a "wrecking ball," as even billionaire currency-speculator George Soros admits. "The impact of the wrecking ball is to suddenly take away the order that ordinary people depend upon, not as speculators but rather as prisoners of these larger structuring forces," Tabb observes. "The pendulum swings and they find their livelihoods gone, their lives disrupted beyond repair."
The wrecking ball's impact has been felt both in the South, where international funding institutions have exported rigid free-market structures and the North, where Third World models of wealth distribution have been imported. In the South, supra-national institutions like the World Trade Organization, International Monetary Fund and World Bank have imposed disastrous programs of financial liberalization: the lifting of controls on capital, privatization of vital government functions, removal of subsidies for critical necessities of life, and the re-orientation of their economies as export platforms.
In the North, corporate-driven globalization has translated into sharp constraints on the living standards and political voice of the vast majority of citizens. Governments have undergone a dramatic, epoch-ending shift in function, narrowing their role from Keynesian-style stabilizers of consumer demand and enforcers of a social contract between labor and capital to ever-solicitous servants of a "good business climate." For a lengthy period after WW II, "the state promotion of profit growth and higher living standards co-existed." This strategy of co-existence has largely been jettisoned, with virtually every component of the social safety net under sustained attack
Instead of the longstanding approach pioneered by Henry Ford of building up domestic consumer markets through providing relatively high pay, major corporations and the World Bank, IMF and WTO are now oriented toward holding down the earnings of their workforces -- whether still in the US or transplanted overseas -- and marketing their products to elite consumers across the globe. In each local setting, capital maintains an extraordinary degree of dominance: workers -- whether in Milwaukee or Mexico -- are frightened to assert their needs for fear of losing their jobs; public officials -- whether local mayors or presidents -- are paralyzed with fear by the judgment of the bond market; entire societies are preoccupied with shaping human needs to the demands of global capitalism rather than re-configuring the economy to meet human needs.
But while capital remains supreme at the local level, events in Seattle, Switzerland, Washington, D.C., Genoa, and Quebec City have exposed a vital weakness of a seemingly impenetrable system of power. When the representatives of global capitalism gather to render decisions on the fate of six billion subordinates, they can only do so behind barbed wire, surrounded by Uzi-wielding centurions shielding them from hordes of multi-national protesters.
While the masters of the universe transact their business behind such barriers, it profoundly reinforces the central message of the protesters: the future of humanity is being decided behind closed doors by a tiny elite too petrified by fear and arrogance to engage with the forces of civil society. Ultimately, this perception may deepen into a crisis of legitimacy for the corporate model of globalization.
Roger Bybee is a Milwaukee-based writer and activist. William K. Tabb, The Amoral Elephant: Globalization and the Struggle for Social Justice in the 21st Century, New York: Monthly Review Press, 2001, 224 pages, $18 paper.