Globalization
By
Cate Malek
July, 2005
On September 9, 2003, thousands of protesters gathered in Cancun, Mexico to protest the World Trade Organization. During the protest, Lee Kyung Hae climbed the police barricade separating the protesters from the meeting place of the WTO. He addressed the crowd and then plunged a small Swiss Army knife into his chest. He was wearing a sign that said: "The WTO Kills Farmers." [1]
The news of Lee's violent death quickly spread across the world. He was alternately depicted as either insane or heroic. People's opinions tended to depend on which side of the globalization conflict they were on. Lee's suicide was just the tip of the iceberg. Globalization can be linked to thousands of conflicts around the world from the debate over Nike's use of sweatshop labor to Russia's troubled oligarchy. Most of these conflicts appear to be highly intractable.
The very idea of globalization, like many intractable conflicts, tends to overwhelm people. The economic processes behind globalization are complex, involving many different factors and individual disputes. Plus, there is so much anger, fear and misunderstanding on all sides of the issue that many people try to ignore the topic. However, since globalization now significantly affects everyone in the world, it is necessary for us to be able to think clearly about both its positive and negative aspects. To reap the potential benefits of globalization, we have to make wise and equitable decisions for people on all sides of the conflict. This will require constructive debate and a clear understanding of the conflict processes behind globalization.
South Korea's Story
The definition of globalization is essentially that because of technology, people around the world can now interact faster and less expensively than ever before. It is not the actual phenomenon of globalization that causes conflict; rather, it is the organizations and treaties set up to regulate and promote it. In the late 1980s, South Korea got its first taste of globalization. The country accepted recommendations from the Uruguay Round (which later became the WTO) to open their economy to free trade. These recommendations required South Korea to gradually reduce subsidies to its rice farmers. In return, the Uruguay Round promised South Korea aid and, even more importantly, entrance to the new world economy. The South Korean government believed it had put its country on the fast track towards development and prosperity and, in many ways, it had. But, the reforms were devastating to South Korea's rice farmers. Other countries, such as the United States, had continued to subsidize their farmers and the Korean farmers could not compete. In twelve years, the number of farmers in South Korea dropped from 6.6 million to 3.6 million. In 2003, U.S. subsidized rice exports to Korea were four times cheaper than the rice produced by Korean farmers. [3]
Many analysts would argue that South Korea's rice industry is inefficient and that it should be replaced with more profitable ventures. This may be true, but rice also has deep roots in South Korean culture. Mexican journalist Luis Hernandez Navarro writes:
Korean culture is based on rice. In Mesoamerica we say we are the "people of maize" - thus we can say that Koreans are the "people of rice." Rice is much more than a commodity for the rural people of Korea: it is an ancestral way of life. The Korean word "bap" is used both for cooked rice as well as for food in general. If you ask a Korean child what they see on the Moon, they will tell you they see rabbits milling rice in a giant mortar. A large proportion of the total labor force in Korea is dedicated to the cultivation of rice. Because of rice, rural villages are located in the midst of the very rice paddies where villagers work. Rice represents 52% of agricultural production. [4]
For many Koreans, rice is part of their identity and thus, very difficult to give up.
This is where Lee comes in. Lee had spent his life advocating for South Korean farmers. He built a demonstration farm attempting to show farmers they could survive despite falling crop prices. But when the farm went bankrupt in 1999, he began to protest. He went on a hunger strike 30 different times. He was elected to his state legislature three times as a farmer representative. His older sister, Lee Kyang, said, "the most important things for him were the farmers, his parents, and his three daughters." His suicide in 2003 was the only way he could think of to bring the South Korean farmers' plight to the attention of the world. In his will he wrote, "It is better that a single person sacrifices their life for ten people, than ten people sacrifice their lives for just one."[5]
But did Lee's suicide do anything to help the farmers? Lee was caught up in a debate that is raging all over the world and his death changed very little.
The Pro-Globalization Side
Eighteenth century economist Adam Smith described the capitalist economy as an invisible hand bringing order to an otherwise chaotic world. [6] This theory defines the pro-globalization side of the conflict. Thomas Freidman, a New York Times correspondent, argues that globalization has replaced the Cold War as the dominant international system. He writes:
The driving idea behind globalization is free-market capitalism — the more you let market forces rule and the more you open your economy up to free trade and competition, the more efficient and flourishing your economy will be. Globalization means the spread of free-market capitalism to virtually every country in the world. Therefore, globalization also has its own set of economic rules — rules that revolve around opening, deregulating and privatizing your economy, in order to make it more competitive and attractive to foreign investment. [7]
Globalization's believers argue free-market capitalism is not always kind or easy, but it is the way to raise the standard of living for the most people. Furthermore, they say, this new international system has given new economic opportunities to people all over the world.
Of course, along with open markets comes an increased mixing and clashing of different cultures and people. This can also be a good thing because it creates increased interdependence, which, in theory, reduces conflict. For example, free-market capitalism increases the costs of war because warring countries lose markets and investors and then their economies plummet. Friedman has a theory that the crisis between India and Pakistan was diverted in part because the Indians were afraid of losing tech jobs from American companies like GE, Microsoft and American Express. [8]
Joseph Stiglitz, a Nobel Prize winner in economics, gives a long list of the benefits of globalization. He writes:
Opening up to international trade has helped many countries grow far more quickly than they would otherwise have done...Because of globalization many people in the world now live longer than before and their standard of living is far better...Globalization has reduced the sense of isolation felt in much of the developing world and has given many people in the developing countries access to knowledge well beyond the reach of even the wealthiest in any country a century ago. [9]
This is the theory the WTO and the South Korean government believe in. While they acknowledge that globalization is not painless, they hope that the end result will be more prosperity for everyone. However, there are some who are skeptical. Joseph Stiglitz, a former chief economist for the World Bank, is one of them. He writes, "Those who vilify globalization too often overlook its benefits. But the proponents of globalization have been, if anything, even more unbalanced." [10]
The Anti-Globalization Side
Stiglitz writes, "Protestors see globalization in a very different light than the treasury secretary of the United States, or the finance and trade ministers of most of the advanced industrial countries. The differences in views are so great that one wonders, are the protestors and the policy makers talking about the same phenomena? Are they looking at the same data?" [11]
Twentieth century economist Kenneth Boulding recognized the crucial role played by Smith's "invisible hand," but he also argued that the story was more complex than that. He described an "invisible fist" consisting of the perverse dynamics of market interactions, which have to be controlled if capitalism is to benefit average citizens. It is this invisible fist that defines the anti-globalization side of the conflict.
The protesters center their criticisms on the World Bank, the WTO and the IMF. Critics argue these institutions have pushed hypocritical policies that push poor countries to eliminate trade barriers while allowing rich countries to keep them. Furthermore, critics question whether these policies will, in fact, create prosperity in the long run. Stiglitz argues that countries that have opened themselves up to free trade have not received the promised benefits. He cites statistics from several Latin American countries that show that after opening themselves up to free trade, their growth rates have fallen to barely more than half of what they were pre-globalization. [12]
Stiglitz, is extremely concerned with the plight of developing nations in this "new world order." He argues that developing countries have been pushed to liberalize their economies before they were ready, forcing many of their citizens into poverty. Furthermore, Stiglitz argues that the World Bank, WTO and IMF are undemocratic and that their policies boil down to taxation without representation.
Apart from this progressive opposition, there is also a more conservative opposition. Various religious groups, including Islamic activists and fundamentalist American Christians, oppose globalization because, to them, it represents a threat to their values. Culture clashes are making it difficult for many to maintain their moral clarity.
Stiglitz sums up the globalization conflict when he writes, "Globalization itself is neither good nor bad. It has the power to do enormous good. But in much of the world it has not brought comparable benefits. For many, it seems closer to an unmitigated disaster." [13]
This conflict is not going to disappear overnight. It calls into question difficult issues of justice, identity and equity. In many ways, globalization has made the world smaller by allowing people around the world to interact faster and at lower cost than ever before. However, in other ways, globalization has made the world bigger. In the past, when people had disputes they could appeal to their government or community for a solution. However, because of globalization, disputes now transcend the boundaries of towns, cities, even countries. Now, when people complain, nobody is listening. When someone has a dispute with the WTO or a multinational company, it can be almost impossible to get these institutions to listen. This gives those who feel victimized by globalization an intense sense of frustration, anger, and powerlessness. History has shown that those who feel they have no recourse often to turn to violence. Lee Kyung Hae is a case in point.
More Constructive Approaches to Globalization
Although globalization conflicts will probably never be neatly resolved and forgotten, there are incremental improvements that can be made. Like a flash flood, globalization can't be prevented, but it can be controlled and directed.
The most important way to address globalization conflicts and to prevent further deaths is to continue to develop, refine, improve and promote international dispute management systems. These could take many forms. One possibility would be international laws and courts, which would protect people's basic human rights. For relatively powerless groups such as the South Korean farmers, effective conflict resolution systems could give them leverage against their more powerful opponents. Hopefully, if powerless groups had an outlet for their frustration, they would not feel the need to resort to violence to get their message across. Whatever methods are used, it is clear that this "new world order" is going to require new institutions to smooth interactions between people around the world.
Furthermore, groups who feel frustrated by globalization, such as the South Korean farmers, can learn to empower themselves to meet their needs. They can do this using techniques like non-violent protest and by building coalitions. These methods may ease some of the power inequities caused by globalization.
The mass media will become more important than ever before. While the media is capable of exacerbating conflict, it can also help to humanize people and draw attention to injustice. Because globalization conflicts operate on such a large scale, mass media will be vital to help different groups communicate effectively with each other.
Fact-finding is also extremely important for globalization conflicts because they often concern highly technical information. In Lee's case, it is vital to know whether the WTO's recommendations were actually benefiting South Koreans more than they were hurting them. It will be necessary for experts to collect trusted, thorough research on the effects of globalization in order to avoid misunderstandings and poor decision-making that will further escalate conflict.
Whatever we can do to divide the world's resources more equitably will help to reduce intractable globalization conflicts. Humanitarian aid and development activities, such as building roads, schools, medical centers and other infrastructure could possibly help developing nations struggling to keep up in a newly globalized world. Also, some economists argue that the World Bank, WTO and IMF have the power to make policy changes that could ease the economic burden for poor countries.