Globalisation
Earlier, I made a distinction between globalisation after 1945 and since 1989. Elsewhere I have described how modernisation and growth tended to pass by the poor during the first period. [Pronk, 1986[ [Pronk 1987] [Pronk, 1997] [Pronk, 2000] They were neglected because economic growth did not need them: neither their labour nor their purchasing power. The emerging global economy had more or less the same pattern as the Western economies that enjoyed economic growth after the industrial revolution. In these countries poverty had been appalling and exploitation harsh. It took some time before the new capitalists and the emerging middle class realised that further economic growth would not only depend on supply factors, but that a growing demand would be crucial and that that required higher incomes for hitherto poor labourers as well. This paved the way for a more positive response to the claims set by the poor and their labour unions and social movements. It resulted in less exploitation, higher wages, better labour conditions, Keynesian economic policies and social welfare systems, based not only on notions of solidarity, but also on enlightened self-interest.
In the world economy it is no different. In the emerging world economic system the rich did not need the poor. After World War II, modernisation created its own demand. Poverty reduction was not necessary: low-cost labour was amply available and there was much purchasing power around, which could be tapped even if it was far away, because globalisation brought those who could afford to buy and pay closer. There was no compelling need to sustain demand by raising the incomes of the poor. The poor were dispensable and could be neglected. That is the picture of the second half of the twentieth century: poverty as the collateral damage of globalisation.
Clearly, this could not last. After a while the world economy would experience similar limitations to further growth as had earlier been the case at the national level. In the eighties this was foreseen by Willy Brandt and Gamani Corea. The Brandt reports bore the titles: ‘North-South: A Programme for Survival’ and ‘Common Crisis’.[Brandt, 1980 and 1983] Corea did not tire of advocating world economic policies on the basis of mutual interests and interdependence. [Corea, 1985] The debt crisis became a burden for debtors and creditors. At the end of the decade, when adjustment policies had taken their toll everywhere, the moment of change seemed to come a little bit closer. Maybe the markets of the poor were needed for the recovery of world economic growth. The awareness grew that poverty reduction was not only socially desirable, but also an economic necessity.
But then there was the quantum leap of the early nineties. The fall of the Berlin Wall and the eclipse of frontiers between East and West, together with the breakthrough in information and communication technology, created an unrestricted world market. Neither geographical distance nor time constraints now stood in the way of the growth of economic opportunities. The sky was the limit. Low-cost labour was abundantly available and less and less sought after: technology was taking over. Boosting the purchasing demand of the poor was not necessary: there was abundant demand around in the emerging global middle class. Elsewhere I have described the consequences: poverty reduction was no longer seen as socially desirable, but as economically undesirable. [Pronk, 1994] In the eyes of the new global middle class, poverty reduction would only cost money without any benefits for the economy. In their economic calculations the poor became a cost factor. Poor people were not a potential asset to society, but a liability, a burden on the budget and on society as a whole. Efficiency required not poverty reduction, but cost reduction, the reduction of social costs in particular. The new global middle class was everywhere: people earning more than about two dollars a day, with access to markets, nearby and far away, access to modernity, the new technologies and the means of communication, access to public services as well, people in all countries, in North and South, East and West. This new global middle class was competing with the poor for resources and access. It still is. The middle class has access to the more fertile soils, the economically promising areas, the better facilities for water and energy, the better settlement areas, more secure, less vulnerable. The middle class has more access to scarce public services, for instance in the fields of education and health. It also has better access to political power, even in democratic political systems. It knows how to use this access to guarantee public funds for itself rather than to lift the poor out of their misery. In doing so, the new and emerging global middle class has deprived the poor of access to the global system itself. The poor were not only thought to be dispensable, but have also been disinherited. They were driven away from scarce resources, and denied opportunities to strengthen their own capacities. Globalisation became occupation, or in the words of President M’beki of South Africa, addressing the Johannesburg Summit, ‘Global Apartheid.’ [Pronk, 2003b]
What did governments do? Mostly they were loyal to the new global middle class, modern, embracing the market everywhere, preaching the wonders of liberalisation, skimming the public sector where this felt like a straightjacket to the middle class. Governments skilfully facilitated globalisation by strengthening those institutions and treaties which would ensure a widely open free world market, unrestrained by considerations of social equity or ecological sustainability. International negotiations to that end succeeded. Other talks produced soft outcomes. Before 1989 globalisation had been a process. In the nineties it was made a project.
All this resulted in more inequalities. Present-day globalisation produces poverty and inequality. The continuation of poverty and inequality is no longer, like during the first period of post-1945 globalisation, collateral damage. It has become an intended result of policy-making: calculated default.
There are numerous examples.23 A pregnant woman is 100 times more likely to die in pregnancy and childbirth in Sub-Saharan Africa than in an OECD country. The poorest 20% of the population, which have a greater chance of being affected by poverty-related diseases, receive less than the richest 20% of the benefits of public-health spending. The same is true for public spending on education and other basic human needs. The average land per capita of the rural poor is steadily declining (from less than 4 hectares in the seventies to less than half a hectare in the nineties) and the decline continues.
Poor people pay sky-high prices for life-saving medication, such as drugs to combat HIV/AIDS. Global middle class-oriented companies both block lower prices on the world market and resist domestic production of antiretroviral drugs in developing countries. Poor people in slums pay up to ten times as much per cubic metre of drinking water as those connected to municipal supplies. They even pay much more, not only as part of their daily budget, but also in absolute terms, than the much richer consumers in the cities of the North.
All this means that the poor are poor and the gap is widening further because their assets decline and the public expenditure in their benefit is declining too, in some countries in absolute terms, in other relative to the position of the other classes. The better-off block reallocation of public budgets to redress this situation. And when governments want to make an effort ‘it is next to impossible politically to shift funds to …. basic social services, without incurring the wrath of those better off.’ [UNDP, 2003, 108]
So it is a matter of political power and distribution. In the second phase of post-1945 globalisation, poverty is no longer a side effect but an intended product of globalisation. Its continuation is seen as beneficial for the middle class, which will continue to resist change and redistribution. That is the basic reason why progress has turned into stagnation and regress since last decade. It is the main reason to be pessimistic about the possibility of achieving the Millennium Development Goals. Unless the dramatic change of direction which was called for really takes place. But, again, that would require a new political approach to globalisation. Not a process to be left to run its course, with some collateral damage to be taken care of on the wayside. Not a project which becomes an end itself, deliberately victimising those who stand in its way. But a project serving the political objective of cutting poverty by half, soon and then again and again, in a sustainable manner.
What will happen if we fail? I don’t know. History provides no indication: the current phase of globalisation is completely new. Present-day fashionable scenario analyses of possible future developments never include the reactions of poor people as variables. So, we have to look around and try to understand present signals. I venture the following postulation.
Poor people do not resort to violence for the very reason that they are poor. But poor people who experience exclusion, who see no perspective whatsoever and who feel treated as less than human beings, may become convinced that there will never be a place for them or for their children in the world system resulting from globalisation. People who feel that the system is turning against them may turn their backs to the system and develop an aversion to that system and its values. Clearly, it is not their system anyway and its values – freedom, justice, solidarity, welfare, modernity – were clearly never meant to be extended to them. Aversion can turn into hatred, and hatred into violence. It is not so difficult to recruit people willing to use violence against a system from a large crowd that is excluded from that system. Nor is it difficult to recruit people within the global system who consider themselves legitimised to act on their behalf.
Poverty is not a root cause of terrorism. But it can lead to violent action against a system that is believed to be a root cause of poverty. Poverty is a political concept and can provide political rationalisations. To squeeze poverty is an end in itself, but it is also a must if we want to eliminate the possible grounds of violence and insecurity. That is the dual mandate for the politics of globalisation.
In the world economy it is no different. In the emerging world economic system the rich did not need the poor. After World War II, modernisation created its own demand. Poverty reduction was not necessary: low-cost labour was amply available and there was much purchasing power around, which could be tapped even if it was far away, because globalisation brought those who could afford to buy and pay closer. There was no compelling need to sustain demand by raising the incomes of the poor. The poor were dispensable and could be neglected. That is the picture of the second half of the twentieth century: poverty as the collateral damage of globalisation.
Clearly, this could not last. After a while the world economy would experience similar limitations to further growth as had earlier been the case at the national level. In the eighties this was foreseen by Willy Brandt and Gamani Corea. The Brandt reports bore the titles: ‘North-South: A Programme for Survival’ and ‘Common Crisis’.[Brandt, 1980 and 1983] Corea did not tire of advocating world economic policies on the basis of mutual interests and interdependence. [Corea, 1985] The debt crisis became a burden for debtors and creditors. At the end of the decade, when adjustment policies had taken their toll everywhere, the moment of change seemed to come a little bit closer. Maybe the markets of the poor were needed for the recovery of world economic growth. The awareness grew that poverty reduction was not only socially desirable, but also an economic necessity.
But then there was the quantum leap of the early nineties. The fall of the Berlin Wall and the eclipse of frontiers between East and West, together with the breakthrough in information and communication technology, created an unrestricted world market. Neither geographical distance nor time constraints now stood in the way of the growth of economic opportunities. The sky was the limit. Low-cost labour was abundantly available and less and less sought after: technology was taking over. Boosting the purchasing demand of the poor was not necessary: there was abundant demand around in the emerging global middle class. Elsewhere I have described the consequences: poverty reduction was no longer seen as socially desirable, but as economically undesirable. [Pronk, 1994] In the eyes of the new global middle class, poverty reduction would only cost money without any benefits for the economy. In their economic calculations the poor became a cost factor. Poor people were not a potential asset to society, but a liability, a burden on the budget and on society as a whole. Efficiency required not poverty reduction, but cost reduction, the reduction of social costs in particular. The new global middle class was everywhere: people earning more than about two dollars a day, with access to markets, nearby and far away, access to modernity, the new technologies and the means of communication, access to public services as well, people in all countries, in North and South, East and West. This new global middle class was competing with the poor for resources and access. It still is. The middle class has access to the more fertile soils, the economically promising areas, the better facilities for water and energy, the better settlement areas, more secure, less vulnerable. The middle class has more access to scarce public services, for instance in the fields of education and health. It also has better access to political power, even in democratic political systems. It knows how to use this access to guarantee public funds for itself rather than to lift the poor out of their misery. In doing so, the new and emerging global middle class has deprived the poor of access to the global system itself. The poor were not only thought to be dispensable, but have also been disinherited. They were driven away from scarce resources, and denied opportunities to strengthen their own capacities. Globalisation became occupation, or in the words of President M’beki of South Africa, addressing the Johannesburg Summit, ‘Global Apartheid.’ [Pronk, 2003b]
What did governments do? Mostly they were loyal to the new global middle class, modern, embracing the market everywhere, preaching the wonders of liberalisation, skimming the public sector where this felt like a straightjacket to the middle class. Governments skilfully facilitated globalisation by strengthening those institutions and treaties which would ensure a widely open free world market, unrestrained by considerations of social equity or ecological sustainability. International negotiations to that end succeeded. Other talks produced soft outcomes. Before 1989 globalisation had been a process. In the nineties it was made a project.
All this resulted in more inequalities. Present-day globalisation produces poverty and inequality. The continuation of poverty and inequality is no longer, like during the first period of post-1945 globalisation, collateral damage. It has become an intended result of policy-making: calculated default.
There are numerous examples.23 A pregnant woman is 100 times more likely to die in pregnancy and childbirth in Sub-Saharan Africa than in an OECD country. The poorest 20% of the population, which have a greater chance of being affected by poverty-related diseases, receive less than the richest 20% of the benefits of public-health spending. The same is true for public spending on education and other basic human needs. The average land per capita of the rural poor is steadily declining (from less than 4 hectares in the seventies to less than half a hectare in the nineties) and the decline continues.
Poor people pay sky-high prices for life-saving medication, such as drugs to combat HIV/AIDS. Global middle class-oriented companies both block lower prices on the world market and resist domestic production of antiretroviral drugs in developing countries. Poor people in slums pay up to ten times as much per cubic metre of drinking water as those connected to municipal supplies. They even pay much more, not only as part of their daily budget, but also in absolute terms, than the much richer consumers in the cities of the North.
All this means that the poor are poor and the gap is widening further because their assets decline and the public expenditure in their benefit is declining too, in some countries in absolute terms, in other relative to the position of the other classes. The better-off block reallocation of public budgets to redress this situation. And when governments want to make an effort ‘it is next to impossible politically to shift funds to …. basic social services, without incurring the wrath of those better off.’ [UNDP, 2003, 108]
So it is a matter of political power and distribution. In the second phase of post-1945 globalisation, poverty is no longer a side effect but an intended product of globalisation. Its continuation is seen as beneficial for the middle class, which will continue to resist change and redistribution. That is the basic reason why progress has turned into stagnation and regress since last decade. It is the main reason to be pessimistic about the possibility of achieving the Millennium Development Goals. Unless the dramatic change of direction which was called for really takes place. But, again, that would require a new political approach to globalisation. Not a process to be left to run its course, with some collateral damage to be taken care of on the wayside. Not a project which becomes an end itself, deliberately victimising those who stand in its way. But a project serving the political objective of cutting poverty by half, soon and then again and again, in a sustainable manner.
What will happen if we fail? I don’t know. History provides no indication: the current phase of globalisation is completely new. Present-day fashionable scenario analyses of possible future developments never include the reactions of poor people as variables. So, we have to look around and try to understand present signals. I venture the following postulation.
Poor people do not resort to violence for the very reason that they are poor. But poor people who experience exclusion, who see no perspective whatsoever and who feel treated as less than human beings, may become convinced that there will never be a place for them or for their children in the world system resulting from globalisation. People who feel that the system is turning against them may turn their backs to the system and develop an aversion to that system and its values. Clearly, it is not their system anyway and its values – freedom, justice, solidarity, welfare, modernity – were clearly never meant to be extended to them. Aversion can turn into hatred, and hatred into violence. It is not so difficult to recruit people willing to use violence against a system from a large crowd that is excluded from that system. Nor is it difficult to recruit people within the global system who consider themselves legitimised to act on their behalf.
Poverty is not a root cause of terrorism. But it can lead to violent action against a system that is believed to be a root cause of poverty. Poverty is a political concept and can provide political rationalisations. To squeeze poverty is an end in itself, but it is also a must if we want to eliminate the possible grounds of violence and insecurity. That is the dual mandate for the politics of globalisation.