“Power is power and must act, and it must act according to the nature of the machinery through which it operates.”
“So Chang points out that international integration could be ‘more equitable, more dynamic and more sustainable’. And Chang refers to ‘market-oriented and corporate-driven globalization’—it’s important to question how ‘market-oriented’ the ‘corporate-driven’ programs really are.”
“So you could argue that transnational corporations have been ‘the driving force’ in shaping our global economy and that transnational corporations have used ‘their political power’ to ‘largely’ shape ‘state policy in their interests’.”
“These commentaries investigate the ‘machinery’ and the ‘nature of the machinery’—it’s up to activists around the world to illuminate the machine that we live inside, expose its injustices, expose its horrors, overthrow it, and replace it with something that works for everyone.”
How was our global economy designed and in whose interests? Asking about this makes me think about the following comment from John Dewey:
Power is power and must act, and it must act according to the nature of the machinery through which it operates.
So which “machinery” designed our global economy and what’s the “nature of the machinery”?
People will condemn “globalization”—I find that unhelpful because there’s nothing at all wrong with international integration. The 1999 Seattle WTO protests spotlighted “globalization”—I took these notes on a 3 December 1999 NYT article:
“Americans do not speak with one voice about globalization, and while most people are enjoying the boom years, it is a very top-heavy celebration.”
“Among Americans in families earning $75,000 or more, 63 percent see globalization as positive.”
“That falls to 48 percent for those with household income of $50,000 to $74,999.”
“And among the half of American adults in families earning less than $50,000, the positive view of globalism is held by just 37 percent.”
“Surveys in 1998 by Pew and Gallup found small pluralities favoring globalization overall, but both polls also showed the same strong socioeconomic skew.”
So you can see the naked deployment of the term “globalization” in 1999—you still witness this naked deployment all the time in 2022.
I took some notes on a 2017 interview where Ha-Joon Chang and Noam Chomsky discuss “globalization”—I took these notes on Chang’s comments:
the “biggest myth about globalization is that it is a process driven by technological progress”—accepting this myth makes it hard to explain the fact that “the world was far more globalized in the late 19th and the early 20th century than in the mid-20th century”
during “the first Liberal era, roughly between 1870 and 1914, we relied upon steamships and wired telegraphy, but the world economy was on almost all accounts more globalized than during the far less liberal period in the mid-20th century (roughly between 1945 and 1973), when we had all the technologies of transportation and communications that we have today, except for the internet and cellular phones, albeit in less efficient forms”—the “reason why the world was much less globalized in the latter period is that, during the period, most countries imposed rather significant restrictions on the movements of goods, services, capital and people, and liberalized them only gradually”
“this period is when capitalism has done the best: the fastest growth, the lowest degree of inequality, the highest degree of financial stability, and—in the case of the advanced capitalist economies—the lowest level of unemployment in the 250-year history of capitalism”
“This is why the period is often called ‘the Golden Age of Capitalism.’”
technology “only sets the outer boundary of globalization”—it’s true that “it was impossible for the world to reach a high degree of globalization with only sail ships”, but “economic policy (or politics, if you like)” determines “exactly how much globalization is achieved in what areas”
“The current form of market-oriented and corporate-driven globalization is not the only—not to speak of being the best—possible form of globalization.”
“A more equitable, more dynamic and more sustainable form of globalization is possible.”
there was “naked imperialism” before 1945—since 1945, we’ve “seen the emergence of a global system that rejects such naked imperialism”
there’s “been a continuous process of de-colonialization”—countries have achieved sovereignty and joined “the United Nations, which is based upon the principle of one-country-one-vote”
“the practice has been different”—“the permanent members of the Security Council of the UN have a veto and many international economic organizations (the International Monetary Fund, the World Bank) are run on the principle of one-dollar-one-vote (voting rights are linked to paid-in capital)”
“even so, the post-1945 world order was immeasurably better than the one that came before it”
“starting in the 1980s but accelerating from the mid-1990s, there has been a rollback of the sovereignty that the post-colonial countries had been enjoying”—the “birth of the WTO (World Trade Organization) in 1995 has shrunk the ‘policy space’ for developing countries”
the “shrinkage was intensified by subsequent series of bilateral and regional trade and investment agreements between rich countries and developing ones, like Free Trade Agreements with the US and Economic Partnership agreements with the European Union”
post-1973 international integration “has been driven by transnational corporations far more than before”—transnational “corporations existed even from the late 19th century, but their economic importance has vastly increased since the 1980s”
transnational corporations have “influenced the shaping of the global rules in a way that enhances their power”—we saw “an unprecedented extension of corporate power” when transnational corporations “inserted the investor-state dispute settlement (ISDS) mechanism into many international agreements”
that ISDS mechanism allows transnational corporations to “take governments to a tribunal of three adjudicators, drawn from a pool of largely pro-corporate international commercial lawyers, for having reduced their profits through regulations”
Chang’s “preferred option” would be a system of international integration based on “far more restrictions on global flows of capital and more restrictions on the flows of goods and services”—“even with these restrictions, there will inevitably be winners and losers, and you need a stronger (not weaker) welfare state and other mechanisms through which the losers from the process get compensated”
So Chang points out that international integration could be “more equitable, more dynamic and more sustainable”. And Chang refers to “market-oriented and corporate-driven globalization”—it’s important to question how “market-oriented” the “corporate-driven” programs really are.
And I took these notes on Chomsky’s comments:
international integration “long pre-dates capitalism”—the “silk roads dating back to the pre-Christian era were an extensive form” of international integration
“There have been quite substantial changes during the recent period of neoliberal globalization, since the late 1970s, with Reagan and Thatcher the iconic figures—though the policies vary only slightly as administrations change.”
“Transnational corporations are the driving force, and their political power largely shapes state policy in their interests.”
“transnational corporations have increasingly constructed global value chains (GVCs) in which the ‘lead firm’ outsources production through intricate global networks that it establishes and controls”
Apple is “the world’s biggest company”—the “iPhone is designed in the US”, the parts come “from many suppliers in the US and East Asia”, the parts “are assembled mostly in China in factories owned by the huge Taiwanese firm Foxconn”, Apple’s “profit is estimated to be about 10 times that of Foxconn”, and only a “slight” amount of “value added and profit” occurs in China “where workers toil under miserable conditions”
“Apple then sets up an office in Ireland so as to evade US taxes—and has recently been fined $14 billion by the EU in back taxes.”
“Nicola Phillips writes that production for Apple involves thousands of firms and enterprises that have no formal relationship with Apple, and at the lower tiers may be entirely unaware of the destination of what they are producing”—this situation “generalizes”
“the 2013 World Investment Report of the United Nations Commission on Trade and Development” reveals the “immense scale of this new globalized system”—the report “estimates that some 80 percent of global trade is internal to the global value chains established and run by transnational corporations, accounting for perhaps 20 percent of jobs worldwide”
Sean Starrs has studied ownership “of this globalized economy”—Starrs “points out that the conventional estimates of national wealth in terms of GDP are misleading in the era of neoliberal globalization”
Starrs argues that “corporate ownership of the world’s wealth is becoming a more realistic measure of global power than national wealth” because of “complex integrated supply chains, subcontracting and other such devices”—he argues that the world is departing “more than before from the model of nationally discrete political economies”
“Investigating corporate ownership, Starrs finds that in virtually every economic sector—manufacturing, finance, services, retail and others—US corporations are well in the lead in ownership of the global economy.”
“US national wealth” was about 50% “at the historical peak of US power”—that 50% has declined to “maybe 20 percent”, but “US corporate ownership of the globalized economy has exploded” despite the national decline
according to Starrs, US corporate “ownership is close to 50 percent of the total”
“the early industrial revolution relied crucially on cotton, produced mainly in the American South in the most vicious system of slavery in human history—which took new forms after the Civil War with the criminalization of Black life and sharecropping”
today’s form of international integration includes “super-exploitation at the lower tiers of the global value chains system” and also “virtual genocide, notably in Eastern Congo where millions have been slaughtered in recent years while critical minerals find their way to high-tech devices produced in the global value chains”
Nicola Phillips’s study inquires into how a GVC world produces and reproduces inequalities through various asymmetries—these symmetries relate to market power, social power, and political power
Phillips shows that market asymmetries are consolidated and mobilized through securing “‘a structure of production in which a small number of very large firms at the top, in many cases the branded retailers, occupy oligopolistic positions—that is, positions of market dominance, and in which the lower tiers of production are characterized by densely populated and intensely competitive markets’”
according to Phillips: “‘The consequence across the world has been the explosive growth of precarious, insecure and exploitative work in global production, performed by a workforce significantly made up of informal, migrant, contract and female workers, and extending at the end of the spectrum to the purposeful use of forced labour.’”
there’s “a great deal of work to be done—from reconstructing collapsing infrastructure, to establishing decent schools, to advancing knowledge and understanding, and far more”
there “are many willing hands”—there “are ample resources”
“the socioeconomic system is so dysfunctional that it is not capable of bringing these factors together in a satisfactory way”
So you could argue that transnational corporations have been “the driving force” in shaping our global economy and that transnational corporations have used “their political power” to “largely” shape “state policy in their interests”.
People should definitely read Sean Starrs and Nicola Phillips—these two scholars are doing important inquires into how the global economy operates. Chomsky was referring in his remarks to the following commentaries from Starrs and Phillips:
These are extremely interesting commentaries—here’s an excerpt from the 2014 commentary:
Ninety per cent of what China Customs classifies as high-technology exports is actually produced by foreign-owned companies. Thus, while an increasing share of global manufacturing takes place in the PRC, much of this production is controlled, directly or indirectly, by outside interests. The contrast with Japan’s earlier ascent is stark. Any survey of global economic power must therefore take account of this shift, which means focusing our attention on the world’s leading transnational corporations.
And here’s an excerpt from the 2017 commentary:
A monumental body of scholarly research has traced trends in inequality over time and across the world, engaging in energetic empirical and theoretical work seeking to understand the drivers behind these vast socio-economic disparities, which some time ago Jan Nederveen Pieterse rightly described as being ‘without historical precedent and without conceivable justification—economic, moral or otherwise’, and which are now playing out politically in seismic and traumatic ways. Not least for that reason, the task is one of ever greater urgency. My contribution to this effort here focuses on a dimension of the picture which has received surprisingly little attention: namely, the implications for socio-economic inequality of the particular form of industrial organization that has come to underpin the contemporary global economy—one organized around the structures of global value chains (GVCs) and global production networks (GPNs).
These commentaries investigate the “machinery” and the “nature of the machinery”—it’s up to activists around the world to illuminate the machine that we live inside, expose its injustices, expose its horrors, overthrow it, and replace it with something that works for everyone.
Thanks for the shout-out! Hopefully my book about this will come out next year...
I want to scream looking at your formatting and “writing”.
You should:
1. Have one quote, and one only, in bold at the top, which should be a good example of what you are going to say.
2. Beginning: here’s what I’m going to talk about and the point I’m going to make.
3. Middle: here is my evidence and explanation of the point in trying to make. Here is a quote to back up what I’m trying to say.
4. End: here is a brief summary of what we talked about and my conclusion based on the evidence we covered in the Middle.