It's like a scene from the latest first-class American TV import, Six Feet
Under - a dark comedy set in a family-run undertaking business. Picture the coffin
sealed and varnished, the final farewells uttered and the conveyer belt humming
into motion, gliding the dear departed into the flames. Suddenly there is the
sound of knocking and muffled cries. "Omigod!" the mourners collectively realize:
the corpse is alive!
The reaction to the wave of financial scandals from the US has felt a little
like that. Enron, WorldCom and Xerox's fudging of the numbers - "a billion here,
a billion there", as President Bush so coolly put it - has had the left putting
on its best black suit as it gets ready to bury American capitalism. They've been
bidding goodbye to a system they reckon is in grave crisis and terminal decline.
Cause of death: the exposure of some of America's starriest corporate names as
hollow shams. And, they predict, if the US economy is on the skids then surely
the big bogeyman - globalization - cannot be far behind. Today, WorldCom; tomorrow
international capitalism itself will lie in ruins!
Not so fast, as Hollywood might say. First, the American system is not ready
for the embalming table just yet. Enron and its copycat debacles obviously represent
a serious blow to the reputation of US business - but not a fatal one. This wave
of scandals will trigger reform, not revolution. What comes next is not the unraveling
of the whole game, but some long-overdue changes - few of which are likely to
excite the May Day protest crowd.
So the Nobel laureate Joseph Stiglitz, author of Globalization and its Discontents
and an intellectual pin-up to many in the anti-globalization movement, foresees
not some fiery meltdown but "increased sensitivity to conflicts of interest" around
the US boardroom table. He predicts a separation of the accountancy and consultancy
functions of single firms along with a demand for greater transparency: necessary
moves, to be sure - but hardly likely to make the hearts of Seattle and Genoa
veterans skip a beat.
Couldn't we set our sights a bit higher, and hope that the current spate of
scandals might do for 21st-century US capitalism what the media's exposé
of collusion in the American oil industry did at the start of the 20th? Might
we not see a shift as dramatic as the 1911 "anti-trust" court decision which broke
up Standard Oil, and stood for decades as a bulwark against cartel capitalism?
No, warn those who know the system inside out. Perhaps if there were 10 more WorldComs,
then America might return to that progressive capitalist tradition which reached
its zenith in FDR's New Deal. But short of an epidemic, radicals should brace
themselves for changes which look a lot like tinkering.
And if those hotly anticipating the death of US capitalism should hose themselves
down, those looking forward to the defeat of globalization ought to take an ice-cold
bath. For one thing, the two are not the same. The Enron affair could have happened
even if the American economy was entirely cut off from the rest of the world.
Its origins lie in greed and the failings of US accountancy law rather than the
contradictions of globalization
In other words, this easy equation of America and global capitalism may be
a tad too simplistic: they are hardly synonymous terms. The problem, says Philippe
Legrain, a former top official at the WTO, is that "globalization has become a
catch-all phrase for everything you don't like about modern life". That's why
he has taken on what may seem a daunting task - writing the upcoming Open World,
a take-no-prisoners, progressive's defense of globalization
Legrain wants us to unbundle all our confused ideas about the g-word and decide
what it is, and what it isn't. For him, that means a belief in free trade and
in strong institutions to manage it - without endorsing every move every international
So rather than seeing systemic flaws inherent in the very idea of global capitalism,
we should approve of, say, Nike opening a factory in Vietnam: those Hanoi workers
may get less than their counterparts in South Carolina, but they're earning way
more than they used to in Vietnam. Foreign investment and know-how comes in; managers
get trained; a developing country is no longer solely dependent on its own means
to build itself up - now it has outside money to give it a leg up. And, by opening
up its markets to foreigners, it gets direct benefits: cheaper Coca-Cola, for
sure, but also cheaper wheat. It is, he says, a win-win.
Think of that as good globalization: the only problem here, say Legrain and
friends, is that there is not enough of it. Richer countries need to return the
compliment and open up our own markets, letting developing countries sell us their
food, textiles and steel. We need to make international trade a two-way street.
Which is not to say all globalization is good. Free trade in goods and services
may bring benefits but, the defenders admit, short-term influxes of capital -
cash coming in one day, flowing out the next - are bad news, destabilizing fragile
economies. Poor countries need to protect themselves from that instability; capital
controls may be the way.
The specifics are secondary. The key point is that the critics need to start
making precisely these kinds of distinctions - and then argue each one on its
separate merits. Stiglitz admirably distinguishes between globalization - which,
he insists, can bring great benefits, spreading knowledge, improving life expectancy
and quality of life - and the institutions which currently manage it. He is scathing
about his former employer, the International Monetary Fund; but his remedy is
reform of that specific body, rather than the abolition of international capitalism.
This seems a smart route for the anti-globalization movement to travel: to
move beyond the sterile debate about whether globalization is good or bad, and
decide what kind of globalization it wants. You can understand its reluctance:
right now it enjoys the perfect unity of a cause which knows what it's against
but not what it's for. As Charles Leadbeater points out in another optimistic
defense of globalization, Up the Down Escalator: "The lack of an agreed program
is a huge strength...they do not have to set priorities or fall out over the terms
of messy compromises."
But it's time to grow up, to recognize that anti-globalization will not do
even as a label. It's far too wide, embracing green ultras or anarchists on the
left and Jean-Marie Le Pen on the right. And it is absurdly impossibilist. Globalization
is now a fact of life: this article can be read, hours after it's been written,
from Sheffield to Shanghai, thanks to that ultimate tool of globalization, the
internet. To be against globalization is to want to turn the clock back, to wish
that the earth can be flat. But it also fails to discriminate, to distinguish
between the liberating globalization of, say, the net, and the menace of smash-and-grab
So put away that black tie, quiet that funeral drum. The task for progressives
is not to bury the modern world but - the same as it ever was - to change it.
© Guardian Newspapers Limited 2002