The Globalisation Debate

TRANSLATED BY BEN LITTLEDYKE AND PROOFREAD BY CARA EVANS-GILLEN

This year, the sixth edition of Printemps de l’économie discussed the theme of “deglobalisation”. Economists, academics, business leaders and journalists debated the subject for four days. Alain Minc praises the benefits of globalisation in his work Happy Globalisation. However, it is a proven fact that globalisation, the intensifying process of international trade of all kinds, including goods, capital and services, is today widely criticised for the inequality that it generates.

While the participants of the debate are far from being non-conformists, they do not deny the evils of globalisation. A source of financial, social, and cultural inequality between individuals and regions, globalisation is above all an economic phenomenon which largely originated from liberalism. Although everyone agrees that globalisation is flawed, finding solutions to its problems is another matter. Non-conformed economists, who challenge liberal dogma are notably absent.

60% of French people deem globalisation harmful

While the survey result is not unanimous,  there is still a clear majority. Six out of ten French people have a negative view of globalisation, according to the most recent Opinion Way survey for the Printemps de l’économie. Furthermore, 71% of those polled are pessimistic about their future and for 64% and 65% of respondents respectively, globalisation has negative consequences on employment and wages.

Only 33% perceived positive effects on growth, and only 25% said that it benefits spending power. As for the doctrine of “tender commerce” according to the Hirshmann index, (established in the 17th Century by Montesquieu, wherein the general idea is “wherever there are soft borders, there is commerce, and wherever there is commerce, there are soft borders”), this no longer seems to convince the survey participants. 66% answered that globalisation does not contribute to global peace.

“The long-held pessimism among the working class on these issues has been well-documented. There is nothing surprising about these results. However, a new development is that the survey highlights the closing gap between the working class and the more well-off; between the supposed victims of globalisation and those who benefit from it. The pessimism is spreading to the well-off, the qualified and the high-earners,” claims Pierre-Pascal Boulanger, founder and President of Printemps de l’économie.

Avoiding a regional Matthew Effect

The impact of globalisation is also linked to the way people perceive it. “The perception of globalisation is more important than the reality”, states professor and researcher Olivier Bouba-Olga. He adds that “it’s crucial that we leave regional competition behind. We need to stop talking about ‘attracting talents’ and start talking about ‘excellence’. On the contrary, we need to spread the joy around everywhere, and return to planned policies.”

Mr Bouba Olga argues in his research that social mobility remains weak, and that there is no systematic opposition between the cities and small towns. “The atmosphere in the cities is quite similar at the end of the day. In [his] work ‘Territorial Dynamics: In Praise of Diversity’, people responded to the question “why do you live here?” with the answers of “because I was born here, I have friends here”. Sociology and work play a major role, much more than “soft factors”; in other words, the attraction of certain areas with an urban atmosphere, their open attitude to minorities and cultural activities.”

Mr Bouba Olga’s work shows that some cities such as Nantes, Rennes, and even Toulouse have had a real effect on their region; however, this is not the case for Lille, Nice, or Saint Etienne. On the contrary, a medium-sized city such as Vitré can prove to be very dynamic. “We have to avoid falling into representative determinism, producing a Matthew Effect; a phenomenon named for biblical figure, in which ‘to him who was, more will be given, and from him who has not, even what he has will be taken away’”.

Outsourcing of services

The researcher El Mouhoub Mouhoud, author of Globalisation and Delocalisation of Businesses, echoes Mr Bouba Olga’s sentiments, arguing that the return of industry in France and the USA can be explained by numerous reasons. These include growing costs of transport and petrol, automatisation, low quality products and rising salaries in host countries– the most prominent example being China – as well as environmental factors. “The variable isn’t wage costs, it’s the relationship between wage costs and productivity that counts”, he states, adding that “for example, high productivity gains in low earners in the USA, coupled with the (relatively) high cost of Chinese workers, mean that today the wage costs of a worker in China is almost the same as for an American. This is what makes outsourcing possible.

Nevertheless, there remain a few flies in the ointment. Globalisation has led to considerable progress in healthcare, computers and technology – notably by creating machines which can carry out tasks more efficiently than humans. However, technological progress has today extended beyond the realm of straightforward, “laborious” manufacturing tasks. For the economist Pierre Noël Giraud, society is divided into three categories, called “nomads”, “sedentaries” and the “useless”. While globalisation has had little or no impact on the first category, it has had an important effect on the second, as traders, winegrowers and aeronautic engineers are directly subject to international competition. “The problem is that more and more sedentary jobs are subject to international competition. Therefore, the number of nomads increases while the number of available jobs declines. In short, there are more workers available than there is work. This process leads to a rise in “useless” people; meaning the unemployed, or workers in unstable, dead-end jobs. This creates pressure on salaries and leads to rising poverty.”

This is the case for the banking sector, which is now seeing widespread redundancies throughout the world after being largely spared. The healthcare industry has also been affected. “Today computers make diagnosing diseases quicker and easier. This allows the doctor to spend more time with their patients,” explains the committed liberal Jean-Marc Daniel. However, it is also a chance to reduce their numbers. One profession which is “doomed”, according to Mr Giraud, is the taxi driver. “With the rise of automatic cars, we will no longer need for drivers, or chauffeurs,” he states. In total, according to technology doctor Gérard Valenduc, “around 10% of jobs will be replaced by digitisation”. However, high-ranking civil servant Maire Claire Carrère Gée acknowledges that “this remains a complex phenomenon. The fear of technological redundancies has always been there, but more and more jobs are affected by it.”

Down with protectionism: universal income seems to have been forgotten

“There is absolutely no evidence that economic free trade is a good thing”, states Mr Giraud. While he admits that Britain was able to overtake Amsterdam thanks to protectionist measures in the 18th Century, he does not consider this example to be proof of the benefits of protectionism.  “Protectionism should be used to help fledgling industries, not to save dying ones. Why are people interested in protectionism? From flaws in the market!” he adds “the economist Ricardo wanted to ban annuitants, to stop savings and thereby invest in free trade. This works when one has an absolute advantage beyond compare, and also between equal countries. Europe doesn’t need protectionist politics; it needs commercial politics aimed towards attracting investors.”

As for universal income, it wasn’t mentioned. While the number of “useless” people continues to grow, inequality rises, and “bullshit jobs” are offered by capitalism as a remedy, universal income could be a serious option to cure the ills of globalisation. In his work Realistic Utopias, Rutger Bregman shows how experiences such as that of Mincome – Winnipeg in 1973 in Canada were conclusive. Each family were allocated $19,000, without any obligation for repayment. “Politically, there were fears that people would stop working, and start having lots of children with a guaranteed annual income”, claims Professor Forget. The result was the exact opposite. People didn’t stop working, and the birth rate fell. The students pursued their studies for longer. The solution to unemployment has to coincide with a reduction in the time spent working, it would be shared by universal income. This would allow more time for leisure time and lower stress levels, but also more productivity. Former president of the European Commission Michel Rocard pleaded 20 years ago that “the unstoppable rise of unemployment shows that all of the techniques used to combat it have been ineffective… The only way to effectively combat unemployment would be by massively reducing working hours. The only question is; how to do it?”

Financing universal income is completely possible. There has never been so much wealth in the world. “It’s the money which will be directly injected into consumption. Clearly it’s not an end in itself, but it has the merit of posing a new public politics,” argues the economist Thomas Porcher. Because, as John Maynard Keynes put it, “the difficult thing isn’t thinking of new ideas, it’s giving up the old ones.”

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