The 10 Misconceptions of the Opponents of Globalisation (in Deutsch)
Summary of “Die zehn Irrtümer der Globalisierungsgegner”
by the economic journalists Markus Balser and Michael Bauchmüller,
Eichborn Verlag, Frankfurt, September 2003

Misconception No. 1: Powerful international corporations rule the world
Corporate enterprises are among the most powerful political forces of our times, warns Naomi Klein. The social scientist, Jean Ziegler, perceives globalisation as the terror unleashed by capitalism on a day-to-day basis. But globalisation’s adversaries are wrong when they turn their pet targets, the multinational corporations, into wielders of unrestricted power over politics and the consumers. Globalisation not only stands for rationalisation and privatisation but also for competition in larger markets in which companies are both larger and weaker at the same time.

Often, the influence of large multinational corporations is grossly overestimated. Naomi Klein’ s often quoted statement that of the 100 largest economic units of the world as many as 51 are companies must necessarily be exposed as a misconception. She compares the turnover of companies with the gross domestic products of nations. But unlike in the case of the GDP, which indicates the value added of a state, costs – as for instance for the procurement of goods – are left out of consideration in the case of a company’s turnover. According to the UN, the importance of the 50 largest companies declined, that is to say, their share of the world’s gross domestic product dropped from 3% to 2.8% in the last decade.

Opponents of globalisation fear that in the global competition over location advantages large companies can play off states against each other in their rivalry over optimum framework conditions. However the argument that taxes of corporations get progressively reduced in the global competition over locations is refuted by the fact that over the last 25 years there has been a rise in fiscal shares in the OECD countries from 30.5% to 37.4%. In practice it has been observed that multinational corporations make a significant contribution towards enhancing the standard of living in the host country.

Often, industrial corporations are much more closely linked with their countries of origin, more often than they like to admit. In fact, they need reliable regulations, standards, guarantees and legal security. For companies, strong states are just as important as they are for states. Taxes flow into an economic milieu that the company needs in order to maintain its presence on the global market (education, infrastructure, health). Otherwise why else would a particularly mobile high-tech concern like Nokia for instance continue to have its base in a high-taxation country like Finland? Investments are also overwhelmingly tied to one’s own country. Thus, in 2002, almost 85% of the capital invested in Germany came from domestic sources, while for the USA the corresponding figure was 80%.

With globalisation it is not just corporate enterprises that have grown but also their markets - a development that has brought in its wake not only a larger number of customers but also more competition. The German company Deutsche Telekom, for instance, is certainly far larger today than it was 10 years ago, but it is by no means more powerful as a result. For corporate enterprises not only stand to benefit from expanded markets, they are also fearful of their implications.

International competition itself is considered an important barrier that prevents the emergence of powerful large undertakings such as the East India Company some 400 years ago. Besides it enables cartel watchdogs, for instance, to carry out effective monitoring.

Even today, it is the public that still exercises control over corporate enterprises and not the other way round. Size is not synonymous with power and, paradoxically, international corporations with widespread operations are the ones that easily turn vulnerable. The consumer boycott imposed against Shell in connection with the planned sinking of the oil drilling platform Brent Spar or the child labour accusations directed at fashion houses show that concerns active world-wide are easy targets for consumer protests.


Misconception No. 2: IMF, World Bank and WTO submit to the will of the powerful in order to suppress the weak
Both the International Monetary Fund and the World Bank are targets of criticism from the opponents of globalisation as practically no other global institution is. They are accused of only serving the interests of the powerful – that is, the rich industrial countries. Radical opponents of globalisation even call for the closure of both institutions.

It is on similar lines that the opponents of globalisation also judge the World Trade Organisation (WTO): This organisation, they argue, is liberalising international trade only so that business enterprises from the rich North can gain access to the markets of the South more easily.

Both the IMF and the World Bank have committed gross mistakes in the past and US influence on decisions cannot be overlooked. That apart, the structure and mode of operation of both the institutions carry the imprint of the post-war period, while today’s world has little in common with the world of 1948. However, since some years, a promising process of reform has been underway in both the institutions. Even if their opponents think otherwise: both the IMF and the World Bank are essential and indispensable constituents of the global village. Doing away with the IMF would amount to dispensing with the structural framework for international financial transactions. As for the World Bank, without its help, the majority of the developing countries would have no chance of becoming partners in world trade in the foreseeable future.

Only the World Bank can stand up as an advocate of sustainable development. If a government is mismanaging and lining its own pockets, then the World Bank has the power to press for a policy in favour of the weaker sections. Likewise, companies that invest in other countries without first and foremost having at heart the welfare of the population and the protection of the environment could evoke a similar reaction from the World Bank.

For the opponents of globalisation, the root of all evil lies in the so-called structural adjustment programmes into which the IMF has compressed the conditions to which credit allocation is tied. An institution with no democratic basis of legitimisation interferes in the affairs and concerns of states, curse its opponents. For all that, conditions set out for credit are in themselves logical and self-evident. The Fund seeks to ensure that it does not sink its money into a bottomless pit. That apart, the IMF does not want to simply throw away its money: structural adjustment is to help economies recover, thereby improving chances of the debtor country being able to repay its debts one day.

The WTO, with its 140 member countries, is also under fire from the international critics of globalisation. The main point of criticism concerns structural change, which often goes hand in hand with the opening up of markets. Yet it is this very change that gives countries the opportunity to exploit their comparative cost advantages – the fact that they are able to produce certain goods more economically than others. With the revenue earned therefrom, they can in turn buy goods, which are produced under better conditions elsewhere. What this signifies for the international division of labour is that countries with low labour costs take up labour-intensive production while those with high labour costs and low capital costs turn to capital-intensive production processes. Is there anything to be said against relocating production to the developing countries to begin with, leaving the development of new products and services to the developed world for the time being? As a result of such an arrangement, new jobs will be created in the developing countries with a tendency to rising wages. And with increasing levels of prosperity there will be an improvement in the standards of education, health care and infrastructure.

The WTO is the locomotive for globalisation. It provides the impetus for such developments to begin with and is by no means an instrument used by the powerful to suppress the poor. On the contrary: used skilfully, the WTO can be an instrument for the developing countries to improve their position on the world market. And free trade is and will remain the best form of help for self-help – if it does not take the concerned countries completely by surprise.
The IMF, the World Bank and the WTO have spurred globalisation; they are also powerful. Yet these organisations are only a little older than the most recent phases of globalisation – they are only at the beginning of the road. Anyone simply condemning them is only making things a little too easy for oneself. A globalisation that is to encompass all the states in the long run will not be able to do without the stability of the IMF, the assistance of the World Bank and the regulations of the WTO.

Misconception No. 3: Free world trade only serves to exploit the developing countries
For every dollar that flows into development aid, two are taken away from the poor countries through unfair trade, grumble the critics of globalisation. This perception of theirs makes them overlook the opportunities that free international trade offers to these countries. If foreign trade were to actually be the new route favoured by imperialist exploiters, as is often contended, then living conditions in the developing countries would have suffered indiscriminate deterioration over the last few decades. However, this does not hold true; the percentage of those who live below the poverty line has dropped from 22%to 18% since the mid-80s. Further, a series of important development indicators such as life expectancy and literacy rate lead one to conclude that the quality of life in the developing countries has improved over the past years in important areas. At the same time, the so-called Third World was able to continuously increase its share of world trade in the past years. And in countries, which have expanded their foreign trade most, the economy has registered growth that is well above average. This makes the one or the other argument falter: trade and globalisation enable many developing countries attain that very prosperity that critics see jeopardised as a result of globalisation.
Yet there is no reason for euphoria, particularly with regard to wages in the developing countries. Real wages in some countries of the Third World are as much as 70times lower than those in the USA, Western Europe and Japan. In the opinion of the critics of globalisation, it is the corporate enterprises of the North that time and again bargain wages: they play off one developing country against the other, thereby driving them to resort to unsightly competition over the most abysmal of working conditions. However, low wages could also be rated and viewed differently – namely, as a competitive advantage within the international division of labour. One prerequisite for a functioning system of international trade is that the countries involved can make use of their competitive advantages. In the case of the developing countries, these advantages lie in the relative wealth of simple, low-cost jobs. Although the wages paid are “exploitatively” low as compared to European standards, yet for those who take up such jobs, there is a resultant improvement in living standards. Fixed wage reduces insecurities, enhances living standards and provides successivly generations greater opportunities and actually makes democratic participation possible in the first place, along with the setting up of trade unions which in turn can protect against poor working conditions – and so on and so forth. These developments need not necessarily take place – nevertheless they remain for the most part unarticulated in the public discussion.

Free world trade is neither the cause for poverty in the Third World nor a means of exploitation through which the rich countries gain access to the poor ones. Poverty in the Third World has other reasons: growth in population on the one hand and epidemics on the other, sick industries and lack of trade, wars and insecurity, corruption and mismanagement. To be sure, the developed world is anything but innocent of having a hand in this poverty – yet a consistent liberalisation of world trade could provide crucial help to the developing countries.

But liberalisation is not something that can run on its own. In order to strengthen the position of the developing countries and promote the building up of an independent economy, liberalisation needs a reliable structural framework that is multilaterally co-ordinated. In the case of the least developed countries, liberalisation and increased globalisation must be accompanied by specially crafted development strategies. This requires democratisation, a functioning legal system and efforts to wipe out corruption. And it is liberalisation that helps enforce these requirements in the first place.


Misconception No. 4: Globalisation destroys our jobs
For many employees in the industrial countries, globalisation primarily means insecurity. Every duty that is lifted, every export guarantee that is removed will only further fuel competition on the world market and bring down world market prices to the detriment of high-wage locations.
But the migration of jobs – as also of capital – is nothing but a long overdue adjustment. Labour, capital and knowledge, the three critical factors of production, are unevenly distributed across the world, and therefore come with different price tags. In a more integrated world market the different regions will have increasingly better opportunities to bring their respective advantages into play. Everywhere there are opportunities that open up for new employment.

The example of the duty on steel levied in the USA shows that the attempt to protect steel production from foreign competition ultimately claims jobs instead of protecting them. The introduction of this duty increased the cost of steel and, with that, the cost of manufacturing machines, refrigerators, automobiles, ships, aircraft and indirectly even transport costs. Price increases are out of the question in these severely contested markets; consequently there had to be a reduction in personnel costs with workers being retrenched. The result was that the trading partners introduced “retaliatory duties” for American products, with retaliation for the most part bringing fresh retaliation in its wake. Thus, in an effort to protect one’s own steel industry, chances of success in other branches of the economy were put at risk. Besides, by paying higher prices the people were indirectly also paying the duty.

In this complex system of bilateral trade relations, every restrictive practice brings another in its wake. Short-sighted protectionism is popular – and cynical. It is always another set of employees who bear the consequences. But this process is for the most part imperceptible.

Essentially, behind every process of structural change that the industrial countries have experienced since the discovery of America lie the phenomena of international trade and technical progress. That is, ultimately, always a kind of globalisation. Contrary to what is often propagated, change is not synonymous with loss. It is always a challenge to cope in a changed world. Without international competition there is no external pressure to bring in innovation – thus, globalisation infuses trade with dynamism that it never possessed. But it is precisely this tremendous pace at which social changes take place that evokes criticism against change itself.

In future, the GATS Agreement must take its place alongside the GATT Agreement – which regulates the phased lowering of tariffs on goods and commodities – as the second pillar of world trade. GATS will undoubtedly lead to more severe competition, greater insecurity over jobs and possibly even to declining wages. But it is improbable that it will result in the axing of jobs. For, essentially, there is nothing different happening from what occurs during the liberalisation of commodity trade – only the effect on the individual is more visible here. Thus, rising competition in the service sector will lead to an increasing supply at declining prices. And therefore ultimately also to jobs.

However, the state should not allow itself to be divested of the right to take firm, binding steps to provide its citizens with amenities, so that no services are withdrawn in areas which only function with public grants, which services society cannot and would not like to do without. Amenities like water supply and management, garbage disposal, theatre and universities can only survive competition to a certain extent, if at all. What is essential are general rules for running these amenities, so as to ensure that liberalisation does not lead to the dismantling of such services.

One thing is for sure; the developed world will not lose its jobs – these will only take on a new form. The future world of employment will be characterised by honorary services, freelancing work, the presence of different employers side by side. The further vocational training of employees will constitute the most important protection against unemployment. Social systems will have to adjust to changes to a greater extent – an adjustment that, not least, is required of them by globalisation. These processes will help find better structures in the competition between systems and ideas. In the long run everyone will stand to gain from this development.


Misconception No. 5: Consumer protection and employee rights fall by the wayside on the global market
Strict standards, in the opinion of many critics, fall victim to globalisation. Either they are given up, like many quality standards in the process of concluding international agreements, or they are wiped out by global locational competition. The opponents of globalisation complain that because countries with low environmental or social standards are often more attractive to foreign direct investment than “overregulated’” high-wage countries, the world is today continually seeking out the least common denominator. Lax environment protection regulations, the unbridled exploitation of workers, consumer protection not worth the name – these in the opinion of critics are the consequences of international competition over location.

It is precisely in this age of globalisation, in which change apparently can hardly be stemmed, that societies show tremendous remaining power. Every change is quickly felt to be like the opening of the floodgates, turning the once familiar world upside down. In such a scenario, the question as to whether a strict standard is also meaningful pales into insignificance. Besides the severe opposition from company representatives or trade unions often leads to a further overemphasis being placed on the consequences. The loss of standards can hurt but actually it helps everyone. If the states concur on common regulations, it would facilitate trade and throw up new export opportunities. This would also create new jobs and take the wind out of the sails of those who had wanted to protect their markets with strict standards. At the same time, there is a substantial fall in the prices of goods as a result of competition.

If consumers do want to remain their consuming behavior, they would also be willing to pay a higher price for the same good. Consumers need not be protected with stringent regulations. They can judge quality for themselves.

The matter turns much more complicated if protective regulations no longer have to do with products but with production processes. With regard to the international competition over locations it is not just a matter of tapping new markets but also of looking for the most favourable conditions of production. Environmentalists, human rights activists and trade unionists complain that the international competition over production locations is increasingly lowering environmental and social standards – criticism that is not without any basis. In the race to procure the much-coveted foreign direct investment, it is a favourable investment climate that is crucial. Yet, cynical as it may sound, by undercutting the high demands made elsewhere, the developing countries throw open for themselves some of the few opportunities they have for participating in international competition. In the value added chain from raw material to final product, these countries would hardly have the opportunity of setting up additional levels of processing in order to trigger off economic growth on their own: in short, to develop.

If strict laboor standards are incorporated into trade agreements, this is ultimately only a new instrument for warding off unwelcome competition. It puts those very companies at a disadvantage that most urgently need to be integrated into international trade to a greater extent. The demand for stricter labor standards is practical to lobby for because it lends itself well to being passed off of as a social issue. This shows how dangerous a misconceived anti-globalisation stand can be that supposedly seeks to help the developing countries but does harm to them in reality. It is therefore not without reason that the developing countries are against social standards being set down in agreements that are binding under international law, as for instance in the agreements of the WTO. They fear a new wave of protectionism from the industrial countries. However, it is not coercive measures conceived politically but cautious economic development that helps establish better working conditions in developing countries.

Time and again, it is the critics of globalisation who demand high standards for the developing countries. But, ultimately in doing so, they arouse suspicions of indulging in a new kind of imperialism. If the Third World is forced to adjust to the high social standards of the industrial countries, it would face a situation that is lethal. Motivating the developing countries to enforce higher social standards is the task of consumers in the rich countries, and not that of the competition-wary companies or trade unions, which ultimately only seek their own advantage.

Consumer protection will have just as firm a place on free markets as it does in an autarkic world where each state only provides for itself. Standards that are meaningful will survive globalisation. The role of the consumer in this world will get increasingly stronger and not weaker. Against this background, the work of those who provide information to the consumer becomes more and more important. If consumers increasingly decide in favour of products that meet certain minimum standards, there is also increasing pressure on the manufacturer to meet these standards. Globalisation does not destroy what is good; rather, it initiates a new, important discussion on what is good and what is not.


Misconception No. 6: The advances made by multinational corporations into the Third World only gives rise to poverty, child labour and social dumping
Companies have relocated their production to places where they can produce at a lower cost. In the meantime, labour-intensive steps of production in particular have shifted over to the developing countries. Multinational corporations are spreading like octopuses across the world, contend the opponents of globalisation, and they are hardly concerned whether the fundamental rights of labour are being violated in the process, whether the environment is being destroyed or children deprived of their childhood. They are colossi without a home, shifting locations without much effort and exploiting the different framework conditions in the different countries to their advantage.

Yet, in the meantime, due to the international reputation they enjoy, many companies have come to stand for more rights, not for less. Besides, the economic rise of many developing countries would be absolutely inconceivable without the involvement of these companies. To be sure, it cannot be denied that many countries of the Third World have become especially attractive due to an explosive combination of locational factors (cheap labour, absence of statutory protection of labour and protection against dismissal, corruption). Yet, what is even more important for many companies is the tapping of new markets. The size of the markets and, consequently, the additional sales potential of these markets are appealing – in this case, the companies bank on economic growth and a purchasing power which cannot be fed by wretchedly low wages in the long run.

Alongside their modern production plants, foreign companies also export Western ideas of decent working conditions to the Third World. They apply pressure on their suppliers to improve working conditions there. Their presence in the Third World brings higher wages to local workers and improves working conditions for broad sections of the population in the long run. Since the developing countries look upon foreign investors as an opportunity for further exports and growth, they vehemently reject any binding social and environmental standards, which would divest them of their locational advantage.

Human rights groups, environmentalists, politicians from opposition camps and trade unionists, all with international links, can organise (world-wide) demonstrations and protests in a flash. Thus, Shell’s support for a corrupt regime in Nigeria and, ultimately speaking, for the execution of Ken Saro-Wiwa in 1995 unleashed boycotts of Shell gas stations all over the world, teaching the company a bitter lesson. Increasingly, multinational corporations are working on their social and ecological image. Therefore, globalisation does not provide them with the opportunities for exploitation, suppression and environmental depredation; rather, it divests them of such opportunities. Many companies voluntarily opt to conform to the OECD guidelines, framed anew the last time in 2000, and encompassing the basic employment standards of the ILO. Then, in July 2000, a “Global Compact” was concluded between 50 countries and 700 companies: the contest for the best social image had begun. With that a new transparency was enforced for all practical purposes: if companies assume certain self-imposed duties and commitments, they should also provide an insight into conditions as they actually prevail. At the same time there is increasing pressure on companies, which have so far not come out into the open.

In the rarest of cases, multinationals employ children (as per UNICEF estimates: 3% with multinationals and their suppliers), though for the most part, it is the local small enterprises that employ them or the child’s own family which is still dependent on the labour of its children for its survival. Child labour is a poverty-related phenomenon and the prosperity that globalisation brings helps check it. Still it must be said that far too many companies employ children: pressure from consumers increasingly oriented to non-material values, who prefer to buy products manufactured under good working conditions and are willing to pay a little more for them, can help hasten the process of checking child labour. Binding social clauses are generally counter-productive because they simply address the symptoms without eradicating the actual problem.


Misconception No. 7: The great financial crash is unavoidable
It was not globalisation and the liberalization of the financial markets that drove South East Asia to the edge of the precipice in the middle of 1997, but the Baht’s firm link-up to the dollar and, more important, the badly organised capital market and the excessive inflow of foreign capital (1996: 95 million US $, 1997: -12 million US $), which gave rise to lax credit allocation and, consequently, to an uncontrollably inflated bubble of speculation. Even the blind faith reposed in the compensation standby credit extended by the IMF in times of crisis encouraged the virtually unlimited flow of foreign capital. It was then globalisation, which prevented the Asian crisis from developing into a global recession, for the US economy compensated for the fall in demand in Asia through an increase in domestic demand.

Critics argue that foreign exchange flows today are to a very large extent driven by speculation, that is to say, short-term transactions that divest the financial market of its stability and reliability. A speculation tax of 0.1-1%, as suggested by the Nobel Laureate for Economics James Tobin in 1972, would reduce the frequency and volume of the foreign exchange transactions, thereby preventing devastating financial crises. Besides, the additional revenue could be used for development aid.

However, on taking a closer look, trading in foreign exchange appears to have more of a stabilising impact on markets and balances out market fluctuations, with 80% of all transactions serving to cover businesses against risk. The Tobin tax would be just as ineffective in averting financial crises, for with exchange losses of up to 50% (as during the Asian crisis), a tax of 1% would have no deterrent value whatsoever. Further, it distorts the efficiency of the markets since it drives a wedge between domestic and foreign investments. Moreover, most of the politicians, and those from the USA most of all, are opposed to the tax.

The cautious opening up of the financial markets must go hand in hand with a rapid opening up of the commodity markets to international trade in the developing countries. On the one hand, developing countries must control their financial markets long enough to be able to build up a financial system of banking and credit in order to protect the country from crises. While on the other hand, the growth process can only be financed through greater equity capital formation, which in turn requires internationally active companies, which can reinvest their profits. Hence, whoever demands the quick opening up of markets in the developing countries, must dispense with all ideas of artificially enhancing the competitiveness of ones own economy for example through subsidies.

The Asian crisis called for some prudent stocktaking, and while the interventions of the IMF in Thailand remained ineffective, the international financial systems of today are provided with a surprisingly large number of protective mechanisms, which prevent accidents leading to massive world-wide collisions. Even the IMF has learnt from its mistakes and the Asian crisis has triggered off initiatives for further developing the world financial order, which will reduce its vulnerability to crises. The Asian crisis has shown that globalisation in particular allows compensatory opportunities to be thrown up during times of crisis.


Misconception No.8: The global competition over locations destroys the environment
From the point of view of the critics, the internationalisation of markets stands for world-wide economic growth and the rising consumption of natural resources. The competition for natural resources has to necessarily lead to their destruction, they argue. Market laws would become the determining political formula world-wide. The global competition over locations would lead to a downward spiralling in environmental protection.

But it is not globalisation that is the natural enemy of the environment, but poverty. “Poverty is the worst kind of poison for the environment”, declared Indira Gandhi. Landless peasants clear century-old forests because they have no alternative sources of income. Among the positive effects of globalisation are an aid programme from the industrial countries for the Brazilian rain forests (1992: 350 million $) – if these rain forests had been destroyed it would also have had implications for the far-off industrial countries of the North. Only by pooling in their efforts and acting jointly can the rich North and the poor South improve the state of health of the blue planet.

What has to be done to realise this objective has actually been clear since a long time: Sustainability has meanwhile become the collective term to denote the right way of dealing with Nature – a term that brooks no opposition. The Commission “Environmental Development” set up by the UN Secretariat in 1983 formulated its core theory four years later: ”Sustainability is a development that meets the requirements of the present generation without impacting on the opportunities of future generations.”

Economic growth is indispensable for sustainable environmental protection because it is only when the living standards of the population are higher that there is a greater understanding for the problems of global environmental protection. Economists have found that from an income of $ 8,000 upward (as for instance in Costa Rica, Chile, Poland), environment standards becoming more stringent with rising incomes. Thus contrary to the theory advanced by the opponents of globalisation, economic growth certainly has a positive impact on the environment.

The stabilisation of the world’s population is regarded as the single most important requirement for the world’s economic system not being put to grave risk. The United Nations have pointed out that the development of the world’s population can be stable in a humane manner only if there is a substantial rise in material living standards in the countries of the Third World. According to World Bank estimates, by the end of this century, population growth world-wide will level off at approximately 10 billion as a result of rising living standards. Globalisation constitutes a stabilising factor in this process.

Since the savings realised by industrial enterprises on shifting location to the developing countries accrue for the most part from the lower wages paid there and since these enterprises only spend 1% towards the reduction of pollutant emissions in the industrial countries. The theory advanced by the opponents of globalisation that international trade leads to the export of environmental pollution from the rich countries to the poor is also oversimplified. Only 5% of direct investment in the poor countries flowed into high-polluting industries; in the rich countries on the other hand, this figure was 24%. Democratic systems of government increase the probability of environmental regulations being framed with the welfare of the population in mind and then duly monitored. Processes of democratisation often receive an impetus from globalisation.

Environmental protection based on bans has served itself out in large parts of the world and there is now the general assumption that if natural resources do not pay their way through in hard cash, they will face destruction. Global systems of quotas and certificates are a case tin point. They provide efficient solutions on the basis of market considerations, besides enabling the state to effect comprehensive monitoring.

Within the ambit of existing laws and regulations, the market will arrive at an efficient solution, and should the wrong framework conditions exist, then the market will optimise the negative results. In order to prevent goods transportation of doubtful necessity from polluting the environment, appropriate framework conditions must be created to put a check on them. Efforts to factor in environmental pollution into the prices of goods will become more and more important. To ensure that the environment liability law takes effect efficaciously, the so-called absolute liability (basic liability in case of damage) must replace the currently valid liability for negligence (liability only for negligent action). Increasing interconnection between the states and their growing interdependency helps push through global agreements.

The economy and the environment need each other: without adequate environmental protection, the foundations of future growth will be destroyed. And without economic growth, there can be no environmental protection.


Misconception No. 9: Global brands pose a threat to cultural diversity and values
The opponents of globalisation see cultural diversity jeopardised in a world in which national identities in a consumer society get completely broken down as per the American pattern. Standardised product ranges and an all-pervasive pseudo-culture in the form of brands would leave absolutely no room for a culture beyond economic interests. Goods would then turn into cultural commodities via brands, while cultural commodities would become brands through their instrumentalisation by companies. The multinationals themselves openly claim to be transporting values as well with their logos. Emblems are no longer to be an indication of just the products alone but also of what they promise (coolness, individuality, the exotic etc.).

Consternation over the standardisation of cultures is rooted in a perception of culture as being a self-contained entity. But, actually speaking, cultures are simply inconceivable without external influences that leave their imprint on them; they always evolve from the interface and exchange with other cultures, from mutual assimilation and demarcation. It is a process that involves rivalry and comparison, in which things get transformed and re-interpreted, dismantled and reassembled. And it is of all things the globalisation movement that is regarded as a sign of a long prevailing global culture of sorts.

And yet it is these very opponents of globalisation who generally speak out in favour of multi-culture and tolerance towards other cultures. But with what justification can one deny the people of the Third World that which is considered enlightening for one’s own country?

National identity is not erased through cultural exchange; rather, there is a loosening of ties with uniform value systems and life forms defined through national or regional communities. Homogenisation and the drawing of boundaries, conflict, clear-cut differentiation and cultural blending are not mutually excluding phenomena but on the other hand mutually dependent ones. People have different ways of dealing with outside influences: either they ward them off or transform them in such a way that they are compatible with their own needs, experiences and values.

Globalisation of all things leads one to dwell on the peculiarities of regional culture. For, while global interconnection has been rendering space and time increasingly irrelevant, the need for local roots and a regional identity has been growing ever more important. This phenomenon has already made its entry into the sphere of regional studies through the coinage of a new term “glocalisation” (globalisation and localisatoin).

There is one cultural commodity that is actually conquering the world market with rapid strides and is particularly effective in refuting the theory of the standardisation of cultures: the English language. Its spread only serves to promote understanding among growing sections of the population without harming anyone. In many-voiced Europe, it is becoming a binding element; however it always takes its place alongside the regional language without displacing it.

Another development that has curbed cultural monopolies is the Internet, which has broken through the information monopolies controlled by media undertakings. The Internet creates an entirely new global cultural platform that opens up new avenues of freedom.

Marketing experts estimate, 4 out of 5 attempts to introduce new or improved products into the market end up as failures – this not exactly being proof of the power of large companies over the consumer. Where products find world-wide acceptance, it is not the phenomenon of “coca-colonisation” which should be held responsible for such tendencies towards homogenisation. Rather, the causes lie elsewhere. People’s preferences in some areas are presumably not very different.

Multinationals can be catalysts of culture, but they cannot themselves create it. Even today, cultural trends develop beyond the realm of efficiency, competition, economic viability and growth. Globalisation provides an opportunity for peaceful coexistence and exchange between different cultures that knows no parallels in history.


Misconception No. 10: Globalisation cannot be steered
The advance of globalisation is associated by many with the fear of losing a home, an identity, a job, influence over politics etc. Why is globalisation still regarded as an ominous force, although it has become a part of everyday life and is dealt with as a matter of routine? Several reports about the power of corporate houses and the helplessness of politics have been instrumental in moulding the belief that the process is absolutely uncontrollable. However what is often overlooked here is that the growing liberalisation and integration of global markets provides the opportunity of steering globalisation in such a way that it brings the maximum benefit to the maximum number of people.

Globalisation cannot run on its own. Greater integration depends on the approval of the people and support from politics. Today, nations decide for themselves the extent to which they want to be integrated into international trade. Small countries in particular which cannot produce everything themselves, use the opportunity to tap into new markets beyond the limited sphere of the domestic one.

Comprehensive processes of democratisation are necessary to distribute the fruits of globalisation evenly. These processes are often possible only through participation in international trade and by securing greater prosperity therefrom. The following measures are necessary to obtain the greatest benefit from globalisation:
 The markets of the North must be opened up: The positive effects of development aid are almost completely offset by the impact of trade barriers imposed by the rich North which are of little benefit but cost a great deal (350 million $ annually). If the First World is serious about world trade then it must also open up its markets to competition from the Third world to a greater extent than has hitherto been the case.
 Democracy must be promoted through trade: absence of democracy, corruption and unstable legal systems constitute the most important obstacles for increased foreign direct investment to the Third World. The IMF and the World Bank could help promote democracy but have to be democratised in the first place. Doing away with these institutions would be tantamount to depriving the world of a structure that could have a major influence on processes of democratisation in the future.
 Acceptance must be created: If globalisation was for a long time primarily an economic internationalisation, then there is an intense need for a process of political internationalisation to follow. The involvement of non-governmental players in governance (environment, development aid and human rights organisations, trade unions) is regarded as an important base for greater acceptance.
 The financial system must be stabilised: in order to stabilise the world financial system, the IMF should engage in foresighted crisis management in far greater measure than has hitherto been the case and make efforts to pay greater heed to peculiar features and specific problems. In future, there must be an insolvency law, so as to prevent the poorest countries from falling deeper and deeper into the debt trap.
 Development aid must be expanded: even today, the Western world’s budgets for development aid are shamefully low (0.22%of the GDP). A higher percentage is not only a moral duty but also an economic imperative because it supports economic growth and promotes processes of democratisation.
 Environmental protection must be internationalised: in order to better address global environmental problems, the international community must co-ordinate its environmental policy better. Although an international environment agency (UNEP) already exists, it is equipped with such small financial resources and such limited powers that it leads but a shadowy existence.

The First World should not impose its wages and social standards on the developing countries because it would deprive the latter of the opportunity of making the most of their advantages: land and cheap labour. Whoever condemns poverty, poor working conditions and the power of the multinationals must realise that his protest is not directed against globalisation but against the lack of it.

Globalisation constitutes a reality but is not an immutable inevitability. Every individual has a choice – a choice he ought to exercise to decide in favour of greater integration. International trade brings greater freedom and prosperity for many. Global competition acts as a tight rein on the power of corporations. The theory of comparative cost advantage according to which international trade increases the prosperity of all those involved is becoming a day-to-day reality. Globalisation enriches our lives, it mixes cultures, ideologies, fashions. Properly steered it could be the gateway to an open, free and more prosperous democratic world.