Economic brutalisation

2008-09-12 00:00

If you are American or Chinese, or belong to one of the smaller economies that have adjusted to globalisation, you can look forward to 2020. If you live elsewhere, the future is decidedly bleak in an increasingly bipolar world. Africa, for instance, is barely mentioned in Robert Shapiro’s book Futurecast 2020: a Global Vision of Tomorrow and South Africa just once — as a source of coal.

Shapiro describes four globalisation role models. The United States has relatively unregulated markets and limited social security and attracts highly educated immigrants. It provides most of the world’s innovation and research. China has minimal human rights, a high degree of regulation and a submissive but sufficiently educated population. It supplies a low-cost, productive labour force. Variations on this theme are two smaller economies. Korea also depended on authoritarian rule to kick-start an expansionist, but well-rooted, economy; while Ireland used middle-class democracy to attract foreign investment. Shapiro believes that countries that do not follow one of these models will flounder and he is particularly pessimistic about continental Western Europe.

Most European nations and Japan have ageing populations, high-cost government social security systems, and a hidebound attitude towards the new global economic order. The relative decline of their economies, Shapiro argues, could well lead to unfulfilled expectations and social unrest. He could be right. Workers whose parents and grandparents retire into relative poverty after lives of hard work and electoral promises may well reject the accepted rules. But this could change as ideas about early retirement alter.

He cheerfully admits that the U.S. and China are the nations of the future because they are prepared to accept sufficient social inequality. Economic brutalisation seems a better term than globalisation, which in any case is often accepted as another term for Americanisation. Much of the system rests on the existence of one remaining superpower, unusual in world history. Apparently Europe made the mistake of investing in its citizens’ welfare rather than supporting the U.S. military-industrial complex against communism. And the social democratic objective of creating re- latively balanced societies, if possible in a more just world, is clearly old hat.

Shapiro’s description of China is particularly informative. Elsewhere, industrialisation has taken decades with the parallel growth of a middle class. In China rapid economic development has been bolted onto an archaic, authoritarian society, 50% of whose people still live in great poverty. Development is an import designed for export: China does not have the infrastructure such as banking systems or health and safety standards to be self-sustaining. It produces 58% of the world’s clothes, but at the same time its manufacturing sector stands on shaky foundations. India is likewise held back by poverty, but also by democracy. Citizens have a real say, perpetuating tradition and preventing India from becoming a global power.

Beware of Washington-based former U.S. government officials peddling forecasts. Shapiro is a scenario painter with a very broad brush, bombarding the reader with economic statistics and repetitive information that amounts to the writer’s equivalent of using a sledgehammer to crack a walnut. There is clear value in what he records, but significant silences and massive assumptions in his forecasting.

He sounds the alarm about petrol well above $100 a barrel, now a permanent state of affairs in the very year his book is published — but without the dire consequences he predicts. Other more severe future shocks might be brought about by a nuclear or biological terrorist attack on a major city that would close down free movement; a quantum leap in nanotechnology applied to energy or a revolution in biotechnology that reduces health costs.

Globalisation involves a double measure of cynicism: dependence on exploitation; and a payoff based on the idea that as long as sufficient millions benefit, the numbers who suffer deeper poverty is immaterial. The wellbeing of communities and whole nations is sacrificed for sanctified competition.

Shapiro writes off advanced, welfare-based societies as future failures without bothering to ask why their people value them so highly and offer resistance to globalisation. Economic growth is a virtually unquestioned good with little said about the environment.

There is a one-dimensional feel to this account: the author regards globalisation as a fait accompli. But it is nevertheless a valuable book if only for the reason that it reflects equally arid thinking in what nowadays passes for the Left. According to Shapiro, two thirds of the value of any large company is now to be found in the ideas and relationships it owns. To what ex- tent is this understood and considered as most societies experience deepening wealth inequality under the influence of globalisation?

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