Economic Globalization and the Economy Downturn

Economic globalization has stealthily crept up on us over the last fifty or sixty years. The economy downturn has exploded suddenly by comparison in the last eighteen months (as at March 2009). This article will show you how the two are inextricably connected.

Economic globalization and the economy downturn are almost like two sides of the same coin. But most people are unable to see it that way. How many people can actually say they’ve been aware of a phenomenon that can be described as “globalization”? It exists in the public perception as only a hazy idea, even a good one, for is it not the reason why we can buy all those must-have gadgets in their eye-catching packaging for such low prices?

Here in the UK, and I know in most other western counties as well, we have in our shops and showrooms cars, TVs, electronic gadgets and household goods at prices well below what they once commanded, and this has been the case for many years now. It’s nothing to do with the reduced prices ushered in with the credit crunch as retailers try desperately to boost flagging sales.

No, these manufactured goods are cheap because the labour force that works long hours in far eastern factories is prepared to accept wages that we in the west could never live on. They’re happy to accept the equivalent of $50 or so a week, often less, and the Chinese government is happy to have a healthy trade surplus and comparatively full employment.

But the fact of the matter is that these cheap consumer goods come with a fatal side-effect. Anyone with a couple of brain cells to rub together knows that we really should be making these products ourselves. After all, we in the west for the most part produced the technology and the genius that led to the invention and development of these electronic marvels in the first place. So why is it that we have to import them from the far east?

Another thing is this. How long can we go on doing so before we as a nation run out of money to pay for them?

Certainly in the case of the United Kingdom and the United States, we ran out of money long ago. Both are effectively bankrupt states, unable to repay their foreign loans if repayment were demanded. This is unlikely, perhaps, because if China, for example, being the leading creditor country of both the UK and the USA, demanded repayment of all the pounds and dollars owed to it, both countries would be forced to default.

What would happen next? Either the collapse of trade or a massive devaluation of the pound and the dollar to render them worth only a fraction of their previous value. And each of these outcomes would be disastrous to China, whose economy depends on the present charade continuing ad infinitum.

Already the recession has impacted this arrangement. Spiraling unemployment in the west has led to a collapse in demand for consumer goods, and this in turn has led to a sharp rise in unemployment in the far east including China.

Economic globalization, long held dear by establishment economists and ignorant politicians, is proving to be a disaster for every country. It’s the modern-day equivalent of “free trade”, which caused so much suffering to the working classes of western countries throughout the nineteenth and twentieth centuries. It embraces the “free movement of labour” and the “free movement of capital” that are policies enshrined in the treaties of international bodies such as the corrupt, so-called “EuropeanUnion”.

What these fine-sounding slogans really mean is that huge, international manufacturing corporations responsible for producing everything from cars and computers to essential medical and technical equipment, and everything in between, are free to slash their labour costs by moving production to the far east (“free  movement of capital”) and if the poor, wretched working people of the west find they are subsequently out of work, why, they can move around the globe until they find a job (“free movement of labour”), provided they will accept the lowest wages being paid anywhere.

The collapse in manufacturing capacity that this process has brought about in western countries may have benefited the Superclass of David Rothkopf’s book, who undoubtedly own and control most of the world’s wealth, including its productive capacity. But it has been disastrous for individual nations, including the ordinary working folk. The cost is not just financial, but social as well, as unemployed youngsters with no future turn to drugs and crime, encouraged to do this as they are by insanely liberal criminal laws.

Next time you hear some university professor or politician praising globalization / free trade or warning us against “protectionism” you may want to challenge them along the lines set out in this article.