Platform fifteen (by Shalom Lappin)

Equality and Globalization: A Reply to Beetham and Devine

In their article 'Left on the Euston Platform' (from Red Pepper, June 8, 2006), David Beetham and Pat Devine consider the Euston Manifesto's commitment to social egalitarianism and broad economic equality, and they find it wanting. They criticize the Manifesto's position on these issues as follows.

This just will not do. The dynamic of global capitalism, with US corporations at its centre, is the main generator of global inequality and environmental degradation...

The International Monetary Fund and the World Bank, dominated by the US, together with the World Trade Organisation, have imposed a ruthless regime of privatisation and deregulation on developing countries, creating untold inequality, poverty and human misery. Supported by British governments, they have also sought to impose the same Anglo-Saxon neoliberalism on Europe’s social market economies.

In fact, the Euston Manifesto addresses these issues very clearly. The relevant sentences appear at B 4 and B 5.

Democratic trade unions are the bedrock organizations for the defence of workers' interests and are one of the most important forces for human rights, democracy-promotion and egalitarian internationalism. Labour rights are human rights. The universal adoption of the International Labour Organization Conventions - now routinely ignored by governments across the globe - is a priority for us.
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The benefits of large-scale development through the expansion of global trade ought to be distributed as widely as possible in order to serve the social and economic interests of workers, farmers and consumers in all countries. Globalization must mean global social integration and a commitment to social justice. We support radical reform of the major institutions of global economic governance (World Trade Organization, International Monetary Fund, World Bank) to achieve these goals, and we support fair trade, more aid, debt cancellation and the campaign to Make Poverty History.

We have expanded on these ideas in subsequent statements. In my speech at the manifesto launch, 'Towards a Renewal of the Democratic Left', I suggest a strategy for reformulating the social-democratic project in global terms in order to deal with the corrosive effects of the juggernaut of neo-liberal economic policies in the context of globalized markets. This strategy involves two main elements. The first is the development of strong democratic labour unions in the emerging low-wage industries of the developing world as a way of responding to the exploitation of workers in these countries. If these unions become effective agents of collective bargaining, they will raise the standard of living of wage earners in the developing world and promote the convergence of economic conditions in these countries and the West. This will alleviate poverty and reduce the conflict of interest between workers in the developed and the developing world, and so facilitate the emergence of genuinely international unions able to constrain the power of multi-nationals.

The second instrument for restraining capital in integrated global markets is provided by reconstructing free trade agreements to impose conditions of social investment, fair labour practices, equitable corporate taxation and strict environmental restraint on companies that enter new markets. These conditions will serve to reverse the rampaging privatization that current free trade agreements promote.

The objective of this approach is to effectively transpose the policies of a socialized market and a strong labour movement into international terms that can overcome the current decline of the welfare state that the new mobility of capital has produced. In order for this approach to succeed it is necessary to establish industrial democracy in the developing world and to substitute social-democratic governments for corporate interests as the prime agents responsible for regulating the institutions of the global market.

My speech at the Euston Manifesto launch was based on two articles in Dissent, 'How Class Disappeared from Western Politics' (Winter, 2006) and 'New Labour and the Destruction of Social Democracy' (Fall, 2000).

Alan Johnson has replied at length along similar lines to earlier versions of the Beetham and Devine criticism of the manifesto on issues of global capitalism.

We have, then, presented a very clearly defined position on global capitalism and neo-liberalism. It calls for empowering workers through strong unions to deal with capital within global markets. We have also called for a radical revision of the institutions regulating international markets, in order to turn them into instruments of social investment rather than simply means of promoting global trade and competition.

By contrast, Beetham and Devine suggest no alternative to the onslaught of neo-liberalism, but simply repeat well-worn slogans condemning American imperialism. In fact, they systematically misdescribe the serious problems posed by the current phase of global capitalism by attempting to reduce it to the projection of American political and military power.

It is certainly the case that the United States has often pursued deeply destructive foreign policies in order to advance its narrow economic concerns (as, without exception, has every major power, as well as not a small number of minor ones). However, the simplistic view that Beetham and Devine suggest misses one of the most important features of integrated global markets and the companies which operate within them. In general, these companies owe no loyalties to any country or constituency beyond their shareholders, who are generally large financial agencies. In the emerging global market companies are able to subordinate national interests to their pursuit of profit, and so they cannot be effectively regulated by national governments.

Beetham and Devine also miss one of the most dangerous economic consequences of the Bush administration's disastrous tenure, which is its penchant for running up an enormous trade deficit and a massive national debt through unrestrained borrowing and credit. Most of this debt is held by foreign creditors, particularly China and Japan. This situation leaves the United States entirely exposed to a sudden withdrawal of credit, which would quickly undermine the US dollar and destabilize the international economy. In part, this situation has been allowed to emerge precisely because the multinational corporations that have moved production to low-wage economies like China so as to reduce prices and expand sales in American markets, and the financial institutions that provide the credit which continues to fuel unrestrained American consumer spending, represent only their own economic interests rather than those of the United States or any other country. The investors and managements of these companies are genuinely global.

Similarly, the oil industry and the oil-producing countries that keep the United States (and the rest of the world) ruinously addicted to high consumption of fossil fuels, with all of the unfortunate economic and environmental results that this involves, constitute a cartel of global proportions that systematically works against American and Western strategic and economic interests. In promoting international corporate and financial concerns the Bush administration has frequently acted against those of the United States.

Large parts of the left that adhere to Beetham and Devine's understanding of the world endorse the anti-globalization movement and promote protectionist policies. These policies would close off the expansion of development that is needed to alleviate poverty in the third world, while serving very narrow interests in the West. So, for example, the EU sustains a very high level of subsidy for local produce, and this effectively imposes a substantial tariff on agricultural imports that prevents third world farmers from exporting their crops to European countries. These tariffs violate the principles advocated by the Fair Trade movement and protect agro-business within the EU. But not a small number of anti-globalization enthusiasts support protectionism of this kind under the guise of local control of resources.

Globalization poses a major challenge to the democratic left. In order to meet it, we must devise effective ways of socializing new integrated world markets. Retreating to the tired slogans of past ideological struggles will in no way advance this cause. Instead we must seek a creative redefinition of a progressive social egalitarian agenda within the new conditions that the current phase of global capitalism is generating. The Euston Manifesto presents a first tentative attempt to imagine the outlines of such an internationalist social democracy. (Shalom Lappin, King's College, London)

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