Thursday, July 26, 2007

The fall of Globalisation would be the end of the tiger

Of the entire world, Ireland probably has the most to thank for from globalisation. While the likes China and India have also boomed, the social changes that globalisation has brought to Ireland has been greater then the changes that have been made in China where civil rights abuses still are rife and India where the caste system still dominates society. In Ireland the wealth that globalisation brought to Ireland has changed a priest ridden society, emigrating, backward looking depressed nation to one that is in many ways unreconcilable to the one we had before. I am sure that few would want to go back to that past way of life. While people talk about inequality and having to buy houses, but inequality is better then 80s poverty and a house in Carlow is better then a flat in Kilburn and I think most people believe that. Joe Higgins was on the Last Word saying why housing speculators were like heroin dealers and talked about the need for justice in the market for young people. But the replies by txt were in the defence of capitalism, I doubt much of continental Europe would have similar responses. But if the world abandons globalisation. We are in for a s**t storm.

The biggest problem for globalisation is that it breeds inequality simply because the workforce is now global. In most non-service cases workers compete against their world peers not there country peers. Some one making cardboard boxes in Dublin is competing against that same person in Shanghai not against others in the same country. While the computer programmer in Sligo is competing against the computer programmer in Chicago. So with each industry existing in more or less global market place their income growth is somewhat linked to the growth in their sector not just in their country.

This is also leading to the fall of the usefulness of a college degree. It is simply a case of supply and demand. With more people going to college in the world then 50 years ago there is simply more people to fill the jobs that require college education to go along with the increased requirement for college graduates in jobs means that a college degree is basically becoming the Leaving Cert. The minimum education standard needed to get a job. It is the very nature of a knowledge economy. While it obvious that we need to educate more to bring people up to be useful in a knowledge economy it may not cause the great increases in incomes that we hope it would, it might just decrease the inequality if we have a equal education sector.

Now it can not be denied that living standards have improved in this country, unemployment is at levels never dreamed of poverty is down and people are by and large better off. This is due to globalisation the begins of the boom were created by growth in export a growth facilitated by the fact that the barriers to our main trading partners were up. And while exports growth has slowed (it shows signs of recovering) it is still at a high level that feeds into the economy as a whole.

While the globalisation benefits everyone it does not do equally. This is where right-wingers make their fatal flaw in thinking. They think of computer logic. The thinking being the belief that people are better off is all that matters to people. But it does not people are not satisfied with being better off they want to be better off in relation to everyone not just themselves. If Johnny gets a raise of €2000 and Mary gets a rise of €1000 while Mary herself is better off by a grand the fact that where she was once equal with Johnny and now not does not go un-noticed and can breed a resentment of the system that caused the difference to happen even if that system gave her a rise as well.

This mechanism is bringing us to a dangerous place. In Germany, France and America winds of change are blowing. Protectionism is on its way back. People see jobs going abroad, companies losing out to foreign competition and wish to protect themselves. While there are measures that can be used to combat this. (Foreign Affairs has an article on this click on the above America link). The measures while should be implemented in Ireland. Will have little effect of the state of world globalisation or indeed the survival of the Irish boom. It is all in the big countries especially America staying open. We can’t survive trading with ourselves. Whether we are selling services or manufactured goods we need people to trade with and they are foreign and what they do will stipulate what happens to us. Our future is not in our hands.

Unless we encourage more innovation, that create stuff that can cross the barriers as they are unique. And even then.

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