capitalsimhistory

  • Globalisation is not really new. After all, contacts between the farthest corners of the world have existed for centuries, and peoples and cultures have alternately influenced each other positively and negatively. What we are seeing now is the latest phase of a historical process of the growth and development of the capitalist world system. It began as early as the Late Middle Ages with the rise of merchant capitalism in Europe and the struggle for global trade routes. Around 1800, industrial capitalism emerged and by the beginning of the 20th century, most countries were more or less incorporated into the capitalist world system, often as a colonising power. So globalisation today seems to be only the latest phase: the large multinational corporations have thoroughly reorganised themselves for the sake of their profits and competitiveness. All this is based on the neoliberal rules of the game: liberalisation, privatisation and deregulation.

    Liberalisation is the freeing of national markets for the free trade and movement of goods, services, people and capital. Liberalisation, i.e. the removal of all barriers to international trade, is the key liberal recipe for creating a healthy and prosperous world.
    Privatisation is the transfer of economic activity from the public to the private sector. The market will 'automatically' provide the best distribution of available resources according to the needs of the consumers in that market.
    Deregulation means that the government should set fewer norms and standards. According to the neo-liberals, market forces can regulate the whole range of the national and international economy at local, regional and global levels.

sen

What does that mean in practice?
Distressed countries in the South have carried out major economic reforms with the help of the World Bank and especially the International Monetary Fund (IMF). These were intended to generate money to pay off the foreign debt of these countries.
The IMF's recipes were aimed at liberalising, privatising and deregulating their economies. Third world countries were to be made attractive to foreign multinationals. State monopolies were privatised. Import quotas were abolished. It became possible to shift profits abroad. Production had to be made for export. There was no more money for food subsidies and social services.

Amartya Sen (left), Nobel Prize for Economics 1998: "Directly or indirectly, the core of the problem is inequality. This is the real challenge. Inequality between states and the inequalities within each country. Differences in wealth, but also huge imbalances politically, economically and socially. The redistribution of the benefits of globalisation between rich and poor countries, but also between the various population groups within each country, will be crucial..”

spreuk

Who are the winners, who are the losers?
The beneficial effects of globalisation have largely fallen to the rich northern countries. A few countries of the South - especially in Latin America and the Far East - managed to surf along on the waves of economic growth. Sub-Saharan Africa has completely missed the globalisation boat. That is the general picture, but the reality is more nuanced. Globalisation has exacerbated inequality. The rich get richer, the poor get poorer. Not only on a global scale, but also within countries in the North and South.
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