Advertising Age: March 20, 2000, Monday
What's next in debate on globalization; Criticism of new global
economy needs a serious business response
By Brendan Smith and Jeremy Brecher
While both parties and all major political candidates are supporting
glo-balization, events in Seattle and Davos, Switzerland, this year should
provide a warning that all is not well in the global economy. Those in business
who have profited from globalization ignore at their peril those who have not.
From the perspectives of a labor historian and scholar of present and past
social movements, we feel it's essential that the business sector respond
seriously to the emerging critique of globalization. Seattle should not be
written off as simply radicals smashing windows but seen as a lightning rod,
marking a fundamental shift in public attitudes.
This movement is neither a one-shot nor a local phenomenon. As Elaine
Bernard, executive director of the Harvard Trade Union Program, put it in the
Washington Post, "The (World Trade Organization) meeting was merely the place
where these people burst onto the American public's radar. Social movements
around the world had already linked into grass-roots networks, made possible by
the astonishing speed at which they can communicate in the Internet era."
This emerging climate will affect the global operations and habits of
business at every level.
What was a surprise to everyone -- including many planning the demonstrations
-- was the wide array of interests that came together to form the coalition.
According to The New York Times, the thousands in Seattle represented "a wide
swath of Main Street America: not just steelworkers and auto workers, but
anti-sweatshop protesters from colleges across the nation and members of church
groups, consumer groups, the Sierra Club, Friends of the Earth and the Humane
Society."
Tracing the history of such broad-based movements, we can see there is the
potential to generate far-reaching changes. Business people very well may lose
their ability to influence these changes or even engage in constructive dialogue
if these social forces are ignored or underestimated. So what's to be done?
Many defenders of globalization say all it needs is a good advertising
campaign to explain its benefits. Before we accept that conclusion, we'd better
see whether the problem is in the advertising or in the product.
The promise made on behalf of globalization was that it would benefit all --
that it would raise all the boats. Instead, many of them are sinking. According
to a recent United Nations Development Report, 89 countries are worse off
economically than they were 10 years ago. Preparing for meetings of the World
Economic Forum in Davos, James Wolfensohn, president of the World Bank, noted
that rather than improving, "global poverty is getting worse. Some 1.2 billion
people now live in extreme poverty." At the same time, the world's 200 richest
people have doubled their wealth in the last four years.
Along with the increase in global inequality and poverty, globalization
remains significant for continual crisis, beginning in Mexico and re-emerging in
Asia, Russia and Latin America. According to then World Bank Senior VP-Chief
Economist Joseph Stiglitz, "Capital market liberalization has not only not
brought people the prosperity they were promised, but it has also brought these
crises, with wages falling 20% or 30%, and unemployment going up by a factor of
two, three, four or 10."
Indeed, for many people and communities around the world, the promise of
globalization has translated into a race to the bottom. As corporations move
their operations around the world, they pit workers, communities, and entire
countries off against each other to see who will provide the lowest wages and
cheapest environmental and social costs. Each community and country seems to be
getting ahead, but in fact, all are being driven down to the level of the
poorest and most desperate.
So how should the supporters of globalization respond to the voices heard in
the streets of Seattle and Davos? Some, like Massachusetts Institute of
Technology economist Paul Krugman, writing in The New York Times, suggest that
"Davos Man" needs to rectify an image problem, recognizing "how serious a public
relations problem now faces the global economy in which Davos Man flourished."
Those who follow this dictum believe globalization merely needs new packaging
and more effective advertising slogans.
But the problem is globalization is being experienced by consumers as a bad
product. Workers and communities were promised that if they downsized,
deregulated, eliminated social services and generally became more competitive,
the benefits of globalization would materialize. They kept their end of the
bargain, but the global economy did not.
Instead of new advertising slogans, the global economy must reflect needs of
people and communities around the world. As John Sweeney, president of the
AFL-CIO, stated in Davos: "Understand the message of Seattle. It was not an
isolationist rejection of open markets. It was a call for new global rules.
Workers from the North and South marched together. And the many different voices
made one clear statement. Fundamental reform is needed."
As opposed to presenting trade and open markets as an end in itself, reform
of the global economy must include human rights for all people, environmental
sustainability worldwide, democracy at every level from the local to the global,
economic advancement for the most oppressed and exploited groups, and protection
against the wild cycles of boom and bust.
The upcoming April 16 International Monetary Fund and World Bank spring
meetings in Washington will provide cheerleaders of the global economy an
opportunity to address the problems raised in Seattle and Davos. Thousands are
expected, once again, to march in the streets. The open question is if the
meetings will be used to make globalization live up to its promises or for the
unveiling of a new, flashy advertising campaign. Surely, consumers will let us
know the answer.