This week’s posts concern the failure of globalism.

Yesterday’s entry showed how globalism was failing as early as the year 2000.

Today’s looks at the year 2005 with excerpts from a Mother Jones interview with John Ralston Saul, ‘The Collapse of Globalism’.

John Ralston Saul is a Canadian polymath. He helped to establish the national oil company Petro-Canada in 1976. He then travelled the world and got to know many types of people, from guerillas to native tribes, about whom he wrote in both non-fiction works and novels. He has written four philosophical books. He wrote a doctoral thesis titled “The Evolution of Civil-Military Relations in France after the Algerian War” and later wrote a novel about General Charles de Gaulle. He also served for several years as the president of PEN International.

In 2005, Saul published The Collapse of Globalism and the Reinvention of the World which explores how and why globalism failed.

Excerpts from the Mother Jones interview follow, emphases in the text mine.

MJ: What about economic equality among and within nations? Is that another sign that something’s amiss?

JRS: Yes, and the statistics show this pretty much everywhere. And the interesting thing is, even that disparity between rich and poor doesn’t total up to a big increase in wealth; it’s just that a small group of people are getting richer and a much larger group of people are getting poorer. So getting more of the pie today, for the poor, still wouldn’t represent a success for the system. This suggests that the system, as designed by the globalists, simply isn’t delivering what it said it would deliver.

MJ: Why not?

JRS: One of the reasons is that a great deal of what’s counted as trade isn’t in fact trade

We count as trade what is moved around inside a transnational corporation, where no real profits are being made at each level. In fact, transnationals are very carefully organized so that they actually make losses at most levels. I give an example in the book of 30-60 corporations operating in Britain. The Financial Times discovered that most of them, despite massive turnover, were making losses, and therefore weren’t paying taxes. More important, they weren’t investing in each place. Suppose the supply chain were 10 separate companies. Well, in some way the companies would be investing in its area—building houses, building schools, paying taxes, in a sense being a real part of the local economy. You’d be getting growth; today you’re not. It’s all designed to prevent the creation of real wealth.

MJ: So are you arguing that deregulated global trade hasn’t delievered any benefits?

JRS: Globalization did some small things; but the previous period brought improvements that gave us levels of comfort and education that were unprecedented. What nobody wants discuss is whether or not the black-and-white argument about trade— you’re either a free trader or you’re a protectionist—is the right one. It’s the old 19th century argument. Why don’t we ask, ‘Is this trade?’ ‘What is trade?’ ‘What does trade actually do?’ ‘What is a proper balance between deregulated and regulated?’ ‘Does it make sense to deregulate some things and regulate others?’ At this very moment the practitioners of free trade are in confusion over what to do, and we’re seeing only the first act of the confusion.

MJ: And the argument is that economic forces are inevitable and ultimately beneficent.

JRS: There are warning signals of [ideological thinking]—of ideas as religion—and one of them is this idea of inevitability. As soon as you hear somebody saying ‘This is inevitable,’ you basically know they have a weak case and are true believers in an ideology. Globalization has been immersed in just such an argument.

MJ: If globalism has collapsed, it’s in part because developing countries weren’t seeing the promised gains, right?

MJ: Yes. The obvious sign that this system wasn’t going to last was the Asian meltdown in 1997/98. You had these very successful smaller countries—Thailand, Malaysia, and so on—collapsing, really because we’d stuffed a massive amount of money in there—money they basically didn’t need, because they had a very high savings rate—and then when we’d overheated their economy we withdrew the money, all over about a 12-month period. So you then had this international theory of globalist economics applied to them with a vengeance, what I call “crucifixion economics,” you know, you get put on gruel and are forced to wear hair shirts and to self-flagellate, and they’re supposed to come out of it cleansed, reborn. And after a year of this the prime minister of Malaysia, Mohamed Matahir, said, ‘We’re not going to do that. We’re going to raise tariffs, and freeze our currency, and block capital flight.’ And everybody looked away in horror—and then a year later they were doing better than anyone else. Four years later Matahir was invited to make the opening speech at Davos during which he lacerated globalization—and they gave him a standing ovation!

What Mohamed Matahir did sounds a lot like what Donald Trump wants to do in terms of raising tariffs and blocking capital flight (i.e. corporations moving overseas). Intriguing.

At the end of the interview Saul said:

I’m saying that since 1995 we’ve been in an interregnum, a vacuum where the picture is confused, and our elites are in denial because they’re inheritors of the system. They don’t have the capacity to stand back and say, ‘We’ve got some real problems here. Let’s think about what we can do about them. If we got some things wrong, let’s do something else.’

We’re still in that space. Things are getting much worse economically. We the people are crying out. The elites are still enjoying privileged lives. Our politicians, part of this group, are pitting citizens against each other with identity politics policies.

There are also the unemployed, classified in various governments’ official figures, and those no longer looking for work who are not part of these statistics. That started around 2005, at least in Britain. I read recently that the United States now uses the same reporting basis. In every case, it is used to make the employment picture look better than it actually is.

Life isn’t better for many middle and working class people, despite what our media tell us.

Tomorrow: Globalism as seen in 2009