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CAPITALIST GLOBALIZATION: Consequences, Resistance, and Alternatives
by Martin Hart-Landsberg
GLOBAL IMPERIALISM AND THE GREAT CRISIS:
The Uncertain Future of Capitalism
by Ernesto Screpanti
THE IMPLOSION OF CONTEMPO-
by Samir Amin
THE ENDLESS CRISIS:
How Monopoly-Finance Capital Produces Stagnation and Upheaval from the USA to China
by John Bellamy Foster and Robert W. McChesney
THE GREAT FINANCIAL CRISIS:
Causes and Consequences
by Fred Magdoff and John Bellamy Foster
An Illustrated Workbook for Studying Marx's Capital
by Valeria Bruschi, Antonella Muzzupappa, Sabine Nuss, Anne Stecklner, and Ingo Stützle
AN INTRODUCTION TO THE THREE VOLUMES OF KARL MARX'S CAPITAL
by Michael Heinrich
THE ROSA LUXEMBURG READER
edited by Peter Hudis and Kevin B. Anderson
TIONS OF "REAL SOCIALISM":
The Conductor and the Conducted
by Michael A. Lebowitz
Toward a Theory of Transition
by István Mészáros
|"Deglobalization" Versus "Inclusive Growth"
by Pablo Solón
The race of globalization is leaving the majority of the world's population far behind. According to UNICEF, the richest 20% of the population gets 83% of global income, while the poorest quintile has just 1%.1 This trend is getting worse. A new UNDP report called "Humanity Divided" estimates that 75% of the world's population lives in societies where income distribution is less equal now than it was in the 1990s,2 although global GDP ballooned in that time from US$22 trillion to 72 trillion.3
For developing economies in Asia, the Gini coefficient -- which measures income inequality on a scale from zero to one where one is worst -- rose from 0.33 in 1990 to 0.46 in 2010.4 Inequality corresponds with high social tensions and political instability -- with the potential for violence and conflicts between groups -- as well as increased economic uncertainty and lower investment. It demolishes human rights for the vast majority, especially for vulnerable groups like women, children, and the elderly.
What causes inequality? The UNDP states: "Specific aspects of globalization, such as inadequately regulated financial integration and trade liberalization processes, whose benefits have been distributed very unequally across and within countries, have played a significant role in determining the upward trend observed over the last decades."
Globalization causes inequality for various reasons. One is that trade and financial globalization has weakened the bargaining position of relatively immobile labor in relation to fully mobile capital, driving down wages. The chief economist of the Asian Development Bank, in an article that argues that inequality jeopardizes economic growth, notes that, between the mid-1990s and the mid-2000s, labor income as a percentage of manufacturing output fell from 48 percent to 42 percent in China and from 37 percent to 22 percent in India.
The UNDP also says dependence on volatile capital flows made countries more vulnerable to economic and financial shocks that cause lowered growth and employment, both of which disproportionately affect the poor.
If globalization drives inequality, what are the remedies? The usual list of recipes of UN agencies, the World Bank and IMF includes measures to stop tax evasion, more progressive income tax policies, incentives for foreign investment, conditional cash transfers, subsidies and credits for small businesses and agriculture, limited expansion of public investment and social safety nets.
Two key things are apparent in these "remedies." First, they talk about redistributing income but don't address unequal access to sources of wealth, such as land or assets. They also avoid mentioning examples of nationalizations that have reduced extreme inequality in some countries.
Second, they don't deal with the process of globalization. The most ambitious among them suggest some kind of regulation of speculative financial markets to minimize volatility. The World Bank clearly states that measures to reduce inequality should not affect "free trade."
The measures to combat inequality touted by international financial institutions ignore the structural causes of inequality. Don't be fooled by their fashionable new name: "inclusive growth." This idea repeats old remedies and is more concerned with profit than inequality.
If we care about reducing inequality, we must seek new solutions to the problem. One approach is "deglobalization," a proposal developed by Walden Bello and Focus on the Global South in response to the Asian financial crisis of 1997.
Focus on the Global South wrote:
For deglobalization, there is no "one-size-fits-all" model like neoliberalism or centralized bureaucratic socialism. Instead, according to this scheme, diversity is expected and encouraged, as it is in nature.
Some key proposals of deglobalization to really address the relationship between globalization and inequality are:
The approach of deglobalization is still under construction. It needs to be debated and joined with other ideas if we are to build viable alternatives to the flawed system we have today, the one that has caused explosive inequality. But it certainly holds more promise than the empty claims of "inclusive growth."
1 United Nations Children's Fund (UNICEF), Global Inequality: Beyond the Bottom Billion -- A Rapid Review of Income Distribution in 141 Countries, 2011.
2 United Nations Development Programme (UNDP), "Humanity Divided: Confronting Inequality in Developing Countries," 29 Jan 2014.
4 Changyong Rhee, "Inequality Is the Real Threat to Asia's Growth Miracle," Financial Times, 8 May 2012.