Globalisation and market dominance Guyana and the wider world by Dr Clive Thomas Stabroek News October 1, 2000 Article 1 So far we have made two points, whose significance should not be underestimated. One is the near universal practice of twinning globalisation with liberalisation. I do not find this an objectionable practice, as some do. The reason is that I believe that these two processes are opposite sides of the same coin, which is, the functioning global capitalist economy. The other significant point is that liberalisation really means the primacy of the market in almost every arena of human endeavour. There is no doubt that there is a global tide sweeping away non-market barriers, both in national economies and at the global level. This is particularly true where the markets for goods and services, and the productive factors (technology skills, finance and capital) are concerned. The main obstacles to the relentless advance of market forces are to be found in those areas where resources are not mobile, for example, land. However, it should be noted that the products derived from such resources are expected to trade freely. There is also the case of labour, where deep-seated racial and cultural barriers considerably impede its free movement across national borders. These are not likely to change significantly over the medium-term. Globalisation triumphant! Despite the triumphant progress of globalisation, we have not yet reached a situation where either globalisation or liberalisation is completely ascendant. At present many exceptions and obstacles remain, even though these are fading. The ideology of globalisation behind these market-based programmes are, however, clearly ascendant over all other ideologies. Despite protests and public demonstrations, as are occurring in Prague right now in opposition to globalisation and the roles of the IMF and World Bank, there are no political or social forces, mobilized and capable of stemming and/or reversing the sea-change now taking place in the global economy. This creates a deep sense of foreboding. As we shall see in this series, accompanying the opportunities that it brings, globalisation also carries enormous costs and poses tremendous risks and challenges not only to Guyana, but to the world as a whole. Competition and efficiency Globalisation based on the rule of markets, or as it is sometimes termed, the "hegemony of markets", is welcome by those who claim that markets ensure competition. And, that competition always enhances efficiency. In their view, markets bind communities together and do not separate them. Markets are the place where the mutually shared interests of suppliers and buyers meet. If markets spread freely across the globe, then economic and political systems will, through competition, converge at the highest possible level of attainment and efficiency. Globalisation would then produce an expanding horizon and enlarged opportunities for everyone. To ensure that this comes about, the private sector, must be unmistakeably ascendant. In other words, government that intervenes the least, is the best government possible. Governmental intervention should be strictly confined to creating the framework for markets to grow, through the introduction of appropriate regulatory mechanisms. This leaves an enormous gap, as it is not stated which actors/institutions will generate equity and social justice. Instability and inequality To date, free markets are as much associated with instability and inequality as they are with expanded opportunities. As we shall see in detail in this series, globalisation has been associated with starkly widening gaps in incomes, wealth, consumption, power, capabilities, and access among countries and within them. We find that instead of binding suppliers and buyers, markets frequently divide them as well. Markets are also prone to crisis and instability. These features have been very evident in recent decades, with a general pattern of a 2-4 year global crisis. The conclusion is, that markets are as much unifying, as they are destabilizing and conflictual. There is always inherent to market-led development, the risk of unleashing potentially lethal self-destructive processes. Inclusion/exclusion Globalisation can lead to either inclusion and integration or exclusion and marginalization. There is no guarantee of which way it will go. This is not a surprising conclusion. A glance back at the evolution of the global capitalist economy will show that this has always been the case. What is different now, is that the scope and pace at which these opportunities, risks (costs) and challenges unfold, are historically unprecedented. Power and equity The point needs to be stressed that markets are not benign or neutral social institutions. Close observation will show that markets embody power relations. They therefore do not only provide a guide (i.e., price signals) for the mobilization, allocation, ownership, and distribution of resources, but they are the basis through which economic domination and exploitation are also organized. Countries with colonial experience like ours, and which have witnessed the resort to slavery and forced labour, in the name of the market, are very familiar with this. Conclusion One consequence of the points noted above is that so far market-led globalisation has been associated with both a tremendous expansion of global output, trade and consumption as well as widening inequalities and increased instability, both among and within countries. For example in 1960, 20 per cent of the world's people who lived in the richest countries had 30 times the income of the poorest 20 per cent. By the late 1990s, this figure was as much as 90 times! This has occurred, even though the emerging tigers of Asia and some leading Latin American economies have prospered in the group of developing economies. Similarly, the US Census Bureau has reported that in the late 1990s, the widest gap between rich and poor in the USA since the end of the Second World War, has been recorded. Next week we take a closer look at these economic outcomes. Follow the goings-on in Guyana in Guyana Today