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Mexico and the World
Vol. 5, No 2 (Spring 2000)
http://www.profmex.org/mexicoandtheworld/volume5/2spring00/oneworld_ready.html
Robert DelgadilloDoctoral Candidate
UCLA History Department
Book Review
One World, Ready or Not:
The Manic Logic of Global Capitalism
William Greider
New York: Simon & Schuster, 1997
Summary
One World, Ready or Not is a sweeping examination of the underlying dynamics of modern capitalism driven by the global industrial revolution. To visualize this process, Greider travels to twelve countries in Asia, Europe, and North America. In doing so, he asks fundamental questions about trade, production, finance, and the environment. During these trips Greider introduces readers to working and unemployed men and women; managers who supervise production; and a number of people who reflect on economic change occurring in their countries. Throughout the book, Greider provides the reader with solid contrasting historical perspectives of capitalism, communism and fascism that help support his observations and assertions.
Greider describes and examines three discomforting trends. Greider’s message is ominous. He argues that the world economy is heading towards a grave and profound socio-economic depression. The first trend is increasing production. Greider states that the world economy is quickly heading for a crisis of oversupply. Powerful multinational firms, in a ruthless chase for increased market shares and higher rates of return, have expanded to the various corners of the world. The profitability of these multinational firms depends on holding down wages in places such as Indonesia and China. The policy of holding down wages result in workers in these countries being unable to afford to purchase what they manufacture. Meanwhile, there is no way that consumers in the West can absorb waves of new production. In the automobile industry, Greider notes, global overcapacity will equal the production potential of the entire North American automobile industry within four years.
The second trend that Greider describes is the rapid and constant flow of finance capital across borders. Greider illustrates how large the stock of financial assets has become and how powerful Wall Street has become in relation to Washington and other governments. Greider argues powerful private markets control the world economy and have become unpredictable. The results are harrowing for governments forced to watch helplessly as global markets raise their domestic interest rates or devalues their currencies. In addition, Greider fears that high growth of investable funds may outstrip sound investment opportunities. When people see that their expectations of return cannot be met, everyone will head for the proverbial exits and set off a panic.
The third trend is rapid industrialization in emerging markets. Greider contends that the planet cannot sustain that such growth without severe environmental damage. For Asia and Latin America, he envisions an inevitable showdown with nature. For example, Greider cites the following statistic: today there is one car for every 680 people in China. China today has a population of 1.2 billion people. (In the U.S. the ratio of cars to people is one car for every 1.7 people.) What will happen when the better off Chinese workers and capitalists fill the streets and highways of China with automobiles?
Greider’s main concern is that the losers in the global economy, those earning low wages, those who live with severe environmental degradation far outnumber the winners. The book focuses on the millions of people who feel powerless and alienated. Greider questions whether these masses of humanity will remain politically passive. Greider believes that no one will take responsibility for global capitalism in all its dimensions. Multinational companies are obsessed with foreign market penetration. Lenders and investors are preoccupied with financial returns and the security of their assets. Political leaders are leaving the issues of the present to be determined by private markets. No one is left to speak for the people, Greider asserts and as a result, capitalism will swing to an extreme until it produces a popular backlash. The result will be that class politics will harden and widespread social conflicts will develop. How far off is this collision between global capitalism and society? Not too far, Greider implies.
This threat calls for an immediate program of action. Greider offers an interesting set of mutually reinforcing propositions, including:
* Taxing capital rather than labor, which will encourage job growth;
* Increasing wages in poor countries by requiring nations involved with trade to honor labor rights;
* Forgiving developing countries’ debts so those trade surpluses may be used to pay interest and principal on their debts;
* Regulating financial capital so those limits are placed on the use of hedging devices;
* Lowering interest rates;
* Reforming central banks so that economic growth is encouraged;
* Adjusting government priorities so that programs of support, subsidies, and research initiatives are emphasized rather than multinational corporate competitiveness.
Comments
William Greider’s One World, Ready or Not has much to offer. It is worth reading. In doing so, the reader is rewarded with a better understanding of global capitalism’s human side. Greider’s clear warnings about global capitalism stem from the harsh reality of economic growth in low-wage countries. He asks questions that illustrate the difficulties faced by industrialized nations trying to salvage their social safety nets. In the end, Greider has sounded an economic klaxon that is worth heeding. Or is it?
The problem with Greider’s interpretation of global capitalism is that most of it is only true in part. As a result, Greider is convincing in predicting a dire future for the world. Events in history, however, have often shown things that look dark in the abstract often turn out not to be in the light of the real world. If such were not the case, the reader would be reeling under the dismal socio-economic consequences outlined in Thomas R. Malthus’ 1798 pamphlet An Essay on the Principle of Population. Malthus argued that since population tended to grow geometrically (1,2,4,8,…) and food supply arithmetically (1,2,3,4,…), the starvation of Great Britain was inevitable and imminent. Almost everybody thought he was right. He was wrong.
So where is Greider wrong? In Greider’s view globalization and multinational corporations are closely linked. In making this point, Greider imprints readers with an image of multinational companies shifting production from one country to another in search of the cheapest sources of labor, without regard for the well-being of either the high-wage workers who stand to lose their jobs or the low-paid ones who will be hired. Yet Greider fails to note that globalization could just as easily make multinationals companies less necessary.
Why? As transport costs and trade barriers fall, it becomes easier to serve foreign markets by exporting, rather than establishing factories around the world. Moreover, few companies even the most familiar household names are truly global. The average multinational produces more than two-thirds of the output and locates two-thirds of its employees in its home country. Most economic activity—cutting hair, driving taxicabs, renovating houses—is still performed on a small scale. Most industries operate, if not at the level of the town or neighborhood, then on a national basis.
Greider’s recommendations do not seem feasible in today’s climate. In fact some of his prescriptions could cause huge disturbances. For example, Greider suggests rich countries impose a "social tariff" against countries that do not observe what he considers to be appropriate labor standards—this on top of an "emergency tariff" of 10 percent to 15 percent to reduce the U.S. trade deficit. If this recommendation were allowed to be played out, there would be at least two consequences. Politically, Asia and Latin America would protest and hold up trade measures concerning the protection of intellectual property rights and greater access to markets for foreign investors. Economically, the U.S. would see the price of the imports soar, creating inflation and making exports much more expensive.
Finally, another weakness of Greider’s book is that he doesn’t acknowledge global capitalism’s built-in mechanism of adaptation. Simply put, global capitalism is not an unstable, destructive machine bent on causing social and political havoc. The recent Asian Crisis—like the Latin American debt crisis of the early 1980s—has generated proposals to contain the type of global depression described by Greider. A step in the right direction is Chile’s implemention of controls on short-term capital inflows to minimize its vulnerability to currency speculators. Economists disagree about how effective such controls are in the long run; but this example, and others to numerous to mention, undercut Greider’s view that global capitalism cannot be held in check when it negatively impacts on a particular region.
In sum a thorough and thought-provoking book to read, but one to take with the proverbial grain of salt.
Table Of Contents
Part One: One World
1. The Storm Upon Us
2. The New Against the Old
3. The Ghost of Marx
4. Part Two: Desperate Enterprise
5. "Gleiche Arbeit, gleicher Lohn" (German: "same work, same pay.")
6. "Waswasan 2020" (Bahasa Malaysia: "vision 2020.")
7. Jidoka (Japanese: "automation.")
8. "Scratching Their Itch"
9. "Facai zhifu shi guangrong de" (Chinese: "to get rich is glorious.")
10. orporate Capitalism
11. The Buyer of Last Resort
12. Part Three: Manic Capital
13. The Alchemists
14. El Barzón (Spanish: "the yoke". In popular usage in Mexico, el barzón refers to the yoke of debt.)
15. The Rentiers’ Regime
16. The Economic Question
17. Part Four: The Social Question
18. "These Dark Satanic Mills"
19. Schraube nach Unten (German: "racket down" like the tightening of a screw or, literally, "twist toward down.")
20. Buruh Sejahtera (Bahasa Indonesia: "worker prosperity.")
21. Wlasnosci Pracowniczej (Polish: "owner workers.")
22. Oikonomia (Ancient Greek: "the management of the household and husbandry of its valuable assets," the original meaning of "economics" before it focused more narrowly on market exchange.)
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