Time to think global and act local

Neo-liberalism lies at the heart of the current phase of capitalist globalisation, argued professor Denis O'Hearn, above, at this year's Desmond Greaves Summer School, held in Dublin in August

Opening this year's Desmond Greaves Summer School, professor Denis O'Hearn, of Queen's University, Belfast attempted to bring some clarity to the debate about 'globalisation'. Describing it as the current 'buzzword' that few really understood, he stresses that, contrary to popular opinion, globalisation is long-standing feature of capitalism. What we are experiencing now could more appropriately be defined as the "current neo-liberal phase of globalisation", he said.

Although 'national' powers had come under threat from the interests of the "global capitalist class", in the form of regional and global institutions such as the EU, the North Atlantic Free Trade Alliance (Nafta), the International Monetary Fund (IMF) and the World Trade Organisation (WTO), and from powerful trans-national corporations, he argued that it was wrong to suggest that globalisation was leading to the demise of the nation state.

For O'Hearn, the critical question was whether nation states had, or could maintain, "the necessary political and policy instruments to achieve desirable national objectives".

Despite attempts by some theorists to hold up the east Asian and Irish 'tiger' economies as examples of how under-developed nations could successfully harness globalisation, he maintained that it is wrong to use them as a general development model.

Economic development for the so-called 'tiger' economies owed much to specific historical and economic conditions and the cyclical nature of capitalism, with its constant need to reinvent itself, having provided opportunities for some local economies to break out of previously entrenched economic development patterns.

This had been the experience of the small Scandinavian countries in the late 19th century and east Asia and Ireland.

The neo-liberal version of globalisation can only bring benefits to one or two countries, in the process creating the opposite of social justice, he argued.

It is therefore highly questionable whether the 'Celtic tiger' experience offers a successful model for harnessing globalisation.

Its background had been the recession, rampant unemployment and debt of the 1980s, followed by government-spending cutbacks and a policy of free-trade openness to foreign investment.

It was these conditions which had attracted IT companies such as Gateway and Intel in the 1990s, as they sought the corporate benefits of tax breaks and access to the big markets of Europe.

"This left Ireland vulnerable to a high dependency on foreign companies, although it was seen by many as a new example of an economy that was able to harness globalisation," said O'Hearn.

However, unlike the Scandinavian and east Asian economies, economic development in Ireland has been achieved on the basis of liberal free-trade and without the strong forms of inward government control and trade protectionism.

Ireland was therefore "a showcase of a new kind of neo-liberal development". A recent IMF consultation report describes the Irish economy as 'a spectacular example of the positive results that come from a sound and consistent macro-economic policies, a generally-flexible labour market, a favourable tax regime and a long-standing outward orientation of Ireland's trade and industrial policies'.

Unsurprisingly, the IMF response has been to call for more of the same, wage restraint and an increase in the government programme of deregulation and privatisation.

However, Irish economic growth and its convergence with the other major European economies had been achieved at a high price -- over-dependency on foreign investment, deepening social exclusion and inequality.

"Perhaps the most damning indictment of the Celtic tiger is the impotence of the state to tackle urban social problems including housing, health and education." Over-dependency on US investment could also lead to a deep period of recession and decline if US firms repeated the disinvestment of the 1980s, he said.

"Even if Irish growth is sustainable, and this still has to be seen, it is highly questionable as to whether the Irish model can be generalised. Southern Ireland succeeded because it attracted a fifth of US manufacturing investment into the EU and 40 per cent of the high-tech-sector investments, with just one per cent of the EU population."

Britain attracted far more investment -- two fifths of all foreign investment into the EU -- but with a population 20 times that of southern Ireland, it had not become a 'tiger' economy.

The same limitations of the 'Celtic tiger' model would apply to Spain, whose population is ten times greater than Ireland or Portugal with triple the population, he suggested.

"Moreover, other countries will find it hard too follow the Irish path: there will simply not be enough of this kind of foreign investment available to sustain growth in more than one or two peripheral European zones, much less in the large areas of Africa, Latin America and Asia.

"As the limitations of this new 'Irish' example of harnessing globalisation through neo-liberal policies becomes clearer, countries that seek convergence with north America or the European core may desire a return to the development models based on more balanced, including indigenous, growth, with more interventionist and regulatory forms of development."

O'Hearn believes that there remains a strong case for countries which seek rapid increases in wealth and technical upgrading to achieve this through creative state developmental policies, rather than through conservative economic orthodoxy of macro-economic balance and stability.

However, this is dependent upon a degree of national control over policy in the pursuit of sustained economic growth.

The inability of the present form of neo-liberal globalisation to deliver wealth and social justice to the vast majority of the world, invites the development of opposition, either in social democratic or social revolutionary forms, he argued.

"The key to addressing the problems of globalisation is in the mobilisation of social movements for change and the best hopes for a transformation towards 'socially-articulated' (economically and socially equitable) development throughout the world is if discontent is transformed into widespread mobilisation for social change."

As some commentators have pointed out, the development of protest movements, such as those witnessed on the streets Seattle, Prague and Genoa in recent times is not strictly 'anti-global'. "Rather it is against the current neo-liberal form of globalisation which favours the rich and lacks democratic accountability."

Today's form of globalisation does not mark the end of history, he insisted, predicting that a return to prominence of 'national' development models, although in new globalised forms.

The failure of liberalised social democracy to deliver equitable development and social justice is also likely to result in the revival of many movements which the popular press would like to consider as being defunct or 'old fashioned' -- including more nationalist movements, he said.

"These will not just be some kind of new social 'globalised' movements of the kind supposedly seen in Genoa but also new forms of the old social movements -- labour, peasant and armed insurgencies. The Zapatista movement in Chiapas, which combines resistance to globalisation, in the form of Nafta, identity politics, demands for democracy and outright demands for a better material chance of life, might characterise one example of such a movement."

O'Hearn questioned those opponents of neo-liberal globalisation who put forward the creation a 'trans-national civil society' as a means effectively means of opposition. While there is clearly a highly organised and extremely effective trans-national capitalist class, he insists, the global organisation of the 'popular', as opposed to the 'capitalist' classes, has been far less effective.

"I'm not sure whether the kind of social movement future opened up by the protesters at Genoa -- however much they may be applauded for their resistance -- is adequate to the task of transforming globalisation. I'm not sure that that kind of resistance can make the system 'hurt enough' to change.

"It might be that the most effective global resistance are those activities which think globally and act locally."

There was no real contradiction between a national and an international movement, he suggested.

"Resistance against corporate dumping or worker insecurity in one's own backyard, especially when combined with solidarity or similar movements in other places, is still one of the most effective things that we can do, not just to oppose globalisation but to try and change it."

While it was right to attempt to make international and regional institutions like the EU more democratic we may also have to pursue the right to win back certain national objectives and national policies at the same time.

One thing is clear from an observation of social movements and social change was that small, even limited 'local' victories like the No to Nice referendum victory in Ireland, or the victory of the Brazilians and South Africans in their struggle over the giant multi-nationals to provide cheap drugs to fight Aids, are crucial to attracting people to the cause of social change, to encouraging resistance at home and in encouraging resistance in other places around the world -- and in making the world a little better place to live in the meantime.

"More and more of these limited victories can help in the creation of a more effective broad movement, which will be ready and mobilised when a time for deeper social change is more inviting than today."