Wednesday, 16 November 2016

Globalisation scapegoated

Our prime-minister, Theresa May,  has recognised that “globalisation [is] a force for good” but admits that there are “tensions and differences between those who are gaining from globalisation and those who feel they are losing out.” (Mansion House Speech, Monday 14th November.)

Well good for her: she “talks the talk very well”, but , as Aditya Chakrabortty points out,  we need to avoid the trap of attributing  the creation of a “left behind” class to the inexorable forces of globalisation  which, now we recognise the danger, just need  a bit of maternal tweaking  to make things better.
Chakrabortty attributes the growing inequality and creation of an underclass not to globalisation but to domestic political decisions dating back to the doctrines and policies of Sir Keith Joseph and Margaret Thatcher.   He lists:

  •    the privatisations, particularly of public utilities, which ceased to be primarily public services but were and are squeezed for maximum profit by their hedge fund owners;      
  •  the reduction of UK manufacturing capacity by a fifth through the economic policies of the 80s;
  • draconian laws to limit the powers of the trade unions;
  •   the reduction of civil service personnel  by 80 000 (with a further 100 000 in the pipeline unless policies change;
  •   the deprofessionalisation of teaching and the substitution of a “tick-box mentality” in our schools;
  •   the development of precarity in employment.

To this list I would add:
  • the squandering of North Sea oil revenues on tax cuts and the funding of unnecessary unemployment  (rather than the creation of a Sovereign Wealth Fund as in Norway);
  •  the abolition of wages boards;
  •  the forced sale of council houses without provision for their replacement with affordable housing;
  •   the brutal and divisive treatment of the miners;
  •   tax cuts for companies and the rich on the pretence that this would increase enterprise, the benefits of which would trickle down to the rest of us;
  •  the failure to chase tax dodgers;
  •  social security cuts for those who need  help;
  •  the selling-off of UK assets, both public and private, to foreign owners for short-term gain but a long term drain on the balance of payments.

It would be idle to pretend that some of the above were not influenced by globalisation, but they were not caused by it, and could have been prevented or ameliorated had there been the domestic political will.

Chakrabortty’s conclusion is that the “[sink ]from semi-prosperity into pauperism” of the working classes, (and now a goodly portion of the middle and professional classes) was and is “not a one-off event driven by the magical, unanswerable forces of globalisation.”

In other words, we can, should and could  work together, preferably with our European neighbours,  to heal the rift which has led to Brexit and work together for a more equitable and co-operative (and thus probably happier) society.  All that’s stopping us is the political will.

Let's hope that there's some evidence of Mrs May's intention to put her talk into practice in the Economic Statement later this month


  1. All those factors (and globalisation) are dwarfed by the effects of technology. Globalisation means that our docks handle more volume now than in the '60s but a vast army of dockers has been replaced by a man with a big crane.

    1. Yes, another writer in the Guardian, I forget who, has pointed out that we need to try to assess, and publicise, how much unemployment is the result of technology and how much due to immigration. He and I suspect mostly the former.

  2. Another factor which has materially affected the lives of working people is the contracting out of public sector jobs like cleaning, security, janitorial work, roads maintenance, refuse collection. It is unclear whether there have been gains in efficiency or even economy but the serious reductions in pay have contributed to poverty and are arguably self defeating since staff turnover becomes high and the employees become dependant on goverment benefits to live.

  3. Yes, and in particular the privatisation of the "care for the elderly" service, which nowadays is probably called an industry. The treatment of workers in this service, where making a profit is now a serious, if not the primary, objective, is a national disgrace.

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