The Written Word
for July 28, 1999

Globalization has got everyone concerned but it has the "left" in an awful flap. When I say "left" I mean the old-line socialists and those, like labour leaders, who must sing from their songbook. They become apoplectic at the mention of the word. There is a great gnashing of teeth and wringing of hands as they predict the certain and imminent falling of the sky. The trouble is that while the socialist solution never did work, it is now so outdated that modern social democratic parties such as are found in Europe and in the form of New Labour in the UK don’t even pay lip service to the old notions. Socialism died with Communism in 1989 when the Berlin Wall came tumbling down.

Ronald Reagan is credited in many circles with bringing down the old Soviet Union because he money whipped them. And he did drive the armaments race to new expensive heights which no doubt tipped the barrel. But the real killer of socialism, whether of the forced or voluntary kind, was the Consumer Age’s marriage to the Communications Age. I’ll never forget a visit to China in 1983 where, near the Hong Kong border, there were hundreds of television aerials pointed at the Hong Kong stations. There was nothing authorities could really do about it. And as the consumer goods and way of life in the west started to turn up on the screens in living rooms behind the Iron Curtain the difficulties facing communist governments became insurmountable. It was the old World War I song, "how you going to keep ‘em down on the farm, after they’ve seen Paree?"

With the end of the Cold War and the rise of the Consumer Age, which now depended upon services and intellectual property, not only manufactured goods, the pool of capital available started to look for places to invest. Because of the "chip" it was no longer possible for countries to pass currency restrictions because with the push of a button the money to be controlled was whisked off to a safer place. Moreover, if a country did succeed in forcing its attentions on a pool of capital, other capital shunned it for future dealings.

There is, of course, this myth based upon umpteen conspiracy theories that somewhere some sinister person is controlling all this capital and is using it for wicked purposes. The fact is that capital, like filings to a magnet, is attracted to where it gets the best and safest deal and it is very widely held if not controlled.

The old left, never ever ready to let an old battle end or an old battle cry die down, talks of withdrawing from Nafta and other sillier things.

There are challenges – lots of them. Not everyone is a winner in the new global economy, not every country or every person. In fact there are lots of losers. But the compensations have to come from sound government – and personal decisions - which recognize that the "electronic herd", as Tom Friedman in his brilliant book The Lexus and the Olive Tree calls the new pool of capital. It can be eased about and directed with guidance, but it’s not going to disappear.

The new world is here and just like the Industrial Revolution, it cannot be stopped. It can be accommodated to and dealt with but it cannot be stopped.

It is the wise country and the wise person who learns about globalization and works out the accommodation necessary to have it a vehicle to prosperity rather than a hearse to the burial park.