Global Dreams

17 November 2005

  Cover Global Dreams

Global Dreams
Imperial Corporations and The New World Order
Richard J. Barnet and John Cavanagh
Simon & Schuster, 1994

Richard Barnet, one of the authors, also helped write Global Reach two decades ago. Both texts look at the power of multinational corporations, but "Global Dreams" views that power from a contemporary perspective that mainly encompasses the last 20 years. The chief differences between the decades profiled in these books is that in 1970 there were 7,000 multinationals and more than half were based in the US and Britain. Today there are approximately 35,000 multinationals and the US, Japan, Germany and Switzerland combined have less than half in their own borders.

The book paints a formidable portrait of power that is both global and parochial in its interests - global in multinationals' ability to reach across boundaries and parachial in their lack of concern for those touched and obsession with their own interests. The book focuses on how a few multinationals directly affect our lives and those of people around theworld. "Globalization," in the authors view, is at once bringing the world together in technology, culture and other ways and also splitting it apart.

The authors use extensive portraits of five major corporations, interspersed with smaller profiles of others, to show how a few companies dominate what Barnet and Cavanagh see as the "four intersecting webs of global commercial activities." These webs include the global cultural bazaar with competition for education and entertainment, the global shopping mall with battles for what we all eat, drink, smoke, wear and enjoy; the global workplace of factories, workshops, hospital and restaurants, and the global financial network.

I think the entire book harkens back to what Clare Boothe Luce called "globaloney" many years ago. Globalization is a popular term in the '90s, but one that means just about what the user wants it to. Although it has a lofty sense, in reality corporations are shaping world history through the mainly negative byproduts of their global operations. They note that of the 5.4 billion people on earth, almost 3.6 billion have neither cash nor credit to buy anything more than a Coke and a bag of Cheetos (examples of "global" products.) At the same time, fewer and fewer people are needed to make goods and provide services. And yet current corporate culture does not address these concerns, preferring to see them outside their power and thus not within their province. And political units, many of them desperate for infusion of jobs and capital, are often willing to let go of the standards and policies that benefit their people in order to entice new industry. This scenario is ripe for abuse.

Enter also the world leadership vacuum. No world authority is trying to define or promote global welfare. With the end of the Cold War, the leading industrial nations who were bound by their mutual opposition to Communism have turned inward in their concerns. This "deglobalization" of world politics is happening while globalization of economic activities increases. But , ironically, although global corporations do not accept responsibility for the social consequences of what they do, they also do not want governments to interceed. And most government and corporate thinking is aimed at how to maximize competition and sucess within the existing global system, not on strategies to push this system in other directions. In fact, by national consensus we rarely examine the assumptions, priorities and values behind these decisions.The authors argue that public accountablity is an important criterion for rmany institutions and should be applied to some degree to multinationals. The authors also briefly note the rise of "globalization from below," a term coined by Richard Falk. This resistance to global culture is producing local citizens' movements and alternative institutions that are geared to bypassing the new world order in order to survive and develop in a more dignified manner - thus creating their own much smaller transnational webs. The authors see this as "the only force that can break the global gridlock," yet they only hint at it at the book's conclusion. I would like to have seen a fuller discussion of this - the onlyl hopeful note that the book relates and one I too am very interested in understanding.

Although the global labor pool is expanding (47 million enter each year), the few jobs that do exist often do not include decent working conditions or pay. Although the consumer marketing machine keeps pumping out incentives to buy mainly Western products, the majority of the world can only windowshop. The downward pressure on wages and lack of jobs is not creating a class of consumers able to fuel the mass-production engines.

Discussion: Though each chapter of this book unfolds a new wrinkle in this global network, I am personally most interested in the chapters relating the effects on labor, especially in the Third World. Most Third World people employed by multinationals or their contractors work in light manufacturing done either at home in "shadow industries" or in export processing zones, special areas designed to generate foreign exchange that are not usually part of the local economy and thus exempt from many policies, taxes, etc. Of the 4 million people employed in these 175 zones, more than 2.6 million are women.

The authors give an example of the complicity between the US Agency for International Development and this exploitable Third World work culture: A business group in El Salvador sponsored an ad in a US spinning industry trade journal that was almost completely financed by USAID. It focused on a young, attractive woman shown at her sewing machine. "You can hire her for 57 cents an hour. Rosa is more than just colorful. She and her co-workers are known for their industriousness, reliabiltiy and quick learning."

In some ways, Nike fesses up to its true role in this new global setting, admitting that the company doesn't know anything about manufacturing. "We are marketers and designers," their vice-president for Asia says. Virtually 100 percent of Nike's shoe assembly is in Asia, hiring or contracting with 75,000 laborers. To me, the essence of the social/political/ethical problem facing us in the multinational "global" culture of today is exemplified by Nike's example. Nikes made in Indonesia cost $5.60 to produce and sell on the average in the West for $73, or as much as $135. In 1991, Nike workers in Indonesia earned 82 cents per day. Overtime is often mandatory after their eleven-hour day. Yes, Nike's operations are providing jobs, but at what cost? Their power allows them to set their own terms, with the consequence of desperately poor people making less than livable wages from producing high-margin products. Juxtapose this image with that of Michael Jordan and other sports celebrities employed by Nike to promote their products. Jordan reportedly received $20 million from Nike in 1992, an amount greater than the entire annual payroll of the Indonesian factories that make them. Asked about these absurdities and potential labor problems in Nike's contract factories, the Asia VP says, "It's not within our scope to investigate. " Although aware of labor disturbances in the six factories that make their shoes, he knew nothing about why they erupted and had not asked. "I don't know that I need to know," he said. This vast population of workers are largely unregulated, unprotected and uncounted. The nations they call home are increasingly disinclined to maintain their own labor standards. Is this development?