Gobalisation is probably the most important change that has occurred in the world over the past several hundred years. Because it is about the rapid and vast takeover by corporations and banks of most of the world’s resources, markets and wealth, Corporations and banks are increasingly able to determine national economic policy and development, whereas governments used to have that control. Globalisation is enabling the corporations to take what others had, especially the resources, land, forests and markets in the Third World that were previously protected and preserved for local people, and the business that enabled them to make a small living in markets that big foreign firms were not allowed to enter.

This takeover is being made possible because the supreme principle is now to "free market forces", i.e., to eliminate arrangements which preserve some resources or markets for the benefit of particular people or industries or regions, or which give governments the power to do things private firms might not want to do. Big corporations can produce more cheaply and make more profit on an investment. Therefore when they are allowed to come into a country they will quickly capture the existing markets and put local firms out of business and make local people unemployed. Governments once prevented these events by regulating, protecting, subsidising and restricting the operations of foreign investors. But now the dominant ideology says that all should be free to compete on "a level playing field" for the available markets and resources, meaning that governments are not supposed to assist some firms or regions or industries. These actions would "distort market forces.".

The power corporations have to get their way is largely due to a) their mobility; they can move their investments quickly, to the countries which offer the lowest wages and least restrictions on their activities, and b) their ability to avoid tax. They will locate in the countries levying the lowest taxes. This is also made possible by their use of "transfer payments" (rigging the invoices on shipment between their plants in different countries to appear to make no profit in high tax countries). Thus half the corporations with branches in Australia pay no tax at all! (See evidence in Website at GLOBALISATION Documents; Tax Evasion by Corporations.) All governments lust now comnpete against each other to reduce taxes, or the corporations will not invest.

Conventional economists argue that regulation, protection and subsidies mean inefficiency, because goods cost more and investment, capital flows and trade are inhibited. This is true. Globalisation will indeed mean cheaper goods in Australian supermarkets, and more trade opportunities for our firms (especially our agricultural sector) to win overseas. It will mean that capital will be freer to flow to where it can be most "productive", i.e., make most profit. All these claims are true, but there are much more important considerations, especially the enormous harm that golbalisation is doing to millions of people and to many national economies.

Another argument is that freedom is in principle desirable and that it is best if individuals and firms are free from government controls and can buy, work and produce what and where they choose. But this is not true in general; a satisfactory society is not possible without a great deal of regulation and restriction of freedom (e.g., the freedom to drive on any side of the road, and the freedom of the rich to take/buy more than their fair share.) The problem is to find that level where much freedom is possible while there are rules to ensure that justice etc exists.

It is also sometimes argued that the market is the "natura" way for humans to exchange things. The market is not natural; it is a product of society; it is the way our society chooses to organise exchange. It did not exist in tribal society and it was constructed, shaped, maintained and protected by governments. (See at this Website, GLOBALISATION Documents; The Role of the State.)

Globalisation heaps great benefits a few people, including those able to shop in rich world supermarkets,those with high skills, and especially the few who own most capital, but it is threatening or lowering the living standards of most people on earth and devastating those of the poorest, while damaging social cohesion and the environment. (For much evidence see at this Website, GLOBALISATION Documents; Nature and Effects.) The 1996 UN Human Development Report found that the poorest one-third of the world's people are getting poorer. In rich countries too globalisation and the neo-liberal agenda are having damaging effects on the welfare of poorer people, social cohesion and on national sovereignty . (Poverty levels in China and India are now falling, but this is because those countries are among the winners in globalisation. Poverty in Africa is increasing.)

Most important is the fact that in future governments will be much less able to prevent corporations from doing many undesirable things, because such efforts will be identified as interfering with the freedom of trade and investment. There have already been several cases where governments have been prevented from blocking some action a corporation wanted to take but which was not in the country’s interests. This means governments will have little control over what is developed. What gets developed will be whatever corporations want to develop, and they only ever develop things that maximise their profits and they never develop what is most needed. (For more detail see at this Website, THIRD WORLD DEVELOPMENT; Documents.)

Also note that freedom to invest and trade means that corporations will be able to come into your country and take (buy) resources and sell them to rich people far away even though you might want to preserve them for your own firms or people. If your government tries to stop this it will again be charged with interfering with trade and investment and your country will face heavy sanctions from all other countries because of the World Trade Organisation etc agreements it has entered into. Thus the world’s resources are more readily delivered to the richest few. Canada has faced this threat regarding export of its water to the US.

Important causal factors have been the development of shipping, enabling goods to be moved all around the world more cheaply, and especially computers. However the main causal factor has been the constant accumulation of investable capital, setting corporations the increasingly difficult problem of continuing to find profitable investment outlets. (This is the "Problem of Surplus" which Baran and Sweezy focus on in Monopoly Capital, 1966, as the basic factor driving capitalism.) This has led to the gigantic push to break down the barriers previously restricting access to potentially profitable fields.

In Marxist terms globalisation is the situation to which capitalism inevitably moves because the ceaseless drive to accumulate more and more capital leads to pressure to remove the barriers blocking access to more fields for investment.

The deregulation of world trade is well under way. They are now pushing for greater freedom for investment, for ways of preventing governments from choosing where to purchase the many goods they use (which enabled governments to assist particular regions or firms) and to make the vast services sector open to market forces. The GATS move.)

Governments are enthusiastic for globalisation firstly because all accept the neo-liberal philosophy. (In general governments function in the interests of the business class. For example their top priority by far is to maximise business turnover or economic growth, not to maximise the average quality of life.) However, even if a government objected to globalisation it now has no choice but to go along and try to be among the few winners.

In a very competiti9ve world economy any government5 must strive to make the country attractive to corporations, which means offering the favourable conditions all the others are offering, such as low taxes on corporations and subsidies and tax holidays 9e.g., set up a factory here and you need not pay any taxes for many years.) If a government wanted to make corporations replant forests, pay full taxes, provide high safety standards etc., foreign investors would leave, the national credit rating would be reduced and therefore higher interest would have to be paid on loans to invest there. Most importantly, the country’s production costs would rise, meaning that it would be less able to compete in the global export market, on which all are now highly dependent for income. Inother words it is not that the politicians are foolish; they have no choice but to go along with what suits the corporate sector or their national economy will suffer.

Another consequence of globalisation, which makes all regions compete against each other for sales in the one global market place, is that wages and working conditions everywhere are driven down towards the level in the lowest paying countries. If any one country asks for higher wages the corporations will move to a country with lower wages. Therefore all are locked into a "race to the bottom". Thus wages everywhere are driven down towards the level in the lowest paying countries, simply because if one country asks for higher wages the corporations will move to one with lower wages. Therefore all are locked into a competitive "race to the bottom."

Where people have known about these proposed changes (as with surveys on the introduction of NAFTA), the majority has usually rejected them, but governments bring them in anyway. However governments have brought in the changes largely by secrecy and deceit, concealing proposals from the public. (See Website, GLOGALISATION; Documents; How They Get The Rules Estgablished.)

Australian politicians and economists have been enthusiastic about globalisation, claiming that we can be among the winners by becoming "the clever country". In conventional economic terms Australia has indeed enjoyed a remarkable surge in prosperity for 10 - 15 years. This has been partly due to global economic conditions, especially the boom in demand for resources, but economic restrcturing in Australia has gingered up our capacity to compete for sales in the international market place. However, even though we have been one of the winners, we have paid a heavy price. Consider the following,

Governments are minimising their spending on crucial public services, such as hospitals. (If you doubt this try a 5-10 hour wait to be seen in casualty ward.) Our public wealth is deteriorating. Despite a c. $12 billion surplus the federal government will not spend adequately on mental health, the poorest, dental health, aborigines, the enfironment etc...because global capital does not like dealing with countries where governments spend on such things and thus have to tax more.

nstead of devoting Australia's productive capacity to providing Australians with a very secure, high quality of life, independent of the treacherous global economy, our fate now depends on whether we can beat others for scarce export markets, on conditions in the global economy and on what suits foreign corporations and banks. Are we among the winners?

Yet no country is in as good a position as Australia is to develop an economy that provides very satisfactory and secure lifestyles from our own resources and at a very relaxed pace. We would not be able to produce most things as cheaply and "efficiently" as the transnational corporations can (using low paid Third World labour), but that would not matter if we only needed to sell a few exports in order to pay for a few important imports.

Globalisation should be understood as a triumphant, brazen grab by the corporate rich for even more wealth and power, legitimised by the free market ideology. It involves the massive transfer of markets, resources, firms, forests from ordinary people to a small number of giant banks and corporations. Because the laws protecting little people have been swept away they are not able to come in and take the markets and businesses those people once had.Inequality is rapidly increasing all around the world. Most of the world’s capital is now owned by about 2% of the world’s people. Yet the push continuesto establish more new rules whereby governments and people have even less power to interfere with what the corporations want to do.

It is not possible to have a sensible and just or ecologically sustainable economy without a great deal of regulation, so that the rich and powerful can be prevented from grabbing everything, and so that society can make sure that the right things are done. The more that market forces are freed, then the more that what is done will only be what is profitable to the rich.

All these alarming effects, especially the deprivation of the Third World and the destruction of the environment and of social cohesion, have come suddenly, since about 1970. They will intensify in the years ahead.

Unfortunately most people critical of golobalisation are only working for a re-regulated capitalist-consumer society. They do not understand two crucial points; a) that the capitalist system inevitably, navoidably pushes in the direction of globalisation, i.e., that when the driving force in a society is the qest for constantly incredasing profit, wthen whatever interferes with this will eventually be eliminated, those with most power in the market will take more and more of the wealth and inequality , social conditions and the environment will inevitably suffer, and b) that the "limits to growth" analysis shows that a sustainable world order must be based on simpler and more frugal living standards, in small scale, highly self-sufficient and localised economies, in which we can work mostly in cooperative ways, and live simply. A sustainable and just world order will not have a globalised economy. There will not be enough energy for much international trade. People will mostly use things produced locally by small local firms using local resources. (For a detailed account of The Simnpler Way, see.)

Chossudovsky, M., (1997), The Globalisation of Poverty, London, Zed Books.

Dalton, G., (Ed.), (1968), Ancient, Primitive and Modern Economies, Boston, Beacon Press.

Hawken, P., A. B. Lovins, and H. Lovins, (1999), Natural Capital, London, Little Brown.

Trainer, F. E. (T.), (1999), "The limits to growth case now", The Environmentalist, 19, 19, 4, Dec. 325 -336.

United Nations, (1996), Human Development Report, New. York.

__________________________________________________________________