Transforming Globalisation
into a Social Good

Anthony Fitzgerald

[An address delivered at a conference on "Social Problems --
Then and Now" at Canberra, 17 September, 2006]

Introduction

The theme of this Conference is Social Problems :Then and Now and obviously I am aiming to examine a social problem in the light of the ideas and principles enunciated by Henry George, particularly in his book Social Problems.

I decided on the general topic of Globalisation after reading a book called Globalisation for the Common Good by Kamran Mofid.

I entertained the hope on reading this book that Globalisation might be transformed from a social problem to a social good and hence the title of my talk today is, namely "Transforming Globalisation into a Social Good ".

If Globalisation was in fact directed to the common good it could hardly be called a social problem but rather social good. Unfortunately I have found that it is not yet a good for all of society but only some sections of it. Henry George in his time regarded another seemingly positive thing - progress - as a social problem purely because under existing conditions it was not conducive to the common good.

I intend to examine the conditions, which spoil both progress and globalisation. I hope to be able to persuade some of the well-intentioned critics of globalisation that a Geogist analysis of the issue, would enable them to get to the root of the problem.

Now globalisation has been very topical in recent times. One author calls it the defining issue of the time. Perhaps that explains why in 1998 there 2,822 academic papers were given on the subject and 589 books on globalisation, each curiously with its own definition of globalisation. Maybe they overdid it in that year because I read on a more recent Internet site that it is "rarely defined". The Tower of Babel was less confused.

I have seen several more recent books on it including the one I referred to above by Kamran Mofid published in 2002.The distinctive thing about his work is that it shows a good deal of knowledge of and sympathy for the ideas of Henry George. He draws on such modern day Georgists as Mason Gaffney and Kris Feder in his criticisms of Neo-Classical economics. He even quotes John Young's The Natural Economy when he explains the common good.

Mofid has quoted a good deal of George, as well. Like George, he seems to be favourable to a religious and moral point of view. He is very ecumenical by trying to bring together all faiths in the quest for economic justice. He seems to try to synthesise different points of view. He does not claim to be a Christian or a Georgist but I would consider him a fellow traveller to both these positions.

I have not read any full account of this topic by any recognised Georgist authors or groups and so I thought I could at least hold up Mofid's book as an example in the hope that it could inspire some avowed Georgist group to take up the task.

I hope I have some things to contribute today but more work will be needed, and collaborative work at that, to illuminate this topic further with Georgist attitudes and principles and to open up discussion with well meaning critics of Globalisation.

Henry George said reverting to principle could solve social problems. What faces Georgists when they look at globalisation is its sheer complexity and the amount of discourse taking place on it at cross-purposes. Georgists would do well to reduce this to some simplicity and order.

There seems to be two sides of the equation as they say -those for it and against it. But there also seem to be some significant third forces to account for as well. By the way, I remember reading an article by Fred Auld written some years ago in "The Georgist Quarterly" in which he defined three types of Georgists namely Christian, right or left wing.

Classifying the different views of Globalisation

Broadly speaking, on the issue of Globalisation, there seems to be a left wing which opposes at least the current kind of globalisation but has a kind of globalisation which they aim for. However, opposition to globalisation can be a rallying call for protestors with all sorts of complaints. Its opponents could include some odd bedfellows. The left largely seems to want to manage and structure globalisation so that it supports fundamental human rights and sustainable development and generates prosperity for ordinary people. It does not have to be linked with privatisation and deregulation. It has the potential to be good for all as long as it can be combined with social spending. You could have free trade and debt relief. Some qualify free trade with the word fair. Some are optimistic that the people can be the master of the kind of globalisation they want by picking and choosing as from a smorgasbord. Others are fatalistic about the kind of globalisation we are going to get. The extreme left wants globalisation if it could only be viewed as the triumph of world socialism.

There is a right wing, which favours the current form of it and wants to extend it. Their theoretical underpinning is very much Neo-classical economics which has been given ample attention by Georgists. There are some right wing opponents of globalisation as well noting Pat Buchanan in the US who wanted an isolated America.

I could refer to some third forces or at least smaller groups. There may be religious groups who want to globalise their religion or even religion generally. There are greens that want a green globalisation.

I will not spend much time on such positions today preferring to look at two positions of those in the mainstream left who want to change globalisation.

My Rationale for considering Two mainstream

"left" views of Globalisation

I thought I would concentrate on a couple of differing left views of globalisation in this paper not because they are necessarily closer to Geogist approach. But there is some common ground in the sense they want to alter Globalisation and I think we have more of a chance to influence their positions. I can identify one type of left view, which characterise globalisation as Americanisation and complains that it is all outside of our control.

I saw another left position that of Philippe Legrain who is critical of many aspects of globalisation in his book, Open World:The Truth about Globalisation. He is optimistic that we have the power to filter out its worst aspects. The latter seems a sound approach and in keeping with George's method and his balance.

Henry George himself is hard to describe as a left or right or even as a particular brand of Christian. He seems to be a very broad church Christian and even inter-faith in his appeals to the religious conscience. He talks about public education "breaking down prejudice and checking the growth of class feeling" (p191). He is a strong advocate of freedom and free trade which may be termed right wing but, on the other hand, there is a strong sense of equity and eliminating poverty which could be considered left wing. Mason Gaffney maintains that he synthesises the best elements of both collectivism and individualism while discarding their worst features.

The problem with capitalism was that it did not exist in conditions which respected natural rights to equal use of the land and the right of labour to its produce. Socialism had the problems of excessive planning control and regulation. It too in its way did not allow for the equal right to use land and funded its welfare state by robbing labourers as well as capital for the apparent benefit of labourers. Really much socialism is a reaction to the worst features of capitalism caused by land monopoly.

Henry George finds socialism understood as "cooperation" and "the art of living together in closer relations", "mankind dwelling together in unity" as natural and ordained by God (p191). He calls this "the truth in socialism" and it is being "forced on us by industrial progress and development" (p177). He is only too happy to concede to the government "that which cannot be done, or cannot be well done, by individual action" (p177).

Henry George's "Understanding" of Globalisation

Globalisation seems to date after Henry George's Social Problems (1883) by just over 60 years if Mofid is right in his view that Breton Woods in 1944 was its beginning. There were barriers stifling world trade in the 1930s and this meeting tried to remove some of them. Others place its beginning in the 16C with the expansion of European capitalism. Some say it began in 1989 with the fall of the Berlin Wall. I believe I can show Globalisation's main characteristics were present in George's time albeit in a less developed form. He recognises "the natural laws which give us the steamship, the locomotive, the telegraph, the printing press, and all the thousand inventions by which our mastery over matter and material conditions is increased." (p192)

Henry George may not have referred to Globalisation specifically, the term had not been coined but he had a lot to say about the dire effects on modern civilisation of a material progress (not based on equal rights to land) "developing such monstrous inequalities as must ultimately destroy it." (p195)

Globalisation is an effect of such a material progress and as such is a problem to the many that don't benefit from it and to even those that appear to benefit from it. A whole chapter (entitled Dumping Garbage) of Social Problems deals with the Irish migration to America. George's basic argument is that, with the progression of land enclosures, they are going from the frying pan into the fire. Globalisation, if a social problem for George (like material progress was), can only be turned into an unqualified positive for all by "a greater intelligence and a higher standard of social morals"(p192) and by "the recognition of the equality of natural rights" ( p192).

Definitional Principles of Globalisation

If an Aristotelian philosopher were to give a definition of a house he would refer to both a formal principle and a material principle. The formal aspect lays the emphasis on the structure and arrangement (formal principle) of the building materials e.g. windows, doors, roof, foundations, walls etc (material principle). The form determines the material elements.

I will attempt to define globalisation with attention to both the formal aspect and material aspect. I am not thereby saying globalisation is a finished product or destination. It is really a process just like progress. Globalisation is a liberalisation and expansion in the arrangement of trade, investment and commerce on a worldwide scale for a particular purpose. It involves an increased integration and interaction of national economic systems. The ties seem to be not only economic but political and cultural as well. Migration is also an aspect of the issue. Unlike the completed house which, for argument's sake, has no major additions done to it, Globalisation seems to have grown and developed with material progress in transport and communication.

If you consider the amount of trade, foreign investment, mechanisation, transportation and communication in George's time which was enabled by material progress of which he was aware, Globalisation was probably well underway even if the term had not been coined and though it has undergone uneven growth since then. I think this statement from Social Problems best demonstrates a vivid awareness of it.

"The seemingly infinite diversities in the capacity of different parts of the earths surface lead to that exchange of productions which is the most powerful agent in preventing isolation, in breaking down prejudice, in increasing knowledge and widening thought." (p216)

It seems to have had a growth spurt with the collapse of communism and a shift away from socialism. At different times it has been checked by periods of protectionism and indeed this was a debate of George's time. He maintained we were fighting "the international law of God" by our tariffs.

Henry George preferred free trade to protection but it would not improve the lot of workers unless it was based on equal rights to land. The problem with it and material progress was that without his reform each could not be disentangled from poverty and deliver lasting benefit to all. Land monopoly and monopolies spawned by it swallows up all the seeming benefits of free trade and progress.

Agents of Globalisation and their Purposes

To return once more to that Aristotelian who, in explaining anything, has recourse to two external principles in addition to the two internal ones of matter and form - these are the efficient and final causes. The first deals with whom or what brings about a change. Returning to the house again let's say the builder is the efficient cause. The final cause would be the builder's ultimate intention or end in building the house e.g. so he could live there. For George (and Aristotle for that matter) there is a Master Workman (p217) who intends civilisation even though we find it easier to consider the lesser efficient and final causes. He elaborates the divine "purpose of this world, so far as man is concerned, is evidently the development of moral and intellectual powers". (p216)

It seems natural enough for any producer to initiate trade and commerce. So producers are the efficient causes in world trade and their ends or purposes are the final causes which move them. On this score it is natural for them to wish to trade freely on a wide scale and for reasonable profit. Unfortunately, with growth of monopolisation, the control of these processes becomes concentrated by a few individuals having little regard for the general interest.

Kamran Mofid- A left wing view of Globalisation

According to Kamran Mofid, globalisation results in giving big business access to a global market to produce as cheaply as possible for the shareholders with no regard for the rest of us. He describes this state of affairs as profit for the fittest rather than an empowerment of the weakest. This is an elite Globalisation "from the top downwards" not a "grass roots" globalisation - one accentuating life values, protecting human rights and the environment. If the players in the game of world trade were the efficient cause of world trade and if no players were greedy or able to dictate the terms of it then the game would not be fouled up. The Master Workman's intention would not be frustrated.

We get a better idea of globalisation by looking at its main players, how they have directed it and their intentions. Mofid quotes The Economist as stating the main players are aiming for a kind of world order or embryonic world government. He notes that the former Director-General of the WTO called it "a constitution for a single global economy". These words could imply the stamp of approval of all those concerned i.e. as in some democracy. Unfortunately it seems just the IMF and the World Bank brought about the changes. Mofid maintains the real purpose was to give US corporations increased access to new markets and raw material. For him the WTO met to continue the corporate agenda in 1995, namely to eliminate all barriers to trade for the benefit of the strongest. He asks some relevant questions; "Who voted for it?" "To whom is it accountable?" "Where is the manifesto of its policies?" "Which citizens of the world voted for or campaigned and voted for them?" As a French commentator has noted, we get a picture of anti-democratic concentration of power like the one that lead to the French Revolution.

Phillipe Legrain-Another left wing view of Globalisation

Philippe Legrain, on the other hand, sees free trade as the natural corollary of the left. He maintains that the WTO has become the whipping boy for many people's fears about Globalisation. He denies that it is a world government in embryo. He in fact sees it as an example of international cooperation. He says its key feature is non-discrimination with its strong rule based system. It has 144 member countries all with the power of veto of anything and everything. They have good dispute settlement mechanisms. It is a champion of the weak rather than a stooge for the strong. He admits that it does have a culture of secrecy, which should be opened up to the disinfectant power of sunlight. Poor countries cannot spend as much on legal representation; but he also sees this as not beyond remedy. In summary, he believes that the poor will be better off with free trade. He gives an interesting account of regional trade agreements like the EU and NAFTA which I believe, although they seem to bypass global free trade, are really freer trade but on a restricted basis. It must be remembered that the free trade aimed for by the WTO is not complete free trade as advocated by Henry George. Legrain does not see much future in world government along the strict democratic lines that is found in western democracies. National governments can have sufficient input on the international stage within current structures. He seems sensible in his approach to NGOs which are constructive, to which he is happy to concede a voice as compared with a vote.

How Geogists could improve Globalisation

Henry George had a different standard when evaluating free trade. He did not just want the poor to be better off he wanted them not to be poor at all. His goal was "the equalisation in the distribution of wealth" (p200). Getting rid of monopolies without getting rid of the underlying monopoly of land cannot achieve this goal. Nor can any reform, "until we make this fundamental reform" (p 201). He illustrates in his rondo game story "that where land is private property the benefits of industrial improvements goes ultimately to landowners" (p196). The key to improving the wages and conditions of labour is cutting the landowners of their unearned income out by free land. We should make clear those to whom dropping the debt is the answer to third world poverty that this would only make the landowners richer according to Georgist principles. We need to stress to them that land values are made by the community as a whole and yet landowners get paid for them. They may begin to see paying for land to the common treasury makes much more sense and that this could be achieved by George's fiscal reform, namely the taxation of land values. The moral aspect to this reform, namely that everyone's equal right to the land is respected, to ensure that the natural progress of society is towards equality, should find their sympathy.

Conclusion

The kind of globalisation actually occurring today is really just "the progress and poverty" or "progress with poverty" described by Henry George that is playing itself out. Today we can see that this globalisation exists with poverty and that this poverty could bring it down. Poverty used to turn the desperate towards communism. Now it seems it turns them to terrorism under the guise of religion. Henry George had a vision of a "progress without poverty" which could be achieved by his reform. It is this kind of progress, which could reform our current globalisation at its foundations. Hopefully more and more people begin to appreciate this by our efforts in the future. Globalisation could then be guided by a "centripetal force tending to unity, growing out of an ever-balancing centrifugal force tending to diversity" (p217) described so beautifully by Henry George in Social Problems.