Robert Schaeffer, the author of Understanding Globalization, worked as a journalist and an editor for Friends of the Earth, Nuclear Times, and Greenpeace Magazine. He is also a teacher of global sociology and environmental studies at San Jose State University. He participates in Pugwash Conferences on Science and World Affairs, which in 1995 won the Nobel Peace Prize. He is also the editor of War in the World System (1990), and author of Warpaths: The politics of Partition, (1990), and Power to the People: Democratization Around the World (1997).
In his latest book, Understanding Globalization, which he published in 1997, Schaeffer discusses globalization from almost every aspect and possible perspective, covering the major economic changes over the globe such as the debt crisis, free trade, global warming, and food and hunger. The book also discusses the social consequences of political, economic and environmental change.
Following World War II, the world started an immense change on economic and social levels. The war certainly drained the economies of major countries of Europe and even the US and the USSR, both which were heavily involved in warfare. The US, however, was involved in the Marshall plan which helped rebuild Europe after the war. This contribution is the most important factor that decades after helped European countries become a major united economic unit, the European Community. This contributed to furthering the gap between the First World and the Third World, which though did not actively participate in the war, was directly influenced by it, both socially and economically.
The term “globalization” is perhaps new, but in effect, it is not. Actually, whenever changes took place in the First World led by the US, influence was strongly felt in the Third World nations. For example, when the US devalued the dollar in 1971 and 1985 to make its products cheaper and more accessible in world markets, products made in Third World markets became relatively more expensive which resulted in growing poverty for these countries. Moreover, as food supplies increased dramatically due to technological development in the US and Europe, food prices started to fall dramatically, which resulted in increased poverty in Third World countries.
Similarly, when the US started fighting inflation in 1971, it increased inflation rates which made investment in the US more attractive. However, this also led to draining most world countries, Third World nations in particular from their capitals which were already scarce. As a result, this led to a regression in the economic development of these countries. Actually, this change in the US economic policy was the single major cause of the debt crisis that swept most Third World countries, since interest rates on foreign debts became floating and related to American interest rates. Accordingly, Third World nations suddenly found themselves falling under the burdens of more debts in order to pay their debt services. The debt crisis in the 1970s was accompanied by a dramatic collapse in commodity prices which led many Third World countries in Africa and Latin America to the verges of bankruptcy. This also triggered a debt crisis in the First World, especially in the US, although the debt structure of First World nations did not impose the threats it did on Third World nations. Eventually, Third World nations were offered tried their best during the 1980s to pay their debts, but only to fall under the pressures of rising interest rates, and in the end, the 1980s was considered as a lost decade, since most of Third World nations were hardly able to pay the interests on their debts, and most of them did so by borrowing more debts from First World banks.
The debt crisis had dramatic outcomes in the 1980s on many Third World countries, especially as 1 billion people fell under the levels of poverty as the United Nations reported. Ironically, hunger struck in a large number of these countries, although none of them faced food supply shortages. Actually, the whole world did not suffer food supply shortages and is not expected to face such shortages in the foreseen future, mainly due to the increase in food production with modern farming and agricultural technologies. Four major revolutions have occurred in this century in the food production industry. In the 1920s, tractors and soybeans were introduced; in the 1940s, chemical fertilizers were introduced into the industry; in the 1960s and 1970s, the Green Revolution started, quadrupling food production, and in the 1990s, genetic technologies were becoming basic aspects of the industry. As a result, supplies have always grown excessively, pulling prices downwards.
Besides, even though food supplies became almost 50% cheaper in the 1980s than they were in the 1940s, costs of growing crops were increasing rapidly mainly because of two reasons. First of all, new technology cost a lot, and secondly, the high prices during the 1940s and 1950s triggered many farmers to fall under debt in order to purchase land and technology. As prices fell and interest rates rose, most farmers faced a disastrous situation which reflected in the failure of many agricultural banks world wide, even in First World countries. Moreover, agrochemical technology used in the industry was a disaster itself, since it destroyed the soil and the lands suitable for irrigation and cultivation.
The problem of food supplies is described by a US official who stated, “We sold what we could for cash. What we couldn’t sell for cash we would for credit. What we couldn’t sell for dollars we sold for foreign currency. What we couldn’t get money for we bartered. What we couldn’t get anything for we gave away – what we couldn’t export by any means we stored. And still the stocks increased” (p.163).
This naturally reflected negatively on Third World countries which relied heavily on selling their food exports, which added to their difficulties caused by the devastating debt crisis. As a matter of fact, those who suffered from hunger did not do so because food supplies were lacking, but because they had become so poor to the extent that they were no longer able to buy any food. The reason why Third World countries had to face hunger was that processed food was too expensive. Food processing companies, all of which were First World companies, did not lower their prices because they were very few in the face of millions of farmers and therefore they had a stronger bargaining power. As a result, the World Bank estimated that there were 1 billion hungry people on earth, that is, roughly 20% of the global population. Agronomist Dale Johnson reflects on this problem, “a significant fraction of world farm output is being produced in the wrong place, in the first world, not in the third world where a majority of the world’s poor and hungry reside” (p.175).
As it became apparent that any change in global economics in one part of the world influenced other economies elsewhere, international trade agreements were once more emphasized. The US which was not a significant part of GATT 1947 finally decided to join in 1995 in GATT/WTO, but mainly to promote US international trade, and to open up international markets for US goods and products. International trade agreements by definition are aimed at reducing and eventually eliminating all forms of subsidies, restrictions, quotas, taxes regulations and tariffs on trade, hence harmonizing the global trade system. Apparently, this would create equal opportunities for all nations, but this would only be true under one condition, that is, when the industries and agricultural sectors of all nations are competitive and compatible with each other. Yet, given the current divisions between first and third world nations, such an equality is impossible and beyond reach. Consequently, free trade agreements would only promote the industries and agriculture of first world countries, whereas third world industries will suffer, as they are already suffering under the influence of underdevelopment and the debt crisis.
Besides, as uniform global standards come to being and lower standard regulations predominate, free trade will not lead to competition, but rather to a state of monopoly by Transnational companies, especially as free trade agreements do not promote any rules or regulations that can be classified as anti-trust rules. It is also noticed that during the Reagan and following administrations, the US economy faced a number of deregulatory Acts which tended to enhance monopolies which would eventually expand globally and bring global economy under their control. This would certainly take place at the expense of Third World nations and their economies, especially as the gap between First and Third world countries continue to grow extensively.
Needless to mention, Third World nations are suffering from a fast increase in their populations, which exerts more pressures on their economies and development. The world is already divided on the subject of population growth, with the Catholic and Islamic countries on one front, standing against population control policies, whereas capitalist and leftist countries supporting such measures. Even if Third World nations adopt population control policies, the influence of these policies will not become tangible before decades, given the fast rate of population increase they witness currently in contrast to the slow population increase in most First World countries.
Pollution and global warming is also a problem which does not relieve Third World countries either. It is true that most First World countries are already suffering from high levels of pollution due to their high industrialization, a curse which most Third World countries do not face. Yet, Third World countries face other serious problems, such as deforestation, especially in countries such as Brazil, Mexico, Indonesia and many others, whose natural timber resources are being depleted without check as they need to compete in the international timber markets. Furthermore, global warming does not only impose its threat on First World countries, but rather, on the whole world. Thus, Third World countries are entitled to pay part of a big bill they had not contributed to.
Schaeffer then argues that democracy in the world has increased rapidly in the past three decades, and most democratization processes were peaceful, and many of them were the result of dictators initiating the steps of democracy in their countries. Several factors have contributed to these major changes, starting with the debt crisis in Latin America, rapid growth in Asia, stagnation in the USSR and sanctions on South Africa. Most democratization processes in Third World countries involved privatization and attracting foreign investment. However, it is also noticed that most democratic changes brought with them growth, poverty and unemployment. Growth only reflected on those few who owned and manipulated capitals and technology, whereas poverty and unemployment reflected severely on the poor who had no share in the process. This, the author fears, is a dangerous support for the argument against democracy as Brazilian Congressman Jai Blosonaro argues that “Real democracy is food on the table, the ability to plan your life, the ability to walk on the street without getting mugged.” Blosonaro also argues, “I am in favor of dictatorship because we will never resolve serious national problems with this irresponsible democracy” (p.291).
Indeed, such an argument has very fertile grounds in Third World countries, especially those whose peoples are unable to enjoy the fruits of democracy in the form of economic development.
While democratization has increased rapidly, so have separatist movements based on ethnic and national forces. In the world almost two hundred states, there are less than twenty homogenous states, that is, with less than 5% minorities. The rise of separatist groups has initiated a large number of disputes and wars all over the world, some of which took very bloody trends such as in former Yugoslavia, Chechnya, Israel, northern Iraq, South Africa and many others. These partition problems are very apparent in newly born nations where possibilities of war are very high given the discrimination, competition over scarce resources and problems of sovereignty that are inevitable and pressing in these countries. While more borders are formed every where almost every couple of years, the world of business is almost unconcerned, since these borders are not considered to be borders of trade. Hence, while separatism continues to grow, it often seems to be irrelevant to the changes taking place in the global economy today, as IBM executive Jacques G. Maisonrouge has argued, “For business purposes, the boundaries that separate one nation from another are no more real than the equator. They are merely convenient demarcations of ethnic, linguistic and cultural entities” (p.315).
In his final chapter, Schaeffer discusses the issue of world mafias, their origins and their growing influence in globalization. He emphasizes the Sicilian, Italian, American, Japanese, Chinese and Russian mafias among the most dangerous, especially as they are involved in the international drug trade that threatens both First and Third World countries, where the youth are becoming more dependent on drug supplies that are becoming more pure, cheaper and more available. The author stresses the need for a global enforcement system that can curb drug trade and bring it to an end. This would involve global legislation and action, otherwise, this trade will continue to grow to dangerous measures that would in the future become out of control.
In this book, Understanding Globalization, Robert Schaeffer has succeeded in discussing the whole world through a global perspective. This book cannot be missed for it is not only a summary of global issues, but also an elaborate study of almost every field and development where global interests and developments come to conflict or agreement. The book is a discussion of the changes the world is facing and going through today. It is a rich illustration of human economic, political and social development at the turn of the century, a study that will have its impact for years to come in our minds. This book is a very serious and realistic study in political economy, and there is a need to address the issues raised in it, because it is these issues that world governments and nations, both in the First and Third World countries have to face and adjust to in the end. The author has simply gathered all the bits and pieces of the coming global system, and as John Judis reported in The New Republic, “He shows how they are not discrete events, but part of a new global economy that has emerged over the last three decades.”