Is economic globalisation incompatible with national democracy? (Part 1)

The first of a two part essay on the relationship between economic globalisation and democracy, with a particular focus on whether the two can co-exist.

Introduction

Across the Western world, economic globalisation is under attack. Whether it be Bernie Sanders, Jeremy Corbyn and the author Naomi Klein on the left, or Donald Trump, Marine Le-Pen and a smattering of others on the right, figures on both sides of the ideological divide have been outspoken in their criticism.  What unites these people is their belief that economic globalisation has not only made citizens poorer, it has subverted democracy itself. They argue that corporations, the wealth and power of which has been greatly enhanced by globalisation, have taken over democracy in their respective countries. In America Donald Trump promised to “drain the swamp” of Washington of its corporate corruption (McGee, 2016), in France Marine Le Pen said her centrist opponent Emmanuel Marcon wanted “uncontrolled globalisation” (Chrisafis, 2017), and in Britain Jeremy Corbyn promised to overturn Britain’s “rigged system” with Robin Hood style taxes on multinational financial institutions. (BBC News, 2017)

 

Economic globalisation has also brought about technological changes, with electronic devices becoming more easily accessible in the developing world (where democracy is rarer), and becoming central to life in richer (on the whole more democratic) countries.  This too has presented challenges to democracy; in some less democratic countries the internet has become another tool of repression, conversely in established democracies internet based news is increasingly being distorted by foreign powers to try to influence election results.

 

This essay will examine the problems that economic globalisation poses to democracy, namely whether the vastly powerful multinational corporations and the global ubiquity of technology that have resulted from globalisation can coexist with genuine democracy, as expressed by Abraham Lincoln as “government of the people, by the people, for the people”? It will conclude that whilst economic globalisation has exacerbated some of the problems related to the overbearing power of corporations in politics, and the suppression of dissent in authoritarian regimes (both of which have hindered democracy), overall these problems do not have their roots in globalisation.  These problems can be addressed without rejecting it and thus it follows that economic globalisation is not incompatible with national democracy. Indeed, this essay will go further and make the case for globalisation as a positive force in promoting democracy. In particular it will argue that through the increased availability of technology in (on the whole less democratic) developing countries, it creates the conditions for democracy to grow.

The Global Reach of Big Business

The previous barriers to the expansion of large companies, distance and national borders (amongst other factors) are becoming increasingly irrelevant. The global reach of multinationals is immense, the Boeing website boasts of “customers in approximately 150 countries and employees and operations in more than 65 countries. The company has manufacturing, service and technology partnerships with companies and governments worldwide and contracts with more than 20,000 diverse suppliers and partners” (Boeing, 2017). As the strength of multi-national businesses has grown, so too has their political importance in the (predominantly Western) countries in which they are based. The American aerospace company Lockheed Martin received $36 billion in government contracts in 2008 alone, which was more than any other company in history. The company works for numerous government agencies including the Department of Defense, the Department of Energy, the Department of Agriculture and the Environmental Protection Agency. It has significant involvement in surveillance and processing information for the CIA, the FBI, the IRS, the NSA, The Pentagon, and even the Census Bureau and the Postal Service. In her book No Logo Naomi Klein argues that by handing over to private companies “many of the most essential functions of government”, we have “hollowed [the government] out”. (Klein, 2010: xix) This not only conflicts with Lincoln’s government of the people, it threatens to destroy accountability, another crucial component of democracy. Klein gives the example of the Iraq war – in 2007 when government contractors made grave mistakes over the Nisour Square massacre the government itself was free to deny responsibly and place the blame on the independent contractors that had carried out the brutality. (Klein, 2010: xxi) Without government accountability true democracy is impossible, citizens cannot make legitimate decisions on whether or not to re-elect a government if said government can shirk responsibility for its mistakes. In this way economic globalisation, by allowing for the creation of vastly wealthy and thus powerful multinational companies, has undermined national democracy.

 

However, although the creation of vastly wealthy corporations by economic globalisation might be inevitable, them possessing vast political power is not. Indeed, before setting out how the mega-businesses can coexist with democracy, it is important to note that the problem of overbearing corporate power in politics is not one that has been entirely created by economic globalisation.  It can, and has existed without it.  In America at the beginning of the 20th Century it was the trust barons like J.P. Morgan whose vast wealth threatened democracy, and it took Theodore Roosevelt’s revolutionary actions to save it.  What is required today is not a rejection of economic globalisation (with the vast economic benefit it brings), but a similarly radical approach, like that of Roosevelt’s which ensures that political power rests with the people, not big business.

 

To eliminate the influence of big donors over politicians and to ensure government contracts are fair and necessary and not created to satisfy party contributors, Governments should seriously consider state rather than private funding of political parties.  At the very least lobbying must be reformed so that corruption within the current system can be minimised.  Lastly, private contractors must be more transparent, so citizens know exactly what their governments are relinquishing control over.  In the same way, elected officials must at least be partially responsible for the actions of private companies they have decided to employ.  Economic globalisation and the corporate titans it creates may pose threats to legitimate democracy, but these threats can and should be addressed without rejecting the vast benefits it brings.

 

Part two of this essay will address technology, examining its role as a force that both promotes and threatens democracy. It will be published on this website, next Thursday (20/07/17).

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