Signs and portents are pointing at last to a crumbling of confidence in the global “free market” system. An economic mechanism fuelled almost entirely by greed was never a model of fairness or long-term stability to begin with. It has managed to survive—even thrive—only by maintaining a precarious balance between resources, production and investment, and, most importantly, between the forces of supply and demand. This balancing act is now wobbling.
In recent months, we’ve had a global financial crisis triggered by massive mortgage defaults in the United States, the recall of shoddy and dangerous products made in China, and the collapse of a multi-laned bridge in Minnesota.
They’re all connected, all indications of widening cracks in the bulwark of corporate globalization.
For a while the system seemed to benefit everyone. Manufacturers got the lowest labour and production costs. Retailers stocking cheap foreign-made goods enjoyed booming sales. And consumers saved from bargain-basement prices.
But the consumers still need good jobs and enough income to buy even the least costly items. As the good-paying jobs were eliminated by the hundreds of thousands and the work outsourced to the sweatshops of Asia and Latin America, more and more Americans and Canadians saw their incomes fall and their debts soar. It was only a matter of time before supply overwhelmed demand. There are more millionaires, of course, but there’s also a limit to the number of homes, cars, and appliances they’ll buy. To sell all the goods churned out by the factories in China and Korea and Japan and India, a large and well-off middle class is required—a middle class whose size has been sharply reduced by the elimination of full-time industrial jobs. (In Canada’s shrinking manufacturing sector, 250,000 such jobs have been lost over the past five years.)
So who do the manufacturers now expect to buy their goods? Not the workers in China and India who make them for wages as low as $4 a day. The remnants of the Western middle class will still consume their share, of course, and even the growing numbers of minimum-wage workers will need essential food and clothing. But an economic system built on the expectation of continuous growth and profit is clearly in trouble. As it should be.
The Chinese toxic products scandal was just the tip of the iceberg that the transnational corporate tanker has banged against. The damage it did was to expose the dangerous free-market myth that cheaper is better—that it doesn’t matter where goods are produced as long as they can be bought and sold at the lowest possible prices.
The price of this grotesque system, however, is not just reflected in the amounts shown on the tags and labels. It includes the ravaging of non-renewable resources, the contamination of air and water, the spread of toxic cancer-causing chemicals, the obscene widening disparity between rich and poor, the erosion of civil rights and basic freedoms, the increase in almost all forms of human crime and conflict.
Also included should be the subversion of the public sector to swell the private sector. This is by far the worst aspect of the neoliberal agenda that drives global capitalism. The primacy of profit-making requires that all impediments to commercialism and trade be removed, or at least minimized. So business taxes are cut, government subsidies to business increased, regulations relaxed or weakly enforced, and industrial pollution tolerated.
The bridge collapse in Minneapolis was only the latest and most noticeable result of the consequent dearth of public spending on infrastructure. The maintenance of many other bridges, roads, water and sewage systems, and other public facilities has also been badly—and dangerously—underfunded by governments fixated on serving the private sector.
This fixation is on full display in the current Security and Prosperity Partnership (between business and government), which is bent on, among other things, the further deregulation of corporate activities and standards. Blithely dismissing the need for stronger measures to prevent more threats to public health from unsafe imports, our political and business leaders want even less public protection. (They’ve already lowered some Canadian pesticide limits to conform to the lower levels in the U.S. and plan to reduce the limits on other chemicals, too.)
It’s understandable that Canadians are alarmed over the toxic toys, toothpaste and pet food coming from China, but how many are putting the blame where it really belongs?
Some are blaming the Chinese, whose safety and quality standards are certainly lax, but the Chinese are under enormous pressure from North American firms to deliver ever-increasing volumes of goods at ridiculously low prices.
Some blame the failure of the corporations to insist that their Chinese, Indian, and other foreign contractors raise their safety standards. But unless all corporations and all contractors introduce such improvements simultaneously, the laissez-faire competition would soon drive the makers of safer products out of business.
Some blame the lack of consumer-protective laws, but again, in a system geared to pleasing investors and CEOs, few politicians dare to incur the wrath of such powerful economic marketers by impeding the free flow of their products.
Not enough people yet put most of the blame where it belongs: on the deeply flawed and destructive global economic system itself. All of the harmful economic, social, environmental, political and health-related problems that are now bursting into the open stem from the system itself, not from any mismanagement or distortion of it.
It’s time to start thinking of the global capitalist system as an out-of-control cancer. Tinkering with the symptoms will bring only temporary relief. The disease itself needs to be controlled.
The first step toward such a radical economic makeover has been taken with the growing public awareness that something is seriously wrong. As more people begin to connect the dots and trace the many damaging effects to their common cause, the struggle for a better world will gain adherents by the hundreds of thousands. A corporate bulwark previously thought unassailable will then ultimately fall, opening the way to a saner, safer, sustainable, democratic, and more egalitarian future. Assuming, of course, the planet is not irreparably devastated by then.
(Some cynical readers will probably feel I’m making a mountain of wishful thinking out of a molehill of corporate mishaps, but I really do think a lot more people have stopped pretending they see the emperor’s new tuxedo. Many even think he’d look better in sackcloth and ashes.)
(Ed Finn is the CCPA's Senior Editor.)