Globalization

Globalization
Donkeys are extinct. Not needed anymore.
How about human resources?
by
Aydin Nurhan
Ambassador of Turkey
Accra, Ghana
Do you have donkeys by your door?
Not in the industrialized countries. Because machines replaced them.
Do you need human beings as economic resource? For the time being, yes.
Yet the human muscle power gradually gives way to machines, human brainpower to follow sooner
than we think..
Think of a world where a benevolent elite run everything through robots, human muscle and intellect is
redundant, and like in pure communism, the benevolent rulers give all products and services free to the
unemployed masses.
Here comes the question…
Would idle human nature be content with free lifestyle? A certain NO!
God created humans with unlimited need and greed, gave them the liberty to sin, and no matter how
much a benevolant regime would give them, there will still be revolts in the society.
Hence even the most benevolent rulers do not have the luxury of leaving the monopoly of the use of
force in human future. Then, are we heading to an Orwelian or a Huxleian future?
After this short update, let us go back to our 2004 speech made at the OECD forum in Istanbul.
Simply put,
Globalism is “equilibrium”. Theoretically, under pure global economic competition, rich
communities would meet poor communities at the middle level.
So, Western farmers and workers will lose, and they will protest globalization.
Secondly, the powerful and prosperous elite of the underdeveloped, closed societies shall lose their
privileges as their peoples open to the global community of free nations. And they will also be against
globalization.
A sharp mind may have caught competition of "communities" here, we do not say competition of
"countries"any more.
The reason is, globalization is swiftly tearing down economic borders of nation states, and as in the
example of the USA and the European Union, we see packs of communities and regions who are doing
well off on the one side, and others not as lucky, though in the same country.
As income distribution gets to be harder to manage fairly, soon we may see packets of wealth reaching
50.000 Dollars per capita in some communities of poor Asian Countries, as against packets of 5000
dollar communities in post-industrial Western countries…
Today, speed of globalization and its complications are so huge that no human brain can manage to
cope with it.
Things are getting out of control, and this is, paying tribute to Paul Kennedy, what I would coin as
intellectual overstretch, and it is disturbing and threatening.
Industrial Revolution eased the need for animal power.
Technological Revolution eased the need for human muscle power.
Now, IT revolution is threatening white collar brain power.
As machines replaced a considerable amount of blue collar muscle power late last century, now the
computers are starting to replace white collar brainpower in 21st Century. Even services sectors are
firing highly skilled finance experts and other white collar personnel, shedding fear throughout the
university graduates of the world.
Soon, the world economy may not need the millions of ordinary university graduates we produce, even
turn them into very low class proletariat as unemployment climbs into 20 per cents.
As in the "Brave New World" of Aldous Huxley, top brains from the top elite schools of the U.S. may
innovate and produce everything through robots and computers, demolishing the middle class
workforce, the pillars of democracy of the industrialized countries.
This trend may bring the end of the purchasing power of the West, lead to social upheavals and
terrorism among Western youth, even lead to the collapse of the EU.
As a case study, Turkish economy broke world record in 2004 with 9.9% rise in GNP. Yet
unemployment stayed at the same 12% level, with not much wealth reflection to poor masses. Today,
Turkey has tens of thousands of new university graduates unemployed. The reason? Technological
efficiency.
Then the question comes..
Apart from the Ivy League elite universities for world's top brains, why university education for
hundreds of millions? Just for culture?
Which fields would be safe from the rivalry of robots and IT?
Tourism? Arts? Services?
What else?
Had this article not been a conventional approach, I would have mentioned about "reversed
imperialism". As would be remembered, Imperialism was an age in which countries wanted to
dominate resources of the world, and then captured markets to sell back manufactured goods.
What do we see today? Eastern peoples start sucking global resources, work for dirt cheap prices to
manufacture them, and fight to conquer the Western markets. Is this not Reversing Imperialism in 21st
Century postmodern world?
Eastern goods invading the USA and European markets reminds me of the Ottoman Empire of
Magnificient Sulaiman, as he granted free commercial capitulations to European merchants, and as
Mediterranean and European merchants freely dumped all their produce to the Ottoman lands at its
most powerful era, gradually leading to the collapse of its economy.
But even this historical approach is soon to be obsolete. Blaming Chinese or East European cheap labor
as rivals is not a wise and far-sighted approach, our horizons should be much wider and beyond.
Serious challenge from artificial rivals, the robots against human work force is much more ominous
and nearer than we think..
In such gloomy picture, comes the question of modernity, postmodernity and religion in the philosophy
of education.
How to educate the interest driven , "rights" oriented Western individual of modernity into acceptance
of hard times? How much "duty" oriented religion education (Marx's opium) for the unhappy,
unemployed masses?
Strategic resources as Coal, Steel and Petroleum were the causes of the World Wars, now, this time,
China and India with one third of world population, opt for the strategic oil… Are we being pulled into
WW3? Any way to stop the trend?
Modern capitalism is based on ever growing consumption. If capitalism cannot expand, it would
implode. So the industrial output needs more and more buyers every year. Yet, with spread of know-
how, if every country overproduces the same cars, same white goods, computers and textiles, try to sell
the same surplus to each other, then what happens?
Should we remember David Ricardo, and assign an appropriate production field to every nation? Or
think of intersecting and/or concentric economic regions?
Empires secured commerce in vast geographies, whereas modern smaller Nation States blocked global
flow of commerce by their strict geographical borders. Now nature is working back its course against
this anomaly, and world commerce is forcing the artificial borders of Nation States in its modern form
of globalization.
And the global capital is very sensitive, like the birds on the telephone wires, they gather very slowly.
And with the faintest disturbance, they all fly away at once.
Then what do these birds want?
First and foremost, they want political stability and commitment, so that they can see their future and
make strategic plans.
If the risk is high, they come in with high profit and interest margins. They come for short term gains,
just to snatch big money, take it, and leave the country as soon as possible, draining the poor
economies of the world.
So the first lesson for the developing states is that half-hearted incentives and half liberalism is worse
than closed economies, it is a betrayal against national economy, because it calls in world's most
corrupt businessmen, and let them drain the economy in short time.
Hence, if countries decide to open once, then they must open in full liberalism, give full security to
capital, so that it may strategically stay long time, live with decent margins of profit and interest, and
above all, reinvest in the same country, without feeling the need to invest its profits in other countries.
Looking back into history, in closed societies, businessmen did not have much freedom to move out,
hence had to obey the feudal lords, or central despots. The more the societies opened, the more
freedom the businessmen had to escape out.
And in 21st Century, you can see a little Turkish Doner Kebab entrepreneur deep in Kyrghzstan. If
harassed by local rulers, he can pack his doner set and fly into a remote African town. He does not have
much to lose. This is real globalism. He can go anywhere in the world, yet with a restriction…
Castle Europe is, more than physical, psychologically isolating itself from global economy. A certain
psychological barrier gradually shuns Eastern, even more, the Western entrepreneurs from going to
Europe. This is a signal for the closing in and decline of Europe.
Now, localization,
First, take a look into transnational capital. As we all feel, metropolitan life is very expensive. So the
businesses, especially to avoid high taxes and high salaries, are moving to smaller towns and suburbs.
And smart mayors of rural settlements start a fierce race for inviting investers to their towns offering
unbelievable incentives to them.
And once the business starts in town, modern feudal system starts acting.
Especially with heavy industries, or headquarters of big corporations, towns become one service towns,
forgetting agriculture or other fields of economy. And now you can imagine what happens to such a
town if the monopolist business leaves it.
This is the point where the business can impose all its will on the politicians and the people of the little
town, just as the feudal lords of Medieval Ages. So the National and local governments and even
workers' unions feel too weak to impose their terms upon the global investors.
Hence they have to figure out the limits of entertaining these neo-feudals, without losing their
sovereignty and dignity, yet making sure their town does not lose the business to neighbouring towns.
And this is the game of Localism.
Here we should give a special example of the Industrial Age, the early 20th Century American
Economy..
When the USA had the near monopoly of know how and the assembly line, without competitors, it
needed more workforce. The world was hungry for American products, like baby birds waiting to be
mouthfed by their mother.
So every worker in the U.S. was needed, not for 8 hours, but more. And every worker had to produce
more, per hour.
How to make them work? Simple. They had to consume. To pay for consumption, they had to work
more. A cyclic mechanism from which the whole world was supplied.
Then 21st Century.. The post-industrial age..
Americans are still "homo-consumptionis", they are heavily debted by the plastic cards and mortgages,
and to consume, and pay debts, they are still hardest workers and the most productive.
Yet the world is changed, in global competition, they cannot sell anymore. Because economic rivals
can make many things better for cheaper.
American trade deficit is soon to force the limit of one trillion dollars.
As for Socialist Europe,
Paying tribute to Sultan Galiev, the Turkish Soviet Communist, we can say that European social
security system was made possible by two factors:

1. Forced by 19th Century social upheavals, European States had to transfer excess Imperial
   wealth to European Proletariat.
2. Later, as in the case of the USA, West had the monopoly on technological know-how which
   the “Rest” did not have, so the Western proletariat had no challengers.
   And today, both pillars are gone, and especially the French youth do not seem to understand this new
   global reality. And the European Governments do not know how to give something they have no more.
   In 21st Century, EU Countries are in a very hazardous position in global competition due to their
   protective policies. Also, due to his high lifestyle, it would be unrealistic to expect a European citizen
   to leave his comfortable social benefits and go to Kyrghzstan to open a little kebab imbiss, to rival a
   Turkish peasant from a remote Anatolian town.
   Let's look at the trend.
   In early 20th Century, America was making white goods, the brown goods, the cars, the airplanes, later
   the computers, and was leading in innovation and services.
   First, white and brown goods jumped into Europe and Japan, then automobiles, then computers, and
   lastly airplanes.
   Did shift of the know how of industrial age stop in Europe? No, it continued Eastwards; today, every
   one of three television sets sold in Europe is made in Turkey. Plus another very high percentage of
   white goods and textiles in Europe are made in Turkey. Renault is in Turkey since nearly 40 years,
   followed by Fiat, followed by Honda, Toyota, and scores of other automobile, truck and bus plants,
   Mercedes among them.
   Yet..
   Will these industries stop half way to the East in Turkey?
   Certainly not, technology is journeying Eastwards from the West, and already Pakistan and
   Bangladesh, not to mention China, are threatening Turkish textile industry, the motor of Turkish
   development since 60 years.
   Technology of 20th Century moving Eastwards is known and accepted since long, and the
   industrialized countries are changing strategies to shift into innovation and services of the post-
   industrial age of the 21st Century.
   Admitting the fact that blue collar jobs may be lost to the Orient, to be followed by South, awakening
   Africa, Western countries seem to think that they still have the upper hand in in services and patents
   due to their creativity and innovation based on their democratic spirit of freedom.
   Here is a very delicate point, Oriental philosophy is based on conceptualization and indeterminism as
   against the empirical, categorical, deterministic mindset of the Greco-Roman tradition.
   As information spreads in lightening speed with globalization, one wonders whether Greco-Roman
   categorical, analytic mind, or the conceptualising, synthetizing old Oriental mind may better utilize
   data they receive for innovation.
   Having opened the subject, let us continue with philosophy.
   Europe slept for centuries under inquisition, living for the next world. Then with renaissance and
   reform, it woke up to the benefits, comfort and luxuries of this material world, and came the industrial
   revolution. Then, came the 19th Century revolutions and social upheaval of Europe.
   200 years after, the Eastern and Southern societies are waking up to the material tastes of this world,
   ready to sacrifice even ethical values for their material interests. It is nearly impossible for the
   European societies to sacrifice as much as the insatiable new masses of the developing world.
   Awakening to this world, curiosity and creativity are emerging in the Orient and the South, they are in
   the offense, and the Occident is in defense, at least trying to hold on to its present lifestyle.
   Although curiosity and entrepreneurship is emerging, poor countries are still handicapped by an
   economic reality. As some capital accumulates in a rural location, it tends to escape to national
   metropols. After a certain size, it then becomes global capital and escapes to other global centers of
   production. Here the small rural capital should be protected from the oppression of local despots to
   keep it at home and be reinvested locally.
   Ottoman economic history is a good case study here, as the state saw capital as a political threat, it
   discouraged capital accumulation in the hands of the Turks. Non muslims, seen not as political threat,
   prospered. Now-a-days, we see similar trends in despotic developing countries where powerful
   international companies get better treatment than local national businesses.
   Now, on national characteristics on global competition.
   As nations get richer, they get used to comforts of civilization, and take them for granted. And
   workforces in some advanced countries start getting sluggish, whereas there are some so-called soldier
   nations as Germans, Japanese, Turks and Koreans who work with strict discipline under modern
   management.
   So comes the Question. What is the role of religion and philosophy on the productibility of a nation in
   global competition? This Weberian question is catching more academic attention in 21st Century.
   Quoting Karl Marx, Lenin had said, "Labourers of the World, Unite", believing they were global
   brothers and sisters, and that capital was their common enemy. Today, desperate governments are
   begging transnational capital to invest and feed their hungry workers. Today, poor governments see
   capital as the best friend for their starving masses.
   We are in an age where some politicians may be forced to unfairly protect their National Workers'
   unions against the workers of other nations, even see rival unions as enemies. We should be very
   sensitive against such radicalism which may lead to national socialism.
   Whereas on the other hand, unemployed hungry masses in national borders are challenging their
   compatriots who have been lucky enough to find jobs and unionized. So the happy unions, especially in
   countries where unemployment is rising speedily, shall be forced to think twice on how to treat their
   desperate jobless citizens who are ever ready for less and less salaries, and give a freer hand to capital
   in "easy hire, easy fire".
   Especially the use of "direct democracy" in global commercial competition would prove fatal in the
   hands of populist politicians. Because people tend to vote for immediate interests as against the long
   term strategic interests of organized state apparatus. If every nation goes protectionist by direct public
   pressure in global trade, then the whole global economy would collapse.
   Until 21st Century, one way to coerce a rival state was to put economic embargos against it. Now, it is
   the public democratic pressure on politicians to embargo foreign goods and workers. This grassroots
   boycotting may bring the collapse of global trade, leading to WW3.
   Now a bit about the postmodern role of transnationals..
   Transnationals like Nike already act as transferrers of technology and serve as Quality Control Brands
   outsourcing their know-how to the best subcontractors around the world, giving their namestamp to the
   best quality produced anywhere on earth. Standard and Poors etc serve same function in financial field,
   private legal arbitration houses to follow suit soon, replacing corrupt and incompetent legal courts of
   many underdeveloped countries.
   In the near future, transnationals shall just make money by giving their name to any product that meets
   their international standard.
   Last but not least,
   States should engage philosophy for their global survival.
   If we give religion, the opium of Marx to societies, peoples would be more subservient and this may be
   good for internal discipline. Yet, such meek people cannot support their government with democratic
   protests in its negotiations with other governments in the global jungle.
   On the other hand, if we give them too much secular education based on interests, they would be
   fiercely pursuing their secular rights, threatening and paralyzing their governments to be irreconcilable
   in international bargaining, as we see in some European countries recently.
   And the trend is..
   As Homo Occidentalis starts experimenting the return to spirituality in 21st Century, the Homo
   Orientalis and Africanus is swiftly jumping into an age of fierce materialism, ready to sacrifice any
   value for the material tastes of this world…
   Can the defensive Occident cope with the trend?
   No, it is impossible to stop Eastern and Southern peoples, the genie is out of the bottle, this was what
   the West wanted, and against the warnings of Sam Huntington, still urge the rest to this end…
   To end my article, I would wonder…
   Is there something wrong with the pillar of capitalism?
   The ever expanding consumption?
   Is this a scientific must?
   Or should we remember Plato to educate enlightened generations who may learn to need less, rather
   than crave to have more?
   This article is an updated version of the speech the contributor had presented at an OECD meeting in
   Istanbul in February 2004. Original article may also be found in OECD site and March 2004 issue of
   journal “Vital Speeches”.