Earlier ruling classes often felt responsible for the less fortunate because they all lived in the same town for generations. English dukes might not care for the working class in general, but they were often good to “their people.” The cosmocrats have little idea what their people means. They usually think that they have nobody to thank for their success but themselves. And they seldom have the time to put down deep local roots. Few of them work in the town where they grew up. (It is significant, as Rosabeth Moss Kanter notes, that the most footloose of all professionals, management consultants, are among the least involved in their wider community.)[19] Even when these p. 239 wandering souls do become attached to a place, they spend most of their time doing business and socializing with people very much like themselves; they have little time left over from their busy schedules to engage in good works. And there is also perhaps something of an attitude problem. Dushan, the good-natured Serbian from Boston, talks about the people working in a town dominated by an old, dying International Paper factory: “Why don’t they leave?” he kept on asking himself.
The companies that the cosmocrats work for are increasingly careless of ancestral loyalties. They regard themselves as world players, locked in life-and-death struggles with others of their kind, rather than as corporate citizens, bound by unwritten ties to the cities that provide them with homes. Around the world, corporate headquarters are detaching themselves from the old city centers and moving to edge cities, where land is cheap, parking spaces plentiful, and the pathologies of urban life nothing more than entertainment on the television. In 1968, New York City was home to 131 Fortune 500 companies; by 1997, the number had declined to just 46.[20] Many newer companies have chosen even greater isolation, building campuses in the countryside. Nike developed an estatelike “university” around a manmade lake ten miles outside Portland, Oregon; Microsoft commissioned a new campus outside Seattle in the style of a monastery. The furious pace of mergers is further detaching companies from the old urban centers and destroying the old civic elites who used to look after their city’s welfare from inside smoke-filled rooms. Kanter quotes Stanley Marcus, the former head of Neiman Marcus, as complaining that it is impossible to get philanthropic projects off the ground in Dallas these days. You used to be able to call a handful of local business leaders and raise a quick half million; “now the decisions are made in Tokyo or Hartford or in Kalamazoo.”[21]
But Will You Love Me Tomorrow?
Therein may lie one of the key weaknesses of the cosmocrats: In giving back less than they take out, they forfeit the support and undermine the health of their host societies. Their very rootlessness makes the cosmocrats infuriatingly hard to regulate. But they are already arousing hostility. Pat Buchanan rages against “Goldman and Sachs.” Mahathir bin Mohamad and Lee Kwan Yew have railed with equal impotence against cosmocrats of all races for undermining Asian values. European leaders such as Jacques Delors have denounced cosmocrats as “golden boys” and “Anglo-Saxon speculators.” Such criticisms are not just confined to tub-thumping politicians. Christopher p. 240 Lasch condemned these cosmopolitan elites for their “indecently lavish way of life,” their contempt for ordinary Americans, and their hubristic revolt “against the constraints of time and place.”[22]
In fact, one could argue that there is no “clash of civilizations,” just the growing pains of one ascendant civilization—that of the cosmocrats—rising against the dozens of civilizations that seek to constrain it. In this battle, the cosmocrats would at first sight seem to have the upper hand. They possess the brains and a good deal of the money. Many of the Western world’s rising politicians are cosmocrats in one way or another. Bill Clinton has perfect cosmocratic credentials, from his background as a Rhodes Scholar to his use of obtuse language in any difficult situation. Al Gore is even more of a globalist than Bill Clinton; George W. Bush is a Harvard M.B.A. who has spoken publicly in Spanish. In Britain, the last election saw the McKinsey-trained William Hague face Tony Blair, who rejuvenated the Labor Party by importing plenty of Bill Clinton’s ideas from Washington and surrounding himself with British cosmocrats, such as Jonathan Powell, Ed Balls, and Philip Gould. The Blairite Demos think tank in London and the Democratic Leadership Council in Washington are full of interchangeable young men who have been educated on both sides of the Atlantic. The European Union is now headed by the multilingual Romano Prodi. Most sensible political discourse is carried on in more-or-less cosmocratic terms.
You can even make the argument that the cosmocrats also have the future on their side. As the transition from an agrarian to an industrial society in the nineteenth century gave rise to giant political machines with umbilical ties to labor and capital, the rise of knowledge-intensive industries in the late twentieth century may yet produce a political system that is much more in tune with the cosmocrats’ individualist and meritocratic values. Loyalty to political parties is falling to an all-time low in places such as California, as well as among young voters, while membership of other civil associations is rising, suggesting that people want pragmatic solutions rather than ideological posturings.
Yet the cosmocrats’ hold on modern politics still strikes us as fragile. Political parties still represent the main source of power, and the cosmocrats have been less successful in remodeling those parties than were either the industrialists or the trade unionists of the late nineteenth and early twentieth centuries. In America, the Democratic Party remains wedded to vested interests that have little enthusiasm for meritocracy, particularly the teachers’ unions, while the Republican Party is lumbered with what Eric Schmidt, the boss of Novell, calls Neanderthal social views. Across Europe, social-p. 241democratic parties are largely still rooted in the world of mass production, and conservative parties tend to have unpleasant nationalist streaks. (For British cosmocrats, the Channel Tunnel is simply a convenient way to visit their friends at Insead rather than a dangerous breach in Albion’s defenses that will be totally secure only when Eurostar trains are equipped, like Boadicea’s chariots, with scythes on their wheels to cut down any Continental types trying to sneak into the green and pleasant land.)
The business community has proved a fairly fickle ally of globalization: Individual companies will happily turn against globalization if it serves their interests. And the trade unions have been a much more doughty opponent than most people realize. Most fundamental of all, the cosmocrats simply do not seem to be involved enough.
America’s venal political system should offer the cosmocrats a chance to control things: They, after all, have the money. Yet politics’ very tawdriness seems to put them off. They are much more confident about the private sector’s capacity to fix things than about the public sector’s. They do not have the time to organize initiatives; they are away on business trips during elections. If there is ever to be a great battle about globalization, then the people one might have expected to form the heart of the defense will probably be on a plane somewhere, sitting next to Ellen Knapp.
13 – Outside the Red Lacquered Gates: The Losers from Globalization
p. 242 In the central halls there are fair goddesses who clothe their guests with warm furs of sable, entertain them with the finest music, feed them with the broth of camel’s pad, with pungent tangerines and oranges ripened in frost. Behind the red lacquered gates, wine is left to sour, meat to rot. Outside these gates lie the bones of the frozen and the starved. The flourishing and the withered are just a foot apart.
THIS COMES FROM a description of the eighth-century Chinese imperial court by the poet Tu Fu. But for many it might as well be a description of the sort of society that is being created by globalization. On one side of the red lacquered gates sit the cosmocrats, pampered but boringly similar from one part of the world to another. (The competition for business-class passengers is so intense these days that it would hardly come as a surprise if an airline started offering broth of camel’s pad.) On the other side sit the losers, in all their infinite and depressing variety.
> Variety is one of the qualities that make the losers so hard to analyze. What does a schoolteacher in Buenos Aires who thinks that capitalismo salvaje (“savage capitalism”) has deprived her kind of their civilized life while enriching “bandits” have in common with the wretchedly poor farmers in the northern province of Jujuy where the problem is not that everything has changed but that nothing has? Or with an environmental activist in Córdoba protesting smoggy industrialization? Or a policeman worrying that the Mercosur free-trade pact will make life easier for the international drug trade? And these people are all from the same country! No wonder so many books on the downside of globalization read like long-winded travelogues.
p. 243 Another reason why the subject is so frustrating is that every statement cries out for qualification, even in a country as battered as Argentina. Yes, Jujuy is still locked in wretched poverty, but the region’s real problem is a generation of chronically inefficient local government, not the workings of the global economy. Yes, Córdoba is a bit of a dump, but surely that stems from the Peronist dream of Argentina building every sort of industry imaginable? Yes, the peso crisis caused havoc, but the government failed to curtail spending. And so on.
But the biggest reason why the subject is so frustrating is that supporters and opponents of globalization rarely listen to each other. There is so much evidence available that each side can go on ad infinitum without ever bothering to acknowledge the other. Occasionally, specialists tangle over a statistic—the exact size of America’s underclass, the number of degrees the globe has warmed (or not)—but rarely do they see the picture as a whole.
In fact, that picture is a fairly easy one to describe. The same competitive, enriching, liberating process that we laud in most of this book does indeed exact costs, occasionally terrible ones. The doctrine of competitive advantage is a wonderful one if you have advantages with which to be competitive. But what if you have a history of oppression, poor education, and malign government? Like many human things globalization can often be just downright unfair or carelessly vicious. That does not mean that some people have to lose for others to win. But globalization has unquestionably worsened some people’s lives. Rather than trying to deny these failings, it seems better to confront them, set them in some sort of context, and try to work out what governments and people on the comfortable site of the red lacquered gates can do to solve them.
Given their numbers and diversity, cataloging the victims is a rough-and-ready process. You can dice them by income, slice them by geography, or even just divide them by the way that globalization has affected them (some bowled over by market forces, others gradually pushed aside). We will try to get around some of these problems by focusing on just three countries; the United States, Russia, and Brazil. We begin by looking at three people who represent three of the main groups of losers: “the has-beens”; “the storm damage”; and “the nonstarters.”
The Deer Hunter
We visit the first on a brisk June morning in 1998. The union hall of United Auto Workers Local 659, which represents the workers of the General Motors metal-stamping factory in Flint, Michigan, seems an unlikely hotbed of p. 244 radicalism. Outside stands a well-kept monument to veterans from the local union; the grass and picnic tables are neat and tidy. Inside, it feels like the final preparations for an over-fifties bus trip, perhaps one going off on the golfing vacation advertised on the notice board. A gray-haired striker brings his granddaughter into the kitchen to get some doughnuts. Dwight Bobo, a mild-mannered fifty-four-year-old electrician, helps her choose one, then goes back to his task of making coffee. It is a nice day: He would prefer to be out on the picket line, but it was his turn in the kitchen.
His slightly odd name notwithstanding (“Apparently we were called Le Beaux Le Beaux once”), Bobo is a typical Flint man. In 1998, GM still employed thirty-three thousand workers at eighteen different factories and offices in the Michigan town. Like many of his peers, Bobo has worked for General Motors since high school, his only break a two-year stint in Vietnam. His father worked for GM; his brother still does. Bobo’s wife, Jo Ann, also comes from a GM family. He would never dream of driving a Ford, let alone a Toyota. Normally at this time of year, he coaches Little League softball in the evening then heads off to the night shift at the stamping factory; he comes home at 7:00 A.M., watches Good Morning America, and then falls asleep. The only break in his routine is when he heads off to the mountains to hunt deer (with a bow and arrow, like his father).
Yet this summer, Bobo and his compatriots are costing GM about fifty million dollars every day and helping shave off 0.1 percent of America’s GDP for the second quarter of 1998. The strike that he and his 3,400 colleagues at the stamping factory began has now rippled around Flint and the rest of the car company. Most of GM’s 250,000 workers in North America stand idle. Officially, the local is striking about health and safety grievances, but the underlying issues are job security, productivity, and globalization. GM makes nearly one thousand dollars less profit per vehicle than Ford, largely because it has too many small factories with too many workers; the Flint stamping plant, where the average worker costs forty dollars an hour, is particularly inefficient. The UAW replies that stamping is a machine-intensive business, and GM has reneged on a promise to invest three hundred million dollars in modernizing the plant. The actual casus belli came when GM “sneaked” into the factory over Memorial Day weekend and removed several dies needed to produce hoods and other parts for a new line of pickup trucks.
Bobo, who earns twenty-three dollars an hour plus benefits, seems exhausted by all this bickering, which he compares to a marriage in which even the smallest row leads to divorce: “We are all only on this earth for seventy years; we should get along.” He still drinks regularly with friends who p. 245 are in management (and thus still work in the factory that he pickets). He does not exempt the UAW from blame. For him, the strike is a matter of principle: “GM said it would invest the money; it hasn’t. When I sign a contract with GMAC [the car firm’s finance arm] to buy a car, I can’t renege on it.”
Globalization has made this only “more of a crapshoot” because it takes what Bobo calls the American dream out of it. “You can’t just work hard and get ahead; your job could just be shipped overseas.” The strike is following hard on the heels of Daimler-Benz’s takeover of Chrysler, a merger that would have been unthinkable when Bobo started working. Back then, Detroit was all that mattered. Now when old-timers at Flint want to criticize younger workers for doing shoddy work, they say things like, “What are you trying to do, move your job to Mexico?” Since 1978, GM has built fifty car-parts factories in Mexico. Now, most fears are centered on Brazil, where GM is growing quickly and working on a new factory code-named “Blue Macaw.” As Bobo wearily admits, it seems a battle that the unions cannot win: Each strike only increases the likelihood that GM will push more jobs overseas. Meanwhile, other car companies are entering the American market. Bobo says he does not mind fair competition, and he admits that, on the whole, cars have got better and cheaper; but he still worries about the foreign firms cheating and not paying people properly. Bobo himself may take early retirement.
That is pretty much what General Motors wants him to do. For the car firm, he is a has-been, an expensive liability. It is an open secret that GM wants to force the older workers (the average age is forty-eight) to leave early, so it can lose the thirty thousand workers it needs to in order to be able to match Ford’s productivity. GM is not being unusually hard-hearted; Ford and Chrysler are both pouring money into overseas plants.
You can hear different versions of Bobo’s story from Wolfsburg, Germany, to Hitachi City, Japan: Decent, hardworking people—to use the cliché—no longer feel wanted. Throughout much of the developed world, the middle class is splintering between those who benefit from globalization and those who are being left out. However, even when they are not being elbowed out of the way, blue-collar workers have been losing their perks. At the same time that Bobo
was brewing coffee for the picketers, some five hundred thousand Danes were on strike because their employers, citing the pressure from foreign competition, had refused to grant six weeks’ vacation. A month and a half is a pretty long holiday, but, as with the UAW’s often absurdly cozy perks at Flint, it still hurts when you lose it.
It hurts that much more when you think you are being left behind. The p. 246 Bobos have been cushioned by Dwight’s UAW-protected wages, but like most blue-collar families they think that they did not get the full benefits of the 1990s boom. Although median wages in America finally crept to new highs in real terms at the end of the 1990s, those gains came only because women were being paid more. The median wage for American men was 3.6 percent lower in 1998 than in 1989 and 12.4 percent lower than in 1979. And, even when you include women, the gains per household were paltry. By 1997, the median American household earned only $1,260 more than it did in 1973.[1] In the 1960s, when Bobo started his career, those sorts of increases often happened in a single year, and people did not work as hard. The average wife now works fifteen hours a week more than she did at the beginning of the 1970s.
This failure to advance hurts even more when you see others steaming ahead. The gains from the 1990s bull market went disproportionately to the rich, with as much as 90 percent of the paper profits going to the top 10 percent of households.[2] Talk about inequality being wrong per se angers many Americans. Envy is supposed to be un-American: A European seeing a Ferrari might think about puncturing its tires; an American might dream only of owning one, too. A Chicago-trained economist might argue that when people like the Bobos discover that the number of Americans reporting annual income of one million dollars rose from 14,348 to 111,728 between 1990 and 1997 or that yacht sales doubled in that time, they should warmly celebrate the workings of the hidden hand.[3] But critics such as Edward Luttwak argue that inequality, particularly in a culture in which the accumulation of wealth is promoted so assiduously, has costs as well as benefits. People are more likely to go into debt to try to keep up with the Joneses. Some people feel that they have not done well enough; many more feel that they have been cheated. The American dream is hard to sustain if people think that the driver of the Ferrari stole it.
A Future Perfect: The Challenge and Promise of Globalization Page 35
