The figures for consumption are even more depressing. In 1998, the top 20 percent of us consumed roughly 86 percent of the world’s $24 trillion in goods and services, according to the UNDP—sixteen times more than the poorest 20 percent did. The richest fifth consumes eleven times more meat, seventeen times more energy, and 145 times more cars than the poorest fifth. In some countries, there are fewer goods and services available today than there were twenty years ago.
Fourth, most nonstarters live in places that get relatively little help from the outside world. Foreign aid to poor countries from OECD countries was $77 billion in 1997, about 20 percent less in real terms than what it was in 1992. Only four Western countries—Denmark, Norway, the Netherlands, and Sweden—reach the UN’s target of giving away 0.7 percent of GNP. America gives less than 0.1 percent. In the stronger emerging economies, such as Brazil, this shortfall has been more than compensated for by private investment (even though very little has reached the Gobettis). But poorer emerging countries get almost nothing. The forty-eight least developed p. 254 countries receive just 1.5 percent of the foreign direct investment (FDI) going to emerging markets and only 0.5 percent of the total FDI. Their one source of money has been loans. In 1998, the debt mountain for sub-Saharan Africa stood at $222 billion, or $370 for every inhabitant.[11]
Only the most idiotic critic would try to lay all these failings directly at the feet of globalization. In the favela, only a few people specifically link their misfortunes to the process—and then often for slightly bizarre reasons. Silvio Pereira da Silva worked as a magician in the circus where Reginaldo briefly clowned. Globalization, he says (bringing it up unprompted) ruined his trade. Thanks to rising prices caused by the Asian crisis, people don’t want to spend money at the big top; they just sit and watch their television. And now, to cap it all, some American from Las Vegas has appeared on a TV program, explaining how all the tricks are performed, ruining Pereira da Silva’s act.
But if specific victims of globalization are hard to find in the favela, so too are beneficiaries. Despite a decade of opening its economy to the outside world, Brazil (just like Argentina) still had a higher unemployment rate at the end of the 1990s than at the beginning. Most of the new jobs it created were in the informal sector. Globalization, Reginaldo says, has made no real difference to his life. “The people who know people have done well out of it,” he scoffs. It is fine for people like President Cardoso, traveling around the world. But the process has merely made Reginaldo’s disadvantages, particularly his lack of education, more acute. His head tells him that he will still be in the favela in two years’ time, but he keeps on trying, motivated above all by his desire “to make sure that Filipe does not end up in the same situation.” His latest hopes are with a new shopping center that will be built over a neighboring favela. Asked why he still seems so chirpy, he replies without irony, “Hope is the last thing that dies.”
The Wrong Man in the Dock
We must be careful not to take the hand-wringing too far. Miserable though the situations of Bobo, Orelsky, and Gobetti are, they are not the whole story. To begin with, the human race is, in general, advancing rather than going backward. Even the richest of those tiny Frenchmen at the time of the storming of the Bastille would, in many ways, consider himself a pauper today. Back then, infant mortality and childhood diseases meant about a 50 percent chance of reaching adulthood; life expectancy was just thirty-four years. The same researchers at the UNDP who unearthed the figures about inequality also have the honesty to admit that the sixteenfold increase in p. 255 consumption in the twentieth century was an “unprecedented improvement in humanity.”
This sort of improvement is most obvious in rich countries. Three out of every four families living below the poverty line in America today own a washing machine and at least one car. Ninety-seven percent own a television; three out of four have a VCR. Thanks to all that terrible competition, many gadgets are much more affordable, particularly in terms of the number of work hours needed to acquire them. A cell phone now takes only a fiftieth of the time to earn that it took in 1984. A bottle of Coca-Cola is roughly half the price it was in 1970, and a Big Mac 20 percent less. Meanwhile, the dynamism of the economy also means that the poor are not “always with us.” They can climb out. Only one in twenty of those in America’s poorest fifth are still stuck there sixteen years later.[12]
In most poor parts of the world outside Africa, there have also been enormous improvements in standards of living. Most of the world’s poor live in India and China. It is not difficult to find examples of gut-wrenching poverty in either country, but it is also clear which way the momentum is going. Deng Xiaoping’s decision to open China’s economy in 1978 helped some eight hundred million peasants more than double their real incomes in just six years, arguably the single greatest leap out of acute poverty of all time.[13] The past five years have been tough for poor Asians, but the long-term trend is upward: By 2020 some two billion poor rural people should be lifted out of poverty. Half of India’s ninety million poor households own watches, and a third have radios. The Gobettis may be poor, but they still have a television and a VCR. In Saint Petersburg today you see a visibly better-clothed population than you did in, say, 1985.
Critics who ignore these general advances are perhaps merely forgetful. They become more dishonest when they focus on specific victims of globalization and fail to mention the specific winners created by the same process. Nowadays, Flint is always depicted as a victim of capitalism. A century ago, it was the aggressor itself, as the car industry lured in sharecroppers, coal miners, poor farm boys, and large numbers of immigrants. Far from being on the defensive, General Motors was eating up other car companies. The creative destruction continues. Jo Ann Bobo works at Manpower; her and Dwight’s daughter is also looking for a job in services, possibly tourism. In other parts of the United States, particularly ones where the UAW’s writ does not hold, car factories are symbols of hope and prosperity. In Evansville, Indiana, Toyota’s new factory has greatly increased local pay levels for blue-collar workers.
p. 256 Venture down to Brazil, and you will find that the “crapshoot” that Bobo resents is helping to change the life of Marcos Andrade for the better. A tall, thin young man, almost exactly the same age as Reginaldo Gobetti, Andrade got a job as a machine operator at GM’s stamping plant at São Caetano do Sul in 1997. The plant, which we visited briefly in chapter 4, is an old one; but it feels completely unlike Flint. There are a few old-timers at São Caetano, and, just as in Michigan, there are even a few GM families, with fathers and sons working together. But the average age of the four hundred workers is only thirty-five. The talk is of soccer, not golf trips. Andrade earns one thousand reals a month (six hundred dollars), enough for him to start thinking about getting a house with his girlfriend, Marie Jose, rather than worry about making ends meet, as most of his friends do. Nor is it just a matter of money: GM also provides him with training (around fifty hours a year) and even picks up half the tab for his English lessons. The factory is safe and clean, and lunch is free.
Andrade might hail the process that has brought him this new life—he admits that it has been good for him—but he does not like the way that a crisis in Asia can spark problems in Brazil. Like everybody else in São Paulo, he is worried about his job. In 1998, the Brazilian market shrank by nearly a fifth. On the assembly line, people sometimes talk about China in the same way that people in Flint talk about Brazil and Mexico. Like most of the other workers, he feels some sympathy for the workers in Flint, but when he hears how much they are paid, he whistles. He has not bothered to join a union himself: He thinks they are too much trouble. But now he has a new goal: a position in the Blue Macaw project in southern Brazil. The money will be better. Other people in the plant are thinking about it, too. In many ways, he is no different from the sharecroppers turning up in Flint one hundred years ago.
Swings and Roundabouts
Knowing that winners outnumber losers—or
that both are part of a fundamentally beneficial process—is scant consolation to people such as Gobetti, Orelsky, and Bobo. We will return to the question of what governments and the more successful members of society can do to help the losers in chapter 15, but prevention would be far preferable to a cure. One of the most persistent myths about globalization—and one that politicians love to hide behind—is that its excesses are unavoidable, just like the hangover that comes after a heavy drinking session.
Globalization can clearly be a savage process, but it is frequently not the p. 257 underlying cause of the harm that it spreads. The rich world’s unemployed are better off blaming technology for their fate than foreign competition. Even if GM had never set foot in Latin America, more efficient technology would probably nonetheless have left them with too many stamping plants in the United States. (It has fourteen such plants in North America; it probably needs only ten.)
Africa’s problems have their roots in decades’ worth of corrupt and incompetent governments, which singularly failed to prepare that continent for a competitive world. It is notable that Botswana, one of the few places in Africa to have a two-party democracy, has been growing almost as fast as the Asian tigers. Some of the world’s biggest tragedies have been caused by governments trying to obstruct globalization. It is hard to think of a single thing that would help the poor more than getting rid of protectionist laws that restrict imports of basic foodstuffs, textiles, and so on in the rich world. Scrapping Europe’s Common Agricultural Policy, as egregious a system of protectionism as any, could do wonders for Africa’s agriculture. The only places where the losers massively outnumber the winners are in countries, such as Cuba, that have shut the door on globalization completely.
All three of the losers that we have selected have been cruelly let down by their leaders. Russia’s deplorable economic state is overwhelmingly a legacy of communism, and the failure of reform is largely the result of not liberalizing enough. Russia has too little business competition, too little foreign input into the economy, and far too much power in the hands of ex-communists who were simply handed huge monopolies during the country’s botched privatization.
In the favela, the Brazilian flag hanging in the Gobettis’ home carries a sadly ironic motto: Ordem e Progresso. Every aspect of government in Brazil has let down the favelas, from the corrupt leaders at the top, through its sluggish education system, to the local politicians, who, as Reginaldo notes, come through the favela just before election and then forget about it. The favela elects its own president; the last one took all the residents’ money and now lives in a house that has a Jacuzzi.
It is harder to find evidence of misgovernment in Flint. Instead, the blame lies with the UAW and GM. It was noticeable how few unions flocked to the UAW’s cause during the great strike of 1998. (By contrast, part-time workers at UPS, who seemed to be getting a rawer deal, received widespread support.) But it is also clear that in an age when industrial clusters are much in demand, General Motors wasted an enormous opportunity in Flint.
Bobo, who often works six-day weeks by choice, patently loves his job. He p. 258 talks nostalgically about his early days at GM when it seemed more like a family business. He remembers the excitement when new models were announced. He admits that change is necessary, but he has never heard managers set an honest vision for the car firm’s future—just a succession of unrealistic promises that have since been broken and ugly rumors about closures that have since come true.
A few years ago, Bobo and a friend put in a successful suggestion for a new welding-wire system. Savings from such suggestions were supposed to be split with the employee up to a limit of twenty thousand dollars, but GM did not measure the savings and fobbed them off with eight hundred dollars each. “It wasn’t so much the money as the principle. . . . It’s like we are the peasants and they are kings.” Since then, things have not improved. Bobo has never met the current head of his factory; and, despite being a relatively well-read man, he can’t even remember the name of GM’s boss, Jack Smith. “I kind of gave up being interested in those things,” he admits good-naturedly. “What’s the point?” Had GM been better at answering that question, then Flint would have a more secure future, and nobody would have to blame globalization for anything.
Smoke Gets in Your Eyes
Our point is not to deny that globalization causes damage but to argue that it usually does so only because of bad decisions or weaknesses that nobody has ever sought to fix. Look behind any “global” disaster story, and you tend to find a trail of woeful mistakes or willful crimes by governments, companies, and individuals. As a final example of this, consider a victim that some critics of globalization hold up before all others as an example of capitalism run amok: the environment.
Here is an early critic of unrestrained commerce:
The centralization of population in great cities exercises of itself an unfavorable influence. Putrefying vegetable and animal substances give off gases decidedly injurious to health and if these gases have no way to escape they inevitably poison the atmosphere. . . . The poor are obliged to throw all offal and garbage, all dirty water, often all disgusting drainage and excrement into the streets, being without any other means of disposing of them; they are thus compelled to infect the region of their dwelling.
Friedrich Engels’s description of the condition of the working classes in nineteenth-century Manchester, England, could apply easily to slums all p. 259 around the developing world and certainly to the favelas. The changes that globalization spurs on, from industrialization to urbanization to the spread of the internal-combustion engine, have produced not only human tragedies but environmental ones.
In Green circles, Brazil will always be associated with the rain forest (about which more below), but arguably its biggest environmental problems nowadays are brown. This is even true in the Amazon region, where cities such as Manaus and Belém have been growing rapidly. The gradual drift of tree harvesters into these cities is one reason why the depletion of the forest has slowed. But just like Sâo Paulo—and cities throughout the developing world—the Amazonian cities are spitting out their own sort of muck: dirty water, foul air, and polluted soil. Urbanization has always been a dirty business, but now it is done with the added help of motor cars. In rich countries, there are forty cars per hundred people; in Latin America there are eight, and in China only two. The full horror of what is to come can be appreciated only from the back of an un–air-conditioned taxi on one of São Paulo’s or Shanghai’s already clogged freeways.
From a brown perspective, Brazil’s biggest eyesore is Cubatao. For most visitors to Brazil, the capital of its petrochemical industry is only a ghastly aberration on the way from São Paulo to the beach—a brief smoggy valley of chimneys stuck between two long tunnels. (At night, the fires of the refinery can give the area a Blade Runnerìsh feel.) Until the 1950s, Cubatao was a marshy valley of Atlantic forest stuck halfway between São Paulo and the harbor at Santos. This convenient location proved its undoing. Chemical and oil companies from around the world filled in the marshes, ruining ecosystems and clogging waterways. As with Los Angeles, the surrounding hills made Cubatao into a natural smog trap. Workers poured into predictably horrible squatter camps. By the 1980s, the town’s factories belched out 236.6 metric tons a year of what scientists like to call particulate matter. In 1982, one out of three Cubatao newborns failed to reach its first birthday, and there were particularly high instances of genetic diseases. Cubatao was known as “the valley of death” or “the most polluted city on earth” and inspired an ironic pop song, “Honeymoon in Cubatao.”
Until 1983, the industrialists successfully managed to resist regulation. Then the cleanup began. Under pressure not just from Western Greens but also from groups such as the Association of Victims of Pollution and Bad Living Conditions, the companies introduced controls, and factories were forced to switch from oil to gas. Close to one billion dollars has been spent by the companies concerned. Nowadays, by whate
ver measures you use, air, water, and soil pollution are all a tiny proportion of what they once were. p. 260 Visit any company, and you will be shown a proud series of charts showing the reduction in emissions.
Nobody has more charts or tables than Ademar Salgosa does. This is partly because he is chairman of the local manufacturers association. But he also runs the best-known monument to the new Cubatao, a big chemical factory owned by Carbocloro, a joint venture between America’s Occidental Petroleum and UNIPAR, a local firm. Carbocloro, by all accounts, was as dirty as any other Cubatao plant in the 1980s. Yet in the past decade it has twice won Occidental’s competition for most environmentally friendly plant. In 1984, it used to consume ninety grams of mercury to make one ton of chlorine; in 1998, it consumed just 0.7 grams, and its emissions of mercury are now less than those from a dentist’s office. The hillside behind the factory, which only a decade ago looked as if it had been napalmed, has re-grown its Atlantic forest and become a wildlife sanctuary. And, in Salgosa’s pièce de résistance, the effluent from the factory is pumped through an aquarium stocked full of carp and goldfish: There has been only one “accident” in thirteen years, and the worker responsible for the piscine slaughter was sacked.
A Future Perfect: The Challenge and Promise of Globalization Page 37
