Dark side of globalisation demands decisive government

10 May 2008

Dark side of globalisation demands decisive government

The strengthening of social security, in its broad sense, could dispel fears of the dark side of globalisation and bring back trust in politics and politicians, argues Ronald van Raak, Member of Parliament for the SP and Chair of the party's research bureau.

People want to live in a secure society, one in which the gap between rich and poor is not too wide, education, health care and other services function well and citizens are supportive of each other. Many people fear, however, that the differences between poor and rich, sick and healthy and well-educated and poorly educated will become even greater, that social provisions are being stripped away, and that contact between people will grow ever harsher.

This fear is coupled with a lack of any belief that politicians can solve these problems. Governments of different political hues have passed responsibility over to the market. Increasingly, citizens are told to take responsibility for themselves. This withdrawal of the state has saddled politics with a problem of legitimacy: never before have so few people had confidence in the power of government to succeed.

The transfer of powers from state to market is leading to a reduction of democratic control over services and provisions. Housing corporations must work as if they were businesses and no longer build affordable housing, the very purpose for which they were created. Politicians receive as many complaints as ever they did about such matters as closure of rail and bus lines or poor quality in public transport services, but now appear unable to do more than pass these on to the directors of the privately-owned firms running these services. When citizens signed a petition protesting about massive pay rises for executives of energy corporations, the Minister of Finance could do no more than issue a weak moral appeal.

An often heard argument for the rolling back of politics rests on the globalisation of the economy. This globalisation is, however, not new. We are now in the middle of the process which Karl Marx, writing in 1848, called the 'cosmopolitan' economy. International competition led, back then as well, to a situation in which entrepreneurs competed over wages, and organised production where this was cheapest. The consequences for society were disastrous.

Workers had to work hard and long, and yet could hardly support their families. The sick and the unemployed were left to their fate. In reaction to these economic developments politicians took the initiative for social legislation and social provision. The welfare state which came into being for the most part after the Second World War ensured that society could escape from the perverse consequences of the market economy.

A second argument for the withdrawal of the government is that this emancipates the citizens, who want less meddling from the state. The fact that the Netherlands has relatively well-educated and indeed relatively emancipated citizens is, however, also a consequence of the struggle for political emancipation, which brought access to education and the enhancement of the power of the working population. It is precisely because of political 'meddling' that our country stands in such a strong position in the globalising economy.

We should not forget that the taking of personal responsibility remains impossible for people who have had insufficient education, who have health problems or who see their employment disappear abroad. Most Dutch people do not match the ideal political image of the strong, emancipated citizen who can do everything for him- or herself. Politicians do an injustice to all of these poorly educated working people and to those who, through disability, are unable to work, to old people and newly-arrived immigrants, and to all those people who cannot simply rely on their own powers.

During the last "5th of May Lecture" (which commemorates each year the country's liberation after the German occupation of World War Two), Wim van de Donk, Chair of the WRR (the Scientific Council for Government Policy, an official body independent of the particular government of the day) said that freedom cannot exist without solidarity. For this solidarity we cannot rely on the market. Politicians must continue to organise it. I would very much like to see us making international agreements to organise markets. European agreements on company taxes could put an end to tax competition between countries. International agreements on labour migration could avoid a situation in which wages and working conditions are everywhere under pressure. Trade agreements could offer developing countries more space to protect their nascent markets.

In every country politicians must guide globalisation along lines which promote and protect human values such as solidarity and dignity, values to which market forces pay no attention, not by removing their countries from the international economy or attempting to frustrate its workings, but simply by protecting the interests of their citizens. It is for this reason necessary to put clearer limits on the market when the quality of public provision is put under pressure, and also to guard the accessibility of health care and education, to create secure societies, and to establish clearer standards in regard to taxation and wages.

Democracy stands or falls by the confidence and trust of the people. As long as politicians shift responsibilities to the market, the lack of trust in the powers of government will grow. Decision-makers must continue in the future to do justice to the wishes and needs of the citizens whom they serve. The strengthening of social security in its broad sense and the erosion of the fear of the dark side of globalisation will increase confidence in politics and politicians. This demands not the withdrawal of government, but one which is strong, and willing and able to take action.

This article first appeared in the financial daily Het Financieele Dagblad, of 10 May 2008

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