This country is divided into those who insist that globalisation means that the service and industrial sectors of the economy must compete in a race to the bottom in employee pay, rights and benefits and those who believe that one of the world’s top economies is capable of supporting rising living standards for all. Unfortunately for the workforce, it is the former view that dominates.
Britain was once proud to be the ‘workshop of the world’, and had a large empire to create a protected market for the goods built by a cheap workforce free from unionisation. This changed after WWII, but we still had a productive industrial sector, and one which became effective at inflating wages. Too effective, in fact. We’re all familiar with the debate over deindustrialisation: was it inevitable, or was it a crusade by a radical government to undermine- destroy, even- the working class? This is a debate which will never be resolved.
I suspect that there are two alternative scenarios which will play out in the next few decades. Either carbon-free long haul transportation will be developed, or industry will have to move back to the countries of consumption. The world in which humans lead a sustainable lifestyle- one which young people such as myself will be instrumental in creating- will be radically different. If transport becomes too expensive, we will see an end to pressure on the wages of unskilled and semi-skilled wages. Instead, it will be the most highly skilled people who shall be the migrants- which is the way things should be: an investment banker can defend themselves against wage competition with more ease than a cleaner.
If globalisation does continue in its current form, there are serious problems that will arise if we persist with the illusion that we want to be competitive. So far, Britain has continued to grow its national wealth despite a lack of material resources or industry. We are dependent on imports to meet half our food needs, a growing share of our energy, oil, most electronics, weaponry, clothing, a good share of our workers even…. The list is way too long. Despite that, we have used our talent base, existing consumer wealth and above all our financial knowhow to maintain a sustainable balance of payments. So why is the logic of competition a problem?
The issue is that rich countries can remain as rich under a globalised system, but the national distribution of wealth will gradually assimilate to global norms. With approaching 200 countries in the world, there will always be some that will undercut the others, triggering perpetual growth in the gap between rich and poor. Ultimately, this will undermine the lucrative high-spending consumer base that props up the well-off in Europe and North America.
I might sound alarmist in tone, which is not my intention. In my next article I will put forward my ideas about the benefits of globalisation, and how its disadvantages can be mitigated.
