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THE DEMOCRACY SHAM
In
The Democracy Sham: How Globalisation Devalues Your Vote, Bryan Gould considers
the impact of the global economy on the democratic process in a number of countries, including New Zealand and Britain. He shows that international capital is, by virtue of its freedom
to move at will across national boundaries, now able to dictate to democratic parties and elected governments the economic
and other policies they can and cannot pursue. The result is that the political
choice offered to voters has, without their realising it, been narrowed and constrained and the voice of the left has been
muted and virtually extinguished.
Bryan
Gould explains the development of the global economy and the reasons for its current hegemony.
He shows that the orthodox justifications for globalisation – that it has delivered better economic and other
outcomes for both the world economy and individual countries – cannot be supported, and that it has, on the contrary,
produced a global slowdown and unsustainable inequalities and instabilities on both the international and domestic scale.
He
looks at the political implications of what he describes as an historic shift in the balance of power between capital and
labour, and at the failure of parties of the left to mount any effective resistance.
He concludes by considering the steps that could and should be taken to restore balanced and sustainable economic development
in the world economy and a fully democratic choice to voters in countries as diverse as New Zealand and the United Kingdom.
The Democracy Sham: How Globalisation Devalues Your Vote is published
by Craig Potton Publishing in September 2006.
National Radio Interview
Bryan Gould was interviewed by Chris Laidlaw about The Democracy Sham on New Zealand National Radio on
the morning of Sunday, 10 September. Excerpts from the interview appear below.
“What I am concerned to do is to dispel the notion that the social and political and environmental downsides [of globalisation]
that are becoming increasingly apparent can be offset by economic considerations…in other words, the economic story
is not a good one either. National governments have found the going tough and internationally the economy has grown quite
slowly since globalisation and has been marked by tremendous inequities and uncertainties and instabilities.
If we’re drawing up a balance sheet, and we can show that it’s not very strong on the economic side, that then
frees us to look at the political and environmental and social consequences that I think are inimical to the kind of world
economy we’re trying to develop.”
“It’s not surprising that people have on the whole been persuaded that globalisation has meant better times because
for some people it has. What you have to ask is, but which people? It turns out that those who have done well, both globally
and within national economies, have been the top ten or twenty per cent. They are able to develop the myth of better times
for all by virtue of their ability to influence the way the media treats these issues. The facts show that many people –
certainly those below the median point and some of those even above it – have not done well out of globalisation, and
that’s true in strictly economic terms as well as in terms of controlling their own lives and influencing events close
to home.”
“I wrote the book to answer the question as to why, when there is so much unhappiness about particular aspects of globalisation
across the political spectrum, these concerns have so little political traction. The answer is, I think, that people have
lost touch with the sort of analysis that I have tried to develop. They tend to look at third world poverty or threats to
the environment or the loss of control to multinational corporations as separate, individual and discrete issues rather than
as manifestations of the huge loss of control that has flowed from the ability of international capital to dictate to elected
governments what the political agenda should be. So, without people being aware of it, the political debate has been narrowed,
so that no major party, either in power or seeking power, dares to pursue a policy, either economic or flowing from economic
policy, that would discomfort the international investors on whom they think they depend. So, even quite liberal or radical
governments, like the Labour government in New Zealand, tailor their economic policies to suit international investors.”
“Thirty or forty years ago, overseas investors would have to negotiate terms with the elected government of a country
in which they wished to operate. That government would specify the terms that were needed to reflect the interests and needs
of their electorate. Today, the free movement of capital around the world means that international investors – and
that means in reality fewer and fewer but bigger and bigger – can roam the world looking for the most congenial conditions,
with the result that across the globe wage rates are driven down, and the treatment of profits becomes ever more favourable
because competing governments feel that they must do what is required of them if they are to secure the investment they need.”
“One of the many downsides of increasing globalisation is that there are fewer and fewer companies [in a country like
New Zealand] flourishing and maintaining their headquarters in New Zealand….That means that fewer and fewer decisions
about our economy are being made in New Zealand and that decisions about how workers should be treated and where investment
should be made are being made by people who don’t even know where New Zealand is, let alone care about it. And there
are some severe economic consequences as well. One of the major burdens overhanging the New Zealand balance of payments is
the huge proportion of our economy accounted for by repatriated profits and the interest we pay to [purveyors of “hot
money”] in order to finance our deficit.”
“You can’t argue that the huge power of international capital will be deployed to secure the best outcomes from
the viewpoint of the international investor, which means that only market values and market forces that impact on the bottom
line will be taken account of, and that they will then sit back and allow governments to come along and change those outcomes.
This is not a play exercise. International investors want certain outcomes and they will insist on getting them. They might
allow a little cosmetic exercise at the margins but they are not going to allow claims for social justice to override the
infallible market. The deliberate objective of free market economics is social injustice. The dice must lie where they fall.”
“I think it’s quite possible that the pendulum [of intellectual fashion that would normally allow a change of
policy in the light of increasing dissatisfaction with globalisation] may have got stuck because of the power of international
capital and the international media, which are just a subset of that same group, to dominate the agenda.”
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