The Ambiguities of Globalization

In the industrialized countries, notably of Europe, the 1990s have seen a systematic erosion of the social protections that the liberal democracies carefully built, as a matter of policy, in the years after the World War II: the protections we know collectively as 'the Welfare State'. This change of direction in social policy is rationalized by appeal to economic arguments: the 'logic of the global market' (it is said) makes it necessary for any major exporting country to enhance its global competitiveness, by reducing the economic burden of 'non-wage ' labour costs imposed on industry as a result of earlier Welfare State policies. The cogency of the economic arguments rests (it is argued here) on confusing two interpretations of the terms 'global' and 'globalization'. In multinational businesses or other global enterprises, these terms imply that the economic role of governments will be reduced, and global competition takes place between corporations.In governments, by contrast, the same terms imply a continued - even, an enhanced - economic role for governments, and global competition takes place, rather, between countries. If tackled on this last mentioned level alone, the economic arguments are, indeed, hard to undercut: addressed One Nation State at a Time (so to say) matters of 'comparative advantage' tempt rival Governments to engage in competitive cost cutting, and the costs of social services are an obvious target for cost cutting, e.g. in France or Sweden. Tackled on a wider ('global') level, this article argues, the same issues can be stated in terms less damaging to Labour and Environmental interests.