Past Sermons by Rev. George Smith, Retired

"The Trick Is…."   A Sermon on Globalization

April 21, 2002

READINGS: Ralph Nader in the introduction to the book, The WTO, Five Years of Reasons to Resist Corporate Globalization, One cannot open a newspaper today without reading about myriad examples of the problems that concentrated power spawns: reduced standards of living for most people in the developed and developing world; growing unemployment worldwide; deadly infectious diseases; massive environmental degradation and natural resource shortages; growing political chaos; and a global sense of despair, not hope and optimism, for the future.

Henry George, Progress and Poverty(1897), This association of poverty with progress is the great enigma of our times. It is the central fact from which spring industrial, social, and political difficulties that perplex the world, and with which statesmanship and philanthropy and education grapple in vain…It is the riddle which the Sphinx of Fate puts to our civilization, and which not to answer it to be destroyed.

So long as all the increased wealth which modern progress brings goes but to build up great fortunes, to increase luxury and make sharper the contrast between the House of Have and House of Want, progress is not real and cannot be permanent.

Theodore Dreiser, Sister Carrie(1900), Our civilization is still in a middle stage, scarcely beast, in that it is no longer wholly guided by instinct, scarcely human, in that it is not yet wholly guided by reason.

Samuel L. Jackson, actor, Anyone who tells you money can’t buy happiness never had any.

These are four statements for the most part involve us in the debate over economic processes and moral critique and action. Economics that social science concerned chiefly with the description and analysis of the production, distribution, and consumption of goods and services, needs moral reflection and a concerned Social Conscience. It being the concern for and concerted effort to produce a positive affect for the well being of all in the community. Economics with this moral concern goes beyond just the description and analysis of this human institution. It begs us to consider values that affect us as human beings and beyond that the whole of the living earth with a bias toward seeing the needs of others and positively affecting those needs.

The social and moral implications of economic analysis have been the subject of a long history of speculation about how to solve a very trenchant problem that of transferring of the results of production such that all would have at least a minimal sustainable life. The great religions in the world have given moral injunctions about our responsibility to the indigent within our communities and even to some extent the stranger that comes to the town gate. Israel’s great prophets inveighed against the ill treatment of the widow, the orphan, the poor and the slaves. The giving of alms is a integral part of Islam. Jesus spoke to the rich young man saying that he needed to give all that he had to the poor in order to gain salvation. Early Christianity was a communist society where all was held in common. Hinduism and Buddhism fostered a care for not only the indigent but also for all sentient beings. Paganism’s respect for all life engenders its own concern for the less fortunate. We as UUs have our own Service Committee to deal with people’s needs around the world. The significance of the distribution of the production of the community has always been very important to all the religions of the world.

Besides such religious injunctions, great thinkers have devised great systems to deal with the distribution of production—all the way from the government’s non-involvement of Social Darwinism and laissez-faire capitalism to the complete control by the state as espoused in the now defunct Communism. Then the question what have been the results? I’m sure I don’t even have to tell you that the poor, the homeless, the less fortunate, are still with us. No system seems capable of dealing with this problem in an absolute way. Even Lyndon Johnson’s Great Society had its limits.

This now brings me to our most recent economic incarnation—Globalization. It has emerged out of the frigid remains of the cold war era as the dominant if not the all pervasive economic form in the world today. It is an integrated economic system with no barriers to financial activity, boundaries between nation-states are blurred and economic entities, called multinational corporations exist outside the control of these nation-states. It does not depend upon the good graces of a local government to function but rather these governments need to conform to its specific economic and political rules in order to share in the world’s wealth. As with most economic and political systems it does not have within itself a Social Conscience per se.

Advances in communication technologies thawed the Cold War era and brought it to an abrupt end and unleashed free market capitalism from its last visible restraints. The world now has Super Markets rather than super powers. It was the destruction of older less efficient products or services and replacing them with more creative and efficient ones which marks the essence of capitalism. It is innovation overcoming tradition. With the destruction of communism it now stands by itself as the economic system in today’s world. We all have benefited from this free market. Globalization is the broadening of Capitalism. Speed and lightness are its dominant features. It is really about communications technology and not just trade. Its supposition is that people’s aspirations are to desire a better life, more freedom and to be able to choose where and how to prosper not unlike words in our Declaration of Independence and our Constitution. As some have said Globalization is the Americanization of the world.

To be successful in this system is simply put to free the capitalist market system via the following suggestions:

1. Keep government small, eliminate government subsidies, develop a federal system, privatize as much as possible even utilities, the private sector produces the wealth is their contention
2. Keep low inflation, balanced governmental budgets
3. Make trade as free as possible, increase exports, make little if any restrictions on foreign investment
4. Deregulate the capital markets, keep currencies convertible
5. Have democratic institutions
6. Create a flexible labor force
7. Protect the transfer of private property
8. Keep a balance among its institutions
9. Maintain a level playing field to ensure that the best innovators and entrepreneurs will win

Add on to these the following:

1. Foster immigration
2. Rid country of monopolies
3. Have free flow of information
4. Have an honest, transparent, legal regulatory system
5. Develop a safety net for the so called losers

Those that respond to these rules and develop a local functioning economy that coincides with the global economy will be rewarded with developing wealth.

However not is all rosy with the Global market. It can be very volatile and Governments are basically at its mercy. The super markets can generate a lot of capital but also a lot of chaos. The East Asian melt down especially the run on the Thai currency that nearly destroyed the Thai economy and the tech stock bubble in the US are examples. The more global the markets become the more there can be significant disruptions. Its vulnerability is its reliance on fast, light communications technology.

Its Social Conscience is at best unconscious and works in spite of itself. It is like the trickle down theory of Reganism it is effective not because it is intentional but because the system has good side effects. For instance some contend that Globalization may be an important factor in the development of democracy in other parts of the world because as more people communicate over broader geographical areas, it brings with it economic development, an increase in the middle class with its values of stability, predictability, and transparency, it could lead to more people being a part of a pluralistic society with a much liberalized political organization that could lead to democracy. I wonder if the events in Venezuela might suggest this happening.

Another such side effect is that Globalization is the most efficient and effective way to create wealth and thereby to help the poor. This theory believes that Capitalism has raised the living standard higher, faster, and for more people than any other time in human history. Multi national companies usually pay workers more than the national average, create jobs faster than domestic counterparts, and spend more heavily on R & D than domestic companies, and export more.

In spite of the fact that Globalization produces more income it does so iniquitously. For instance the poorest 1/5th of the US between 79 and 95 lost 21% of its income while the richest 1/5th’s income jumped 30%. Although the world is more tightly knit by communications technology it is more widely split economically and socially. In 1999 the UN produced the following statistics. 1/5th of the world lived in the richest countries and had 86% the World Gross Domestic Product; they had 82% of the world’s export markets, 68% of the direct foreign investment, and 74% of the telephone lines. The bottom 1/5th had only 1% in each category.

Globalization is similar to the process that took place in the US during the industrialization period with its robber barons, Laizzez Faire capitalism and Darwinian Social ideas reigned supreme. The counter cultural voices of that time were men such as Henry George and George Bellamy, both progressives who wanted to see the system take care of the less fortunate. There were many others who worked in specific areas of concern at that time. They all focused on the brutality of that system whose faults are similar to that of today’s globalism. A major problem the system of globalization is that many who can not keep up with the system are brutalized by it and are left behind without any hope of help. It is a winner takes all system. It can be very oppressive to so called losers who find it hard to get back in, it operates to fast for them, it is at times too connected—hard to break in or too disconnected—no centralized office to contact, too intrusive in people’s lives, and too dehumanizing all part of the modern communications technology revolution. Also, as much as globalization can and may help a nation develop democracy, it also instills a sense of despair about how much control one has as the locus of power is not in the hands of the people but in a large virtually uncontrolled global system. Further how does one keep multinationals accountable when they operate across boundaries seeking places to operate that give them the least amount of regulation. The profit motive can too easily lead to commercialism and the exploitation of cultural icons and foster world wide homogenization of cultures. Changing the economics in an area can be disruptive to the indigenous population as they may lack the skill and energy to change. If you destroy the environment of an area you may undermine its culture and social cohesion and as people leave that area and become absorbed into the general population, its language disappears and soon its culture.

What of a moral critique of this system, where will the reformers come from to make the changes that a Social Conscience requires, and what will these changes be? Some would suggest that economics is amoral and thus we should not confuse it with ramblings about morality. In deed Economics is amoral but we the humans that live it are moral. Life is a whole and not just a variety of separate aspects one cut off from another. If we do this we try to evade our responsibility for our actions as they affect life in general. The moral piece is our response to a system. If we do not act on our morals then we are the culpable ones.

Globalization is not going away. We cannot most likely change it. We need to be willing to put ourselves on the line to correct its deficiencies. It is our Social Conscience that can lead us on the path to do so. To begin with Globalization’s process focuses on so called winners and losers. But that is just looking at one particular aspect of what we are as humans. What of the artist, or those who are not compelled to "win"? Are they just going to be left out of the system, of life? We need to be aware that life is not the same for all. The homogenization process of Globalization is not the end all and be all of the system of life. We need to develop economic and cultural safety nets to preserve the diversity of cultures and human responses to life. Sometime in the future that diversity may save life as it is. This is the same for environmental concerns. The importance is to work with the system to find ways to create niches that the system can live with and we can then explore such diversity.

Also, in order to be a part of the system, Governments may want to stifle as much dissent as possible in order to partake in the economic prosperity. The Global system is fairly rigid and narrow. But dissent is important and we need more of it rather than less. We need to use the technology available to keep a free flowing set of ideas.

So what is the trick? It is not to be taken in by nay sayers that Globalization is evil incarnate and then to lose objectivity to focus on what needs to be done to make this system better. It is not be lulled into believing that we cannot with a Social Conscience critique this seemingly all powerful system. We need to make it more responsive to the needs of others. It is not like the progressives of old who battled the goliaths of their day. The trick is to balance oneself between the forces that keep us from acting and the forces that keep us from thinking the process of change. It is our challenge to confront this system. It is our challenge to see what we can do.