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This paper examines the impact of the process of globalization on workers and their families in Canada, Mexico, and the United States. Globalization is based on the ideology of neoliberalism, which is promoted by the most powerful economic and political actors in the world, and includes the deregulation of financial transactions and the promotion of free trade. Globalization and neoliberalism have brought tremendous profits to transnational corporations (TNCs) and international financial institutions (IFIs), and accelerated the accumulation of wealth to a small, powerful elite in all countries involved.
At the same time, globalization has led to economic decline for workers, massive impoverishment, and growing income inequality worldwide. These effects have appeared, albeit to differing degrees, in both developed and developing economies. Once again workers are forced to pay the price of political and economic change but, this time, on a truly global scale. This paper is part of a long-standing research project initiated by the authors to uncover the meaning of globalization, to describe its critical policy components, to empirically analyze its impacts, and, finally, to propose educational and action strategies for workers and unions in response to it.
Globalization: Competing Interpretations
Globalization studies have become an academic/journalistic growth industry. Hundreds of books and thousands of academic and newspaper articles have been written about globalization since the end of the Cold War. As expected, the definitions of globalization vary, the assumptions made about what is changing in international political economy are different, and judgments about whether it is a good or bad thing are also a matter of dispute.(1)
Surveying some of the vast literature on the field, one can find celebrants of globalization, who see the process as largely an advance for humankind in economic, political, and cultural terms. Others argue that we are in a new global age the benefits of which will only be achieved if nations and peoples adapt to the requirements of change and thus accept globalization. Still others see the new developments as an unmitigated disaster for humankind: globalization breeds inequality, poverty, violence, hatred, and the destruction of cultures. Finally, there are writers who see globalization primarily as a continuation of the long history of capitalist development.
Uncritical adoption of globalization is dangerous for several reasons. We have found that there are new developments in the global political economy that warrant attention, that certain sectors of the global economy, particularly finance, are changing radically. Significant changes in international economics require workers to reeducate themselves and to develop new tactics and strategies to defend their rights. However, at the same time that changes in the global economy are recognized, it is critical to understand that this is still happening in a capitalist economy and is the by-product of a 500-year process of evolution, adaptation, conflict, and struggle.
Where Does Neoliberalism Fit?
Outside the United States, many analysts of economic policy use the term neoliberalism as a label for the policies advanced by the industrial capitalist countries, the International Monetary Fund, the World Bank, and other IFIs. In general, neoliberal policies promote a greater role for markets and a contracting role for government in the economic life of nations and the international economy. Any institution which interferes with the market system, particularly governments and labor unions, is regarded as an undesirable inefficiency. Neoliberals claim states should deregulate their economies, cut public spending, and privatize public institutions, including prisons and educational systems. They argue that in the long run reducing the powers of the state and increasing those of the markets will benefit everybody.
Neoliberalism is essential to globalization for at least two reasons: first, virtually every nation in the world has to some degree adopted neoliberal economic policies. These policies have been embraced by the industrial countries of the north but have been imposed on poor countries.
The last fifty years of Mexican history are illustrative of this trend. Until 1982 Mexico had adopted an economic development policy called Import Substitution Industrialization (ISI) to protect domestic markets and provide state supports for domestic industrialization. Because of failures in ISI and the attendant accumulation of enormous debt, Mexico was forced to declare itself bankrupt in 1982. In exchange for rescheduling debt, the Mexicans promised to shift from ISI to neoliberalism. Subsequently, Mexico joined the General Agreements on Trade and Tariffs (GATT), lobbied for the creation of North American Free Trade Association (NAFTA), internally downsized government, sold about 1,000 state-owned enterprises to private investors, privatized communally owned farm land, and opened its doors to manufacturers and IFIs from the G-7 countries and some newly industrialized countries of Asia.
Second, as the Mexican case also suggests, the neoliberal ideology and policy program has stimulated increasing international penetration of countries by multinational corporations and banks. In other words, the imposition of neoliberal policies by the rich and powerful and the acceptance of them by elites all around the world have together fostered globalization. Ultimately, globalization, trade liberalization, financial deregulation and speculation, and privatization all lead to the same thing.
Mapping Globalization: An Empirical Analysis
In prior papers we concentrated on data gathered about the United States, as it has the largest economy in the world today (USDC, 2000: Table E2). We assumed that if there are identifiable changes …