Economic Globalisation, the Economy Downturn and the Real Truth

The following article was first posted on 16th March 2009.

"Globalisation" has been the in thing for establishment economists and dumb politicians for years. According to them it is largely responsible for our so-called prosperity over the last 50 years. They are in a state of shock that the recession has hit in spite of the massive globalisation that has taken place. But let's cut away the rubbish and have a look at how things really are.

Economic globalisation and the economy downturn are almost like two sides of the same coin. So how is it most people are unable to see it that way? How many people can actually say they know anything at all about "globalisation"? It exists in the public mind as only a hazy idea, even a good one, for, so it is thought, it is the reason why we can buy all those mouth-watering, must-have gadgets in their colourful packaging for such low prices.

Here in the UK, and I know in most other western counties as well, we have in our shops and showrooms cars, TVs, electronic gadgets and household goods that have been manufactured for the most part in the far east. Certainly nearly all the manufactured goods you can buy are made somewhere overseas. Why should this be?

Because these manufactured goods are cheap. They have undercut our own manufactured goods for so long that all the factories that used to make these goods have had to close down. The men and women formerly employed in these factories have either become part of the long-term unemployed, funded by the tax payer, or have had to become shelf stackers at a supermarket, or take up other, non-wealth-producing roles in order to survive.

And all because of "globalisation", which has made it possible for multi-national corporations to switch production from western countries, with their higher labour costs, to places like the far east, where the labour force works long hours and is prepared to accept wages that we in the west could never live on. Take China, for example. Their workers are happy to be paid the equivalent of $50 or so a week, often less, and the Chinese government is happy to have a healthy trade surplus and comparatively full employment.

But with these cheap consumer goods comes a fatal side-effect. Anyone with a couple of brain cells to rub together knows that we really should be making these products ourselves. After all, we in the west for the most part produced the technology and the genius that led to the invention and development of these electronic marvels in the first place. So it's only right that our own country and our own people should benefit from the profits they earn. But under "globalisation" this doesn't happen.

Instead, the manufacturing rights of every invention, every new development, either belong to a multinational corporation, through its research and development programme, or are purchased from the original inventor. The goods are then produced in a far eastern country while we in the west are saddled with high unemployment and all the social problems that go with it.

Meanwhile, we carry on purchasing most of the goods we need from overseas. How long can we go on indulging in this lunacy before we as a nation run out of foreign exchange to pay for them?

This has actually already happened. Both Great Britain and the United States are effectively bankrupt, unable to repay their foreign loans if repayment were demanded. This is probably the main reason why China, for example, as the leading creditor country of both countries, will never demand repayment. If it did, both the UK and the USA would be forced to default.

This would lead to a massive devaluation of the pound and the dollar to render them worth only a fraction of their previous value. And this would be disastrous to China, whose foreign reserves consist mostly of these two currencies and whose economy therefore depends on the present charade continuing ad infinitum.

Already the recession has impacted this arrangement. Spiraling unemployment in the west has led to a collapse in demand for consumer goods, and this in turn has led to a sharp rise in unemployment in the far east including China.

Economic globalisation, long held dear by establishment economists and ignorant politicians, is proving to be a disaster for every country. It's the modern-day equivalent of "free trade", which caused so much suffering to the working classes of western countries throughout the nineteenth and twentieth centuries. It embraces the "free movement of labour" and the "free movement of capital" that are policies enshrined in the treaties of international bodies such as the corrupt, so-called "European Union".

What these fine-sounding slogans really mean is that huge, international manufacturing corporations responsible for producing everything from cars and computers to essential medical and technical equipment, and everything in between, are free to slash their labour costs by moving production to the far east ("free movement of capital") and if the poor, wretched working people of the west find they are subsequently out of work, why, they can move around the globe until they find a job ("free movement of labour"), provided they will accept the lowest wages being paid anywhere.

The collapse in manufacturing capacity that this process has brought about in western countries may have benefited the "Superclass" of David Rothkopf's book, who undoubtedly own and control most of the world's wealth, including its productive capacity. But it has been disastrous for individual nations, including the ordinary working folk. The cost is not just financial, but social as well, as unemployed youngsters with no future turn to drugs and crime,
encouraged to do this as they are by insanely liberal criminal laws.

Next time you hear some university professor or politician praising globalisation / free trade or warning us against "protectionism" you may want to challenge them along the lines set out in this blog post. Before you do, make sure you have downloaded "Promise To Pay", available free of charge from our home page at Ancient Banking Secret.

And then . . .

Spread the word.

Philip Gegan

 

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