• Globalization and trickle down economics: R.I.P.

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    PHILIP CAMARA

    PHILIP CAMARA

    How to explain the stunning victory of the Donald as President of the US of A, and of Brexit and even our very own PRRD victories? Some analysts and even President Obama picture it as the “populist backlash” against globalization, its super elites and governing institutions that seems to be run by paid hacks of corporations. In other words, a stiff reaction of voters against the great inequality — between the 1% who have and the 99% who can only trying to get by — produced by rapid globalization in the past 40 to 50 years.

    Globalization of the economy over these past decades was underpinned by a heartless (supposedly logical) socio-economic policy model of Neoliberalism that sought to limit the function of governments in the economy and in social life and instead shifted these functions to the “free market” to be provided by the private sector, meaning corporations.

    Neoliberalism is the epitome of the what is termed as the “trickle down” system or what I term “Pinatulo” as the political-economic system operates to empower those who are already strong (well capitalized and managed corporations) to grow even bigger so that from their growth, some benefits would perhaps trickle down to the people in communities basically in the form of jobs. Neoliberalism is the soil of privatization and leads naturally to globalization especially when the powerful corporations fund political campaigns that result in new global trade pacts that primarily seek to further limit the power of governments and communities to interfere with this “freeness.”

    Neoliberalism, once it is started, is difficult to control or bend or amend, because of its strong influence over politicians, political parties, regulators, and the media (which the big guys own). Neoliberalism has succeeded in concentrating vast amounts of power in very few hands. And these hands, as we are witnessing, can belong to deviant heads.

    It would not have been so bad, if the fruits of globalization were better shared. Would that have been possible? Maybe, but a charitable or even just equitable underpinning would have been highly unlikely given the fact that under Neoliberalism the unit of organization of management and accounting is necessarily the corporation, an entity that exists solely for growth of profit, of retained earnings.

    Consider that this kind of entity, the corporation, that was created to generate profits and more capital, is really like the first malignant cells of cancer in a human body when the regulator is friendly or easily persuaded. It has growth of capital as its genetic instruction and it is but fulfilling its destiny to grow and grow (at all costs) until it has fully maximized the economic sector’s potential. It has a single bottom line (profit) even if it likes to green wash its activities and does a little Corporate Social Responsibility here and there.

    To maximize profits is to be the winner in the race to the bottom. And this is where globalization complements Neoliberalism, in getting nations to foist pro-corporate global trade deals that further weaken the role of national governments and communities in regulating the economy for its social and environmental priorities. Corporations profit vastly by moving operations where it is cheapest (or easiest to get a government deal like in a communist country or just a corrupt one). And to do so even if the cheapness comes at a large expense to the host country (little and ineffective labor and environmental standards, suppressing human rights). And while some of this cheapness is passed on to the consumer, it masks the expensive destruction of the social fabric of the global corporation’s home country.

    Thus, witness the massive loss of identity-giving jobs (manufacturing), the massive transfer of wealth to fewer and fewer owners of the global corporations, and the lack of fiscal resources to upgrade infrastructure that leads to poisonous, acrimonious and trust-reducing social relationships reflected in highly fractured voting populations. Fractures happening along all kinds of lines: racial, ethnic, religious, income class, level of education, sexual orientation, etc.

    Globalization and Neoliberalism and huge “for-profit” Multinational Corporations have run its course, have run the earth and most of it’s people to the ground. It has even run it’s very own existence to the ground with massive debt, massive over-capacity and weak consumer demand (from inequitable distribution of income). The Pinatulo, trickle down system is in its death throes.

    But whether it will be buried or resurrected as a zombie remains to be seen. Will the Donald really dismantle globalization and rein in the global financial oligarchs and empower communities, or will he betray the disenchanted and the disenfranchised? His main message was to re-envision the USA as a nation protecting its own citizens from the ill-effects of Neoliberalism rather than continue to be the global guarantor of the free market and free trade mediated by corporations, i.e. the global promoter of Neoliberalism. Trump may have no choice but to do a genuine “Local” first or “Pinatubo” replacement to the dead-beat “Pinatulo” governance system.

    If Pinatulo has reached its natural dead-end, does it auger well for the re-emergence of Pinatubo?

    I think, the emergence of Pinatubo or “Locals first” or community-centered area-based development will be a natural result from the collapse of the global order as we know it today. Economists are very much aware of the fragility of the whole debt-ridden Pinatulo economic system. There are staggering amounts of money tied up in obsolete industries like the fossil fuel, weaponry, bad pharma, bad industrial agricultural industries which if allowed to really go bad or under would undermine the very survival of the global financial system.

    On the brighter side, Technology and the number and distribution of highly intelligent people have developed a present capacity for small groups to work together, find common ground, recreate the social contract, apply appropriate technology and cooperate (rather than compete) towards rebuilding the local economy with community enterprises at its core. Nurturing these for sustained growth will be the new government’s job (Pinatubo function). Out of the ashes will arise a government of the people, for the people (not of corporations as it is today under Neoliberalism).

    Philip Camara is Co-Convenor of Subsidiarity Movement International, and Federalist Forum of the Philippines, he advocatesfor the bottom-up development model as well as proper decentralization; and the strengthening of regional governance. He served for 12 years in the Regional Development Council of Central Luzon as Chair of the Economic Committee. He was a consultant at Philippine Alternative Fuels Corp (PAFC) and was on the Board of Trustees of the HARIBON Foundation. He is currently a member of the Board of Advisors of CDPI

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