Green Alternatives to Globalisation: A Manifesto

Green Alternatives to Globalisation

First published 2004 by Pluto Press

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Distributed in the United States of America exclusively by

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Copyright © Michael E. Woodin and Caroline Lucas 2004

The right of Michael E. Woodin and Caroline Lucas to be identified as the authors of this work has been asserted by them in accordance with the Copyright, Designs and Patents Act 1988.

British Library Cataloguing in Publication Data

A catalogue record for this book is available from the British Library

ISBN 978 0 7453 1933 9 hardback

ISBN 978 0 7453 1932 2 paperback

ISBN 978 1 7837 1063 8 ePub

Library of Congress Cataloging in Publication Data

Woodin, Michael.

Green alternatives to globalisation : a manifesto / Michael Woodin and Caroline Lucas.

p. cm.

Includes bibliographical references.

ISBN 0–7453–1933–5 – ISBN 0–7453–1932–7 (pbk.)

1. International economic relations. 2. Globalization—Economic aspects. 3. Economic development. 4. Sustainable development. I. Lucas, Caroline, 1960– II. Title.

HF1359.W656 2004

338.9’27—dc22

This book is printed on paper suitable for recycling and made from fully managed and sustained forest sources. Logging, pulping and manufacturing processes are expected to conform to the environmental standards of the country of origin. The paper may contain up to 70 per cent post-consumer waste.

10  9  8  7  6  5

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For

Deborah, Talia and Rafael (MW)

Richard, Theo and Isaac (CL)

Contents

Foreword

Acknowledgements

List of Abbreviations and Acronyms

Introduction

Section One: Assessing the Damage

1.  Globalisation: The Economics of Insecurity

2.  Democracy for Sale

3.  A World in Decline

4.  Globalising Poverty, Inequality and Unemployment

Section Two: The Green Alternative

5.  Economic Localisation

Section Three: Turning the Tide

6.  Connecting Hearts and Minds

7.  Learning From History

8.  Storming the Citadels: Sacking Bretton Woods and the WTO

Section Four: Applying the Alternative

9.  Local Food: The Global Solution

10.  Localising Money

11.  A New Context for Multilateralism

Conclusion

Notes

Bibliography

Index

TABLES

5.1  Creating a General Agreement of Sustainable Trade (GAST)

9.1  Average Energy Use of Different Forms of Transport

BOXES

Box 1.1    Greens and Growth

Box 2.1    GATS

Box 3.1    The State of the World: a summary of GEO 3

Box 9.1    Supermarkets

Box 9.2    The ‘Development Box’

Box 9.3    GM Crops – Myths and Reality

Box 10.1  An Underground Currency for London

FIGURES

1.1  An environmental Kuznets curve, showing a supposed relationship within any one country between environmental degradation and average income

2.1  International trade and the percentage of US and UK voters participating in elections in an era of globalisation

3.1  Humanity’s growing global footprint

3.2  Transport of goods in the EU by mode of transport, 1970–99 (aviation not included)

4.1  Unemployment in the EU and US

4.2  UK per capita GDP and ISEW (1950–96)

4.3  US per capita GDP and GPI

4.4  Personal income and satisfaction in the US

5.1  Percentage change in household income under Desai’s CI proposal

Foreword

Mike Feinstein

The unsustainability of our lifestyle as a species cries out for response - both because of widespread environmental degradation that scars our planet, as well as criminal inequities among us that literally rob billions of people of the chance to realize their potential.

These negative trends are not new – in some ways, they’ve been with us for hundreds if not thousands of years. But our failings today are magnified by the size of our global population, the immense power of our technology and a global economic system that exploits people and planet for short-term profit. This brings about an unprecedented urgency to our time.

Into this moment step Woodin and Lucas with their new book. Visionary yet precise, profound yet full of common sense, Woodin and Lucas carefully dissect the propaganda-laden myths of corporate capitalism that too often lead us to believe ‘there can be no other way.’

Even many who instinctively suspect there is something deeply wrong with globalization, often have trouble fully unlearning these myths that we have come to internalize as a result of their almost mantra-like repetition in our daily lives. And even if we have unlearned them in our own lives, we often have difficulty articulating this in concrete terms to others.

To help us with this, Woodin and Lucas bring to bear a sophisticated knowledge of the alphabet soup of economic globalization – WTO, GATS, NAFTA, IMF MAI, and TRIPs – and expose the failings of those institutions in traditional economic terms.

How many of us for example, when hearing a simplistic, jingoistic, yet intuitively attractive saying like ‘a rising tide lifts all boats’, can succinctly explain why globalization is not the answer to poverty? Woodin and Lucas can and do, by giving clear, empirical evidence that the problem is not that there is not enough wealth to go around. Rather, the problem is the way wealth is created and distributed in the first place.

What about the ‘principle of comparative advantage’, which suggests that goods should be produced wherever they can be done so most ‘efficiently’? This is frequently used to justify economic globalization and at first glance, it also has an intuitive appeal making it hard to argue with.

But Woodin and Lucas demonstrate how the mobility of capital (so coveted by transnational corporations) seeks absolute profitability as a basis for comparative advantage, and thus drives down labour, environmental and health and safety standards worldwide.

Such a critique is critical, because it exposes the sheer lunacy of economics based upon unlimited growth on a finite planet – especially an economics that concentrates wealth and power in the hands of the few, while squandering scarce resources at the same time.

But in addition to opposing the status quo, for those of us marching in the streets, debating in the classrooms, or struggling in City Halls and state and national legislatures, we also have to provide a positive alternative. That is where the work of Woodin and Lucas is perhaps most compelling.

Defenders of the status quo often ridicule Green visions as unrealistic ‘back-to-nature’ fantasies that have little relationship to reality (‘those Greens are so against trade, they don’t even want to let us eat bananas’).

By contrast, Woodin and Lucas propose a sophisticated vision of economic localisation that involves reforming monetary, investment and trade policy within an ecological context.

Woodin and Lucas suggest a world where the flow of ideas, technologies, information, culture, money and goods has, as its end goal, the rebuilding of truly sustainable national and local economies worldwide. Embodying what Greens everywhere learn from nature - that we are all deeply interdependent – the emphasis of economic localisation is not on ‘competition for the cheapest’, but on ‘cooperation for the best’.

In such a world – recognizing that democracy, ecology and social justice go hand in hand – control of the economy would also move back from the boardrooms of distant corporations to the peoples and communities that are directly affected by it.

As an activist involved in Green politics, I find Woodin and Lucas’s book very inspiring and reassuring. Inspiring, because it demonstrates how problems today, can be turned into solutions tomorrow. Reassuring, because the book itself reflects the increasing maturation of the Green movement over the last three decades. Having been both inside and outside the halls of power, Woodin and Lucas combine the energy of street protest with the policy-making expertise of serving in elected office. The vision and practicality of their recommendations reflect that fact.

One can look around the planet and despair at the immensity of the challenges we face. But just as the current system benefits from a series of self-reinforcing policies and institutions, Woodin and Lucas remind us that a more sustainable and just economy can come into being with similarly synergistic practices.

Acknowledgements

Many people have helped us get to the stage of collecting all these ideas together and setting them out in some kind of order. Most of them are unknown to us. They might have said something at a conference, painted a witty slogan on a placard or penned an article that, in turn, inspired others to think, write or speak until we got to hear of it. We are grateful to you all.

We are, however, particularly grateful to those whom we do know about. Colin Hines has been an extraordinary source of inspiration for many years and owns the intellectual property rights to much of what we have to say. We are also very grateful to Molly Scott Cato for her guidance in Green economics and to James Forder for his patient tutorials in the conventional variety.

Many others have helped us to refine our ideas along the way. They include Steve Dawe, Paul Ingram, Penny Kemp, James Robertson, Lucy Ford, George Monbiot, Spencer FitzGibbon, Justin Wilkes, Darren Johnson and Craig Simmons. Timely literary advice was forthcoming from Emily Miles and Rob Sykes;Xanthe Bevis finished the index and Stig designed the figures. Many thanks also to David Weston, Chris Keene and the excellent folk at WDM Scotland for their ceaseless flow of extremely useful emails.

We are very grateful to Roger van Zwanenberg at Pluto Press for suggesting the book in the first place and to Julie Stoll, our extraordinarily patient editor.

Finally, ‘the book’ simply would not have been written were it not for the forbearance, inspiration, love and stoicism of our partners and children, particularly over the last 18 months. We hope they think it was worth it.

November 2003

List of Abbreviations and Acronyms

Introduction

GREEN POLITICS AND GLOBALISATION

Reactions to the current wave of economic globalisation vary widely, but its supporters and opponents alike are clear that it is the dominant economic and political process of the age as it tears up long-established assumptions and demands new responses.

Greens see far more harm than good in economic globalisation, an assessment that is shared by many others from across the political spectrum for many different reasons. However, to anticipate a frequent refrain of this book, opposition alone will not reverse such a systematic and powerfully driven tide. If resistance is to be effective it must be driven by an inspiring and coherent alternative. We must move on from opposition to proposition and any political philosophy that aspires to lead the resistance must rise to the urgent challenge of articulating just such an alternative. It is precisely this challenge that motivated our book.

Uniquely, Green politics aims to reconstruct the patterns of human activities and relationships so that they come to respect the natural systems on which they depend and thus guarantee the central goal of sustainability. This goal cannot be achieved until equity and social justice are woven into the fabric of society. There is overwhelming evidence to show that equitable societies are healthier and happier than unequal ones. Equitable societies are also more likely to build sufficient support to undertake the large-scale changes that a genuine commitment to sustainability entails. If people are persuaded that the society in which they live genuinely protects and caters for their interests, they will gain the security that enables them to devote their attention to solving common problems rather than to the narrow fight to ‘keep up with the Joneses’. Why, for example, should a young man who earns the minimum wage in a dead-end job be expected to fret about the social and environmental consequences of his choice of mode of transport when there is no decent public transport for him to use and when, at every turn, the message is reinforced that the possession of sufficient wealth to purchase the latest car is the measure of man? Equally, why should we expect the poorest countries to cut greenhouse gas emissions when the richest nations blatantly shirk their disproportionately greater responsibility to do the same?

Green politics seeks not only to protect the natural world, but also to learn from it. It recognises that we are at once part of many interdependent communities of interest, from the local to the global. In a globalised world, even the most mundane activities, such as choosing which shop to use, have implications that reach far beyond the local economy to affect the lives of communities around the world. This situation can only be managed equitably if it is underpinned by genuinely democratic structures at every level. Since these are difficult to achieve at a global level where, in any case, the feedback loops between actions and their consequences are confused and indistinct, Green politics is guided by the principle of subsidiarity. This states that decisions should be made as locally as is appropriate. As we argue later on, some issues like the equitable access to global resources, for example, the atmosphere’s ability to absorb emissions of carbon dioxide, can only be settled at a global level. In other spheres, such as trade, the case for doing things predominantly at the global level, where democratic regulation struggles to keep pace with the dominant vested interests, is much less compelling.

This whistle-stop tour of the principles of Green politics attempts to prepare the ground for much of what follows.¹ It also helps to highlight some of the main similarities and differences between our critique of globalisation and those promoted by other sections of the anti-globalisation movement. Together with Greens, many groups on the traditional and hard left blame economic globalisation for growing inequality and global unemployment and for the remorseless drift of power away from elected governments and workers to private corporations and investors. The analysis of the problem is shared, but to Green ears the response of the unreconstructed left is silent on sustainability. It is not sufficient to pursue redistributive policies, enhance workers’ rights, boost the public sector and argue for tougher regulation of the private sector, without also directing the more accountable and equitable economy this would create along a path that is as sustainable as possible.

Many environmentalists can also be found marching behind antiglobalisation banners. Greens obviously share their concern about the deteriorating state of the environment. What distinguishes the response of Green politics from that of environmentalism however is that Greens go beyond lobbying the established politicians to clean up their mess. Green politics provides an alternative political philosophy, an economic programme, and an alternative set of politicians to replace the conventional ones and stop the mess being created in the first place.

Green politics is necessarily internationalist. At its heart lies a call to action to tackle urgent global problems. Green politics is therefore helping to identify and mobilise a global community of shared interest. This community is already well aware that the details of the solutions it proposes will vary to meet local conditions, but that the intentions of these solutions are shared, as is the analysis that inspires them. We hope then that, even if this book occasionally becomes preoccupied with details that are specific to Britain or the EU, its intentions and analysis will ring true wherever it is read.

THE BOOK

The book is presented in four sections. Section One examines the theory and consequences of economic globalisation. Chapter 1 looks at the context within which economic globalisation is being driven forward, who is driving it and the flaws in the theory on which their rhetoric is based. Chapters 2, 3 and 4 examine respectively how the process of economic globalisation is radically undermining democratic governance, exacerbating environmental destruction, and widening the gap between rich and poor.

Section Two presents an alternative to economic globalisation: namely economic localisation. It consists of just one very long chapter (Chapter 5) that contains no obvious point at which it might be divided equally into two shorter ones. All is not lost however, as the chapter comes in several short sections which can be read all at once or one at a time, as the reader wishes. The sections explain the main building blocks of economic localisation and then answer some of the principal objections to it.

Section Three explores the strategies that are needed to implement economic localisation. It attempts to deal with those awkward ‘ah yes, but how are we going to get there?’ questions. Chapter 6 argues that as a precondition for turning the tide of globalisation, people must see the connections between its consequences and the process itself; then they will be prepared to accept an alternative. Chapter 7 asks whether the global institutions that are currently driving economic globalisation could be reformed from within to deliver that alternative. The answer, supported by a brief study of the institutions’ history, is ‘almost certainly not’; what is required amounts to a revolution from without. Chapter 8 discusses the options for instigating the revolution.

Section Four demonstrates how economic localisation can be applied to provide solutions to some of the most critical issues of our time. The chapters in this section deliberately concentrate on topics that are central to the debate about economic globalisation, yet are the subject of controversy within the wider global justice movement.² Thus, Chapter 9 examines agriculture, Chapter 10 argues for the localisation of money and Chapter 11 concludes that prospects for multilateral cooperation would be improved within a context of localisation.

THE AUTHORS

Michael Woodin is one of the two Principal Speakers of the Green Party of England and Wales.³ He is also the party’s Spokesperson on Trade and Industry and wrote its manifesto for the UK general election in 2001. Michael lectures in psychology at Balliol College, Oxford and when not teaching, speaking, or thinking global thoughts, he takes local action as an elected member of Oxford City Council, a position he has held since 1994.

Caroline Lucas is a Green Party Member of the European Parliament (MEP) for South East England. She serves on the Parliament’s Trade and Environment committees and was a member of its official delegations to the Seattle, Doha and Cancun Ministerial meetings of the World Trade Organization (WTO).⁴ Caroline is also one of the two Principal Speakers of the Green Party of England and Wales. Before her election to the European Parliament in 1999, she was a senior policy adviser at a major development non-governmental organisation (NGO) working on trade and environment issues and served for four years as a member of Oxfordshire County Council.

Section One

Assessing the Damage

Who is driving economic globalisation – and why? What is the theory behind it and what impacts does it have on democratic governance, the environment and the poor?

1

Globalisation:

The Economics of Insecurity

The terrorists deliberately chose the World Trade towers as their target. While their blow toppled the towers, it cannot and will not shake the foundation of world trade and freedom.

Robert Zoellick, US trade representative¹

In the aftermath of the attacks on the Twin Towers on 11 September 2001, political commentators were quick to pronounce the death of the anti-globalisation movement. On the very morning of the attacks, the Financial Times asserted, in what was to have been the first instalment of an upbeat four-part series entitled ‘The Children of Globalisation Strike Back’, ‘one certainty was that anti-globalisation protest was not going away’. The rest of the series was pulled and only published much later in revised form, which included the observation that activists ‘who used to relish the rhetoric of revolution and confrontation, are now holding their tongues’.²

At the same time, advocates of economic globalisation also seized on the events of 11 September as an opportunity to revitalise their flagging effort to liberalise international trade and investment. The smoke had hardly cleared from the ruins of the World Trade Center before the US trade representative Robert Zoellick and EU trade commissioner Pascal Lamy were pressing for even greater trade liberalisation through the World Trade Organization (WTO), asserting that free trade was an essential means of countering terrorism. In a Washington Post column, Zoellick called for a campaign to ‘counter terror with trade’, arguing that trade ‘promotes the values at the heart of this protracted struggle’.³ The following month, to enthusiastic applause from Californian business leaders, President Bush declared ‘We will defeat [the terrorists] by expanding and encouraging world trade.’⁴ Developing country delegations at the WTO Ministerial at Doha subsequently complained of being bullied into accepting a new round of negotiations on the grounds that they would be opposing the war on terror if they did not.

Proponents of economic globalisation were also swift to insinuate a link between the terrorists and the global justice movement. On 11 September itself, US Congressman Don Young of Alaska even suggested that there was a ‘strong possibility’ that the attacks were the work of anti-globalisation protestors. Two weeks later, the Italian Prime Minister, Silvio Berlusconi, asserted that whilst Islam was attacking the West from outside, anti-globalisation protesters were attacking it from within.⁵ A leading pro-globalisation columnist in the US wrote: ‘While they are not deliberately setting out to slaughter thousands of innocent people, the protestors who want to prevent the holding of meetings like those of the IMF or the WTO are seeking to advance their political agenda through intimidation, which is a classic goal of terrorism’.⁶

Attempts to paint protesters for global justice and Islamic fundamentalist terrorists into the same corner could not be more misconceived or more cynical, for it is the process of economic globalisation itself which is responsible for increasing insecurity. Indeed, there have since been hints from UK and US government sources that this is recognised at the highest levels. The UK’s Secretary of State for Trade and Industry, Patricia Hewitt, has argued, ‘If we in the West don’t create a system of world trade that is fair as well as free … we will pay a price in increased terrorism and increased insecurity.’⁷ Significantly, the CIA has reached a similar conclusion – at least in theory:

The rising tide of the global economy will create many economic winners, but it will not lift all boats. [It will] spawn conflicts at home and abroad, ensuring an even wider gap between … winners and losers than exists today … [Globalisation’s] evolution will be rocky, marked by chronic financial volatility and a widening economic divide … Regions, countries, and groups feeling left behind will face deepening economic stagnation, political instability and cultural alienation. They will foster political, ethnic, ideological, and religious extremism, along with the violence that often accompanies it.⁸

As we detail in subsequent chapters, it is precisely the damaging patterns of economic globalisation, which the rich world is foisting unevenly on the poor, that drives poverty, inequality and environmental degradation. This in turn fuels insecurity and conflict.

In this book we argue for an alternative framework to economic globalisation that will combat inequality and provide space for communities around the world to implement their right to choose appropriate social and economic strategies to meet their own needs. We believe that this, rather than any display of military superiority or war on terror, will create true security. And indeed, it is this vision of security that has inspired millions of people around the world to join the global justice movement, and millions more to demonstrate against the US-led invasion of Iraq, in a globalisation of grassroots protest against the unaccountable projection of Western power across the world. This unprecedented growth of activism and awareness powerfully demonstrates just how greatly exaggerated the rumours of the death of the movement have been.

RESTRAINING THE POWERFUL

If anything is to restrain and democratise the West’s power it will be the enormous array of conventions, treaties and agreements by which international relations are regulated. These have grown up over time and now form a complex and fragile edifice that is the nearest thing there is to a global constitution. Rarely are the rules of this constitution enforced however, and when enforcement does occur it is rarely consistent.

UN Security Council resolutions for instance occasionally trigger decisive and effective action, particularly when they coincide with dominant strategic interests, but for the most part they lie scattered, no more than dusty ornaments on the global mantelpiece. A few multilateral environmental agreements have met with success, notably the Montreal protocol on ozone-depleting substances, but most have failed to live up to the expectations they generated. For example, the United Nations Environment Programme (UNEP) estimates that concentrations of carbon dioxide in the atmosphere could double by 2050 despite the UN’s Kyoto Convention on Climate Change.⁹ Klaus Toepfer, UNEP’s executive director, perhaps best described the situation as it relates to environment when he said, ‘We now have hundreds of declarations, agreements, guidelines and legally binding treaties designed to address environmental problems and the threats they pose to wildlife and human health and well being. Let us now find the political courage and innovative financing needed to implement these deals and steer a healthier, more prosperous course for planet Earth.’¹⁰ He could equally well have been describing the state of weapons proliferation, development, human rights, or many other policy areas.

If there is one realm of international negotiations that does not fit Toepfer’s description, it is trade and international finance. Here, political ‘courage’, as some would see it, has been found in abundance. They have spawned the General Agreement on Tariffs and Trade (GATT), the WTO, the International Monetary Fund (IMF) and the World Bank. Almost uniquely in international affairs, the regulations of these bodies not only override domestic legislation, but they are also routinely enforced through trade and credit sanctions. Their combined effect is driving the process of economic globalisation.

ECONOMIC GLOBALISATION – WHAT IS IT?

We need a clear definition of economic globalisation from the outset, since many of its advocates and beneficiaries recruit the undoubted benefits that can accrue from constructive international flows of information and technology to excuse the destructive effects of economic globalisation. The former UK international development secretary, Clare Short, typifies this approach. One publication from her