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Market vs. Justice Globalism Essay

Since the Industrial Revolution of the late 1800’s and early 1900’s, our planet has gone through a huge variety of changes. We can now drive cars, we have the Internet, we have TV, etc. One of the biggest changes though has been on the global level- not with ourselves. Due to increased availability to travel, and for ideas and situations to spread more rapidly, this has lead to a phenomenon called globalization. Globalization, simply put, refers to the interconnectedness of all of the nations and peoples in our world. We are all connected, we trade back and forth, share ideas, and even in some cases- share culture. This is both a good and a bad thing of course.

Since globalization began, there has been a huge argument about two different types of globalism and which type is better for the people engaged in such traditions. The two types are : market globalism and justice globalism. These two schools of thought are especially important today with the ever-increasing gap between rich and poor countries, and increasingly volatile international relations.

Manfred B. Steger, in his book entitled, “Globalization: A Very Short Introduction” defines market globalism as “seek[ing] to endow ‘globalization with free-market norms and neoliberal meanings.” He then states, with a short intro that I think is very telling of the political parties in our country, “contesting market globalism from the political Left, justice globalism contructs and alternative vision of globalization based on egalitarian ideals of global solidarity and distributive justice.” (Steger 99)

Market globalism is without question the dominant ideology of our time. Since around the Reagan administration, market globalism has been the main view. A big reason it is still prevalent today is because the main proponents of market globalism are very wealthy individuals and corporations. These individuals and corporations are usually in line with the neo-liberal ideology. This way of thought revolves around the idea of a self-regulating market, open trade, limited governmental regulation or oversight, etc.

“The idea that the market should be allowed to make major social and political decisions; the idea that the State should voluntarily reduce its role in the economy, or that corporations should be given total freedom, that trade unions should be curbed and citizens given much less rather than more social protection – such ideas were utterly foreign to the spirit of the time… the whole point of neo-liberalism is that the market mechanism should be allowed to direct the fate of human beings.“(George)

The above quote is by Susan George from a speech she made in 1999. She outlines the fact that around the end of WWII the ideas of neo-liberalism were unheard of. She says one would be “laughed at” or even (Im sure jokingly) the “insane asylum.”

However, times have changed drastically. George remarks jokingly that at one time the IMF and the World Bank were actually good instituations. However, later she makes a dark prediction that neo-liberalism can lead to the “destruction of society.” One thing that is particulary frightening, is how many people have bought into the ideas of neo-liberalism. There are some good arguments made by those on the side of market globalism, and another thing George points out is that because neo-liberals have spent so much money trying to advance this idea, they have literally bought people’s thought processes. We as a society has changed how we think- all in less than 50 years!

The founding fathers of neo-liberal thought took the political ideals of human dignity & individual freedoms as fundamental. The assumptions that individual freedoms are guaranteed by the freedom of the market and freedom of trade is a cardinal figure of neo-liberal thinking. (Harvey 5) “According to theory, the neo-liberal state should favor strong individual private property rights, the rule of law, and the institution of freely functioning markets and free trade.” (Harvey 64)

Harvey argues that the freedom of businesses and corporations (legally regarded as individuals—– we’ll see how this has helped broaden the economic gap between rich and poor exponentially) to operate within the institutional framework described aboce is a fundamental good. Neo-liberals are a big fan of something called the “trickle down theory” which Chicago thinkers like Milton Freedman pretty much see as the be-all end-all way to go. This theory is that if the corporations and businesses at the top are making a lot of money, it will make it’s way down to the lower classes through jobs, pay increases, health benefits, etc. However, as we have seen time and time again- this is not the case.

There is an excellent documentary regarding this called the One Percent I believe, where Freedman states that because the income levels of the poor have grown in the last 20 or so years, that is the indication that neo-liberal thought and market globalism are working. We know this is partially true- the income levels of the rich in this country have increased through the roof.

Market globalists regard competiton as a virtue, claiming privatization + regulation combined with competition= increased efficiency and productivity, improving quality, and reducing costs. (Harvey 66) International competition is seen as healthy to market globalists (of course) because it also improves efficiency and productivity, lowers prices, and therefore controls inflationary tendencies (Harvey 66)

The Chicago School of Thought is exactly along the lines Harvey has described. In the movie, “Commanding Heights” one commentator says “the forces of the market are just that, forces.” He describes that one must be on top of the market, and must use their skills and know-how in the market to help “the public.” History has not always shown this to be the case, in fact it has rarely shown this to be the case. Any regulation however, according to Chicago school is actually detrimental to competition and growth. It raises prices, as businesses have to adhere to a lot more rules and regulations which costs more money to operate the company. The more a company is regulated the higher their prices are, which eliminates competition. And remember, according to market globalists competition is the driving force of the markets and of all trade.

The only real concerns Harvey has is that market globalism could negatively effect smaller businesses, which is incredibly obvious. Small business essentially cannot compete in a complete market-globalist, neo-liberal driven society. In terms of costs, manpower, money, etc. big business has it all. The other concern of Harvey is in cases of pollution- whether or not corporations will take responsibility for their failures.

So how exactly did market globalism and neo-liberalism exactly come about? After World War II, FDR implemented a completely new set of ideas for how to maintain a strong economy. FDR began adopting a Keynesian ideology in a response to the Depression. Keynes stated that government should stop spending during times of surplus, but should step up spending and “run deficits” to help the economy. There were great fears of a second Depression happening, and a fear that a lack of regulation would be the cause of it. The job of the agencies was to “regulate banks, stock market, capitalism itself.” This is very interesting. (Commanding Heights 27:20-46:20)

Looking in the past, we Americans saw his policies work. We ended up having an incredibly strong economy and a huge resurgence of the middle class in the late 1950’s-early 1960’s. Things seemed to be going very well for America, until the 1970’s.

Richard Nixon was re-elected in 1972 because of one huge campaign promise: the fight of high prices. He adopted this as a tool to become re-elected, and America fell in love with him. He was re-elected in a landslide. However, his war on high prices completely failed. By forcing prices to be too low, many local businesses couldn’t turn a profit. This began a huge process of shortages- farmers were drowning their chickens, they weren’t sending their cows to market. This ended up driving prices up even higher, which sent the US economy into a downfall. The administration of Jimmy Carter also did not help the economy.

So, the stage was set for a drastic change. In England, the unions began striking- from the coal miners, to the grave diggers, to the garbage men.
England was in a state of disrepair. In the video “Commanding Heights” there are many images of the riots in England and of the squalor the English people were living in. The piles of trash are enormous and must’ve smelled awful, dead rats are strewn in the streets. It looked like an anarchist state. There was a need for a change. Margaret Thatcher was that change.

Margaret Thatcher was elected in 1979 on the issue of privatization. (George) At first, there was a huge clash in the country about Thatcher’s policies. She wanted to combat the unions, and the unions were a large part of the working class in England. According to Susan George, the number of jobs in the public sector fell from 7 million to 5 million during Thatcher’s tenure. Thatcher’s policies at first did not appear to be working and she was very unpopular for a bit. However, after England’s war in the Falklands she did gain a lot more respect in Britain, and from the national community. Had she not taken a gamble on going to war with Argentina, it is very probable that the policies Margaret Thatcher embodied would never have come to fruition. (Commanding Heights 58:09- End)

In turn, Thatcher’s policies began taking hold in England and appeared to be working. She decided that because the industries had been digging into the pocket of the English Treasury, they weren’t efficient at all. If there was no accountability, and the companies could keep getting a bail-out, they wouldn’t maximize efficiency and productivity. This is actually a very good idea. Industry needs to have some sort of accountability. Unfortunately, in this country we go through every industry digging in the government’s pocket. However, as evidenced by the 2008 recession, bail outs are needed for certain industries.

The unions were essentially bleeding tax payers dry, as they were taking the money from the Treasury- and they still were not doing good by their customers. Thatcher effectively crushed all of the riots and the strikes of the Union- many simply did not want to wait out the time they did- the coal miners held out for over a year, and according to Thatcher had the most militant leader, yet they folded as well. In the coal mine industry, 70% of the nation’s coal mines weren’t running a profit. After taking control of the industries again, Thatcher completely changed the game and sold almost every single union/industry to private companies. This increased productivity and efficiency in the industries.

It seemed as if Thatcher’s policies made England as a whole, better off. However, George points to a statistic in her speech that is incredibly telling and also scarily reminiscent of the state our country is in. According to George if you were “roughly, in the top 20% of the income scale, you are like to gain from neo-liberalism…… the bottom 80% all lose. (Do these stats remind you of our own country, and say the 1% maybe?) In the 1980’s in England, people with half of the average salary saw tx rates grow by 7%. However, those with a salary saw a reduction of 21%. (George)

Reagan made the economy do a U-turn as well. His main ideas were to reduce government spending, reduce government regulation, reduce the income and federal gains tax, and reducing inflation by getting a better handle on the money supply. These policies were implemented by the Bush administration throughout his tenure. It is interesting how the policies of the two schools of thought Keynesian and Chicago interchange relevance every 20 or 30 years. FDR was a huge proponent for justice globalism. He implemented his policies, and by the late 70’s, they were no longer working for our country. Reagan also implemented his justice globalist strategies, and in 2008, they crumbled.

Now we are at somewhat of a standstill, unsure of which way our next economic thought process will become. It is obvious that there needs to be such some sort of fusion of both of these thoughts. We can’t leave the weak to drown, yet the weak cannot learn to depend on the strong, as it will make them less productive. The problem with market globalism is that it leaves the lower in society to die off, essentially making it impossible for any person not in an advantaged position to be able to raise themselves from their present situation.

The problem with justice globalism is that it tends to stagnate efficiency and productivity, yet it is the moral and ethical way to deal with individuals. We humans need to stick together, not try and spread ourselves apart through competition and one-upping. Hopefully we will be able to do so soon, because we need too.

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