Trade and Globalization

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The world today is one big market and multinational companies can move money and resources to where it suits them and evade taxes in their home country.

Or to put it another way: Speculation is global and has no borders, whereas democracy is a form of government which is linked to national borders. If globalisation weakens the form of government, it also weakens democracy, partly because the nation state, and thereby democracy, does not have the same sovereignty over its own economy and its own society as before.

In addition, the degree of democratisation is generally in inverse proportion to the size of the entity. The smaller a political entity is, the more democratic it has the possibility of being. The larger the political entity, the more difficult it is to remain democratic. In a globalised economy, democracy is thus faced with some immense challenges. Even if one imagines some sort of global government, that would be a gigantic challenge.

Democracy and the market

Democracy and the market are interdependent. Also globally. This is an important point to bear in mind, not least for the business world. Many companies try to make the most of global opportunities by turning a blind eye to wages, working conditions and a number of democratic principles when they work outside the borders of their own country. This provides an excellent business economy here and now, but in the long term contributes towards making the global economy uncertain. Investments that underpin democracy create stable societies; investments that do not support democracy create unstable societies. Unstable societies are risky to invest in and thereby become bad places to do business.

If the business community does not live up to democratic principles, there is a risk that globalisation actually becomes neo-colonialism, where companies come to play a similar role to the one the former colonial powers did.

A couple of examples

In relation to China in particular, some European and American companies have been quick to sell out on democratic principles. For example, Google has previously ensured that it was not possible to search for words like "democracy" and "freedom of speech" in China. If Google had not agreed to the demands of the Chinese regime, another company would have got the lucrative licence to provide the search engine in China. However, in early 2010, it led to Google wanting to pull out of China.

The Chinese are in turn starting to invest in Africa without petty distinctions towards human rights or democracy - in exactly the same way as the West did when European and American prosperity was being built. Nowadays, European and American investments in Africa go mostly hand in hand with plans for development and democratisation. China's interests are purely economic and all about access to raw materials and the possibility of marketing of Chinese products. The interesting thing is that many Africans are happier for Chinese investment than European and American because they perceive the West's talk about democratisation and human rights as pure hypocrisy. Chinese investments, on the other hand, are nothing other than what they purport to be.

European electronics and phone companies that have sold surveillance technology to the Iranian theocracy are a truly frightening example of companies who are ignoring democracy and human rights.

The nation state and globalisation

There are also areas where democratic nations care more about the economic and political interests of their own nation state than about democracy; for example, in connection with trade and security agreements with China.

The opportunities and dangers of globalisation

However, it's not all just misery. Globalisation is also a unique chance for democracy and humanism because information can spread across the entire globe, but so can short-term political and economic interests. If globalisation is not followed up with national and international legislation requiring companies and financial players to abide by certain rules, the market will take control of globalisation, unless the world's business leaders themselves realise the importance of having a stable world to operate in and think long term. History does not indicate, however, that business leaders generally reach that conclusion by themselves.

It is also necessary that the political and economic agreements which democratic nations enter into with other countries live up to democratic values, otherwise the democracies will themselves be contributing towards destroying democracy.


Next chapter: Trafficking