Globalization and Neoliberalism

 What is the understanding of the Church concerning the almost daily changes in the world? How should the Church respond to these changes? Just as we are told new wine needs new containers, there needs to be a new understanding of what is going on in our newly globalized world, said one of our Korean bishops in his weekly column on economics.

Globalization is to be seen not only negatively, he said. In matters of finance and culture, countries, when not limited by their borders, are benefited in many good and profitable ways. There can be, among other things, sharing of medical knowledge and economic expertise, along with the flow of monies to the underdeveloped countries from the developed countries. Though the proponents of globalization stress the  positive contributions to the global economy,  opponents stress the  negative side. Money that comes into the marketplace from the wealthier countries can tilt the economic scales against the underdeveloped countries and fuel unlimited competition, which favors the developed countries. This face of globalization, which is often called neoliberalism by the opponents, is the other side of the same coin.

In 1970, the recession circled the world; the movement to counter the recession was neoliberalism with its free markets, relaxing of regulations, and emphasizing property rights and individual initiative. The proponents of this position said  government intervention by any country into the marketplace would do harm to its efficient operation, believing that the unregulated forces of the marketplace   guarantee  economic success for all participants. In their view, the least control is best for a smoothly running marketplace otherwise  governments would be forced to spend more on welfare, encouraging the workforce to lose the  desire to work, fostering social unrest. 

It is this potential for disrupting the labor force in the underdeveloped countries, leading to a depressed economy and unemployment, and further alienating its under payed workers that is overlooked by globalization proponents. say their opponents. The developed countries not only are putting pressure to open all markets to the usual goods but are aggressively forcing the underdeveloped countries to accept advanced technologies and questionable items like genetically modified foods, which can negatively impact traditional methods of farming and manufacturing.

Korea, though not an underdeveloped country, has direct  experience of what it means to deal with the power brokers in the grain market. Grain prices are determined not by the free play of the market, but by the big multinational companies and by investor speculation. Adding to the difficulty experienced by many countries, the world bank and the IMF (International Monetary Fund) which provides funding do not always have the poor in mind when it comes to  loans. A fact Korea has experience first hand. The bishop emphasized that both sides of  globalization, as seen by proponents and opponents, must be kept in mind if we are to get a valid picture of the current world economy. Perhaps less pressing, but equally important in the long run, is the harm done to the environment, often cited as a side effect of globalization, which occurs when underdeveloped countries adopt industrial and farming methods of the developed countries in efforts to compete with them in the global marketplace.

The bishop concludes with an example which underdeveloped countries, and those who have more than  economic interests at stake, have difficulty understanding. Why did the United States, he asks, refuse to sign the Kyoto Protocol to reduce greenhouse gases?  Many see this as the United States staying on the sidelines because of the harmful effects to their economy that would result from implementing the Protocol provisions. Though no one believes that the poorer countries can solve the climate problem, since their contribution to the problem is almost zero, the US position seems to be content to leave it up to other countries to solve the problem.

The economic realities today are too complicated even  to begin to give a brief, completely understandable picture of what is involved. But what is clear and indisputable are the many misunderstandings and the bitterness the underdeveloped  countries have toward the developed countries, who are, they claim, the sole beneficiaries of globalization. Whether the accusation is deserved or not, it  should be considered worthy of discussion by the developed countries. Korea, being one of these developed countries, with many multinational companies overseas, would do well to point the way to discussing measures that would lessen the misunderstandings and bitterness that now characterize so much of international trade.