Globalisation and the battle for hope

Densil A. Williams, Contributor

RECENTLY, TWO 'Generation X' politicians from the ruling Jamaica Labour Party (Delano Seiveright and Marlon Morgan) entered the debate on renewing the hope in the Jamaican economy. Opposition Leader Portia Simpson Miller raised this issue in her speech to the public session of the People's National Party's 72nd annual conference.

A close reading of the contributions from these Generation X politicians, however, shows that their arguments are at best, superficial. They have not addressed in any serious way how to restore the hope in a capitalist system which is increasingly inhospitable to inefficiency and smallness. Reading the contributions from these gentlemen, it would give the impression that our problems are merely managerial and once the right driver is in the seat, then things will change for the better. This is far from the reality.

If we are to take these Generation X politicians seriously, they have to show a better nuanced understanding of the complexity of managing an economy in an increasingly complex, global capitalist system. Merely substituting people based on age, and thinking this will bring novelty and better outcomes, is just plainly ridiculous. The only way to restore the hope is to first better understand how global production systems work and then fashion a model around it to see how best a small, open economy like Jamaica can carve out a position for itself. The Generation X politicians have not shown this level of sophistication in their reasoning.

Globalisation erasing the hope

Morgan, one of the two Generation X politicians who came out swinging for the Government last week, gave the impression in his piece that it is the global financial crisis of 2008 that should be blamed for the low level of hope among the Jamaican people at this time. He stated that "no well-meaning persons can fairly compare their standard of living today following the unprecedented global economic fallout with their standard of living three years ago (before the crisis impacted)". However, what Morgan failed to point out is that the global financial fallout is a mere manifestation of the more complex system called globalisation, which, incidentally, did not start in 2007 but hundreds of years before. The most severe wave of the project, the neoliberal wave, did start about 1980 with the election of Regan in America, and Thatcher in Britain a year earlier. Many commentators give the impression that it is since 2007, when this current administration came to power, that globalisation began.

Every problem these days is blamed on the global economy. Both political parties, since the 1980s, have had to deal with the forces of the neoliberal project and none of them had an easy time managing under the rules-based system which guides this project.

Globalisation has resulted in serious dislocation to people's hope in economies where little or no innovation and creativity take place in the allocation of their stock of resources. Reginald K. Nugent and Trevor A. Campbell, in a piece in this newspaper on October 17, 2010, noted: "The fact of the matter is that under capitalism, a capitalist enterprise can survive only to the extent that it expands its market at the expense of other capitalist enterprises. Capitalist competition is economic warfare and in matters of war (and some people would even say love), there is no such thing as fair play".

The point here is very clear: if our industries do not innovate and improve their productivity, then no matter what the political directorate says, the hope will not be restored. For, if firms do not improve their competitiveness, they will die, and this will result in a large number of persons being thrown on to the unemployment heap. When one is unemployed and sees no way out of that trap, hope disappears swiftly. If we want to restore hope in the Jamaican economy, we will have to: a) create internationally competitive enterprises that can offer people decent jobs b) create an environment in which people can innovate and start their own enterprises in order to gain the resources to make themselves, their families and their communities happy.

To do this, however, one has to understand the global context of production in which we now operate. Jamaica has to find a way to carve out it benefits from this fiercely competitive global system. If we continue to struggle in the periphery, we will not restore the hope.

The broad strategy for Jamaica

If hope is to be restored, Jamaica will have to make clear which development strategy it will follow in this complex global web. Global production, as Nugent and Campbell correctly identified, is based on two mutually exclusive principles: low cost or differentiation as manifested through advanced technology. To derive low cost, industries have to generate economies of scale in production and also have cheap labour. Jamaica is too small for its firms to generate sufficient scale in order to lower cost. Further, labour in Jamaica is not cheap.

Therefore, low cost does not seem to be an option on which to anchor a development strategy for restoring the hope. So, since low cost is not available, we will have to differentiate through advanced technology.

For this to happen, however, a complete structural shift in the economy is needed. We will have to rethink the education system to start focusing on science, technology, and mathematics in a more serious way. We will have to engender an environment that allows creativity and innovation to take place. Our research institutions will have to show strong capabilities in basic research. The marketing capabilities of the nation will have to be improved, and we will have to have the right amenities to attract highly skilled labour, including creative peoples. Are we, as a society, ready for this transformation?

Importantly, when the society organises its industries around advanced technology, this will have serious political implications. With advanced technology, there comes a point when workers will have to be displaced, as technology will take over their task. This will end up putting a large number of workers into the unemployment ranks. Political leaders want to boast about employment figures, so this would put them in a major crisis. What is good for the business class may not always be good for the political class. This is what the complex system of globalisation is making clear each day.

So, how do you restore the hope in this seemingly tangled web of global capitalism where smallness and inefficiency are punished?

It is the role of leadership to first understand the pillars on which global production and distribution of goods and services are based, then to try to reconcile the different motivations for the political and business classes in order to lead to a better integration of the society into the global economy. An important part of this strategy is that our industries have to shift strategy and move to a more focused differentiated competitive strategy, rather than trying to compete with the likes of the Chinese with their unlimited supply of labour, which can drive down wage rates and allow them to compete.

Generation X politicians need to start trumpeting a focused differentiation strategy if they want to bring back the hope, and not continue with business-as-usual strategies and blame unfair competition and financial crisis as the source of our problems and the reasons for the loss of hope.

Densil A. Williams is a senior lecturer and head of Department of Management Studies at UWI, Mona. He may be contacted at densilw@yahoo.com