Globalisation isn’t what we think it is

By Jon Wilson, historian at King’s College London, and a Labour activist in Greenwich and Woolwich

Globalisation can be used as an excuse by political leaders to claim no responsibility for bad jobs and higher prices. The idea is that we can do more than eke a living from call centre jobs and tax credits if we accept financial services as the driving force behind the British economy.

But as Tony Blair said in 2005, that means we must be “prepared constantly to change to remain competitive”.

This belief tells politicians they can’t protect families and communities against the ravages of what Chuka Umunna calls ‘bad capitalism‘. Every attempt to return to Labour’s tradition of organising people against the power of big capital is blocked by one killer question: ‘in a globalised world, where will the jobs come from’.

But globalisation is not a force of nature. It has less impact than people think. It is a process created by real institutions, local and national, that people can control if they are organised well enough; protecting their work lives from becoming ’flexible’ and insecure.

Firstly, Britain is much less globalised than people think. Britons do much of their shopping in British-owned supermarkets, buying food made in the UK or EU, and 52 per cent of our income is spent on services like transport or housing where there can be no global market (pdf).

Secondly, even where we are wired to worldwide market forces, the benefits of global inter-connectedness don’t come from infinite flexibility and permanent change. They happen when strong institutions blunt the excesses of the market. China and India have done well from globalisation because they’ve carefully managed their exposure to global capital flows and commodity markets.

As the Harvard economist Dani Rodrik points out, “countries that have benefited the most from globalisation are those that did not play by the rules” (pdf).

Thirdly, the places that have done best from globalisation have invested long-term in specific skills. They’ve developed employees who have a sense of commitment to their work that goes beyond the bottom line. The story of Germany’s vocational regulation, ‘inflexible’ labour market and works councils is well known.

When Nye Bevan said ‘the language of priorities is the religion of socialism’ his point was that the destiny of a nation’s economic life is, in part, the result of democratic political decision. Our tragedy is to imagine that’s no longer the case. The real history of globalisation says that economies which sustain the good life, happen when market forces come together with political organisation.

Governments can’t calculate what consumers want in the future. But politicians can help create institutions that nurture the skills and entrepreneurial instincts that can sustain long-term economic renewal. That process takes time, generations in many cases. It isn’t just done by states, but has to grow deep roots in the culture, history and tradition of a society.

It needs politicians to lead a process of long-term national renewal, and to recognise that democratic institutions they don’t directly control – businesses, trade unions, vocational schools, local authorities - will do most of the heavy-lifting.

These should, of course, be traditional Labour values. Putting the importance of worthwhile work back at the heart of what Labour stands for is one thing the idea of blue Labour is trying to do. In this day and age a profoundly mistaken idea of what globalisation is, is a luxury we can’t afford. It’s time to learn to love Labour again.