The Not-So-Good Ship Globalisation

It seems that there is a hole—somewhere in the hull of the not-so-good ship Globalisation—and we are all being threatened by a deluge, in the form of the toxic assets currently inundating the global economy. It seems to me that both the great and small economies of the world need to correct themselves, at this moment in time, by returning to economic practices that actually work. Surely, at this point in time, and eighteen months into the global financial crisis, most people have become aware of the fact that the so-called banking ''bail-outs'' do not actually work. Why else do the relevant authorities keep returning to this flawed policy?

No less than 14 financial institutions have failed, in the United States, during 2009 already, and it is probable that we shall hear of many more failures during the months to come. For some strange reason, the policy makers responsible for regulating the great economies of the world refuse to take the measures necessary for remedying the financial mess that we currently find ourselves in. Instead of allowing the so-called ''bad financial institutions'' to fail outright, the policy makers have unanimously decided to prolong this agony by lending financial assistance to severely compromised financial institutions.

Such policies, almost certainly, do not solve the basic problems that we currently face. Without doubt, the so-called toxic assets held by these financial institutions can never be adequately rehabilitated. It is simply illogical to think otherwise. Therefore, the only viable solution, to the enormous problems at hand, is to write off these crippling losses and to rebuild the global financial system on a sounder platform. For too many years, both individuals and corporations have been living beyond their means. The lifestyle, of the average Western individual has been subsidised by access to cheap credit, and the illusion of cheap goods and services.

Most of us are now being confronted by the fact that the world of finance shall never return to the illusory boom of the past 15 years. We are currently facing the kind of economic upheaval that shaped the world during the early part of the 20th century. Ironically, there is a degree of economic protectionism, by stealth, creeping into the Western corridors of power. This—in my opinion—shall lead to the reversal of the process of Globalisation if this economic protectionism is not curbed. Local subsidies shall, in my opinion, lead to the devastation of the Globalised economy as we have come to know it. We have already seen the picket lines being drawn, in Northern Europe, for the protection of the economic rights of native workers and in response to apparently cheaper imported foreign workers.

This behaviour, if repeated by all the nations of the world, clearly heralds the demise of the concept of free trade. Economic barriers are currently going up all over the world, and whether we like it or not. It is clear to me that any form of government ''bail-out'', for any branch of any particular domestic industry, is a clear form of economic protectionism. Such a ''bail-out'' will, quite inevitably, lead to retaliatory actions by the governments of rival transnational industries. This is a rather dangerous economic arms race, and it is best avoided. The potential consequences of such actions are very bad indeed. History teaches to avoid 'beggar-thy-neighbour' protectionist policies if we wish to avoid the spectre of armed conflict between neighbouring states.

In conclusion, it seems to me that the best option, for all concerned, is to rediscover the concept of economic emancipation. For the smaller economies, in particular, it is important to find a comfortable niche. By this I mean that it is foolish for a small economy to become overly dependent upon the economic fortunes of the so-called greater economies. In many ways, economic dependence is the death of a nation. The idea of economic emancipation is worth striving for, and at this moment in time, when the frailties of economic neo-liberalism are there for all to see, the concept of Globalisation—if it is to survive—must embrace the idea of economic emancipation for all in this world.