Eminent economist Professor Jagdish Bhagwati has defended globalisation staunchly in his latest book 'In defence of globalisation' and so has the editor of Financial Times (London) Martin Wolf in his book " Why Globalisation works". Both point out that there are many gains from trade and it is much better to let different countries specialize in what they are good at. Trade between nations will enable countries to enjoy goods that are produced at a lower cost than if they tried to produce everything themselves.
There is no doubt that globalisation enriches the quality of life for those with education and skills and it allows a person with a high disposable income to savour the world's best foods, go to the most beautiful places and consume the best products from across the world.
This was happening even in the Nineteenth century in India and the rich Bengali babus were enjoying the best Scotch whiskies and wines and wore the most stylish western clothes that were imported from abroad . This elite group so emulated the life style of the colonial masters, that they could well be the true "Brown sahibs". The dandified babus were copied by the middle classes and their lifestyle was considered the model of high life.
They were the biggest votaries of the laissez faire policy followed by the British in the second half of the Nineteenth century (1882-94) through which they encouraged a free trade of goods from Britain. British goods flowed into India and the demand for them kept growing as they were often of superior quality due to their being machine made . The growing demand from India and other colonies kept the industrial revolution in Britain going and the excess capacity created by use of new capital, could be fully utilized. But Britain soon realized that they needed raw materials from India and production of raw jute, cotton , silk and food products like wheat , was encouraged .
The British discouraged the export of cotton textiles from India, something in which India had a distinct comparative advantage. Fines were imposed on Indian printed textile imports from 1700 onwards and later, stiff custom duties were imposed on all textile imports from India. The customs duties were used to expand the base of the industrial revolution in Britain and it helped to produce more goods for the colonies.
Today, in the Twenty first century, with globalisation making big strides, the trade of goods and services from India are being screened for their adverse impact on the local industries in the US and EU today. Anti dumping duties are imposed rather quickly. If Indian software engineers are doing well, then restrictive policies on their entry is called for. If outsourcing is helping the private sector in the US, UK and EU, the governments of these countries are seeking to impose restrictions. But for their own exports, there is no holds barred promotion in the developing countries. The Indian government is always being told by visiting dignitaries from the industrialized countries that its tariff barriers are still very high.
They have also been interested in establishing food chains in the developing countries. Their 'junk food' has caught on with the youth in all the poorer countries and has led to health problems in many cases. Multinational corporations have also established manufacturing units in poorer countries with their cheap labour and the goods produced are exported to other countries.
Another aspect of globalisation is over production and the need to churn out more and more products to keep the bottomlines up. Inventory is expensive and finding ready markets is imperative. Promoting a uniform fashion and style, and consumption pattern across the world which originates in one group of countries, has become important. In all this, unification of culture across the world, there is a clear domination by US over the developing countries. It was the same in the Nineteenth century with British dominance over India and other colonies.
Today, the elite group in India has taken up the western attire and fashions derived from the west. There is an enormous demand for western textiles and ask any designer about the materials they use and the answer will be 'imported cloth' from countries like Germany, France and Italy.
Just like the East India Company encouraged the growth of wheat, jute, indigo, opium and cotton, today the multinational companies are encouraging the production of potatoes and tomatoes. Growing mainly commercial crops during colonial times led to problems and famines occurred regularly. Failed monsoons raised the price of foodgrains when foodstocks were limited. In Bengal famine of 1943, around 3.5 million people perished because they did not have the money to buy the foodgrains lying in the shops. As has been pointed out by all agriculture economists, diversification of crops is important and dependence on monsoons has to be reduced through agricultural reforms. Even during the era of globalistion, self-sufficiency in food is of vital importance.
There is no doubt that there is an increasing demand for foreign goods and buying them in shopping malls is becoming fashionable and buying indigenous goods in local bazaars is passé . But just as dandyism and copying the British way of life did not last long because of the widening of inequalities, there will be problems if the consumption patterns differ widely between different sections of the population. Stark differences in lifestyles are hardly sustainable.
Whatever people may say of India and China influencing the consumption patterns in western societies under the impact of globalisation, it is not making deep inroads. The influence remains on the fringe and ethnic goods from India are adopted only by a handful. By contrast, Americanization is spreading to all corners of the globe and it is useful for their business that people all over the world are adopting their styles of eating, dressing and entertainment. Other industrial countries are also benefiting from globalisation like the other colonial powers of the Nineteenth century reaped profits from the colonies. The real test whether globalisation is helping the poorer countries would be if the rich countries allow free inflow of goods, services and people from these countries. These questions remain unanswered in the two books.
* Views expressed in this article are those of the author and do not necessarily reflect those of Observer Research Foundation.
The views expressed above belong to the author(s). ORF research and analyses now available on Telegram! Click here to access our curated content — blogs, longforms and interviews.
PREV
