Globalisation has a darker side – and it’s a challenge to us all

Globalisation has a darker side – and it’s a challenge to us all

Yet the telecommunications revolution that has taken place since then has had a democratising effect. It is no longer just members of the elites – the Kennedys, Worsthornes and Howells – who can stay in such close touch across borders. Hundreds of millions of people, many of them new entrants to the global economy, can now reach each other instantly via mobile and the internet, even if half of us are using it to send each other amusing pictures of our cats.

This explosion in communication is one of the main benefits claimed for what we have come to call globalisation, the recent rapid acceleration of the process by which trade and contact across continents have been increased to such startling effect. More broadly, globalisation has produced some tremendous advantages in terms of cheaper goods, increased trade and the lifting of poor workers out of poverty.

But there is a much darker side to all this creative destruction and innovation, which is clearly visible in several recent developments. For instance, the social media website Twitter is in several respects a useful invention, but parts of it are a moral sewer. Earlier this week, when campaigners in the UK demanded action over rape threats made to female users, it took days for the US-based firm to respond. Its representatives – used to being garlanded for their brilliance – will not even debate the issue openly on television. When it comes down to it, in a row about ethics, we find that British users are just a pimple on the backside of a global giant.

Twitter’s fellow internet behemoths also like to foster the idea that they are run by well-meaning, chino-wearing hippy types. In reality, these increasingly monopolistic firms pay scant regard to criticism, and, what’s worse, almost no tax – while collecting vast amounts of information about us. A report by the House of Lords economic affairs committee revealed yesterday how multinationals game the system to get round the nation state: it showed that Google generated £11.8 billion of revenue from the UK between 2006 and 2011, and somehow paid just £16 million in corporation tax.

The very biggest of these firms long ago outgrew their insurgent roots. They are now vast and rapacious companies that often act as though they are bigger than their host governments. And then there are the enormous banks – such as Barclays, which was in trouble this week – which actually are much bigger than the state. Even after the financial crisis, the UK’s five clearing banks have combined balance sheets of almost 400 per cent of GDP.

This is a troubling manifestation of an emerging problem with globalised big business, and the way it makes nations think they are increasingly powerless. Some on the libertarian Right love this, tending to see it purely in terms of liberalised markets while ignoring the dislocating impact on traditional collective institutions, and even welcoming the weakening of the nation state.

Dealing intelligently with this dilemma – finding a way somehow to benefit from important technological change while not being bossed about by the firms it creates – is going to be one of the big challenges of the coming decades in democratic, open countries.

To his credit, some of this seems to have started dawning on David Cameron, after a long period during which he was much too close to Google, and his Chancellor rolled out the red carpet for the company’s bosses. Yet so far, the Prime Minister has not got beyond his probably futile attempts to clamp down on internet porn.

The ultimate problem is bigger than that. As we discovered during the financial crisis, whenever there is a serious difficulty, and these globalised experiments go wrong, the burden of averting anarchy falls back on the nation state and its taxpayers. It will be exactly the same if the internet ever freezes in some unforeseeable manner, or transcontinental energy infrastructure is blown up by the next generation of terrorists. In a crisis, when globalisation fails, we will turn to our nation’s government and expect it, with our hard-earned money, to help.

That certainly should not mean bigger government. But small-government conservatives have traditionally never believed in the idea of no government. The need instead is for a stronger, more effective, truly independent-minded state.

I fear the status quo involves just accepting the numerous downsides of globalisation, and seeing it as like the weather, a force it is impossible to restrain even a little. This means stumping up for ever larger repair bills after the next storm.

In a different context, David Howell’s host in 1961 argued against defeatism and despair by saying that we do have considerable scope to influence the direction of events, if only we have the guts. Which politicians will be big enough to really stand up to the corporate giants and to tame them? As JFK put it: “Things do not happen; they are made to happen.”

Iain Martin’s new book, ‘Making It Happen: Fred Goodwin, RBS and the Men who Blew up the British Economy’, will be published by Simon & Schuster on Sept 12

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