Introduction
Liberal Democrats welcome many aspects of globalisation, including open borders, the exchange of goods, service and ideas, and the movement of peoples, across national boundaries, and the closer links between communities and nations that this leads to.
Nevertheless, we also recognise that it brings challenges, including, for the UK:
- Redefinition of the role of the state to provide macroeconomic stability, training and welfare; in order to maximise the capacity of all citizens to benefit from globalisation.
- The need for the British economy to continue to develop and innovate, generating new opportunities for employment and prosperity as older industries migrate to developing economies.
- The need for these new developments to be environmentally sustainable.
- The problems faced by areas of the country excessively dependent on declining industries.
- The problems faced by lower-skilled British workers subjected to competition from economic migrants, and the social tensions that can result from large movements of migrant labour.
Economic globalisation also means that problems which would once have been contained within a single national economy now have often highly unpredictable impacts elsewhere – for example the subprime lending crisis in the US leading to the first run on a British bank since the mid-nineteenth century.
Recent governments’ failure to meet these challenges adequately has contributed to a feeling of helplessness in the face of globalisation, and hostility to many of its aspects, including trade liberalisation and immigration. Liberal Democrats need to remain overwhelmingly positive about these, while seriously addressing people’s concerns about their declining sense of control over their own lives. To achieve this, we want to take positive lessons from the ways in which other nations with open economies have responded to globalisation, as well as from successful sectors within the UK.
It is also important to envisage scenarios in which globalisation might be reversed; that is to say in which cross-border trade, production and investment might decline, putting pressure on national governments to take a protectionist stance. Liberal Democrats need to consider how the UK should prepare for such an eventuality by devising systems to anticipate, prevent or mitigate it, and ensuring that Britain and Europe remain committed to global openness under all circumstances.
This consultation paper is solely concerned with domestic policy in response to globalisation; that is to say with issues arising from the real or perceived impact of globalisation on the UK economy and society. It will not, therefore, directly address questions of international security and crime, aid and development, the role and structure of global institutions, or international trade.
Issues to consider
- What have been the main drivers of globalisation? Are these likely to change?
- What would happen if the spread of globalisation were to reverse? What could or should the UK government do to prevent this?
- Which aspects of globalisation require a response?
- Who are the key stakeholders in the UK most likely to be affected – both positively and negatively – by globalisation? Which regions or sectors have most to gain and which are in danger of being bypassed?
February 2nd, 2008 at 10:17 am
1. Large multinationals, dont expect things to change
2. Local Communities,Urban areas and society in general would benefit, Large cities etc,would not. The UK Government should help to prevent Globalisation, until a much fairer way of distributing wealth, power etc. and stopping corruption, can be devised.
3. All
4. MultiNational Companies benefit from Globalisation, encouraging larger & larger factories, Superstores etc, that have to be supplied from further distances, for workers goods & services etc, promoting global warming. They also have so much power that they can very easily corrupt, Governments councils etc.(ie. Let us build a superstore here, & we will build you a bypass, a school etc. to me thats bribary/corruption, and its happening 3 miles from where I live).
Small local communities, suffer from globalisation for the above reason
March 25th, 2008 at 5:22 pm
(1. Ever-lowering communications costs both in terms of physical transport and the transport of ideas, and access to stupendously cheap labour abroad. Insofar as oil is continually getting more expensive, I think that we can expect physical transport to become pricier over time. Due to other countries getting richer due to receiving our money for their products, the price of labour abroad is likely to go up over time, too.
It is entirely possible that we are currently in a good spot globally in which we have lots of money and able to buy what we like from abroad and that this comparatively advantageous position won’t be maintained forever - it is likely to erode gradually over time.
(2. Presuming that “globalisation” means the transfer of goods and services globally, a contraction in the global markets would impact upon everyone, making “stuff” more expensive generally as transport costs go up and it becomes viable to manufacture eg. LCD TVs locally rather than import them, meaning that workers spend their time less efficiently. This would be a very bad thing!
What can the government do? Unilaterally eliminate all barriers to UK trade, to guarantee that we get goods from around the world at the best price, and potentially invest in eg. African infrastructure and democracy projects in order to build the next set of nations that can supply our stuff for us cheaply.
(3. The manifestation of globalisation in the UK that most warrants a response, is, I think, the genericization of our high streets with identikit stores and the continued rise of out-of-town supermarkets and “big box” stores.
There is a very reasonable distaste on the part of many people that our city centres are all becoming alike - the inevitable product of ultra-successful chain stores. But of course, those chains are only successful because people keep on visiting them. We hark back to an era of tiny, personal stores, without remembering how much further our money goes now. It seems to me that there is the possibility for a response here, but I am not sure what it would be. Let me throw out a few ideas:
- locally-specified planning constraints on shopfronts in order to provide a local and unified feel to each town instead of a clutter of advertising and huge plate-glass windows (see the arcades in Leeds for a wonderful example of this)
- local-council-owned blocks of very small retail properties situated in town centres and rented at rates subsidized by chain stores, that can only be rented by small, local companies.
Of course, all of these ideas require the effective taxation of large stores so that the small can survive, making those large stores more expensive generally. There is certainly a debate to be had on how much we are willing to subsidize kooky local stores.
Another response to globalisation is tax competition between nations. We’ve already seen it with Asian countries offering “Special Economic Areas” to manufacturers in order to capture jobs, and as the global markets mature we will see it in the UK too.
However, rather than viewing tax competition as a menace, we should view it as a benefit: the UK state is fat with corruption and makework, and forcing the government to shed jobs is a good thing that both makes us more competetive globally and reduces the tax burden on our own citizens.
That means that we should be looking to not only reduce taxation, but switch it onto items that we know we can tax successfully and fairly - a land value tax could be an efficient way of doing this, since land is one of the few things that can’t be hidden from the tax man.
(4. We are all affected by globalisation. The real winners are, I guess, those very close to good transport links and so actually end up getting products at the cheap prices that are promised. The losers are those trapped in out-of-the-way areas with no access either to buy or sell their own goods.
Secondly, the continued productivity improvements in UK manufacturing (producing more goods now than ever!) and agriculture sectors (and the abandonment of mining) has led to a large class of people who are marooned in the wrong place to benefit from globalisation, and with the wrong skills. We need to find a way to bring these people their own comparative advantage, through retraining and education, and in the long term through the high-quality education of their children.
March 25th, 2008 at 5:26 pm
I should also say that I think that it is vital that we have high-quality government as well as low-cost government (and the two are linked, really, since bad governments cost the taxpayer tons of cash). A government that can really stand up for globalisation in the face of the (very real) fears of the working class and by strongly committing to helping those whose jobs do go abroad to find (or create) a new job that will continue to make us all richer.
Slightly relatedly, I think that the key to this is going to be showing the lower-paid that they really will benefit from globalisation, by ensuring that they share in the proceeds of it - which is to say, make sure that the super-rich capitalists don’t get to abscond with all the loot.