The Open Economy and its Enemies: Public Attitudes in East Asia and Eastern Europe available in Hardcover
The Open Economy and its Enemies: Public Attitudes in East Asia and Eastern Europe
- ISBN-10:
- 0521864062
- ISBN-13:
- 9780521864060
- Pub. Date:
- 12/21/2006
- Publisher:
- Cambridge University Press
- ISBN-10:
- 0521864062
- ISBN-13:
- 9780521864060
- Pub. Date:
- 12/21/2006
- Publisher:
- Cambridge University Press
The Open Economy and its Enemies: Public Attitudes in East Asia and Eastern Europe
Hardcover
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Product Details
| ISBN-13: | 9780521864060 |
|---|---|
| Publisher: | Cambridge University Press |
| Publication date: | 12/21/2006 |
| Pages: | 284 |
| Product dimensions: | 5.98(w) x 9.02(h) x 0.67(d) |
About the Author
William L. Miller is Edward Caird Professor of Politics at the University of Glasgow and a Fellow of the British Academy. He acted as consultant to the Independent Media Commission during the transition to democracy in South Africa and has directed major research projects for the ESRC (UK Economic and Social Research Council) and DfID (UK Department for International Development) in Bulgaria, the Czech Republic, Hungary, Korea, Poland, Russia, Slovakia, Ukraine, Vietnam, and the UK.
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Cambridge University Press
9780521864060 - The Open Economy and its Enemies - Public Attitudes in East Asia and Eastern Europe - by Jane Duckett and William L. Miller
Excerpt
1 Understanding public attitudes towards the open economy
Globalisation is a contentious subject, much criticised in street protests as well as in seminar rooms. But though many of the critics claim to defend the interests of ordinary people in the developing world, the voices of those people themselves have seldom been given as much attention as those of western protestors and academics.
Globalisation – in Stiglitz’s working definition: ‘the closer integration of countries and peoples of the world’ (2002, p. 9) – is a process usually viewed from above. Our own perspective is less Olympian. We are interested in globalisation not viewed as a world-wide process but from the perspective of the public in developing countries, who see it as an external challenge to their own country or locality. For them, the key questions are about greater economic and cultural ‘openness’ to an external, rapidly integrating world; about participation in multi-national or supra-national organisations; and about embracing or resisting the inward flow of foreign ideas, customs, symbols, capital, and personnel, as well as foreign technology, economic goods and services.
From a democratic perspective, grass-roots publicopinion is important in itself. But even in countries that are only partially democratic, or not democratic at all, grass-roots opinion can be important. Indeed governments may be more exposed to public opinion in such countries just because they have so little ‘process-legitimacy’. The climate of public opinion affects elites and elite policy in most contemporary societies. It can always influence, if not determine policy. It constitutes the background against which elites and activists must operate, and not only sets the frame for elite policy choices, but also influences the mind-set of elite opinion itself.
Development economists have argued that public opinion is important for the sustainability of economic openness and market-oriented policies. Public discontent and resistance to outside influences can affect political stability, encourage protectionism, and discourage inward investment. The United Nations Development Programme (UNDP) has argued that opening up economies has spurred economic growth in the short run, but in a form that may threaten longer-term development: ‘increasing the concentration of income, resources and wealth among people, corporations and countries’, ‘dismantling institutions of social protection’, and letting ‘criminals reap the benefits’, which may stimulate ‘social tensions that threaten political stability and community cohesion’ (UNDP 1999). In turn, that instability may restrict future development since stability-seeking investors avoid areas of conflict (Alesina and Perotti 1996; Garrett 1998; Klak and Myers 1997; see also Muller 1997). In order to encourage inward investment governments need to maintain public support for markets and openness.
In a series of influential papers, Rodrik (1996; 1997; 1998) advocated greater emphasis on ‘social safety nets’ and measures to ‘root out corruption’ in order to offset the naturally perverse distributional and social consequences of globalisation that provoke public discontent and thereby threaten longer-term stability and development. Threats to the environment (Kelly 1997) or to local culture (Appadurai 1990) may also provoke public reactions that damage prospects for long-term development. A strong sense of national or cultural identity may reinforce social cohesion and assist development in the short term. But the cultural opening that goes with economic opening may provoke fears (justified or not) that national/cultural identity is threatened, stimulate public reactions against an open economy as a by-product of cultural fright, and thus threaten economic development in the longer term.
But it is public support for openness that is itself the key socio-political precondition for maintaining an open economy rather than the specific factors – economic, cultural or environmental – that may tend to generate that support. Perceptions of increasing inequality, for example, may lead to political instability if inequality is attributed to the policy decisions or corrupt behaviour of local political actors. They are likely to reduce public support for openness if inequality is attributed to globalisation. But they are unlikely to have much impact on the political conditions for development if inequality is attributed to chance, to misfortune, or to circumstances beyond anyone’s control. Perceptions of corruption, environmental damage or cultural threat may also have different consequences depending on the way they are viewed by the public. How ordinary citizens feel about the downside of a more open economy – quite apart from their perceptions of the downside itself – may have a significant impact on its sustainability. Attitudes cannot be inferred from perceptions, still less from objective reality.
Relatively few of the ordinary public get regularly involved in political action of any kind, least of all in active protest or resistance. Nonetheless public discontent matters. Across the mass public, the consequences of individual discontent may be regarded as trivial – nothing more than demotivation, lack of commitment, slow or bad workmanship, even purely ‘psychological’ or attitudinal reactions, mere grumbling to friends and family. Individually, such reactions have little or no impact. But when multiplied by millions, grumbling or enthusiasm can create a climate that may significantly promote or inhibit openness and development. Moreover, as the literature on protest indicates, a general climate of public support or disapproval has a very significant impact upon whether the relatively few potential activists are encouraged into actual activity or discouraged from it: the general climate of public opinion acts as the trigger for the actual behaviour of the relatively few potential activists (Muller 1979). Counter-elites, as well as establishment elites, operate against the background of wider public opinion.
It might be argued that the public does not have sufficiently well-formed views on such abstract issues as globalisation or openness to make them worthy of serious study. There is an element of truth in that. Technicalities are boring as well as obscure. But ordinary people do have views about the availability of foreign goods, about foreign films and TV, about foreign ideas and customs, and about the influx of foreign companies, foreign employers, foreign managers, foreign immigrants and foreign ‘guest’ workers into their country. Indeed ordinary people have strong views about foreigners and ‘foreignness’ in general. They also have views, sometimes strong views, about ‘who benefits most’ from marketisation and opening up (often part of the same neo-liberal package), views about the ‘new rich’ and the ‘new poor’. Whatever the factual basis or moral status of these views, they are significant for public policy, for public order, and ultimately for economic development. And they should be heard, and heard directly rather than inferred from inspired speculation, from fascinating anecdotes or from press reports of ‘newsworthy’ incidents.
We aim to complement the well-publicised views of elite western academics, activists, international organisations and pressure-groups – valuable though these are – by listening to the views of the ordinary public in selected developing countries in East Asia (Vietnam and South Korea – hereafter called simply ‘Korea’ for brevity), and ‘transitional’ countries in East Europe (Ukraine and the Czech Republic). We accept that the public’s perceptions and attitudes may be right or wrong, coherent or incoherent. Nonetheless, we believe they deserve our respect and demand our attention.
This is not a study of globalisation, therefore, nor of the case for or against globalisation. It is a study of public attitudes in developing or transitional countries towards globalisation. We begin by reviewing the arguments of some distinguished critics and advocates of globalisation – but only by way of introduction to grass-roots public opinion in these countries.
1.1 Globalisation and economic discontent
Discontent and satisfaction are two sides of the same coin. A study of public discontent with globalisation is the same thing as a study of public satisfaction with globalisation. It is purely an empirical matter whether public discontent exceeds public satisfaction or vice versa. But since much of the literature focuses on the dangers of public discontent we shall use that term more often than its obverse, satisfaction. Whether we find more public discontent than satisfaction, and the nature of that discontent, will emerge in later chapters.
The critics For a time, Joseph Stiglitz’s Globalisation and its Discontents (2002) succeeded in almost equating economic openness and ‘globalisation’ with ‘discontent’. There is good reason for discontent: an International Labour Organisation (ILO) report (2004) A Fair Globalisation – Creating Opportunities for All argued that the potential of globalisation was ‘immense’ but ‘not realized … the unfairness of the key rules of trade and finance reflect a serious democratic deficit … financial and economic considerations have consistently predominated over social ones’, and ‘seen through the eyes of the vast majority of men and women around the world, globalisation has not met their simple aspiration for decent jobs, livelihoods and a better future for their children’.
Successive UNDP reports (1999; 2002) pointed to increasing inequality exacerbated by ‘dismantling the institutions of social protection’ (UNDP 1999: p. 4), the privatisation of public services (Pollock and Price 2000) and a decline in transfer payments. Internally, marketisation sometimes increased inequality between ethnic groups and bred ‘ethnic hatred’ (Chua 2003). Even in developed countries, neo-liberalism and globalisation increased inequality by cutting the demand for unskilled workers (Goodman, Johnson and Webb 1997: pp. 281–2). Globalisation led to a world divided between ‘tourists and vagabonds’ (Bauman 1997: p. 93).
Increasing inequality was not the result of some impartial ‘invisible hand’ however. Power remained in the hands of rich countries (Hirst and Thompson 1999: p. 2) who defined globalisation in terms of the ‘Washington Consensus’: US-style free-markets and democracy (Gray 1998: p. 215), or defined it simply in terms of US national interests: George Monbiot criticised US drug firms as ‘companies now demanding intellectual property rights [though they] were built up without them’ (Guardian, 12 March 2002). Larry Elliot argued that ‘the West talks about free trade but its approach can be summed up in four words: you liberalise, we subsidise’, whereas history showed that the US, Germany, Japan, Taiwan, and indeed South Korea, ‘all built up industrial strength in well-protected domestic markets’ (Guardian, 16 November 2002).
Even the central claim that opening up the economy stimulates economic growth has been disputed. A Centre for Economic and Policy Research (CEPR 2001) analysis of UNDP data, comparing the period before and after 1980, claimed that economic growth actually slowed down during the ‘era of globalisation’. Saldivar (2001: p. 10) claimed that after subtracting the identifiable costs of development, although US gross domestic product (GDP) steadily increased, ‘genuine progress’, even in the US, peaked in the 1970s and declined steadily thereafter: ‘growth does not equal progress’. Rodrik (2002: p. 9) attacked studies that ‘purport to show that globalizers grow faster’ as ‘misleading … the countries used as exemplars of globalizers in these studies, China, India, and Vietnam … remain among the most protectionist in the world’.
At the same time, specific International Monetary Fund (IMF) and World Bank prescriptions for developing countries have been labelled incompetent and perverse by long-term critics such as Joseph Stiglitz and more recent critics such as Jeffrey Sachs – notably on the Soviet transition from communism and the 1997–9 East Asian crisis, where these prescriptions contributed to decline, not growth: ‘The contrast between Russia’s transition as engineered by the international economic institutions and that of China, designed by itself, could not be greater’ (Stiglitz 2002: p. 6). During the East Asian crisis of 1997 and the subsequent crises in Argentina and Brazil, international advice was ‘like the 18th century medical practice of treating feverish patients by drawing blood from them … hastening their deaths’ (Sachs, quoted in the Guardian, 8 May 2002). Indeed, Stiglitz (2002: p. 97) claimed that ‘the perception throughout much of the developing world is that the IMF itself had [in 1997–9] become a part of the problem rather than a part of the solution’, noting that in several countries ‘history is dated by before and after the IMF … the way one would say the Plague or the Great Depression’. Korea only recovered as well as it did by rejecting international advice (Stiglitz 2002: p. 117, 127).
Finally critics argued that regional organisations such as the European Union (EU) or Association of South-East Asian Nations (ASEAN), as well as global organisations such as the IMF, World Bank, or World Trade Organisation (WTO), constrained the independence of the state: ‘The nation-state, economic integration, and democracy are mutually incompatible’. (Rodrik 2002: pp. 13–14); ‘as your country puts on the Golden Straitjacket [of international integration] your economy grows and your politics shrinks’ (Friedman 1999: p. 87).
The advocates On the other hand, the case for marketisation and opening up has been argued with equal vigour and distinction. After the collapse of communism even long-term critics of market economies now agreed ‘there is no plausible alternative’ (Galbraith 2000: IX; see also Haass and Liton 1998; Rodan 1996). But support for the open economy went far beyond reluctant acceptance. Philippe Legrain (Guardian, 12 July 2001) listed – and rejected – charges made by critics of the WTO: (i) that the WTO ‘does the bidding’ of the multinationals; (ii) that it ‘undermines workers’ rights and environmental protection by encouraging a race to the bottom between governments competing for jobs and foreign investment; (iii) that it harms the poor. Instead, Legrain argued that opening up the economy exposes national monopolies to competition and the WTO keeps the international marketplace more competitive; that the alleged ‘race for the bottom’ has not prevented Britain from raising taxes and imposing a minimum wage, nor Organisation for Economic Co-operation and Development (OECD) countries generally from increasing taxes; and that the poor in developing countries get better jobs with multinationals than in ‘local sweatshops’. Opening up did not inhibit the maintenance of a welfare state: ‘Sweden’s economy is far more open than Britain’s yet its welfare state is second to none’ (Legrain, Guardian, 9 October 2002).
The Fraser Institute’s 2004 report, Economic Freedom of the World, suggested that an open economy is good for civil liberty, for reducing corruption and for improving human development in the widest sense. Its Economic Freedom ranking (one measure of an open economy) not only correlated modestly with World Bank economic growth rates, it also correlated more consistently with Freedom House scales of civil liberties, with Transparency International indices of low corruption and, perhaps most importantly, with UNDP Human Development Indicators (Fraser Institute 2004: pp. 22–6).
Even globalisation-sceptic Larry Elliot accepted that ‘history suggests trade can help boost the economic growth of poor countries’, and very significantly that ‘the developing world does not have much in common with the anti-globalisation movement in the West … it sees trade as a key ingredient in boosting growth and per capita incomes’ (Guardian, 12 November 2001). Contrary to the impression given by the UNDP that globalisation had not helped the poor, analyses by Dollar and Kraay (2000; 2002) at the World Bank suggested that globalisation and development had helped the poor – though these analyses were hotly contested by critics of globalisation (Sumner 2003).
In contrast to the ILO (2004) claim that ‘for the vast majority of men and women around the world, globalisation has not met their aspirations’, the Pew Center’s multinational survey report, Globalization with Few Discontents? (2003), concluded that there were ‘few discontents … generally, people of the world agree, albeit to different degrees that they favour an interconnected world … economic globalization is particularly popular’. On Pew’s remarkably positive figures, the people of the four countries in our study were exceedingly enthusiastic about ‘growing trade and business ties’ – 98 per cent in Vietnam felt that such economic globalisation was ‘good for their country’, along with 93 per cent in Ukraine, 90 per cent in (South) Korea, and 84 per cent in the Czech Republic – all significantly higher than in the US, where only 78 per cent of Americans felt it was ‘good for America’. Similarly the World Economic Forum Poll (2002) of the public in 25 countries found that a majority in 19 of the 25 countries surveyed felt more economic globalisation would be good for themselves and their families. Could both the ILO and the Pew/WEF findings be right?
1.2 Globalisation and cultural discontent
Public fears (justified or not) that opening up their economy to world markets will erode their distinctive culture might provoke a public reaction against an open economy. Yet it is not entirely obvious whether the public in developing countries regard cultural homogenisation as a consensual drift towards a common culture or as a craven submission to a dominant cultural imperialism. Indeed it is not obvious how the public in developing countries define culture itself. Understanding cultural discontent is a more complex task than understanding economic discontent.
Modernisation, Westernisation, Americanisation? ‘Modernisation theory’, now much criticised, assumed a single ‘hierarchy’ of development with American culture at the top (Featherstone 1995: p. 87; Rucht 2001: p. 97). Some now argue that ‘it is misleading to view cultural change as Americanisation … [since Americans] hold much more traditional values and beliefs than do those in any other equally prosperous society’(Inglehart and Baker 2000: p. 49). Cultural globalisation now ‘frightens many Americans and has brought forth a religious-fundamentalist backlash in the United States that rivals that found anywhere else’ (Thurow 2000: p. 28). Yet many critics – and some advocates – of globalisation still equate contemporary cultural globalisation with ‘modernisation’, with ‘westernisation’ (Wallerstein 1990: p. 45), and even with ‘American cultural imperialism’ (Chang 2004: p. 1). ‘The concept of globalisation has in many ways replaced that of modernisation … [as something] inevitable … hegemonic … globalisation is a kind of modernisation in one stroke’ (Rucht 2001: pp. 98–9).
But others have argued that contemporary globalisation has not standardised culture at all. Instead it has led to ‘hybridisation’ (Holton 2000) or ‘indigenisation’ (Apparadurai 1990: p. 295) in which imported culture ‘takes on local features’ (Lull 2000: p. 115). So ‘simple notions of homogenisation, ideological hegemony or imperialism fail’ (Held et al 2000, p. 374).
Two cultures Some of the confusion about cultural homogenisation arises from the failure to distinguish sufficiently between different kinds of culture. For clarity we find it useful to distinguish between what we shall call ‘identity culture, ‘values culture’, and ‘consumer culture’. These differ in several important ways, not least in their relationship to globalisation. Identity culture centres on religion, ethnicity and nationalism – on the deepest, most instinctive, most emotional and least rational of human feelings. Values culture centres on enduring social and political values – left/right ideologies, socialism, liberalism, democracy (see for example Rieu and Duprat 1995) – which are somewhat less emotional and instinctive, more rational, less deeply held, and more open to change. Consumer culture centres on choice, style, fashion, entertainment – and would appear to be the most transient and superficial.
The sharpest distinction is between the two extremes of ‘identity culture’ and ‘consumer culture’: culture ‘as a way of life … shared norms, rituals, patterns of social order and probably a distinctive dialect’ if not a distinct language; and culture ‘as a lifestyle’, culture as clothes, food, TV programmes, decoration, consumer durables, and leisure activities (Chaney 2000: p. 83). Pasha (2000: p. 242) complains that ‘global hyperliberalists equate culture with consumption’.
There is no agreement about what constitutes the most significant aspect of ‘culture’ however. Arguments about culture often pass each other like ships in the night without interacting or engaging. It is tempting to dismiss ‘consumer culture’ as froth – superficial, unimportant, not an essential part of personal identity, malleable simply because it is so superficial. In that case, changing consumer possibilities and preferences present no challenge to deeply embedded identities and will only provoke resistance among those who mistake the superficial for the fundamental: ‘entertainment, branding, language, media and television … represent a culture that overlays or co-exists with pre-existing more local cultures’ (Sweeney 2005: p. 347). But Chaney (2000: p. 83) argues that ‘consumer culture’ may have ‘more significance than … ethnicity or religion’. Consequently ‘identity culture’ and ‘consumer culture’ may in fact conflict: ‘consumer culture is generally presented as being extremely destructive for religion … [because it emphasises] the pursuit of pleasure here and now’ (Featherstone 1991: p. 113). The essential conflict may be between personal, individual and immediate ‘choice’ on the one hand, and ‘respect’ for a community that spans both territory and time on the other. The fear that community identifiers have of being submerged and lost in a rootless, cosmopolitan world that despises community (Smith 1995: p. 22) has to be set against the fear that individualists have of community: ‘one man’s imagined community is another man’s political prison’ (Appadurai 1990: p. 295).
The impact of globalisation on consumer and identity cultures Cultural globalisation is not new. What is new is its ‘nature’ and ‘processes’ (Beynon and Dunkerley 2000: p. 13): the nature of global culture has shifted over the centuries from world religions, through political and scientific values, to consumerism; and the process has shifted from colonialism to telecommunications.
Contemporary globalisation has had an immediate, direct, visible, and large impact on ‘consumer culture’: ‘the most obvious and tangible forms of cultural globalisation are … Coca Cola and McDonalds … Western consumer goods’ (Beynon and Dunkerley 2000: p. 13). Values have also been affected: ‘economic development is associated with shifts … towards values that are increasingly rational, tolerant, trusting and participatory’, (Inglehart and Baker 2000: p. 19) and public support for the principle of democracy has spread across the globe (Klingemann 1999). But although ‘economic development tends to bring pervasive cultural changes, the fact that a society was historically shaped by Protestantism or Confucianism or Islam leaves a cultural heritage with enduring effects’ (Inglehart and Baker 2000: p. 49).
State-manufactured culture Although history, historical cultures and historical legacies were manufactured in the past they are refurbished and re-marketed in the present: ‘what we witness with the development of a global economy is not increasing uniformity, in the form of a universalisation of Western culture, but rather the continuation of civilisational diversity through the active reinvention and reincorporation of non-Western civilisational patterns’ (Hamilton 1994: p. 184, our emphasis). In East Europe and the former Soviet Union, the past ‘exists, if it exists at all … in the present’; the past is ransacked by current ‘cultural entrepreneurs’ for ‘usable pasts’ (Kubik 2003: pp. 319, 325).
The state has a peculiar power and authority to manage this process of selectively preserving or reinventing the national culture. There may be problems if governments go against the grain of public opinion: ‘Totalitarian states, communist states and theocratic and right-wing military regimes have all attempted to implement a closed cultural policy in which foreign influences, products and ideas have been actively controlled … this kind of policy is the most threatened by contemporary cultural globalisation’ (Held et al 2000, p. 370); and ‘states which seek to pursue rigid closed-door policies on information and culture are certainly under threat’ (Held and McGrew 2002: p. 36). But an entrepreneurial state, going with the grain of public opinion, may see globalisation as an opportunity rather than a threat. It has more resources than others within the country to ‘reinvent memories, traditions and practices … with one eye on traditional [national] integration and one eye on the international tourist trade’ (Featherstone 1995: p. 116) – memories, traditions and practices which are all the more effective in gaining public support if they can be presented as national tradition rather than partisan ideology.
‘Identity culture’ – with a little help from the state – is the most able to resist global forces, and ‘consumer culture’ the least. The public may welcome the globalisation of ‘consumer culture’, even insist upon their right to enjoy it, yet nonetheless reject the globalisation of their ‘identity culture’. Those who ‘wear Adidas, drink Coke and move overseas’ may nonetheless commit themselves to ‘local economic development, religious fundamentalism, reform movements or nation-building programmes’ that challenge – and are consciously intended to challenge – the hegemony of the ‘cultural empire’ (Gold 2000: pp. 85–6). So while ‘there has been some degree of homogenisation of mass cultural consumption, particularly among the young … there is little sign as yet that nationalist cultural projects are in terminal decline’ (Held et al 2000: pp. 373–4).
A globalised identity culture? In principle identity culture could be globalised if ‘a new sense of global belonging and vulnerability [transcended] loyalties to the nation-state’ (Held and McGrew 2002: p. 37 – citing Falk’s New Global Politics, 1995 and Kaldor’s New and Old Wars, 1998). But Smith (1990; 1995) argues strongly against the possibility of a common world culture: ‘cultures are historically specific’ (1995: p. 23); ‘a global culture seems unable to offer the qualities of collective faith, dignity and hope that only a religion surrogate [like nationalism] with its promise of territorial cultural community across the generations can provide’ (1995: p. 160). There is no ‘global culture and cosmopolitan ideal that can truly supersede a world of nations (1990: p. 188); ‘no global
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