I was very skeptical about his statements about the benefits of a global economy and financial system but as a journalist tried to remain as unbiased as possible. His high praise of globalism was pretty much standard fare -- the usual propaganda the globalist shills would always offer when discussing the subject. But there was one thing he said at the conclusion of our interview that I'll never forget. At that time everyone was bearish on the prospects of the U.S. stock market and many high profile analysts and newsletter writers were predicting an outright market crash and major depression.
Near as I can remember he told me, "You can bet your bottom dollar that the stock market will soon bottom and take off from here. The government and the multi-nationals will not allow the market to sink much further because it would jeopardize all the work they've accomplished in paving the way for the global economy. They haven't finished yet so there's no way they can let the market and the domestic economy sink. We'll see a major economic boom here before long."
As it turned out he was exactly correct. The market did bottom shortly after our interview and went on to make sizzling gains in the remaining part of the '90s, igniting the economy along the way. In many ways my interview with that pro-globalist (whose name I can no longer recall) was pivotal and has given me a clear vision of the motives behind each of the major economic shifts we've seen here and abroad since that time. What it all boils down to (as I'm sure the pro-globalist would agree) is this: everything that happens in the financial markets is with a view toward establishing and fully integrating the global economy (and eventually a global government and judicial system).
Why did the stock market boom and the domestic economy sizzle in the late '90s (at the expense of commodities)? To allow multi-national corporations to merge and consolidate in preparation for globalist integration. Why was the U.S. dollar strengthened in the late '90s? To help overseas exporters strengthen their economies in preparation for entry into the globalist economy. Why were commodities allowed to rally to stellar heights in the past couple of years when inflation was never really an issue? To allow those industries that were left behind in the '90s to play "catch up" in the globalist agenda. Why has the dollar been allowed to collapse to such extreme depths recently? To give a competitive edge to domestic exports as the integration of the multi-nationals into the global economy continues to expand (as a recent headline in the Financial Times states, "Manufacturers in U.S. benefit from falling dollar.") In one way or the other, everything that happens in the financial world ultimately converges at one central goal, that of globalism.
With the swirling torrent of activity in the march toward globalist integration in 2004 as a backdrop, I was surprised to receive a review copy of Martin Wolf's latest tome, "Why Globalism Works," a couple of months ago from Yale University Press. I eagerly read from this book a little each day, knowing full well that I'd disagree with its arguments, but interested nonetheless at hearing a leading exponent of the global economy essentially lay out a road map showing what we can expect in the years ahead as the world marches ever closer to a fully global economy.
In "Why Globalization Works," Wolf, a former senior economist at the world bank in the 1970s and currently Associate Editor and Chief Economics Commentator at the London Financial Times, has assembled a 400-page collection of economic and political arguments in favor of globalism and attempt to answer the main criticisms leveled against the global economy from both the right wing and left wing of the political and economic spectrums.
Total global economic integration is obviously something that is near and dear to Mr. Wolf's heart. If you read the Financial Times you've probably seen Mr. Wolf's glowing praise and tireless arguments in favor of globalism time and again in his editorials. Wolf is a man of exceptional intelligence and yet is able to convey matters of high finance to an audience in understandable terms (unlike most who come from the higher levels of the banking industry). This much I'll give him credit for. Where I part ways with Mr. Wolf is in his ceaseless pro-globalist propaganda.
More than anything else, globalism is all about the "China Factor." This much was recently admitted by a cover story by Business Week, entitled "The three scariest words in U.S. industry: The China Price." The article indicated that manufacturing companies producing in the U.S., in order to stay in business, must slash pricing by at least 30% or risk losing all their customers to China. Business Week further warns that every single manufacturer is equally vulnerable to the China crisis, which commentator Lawrence Patterson says was "created for them as a trap by traitors, criminals and worse, in our worm-eaten federal structure."
Even more eye-opening was a recent issue of the Journal of Commerce, which contained the words "New World Order" on its front cover of Nov. 29, 2004 with a picture of a garment containing a "Made in China" tag. Thus even the Journal of Commerce recognizes that the march toward a fully integrated global economy is all about China. We might also add that the "Wal-Mart-ization" of the U.S. and other countries is the route through which China gains its competitive advantage on the road to globalization.
Yet within China and other developing countries where global manufacturing is booming, the trend toward economic development and their integration within the globalist framework is borne largely on the backs of what some critics have called "slave" or "sweat shop labor" (i.e., workers who labor for inadequate wages, including children and the elderly). This is nowhere more evident than in developing Asian countries where child labor is common. Wolf treats this concern in his book and shockingly arrives at the conclusion that such labor is inevitable (if unfortunate) with the alternative for these children being extreme privation or outright starvation. He tries to candy coat this situation by suggesting that in time wages will rise and along with it an improvement in working conditions. Yet he falls short of offering a workable solution to the child labor problem, children whose shoulders bear the heavy load of global economic integration.
Does Wolf do a successful job of arguing the benefits of globalization? I say he does not. For instance, in Chapter 9 (entitled "Incensed about Inequality") he begins with a quote from Jay Mazur, president of the Union of Needletrades, Industrial and Textile employees. The quote reads, "Globalization has dramatically increased inequality between and within nations, even as it connects people as never before. A world in which the assets of the 200 richest people are greater than the combined income of the more than 2 billion people at the other end of the economic ladder should give everyone pause."
He then spends the rest of the chapter trying to refute the above sentiment, yet in my opinion he fails and by the time I finished reading the chapter I was more convinced than ever that Mr. Mazur (quoted above) was correct. Wolf even admits that the divergence between the incomes of the world's rich and the poor as doubled since 1820...but the trend *could* be reversing!
In Chapter 11 ("Cowed by Corporations) he makes the argument that the widespread fear of an ever-growing Corporate State is misguided and that consumers have nothing to fear from corporations and their "tyranny" of brands and ubiquitous logos. He provides some examples of how corporations supposedly aren't nearly as powerful as we think they are, yet again he comes up short in this reader's opinion. The exploitation of poor countries and workers by the multi-nationals is another issue Wolf addresses in this chapter and he might have spent the remainder of the book arguing this point. But alas to not avail! He simply wasn't able to make a convincing case that the undeniable low wages of workers for the multi-national corporations in developing countries were justified, nor could he convince me that those wages were destined to rise.
The leading lights of the Global Economic Order -- GEO as I call it -- (or "New World Order" in the words of the Journal of Commerce) have made it their stated goal to have a fully integrated and functional global economy by 2010. We are but five short years away from this self-imposed deadline toward globalist tyranny and with each passing month we see evidence of an acceleration of the trend. Serious students of economics as well as those concerned with globalism and its dangers would benefit from a reading of Mr. Wolf's book regardless of its biased slant. As someone who has access to the upper echelons of the globalist crowd, Mr. Wolf provides some chilling glimpses of what we can expect in the years ahead on the road toward GEO.
January 13, 2005
Clif Droke is the editor of the 3-times weekly Momentum Strategies Report, a forecast of U.S. equities and markets. He is also the author of more than 20 financial books, including most recently "Channel Buster! How to Trade the Most Profitable Chart Pattern." For free samples of his work, visit www.clifdroke.com