Buzz Hargrove: 'Globalization is largely a fraud'

Share

Buzz Hargrove's Laying It on the Line: Driving a Hard Bargain in Challenging Times was one of five books nominated for Canada's 2010 National Business Book Award. The award was established in 1985 to recognize the outstanding talent in Canadian business writing. The $20,000 prize is sponsored by PricewaterhouseCoopers, BMO Financial Group and media partner The Globe and Mai. Jeff Rubin's Why Your World is About to Get a Whole Lot Smaller: Oil and the End of Globalization won the award on June 9.

Buzz Hargrove is former national president of the Canadian Auto Workers (CAW). Read an excerpt and listen to a reading from his book below.

Excerpt from Laying it on the Line © 2009 by Buzz Hargrove. Published by HarperCollins Publishers Ltd. All rights reserved. Reproduced by arrangement with the Publisher.

Some people may charge me with protectionism, claiming that I want to erect trading walls between countries. Well, that's another crock. Canada has built its wealth on trade-more, perhaps, than any other comparable nation. We're much more of a trading country than the United States, for example, and our position as a trader makes us aware and sensitive to the importance of trade. We expect that countries who buy our goods, products and services will want to sell us some of their goods, products and services as well. Hey, that's a good idea. Just don't call it "free trade" when I'm around.

The terms "free trade" and "globalization" are tossed around as though they were carved into stone tablets along with the Ten Commandments that Moses carried down the mountain. Challenging their merit or even their definitions will start name-calling and finger-pointing from business executives and right-wing commentators. The fact is that the world doesn't need more free trade and it sure as hell doesn't need more globalization based on free trade. What it needs is fair, or managed, trade-agreements that prevent one country from conquering another country's markets while shutting its doors to that same country's exports. If you believe this doesn't happen, you must also believe that a tooth under your pillow turns into a loonie overnight. Trade can be beneficial for both parties, but market forces and corporate decision-making will never guarantee that mutual outcome. Only active management of trade flows, to ensure that trade is fair, can ensure that everyone benefits from trade. Ironically, that is exactly the sort of intervention that the free trade agreements try to prohibit.

Trade unionists have railed against globalization for years, refusing to buy into promises of some great golden future when, to use another cliché from that crowd, "all playing fields would be level." The neo-cons refused to listen to our concerns. But as I write this, in early 2009, we no longer have to shout to be heard, because the message has been delivered in the form of the biggest global financial crisis in nearly 80 years.

We've had credit crises in the past, but for the most part they were limited to one country that controlled its own internal banking rules. If a bank in the United States failed, almost nobody in Canada or anywhere else in the world felt a ripple. But look at what happened with the sub-prime mortgage fiasco in the U.S. The gang who lectured us about the inevitability of globalization applied the same rule to securities, and a bunch of financial shysters peddling worthless paper brought down banks all over the world. It was so bad that Iceland, a country hardly known for its risky investment style, practically declared national bankruptcy. Iceland!

All those pious lectures about the virtues of globalization are painfully ironic today, with the global economy mired in crisis. Indeed, now the executives of Lehman Brothers, Morgan Stanley, AIG and various U.S. banks are as unemployed as CAW members at the John Deere plant in Welland, the Freightliner plant in St. Thomas, the Navistar plant in Chatham, and dozens of other locations across Canada. Of course, most of those executives walked away from their jobs with multimillion-dollar parachutes. Most of the workers walked away with only memories. Both were victims of globalization, although it's difficult to describe Richard S. Fuld, CEO of Lehman Brothers, as a "victim." According to Forbes magazine (April 30, 2008), Fuld was paid $72 million in 2008, bringing his total compensation for the five-year period from 2003 to 2008 to over $350 million. Do not hold a tag day for Richard S. Fuld.

We saw the same thing happen to the big-money people around the world in 2008 that had been happening to CAW members for the past decade. I take no pleasure in watching people for whom I have little sympathy fall on their collective asses. (In the case of Fuld and people like him, at least the fall was well cushioned.) And I'm not the kind of guy to scream, "I told you so!" either. But I honestly hope that, if nothing else comes out of the sub-prime disaster of 2008, it will be a realization that globalization is largely a fraud, as are all the claims for the benefits of "free trade."

The members of the CAW didn't need a world financial crisis to prove the truth of this idea. We've been watching this shell game for years. Nobody, I guess, gave a damn when working people were hit by the effects of globalization. It took a few executives selling off their yachts before people noticed.

I think it's interesting and outrageous that we needed the loss of hundreds of billions of dollars spent on lousy investments based on American sub-prime mortgages to draw attention to the same kind of thinking that caused the loss of hundreds of thousands of manufacturing jobs through free trade. The CAW and other unions have been pointing to the fallout of globalization for decades. In response, we were told that protectionism was dead and the world was evolving into a different kind of economy. The hell it was. It was evolving into a form of social Darwinism that said people will fall by the wayside, through no fault of their own, and families will slide into poverty without well-paying jobs.