Globalization and its consequencesSpecial topic

Christoph Schattleitner

Bg/Brg Stainach

English: Prof. MMag. Alexandra Altenaichinger

2010/11

Globalization, as defined by rich people like us, is a very nice thing. You are talking about the Internet, you are talking about

cell phones, you are talking about computers. This doesn’t affect two-thirds

of the people of the world.(Jimmy Carter)

Inhaltsverzeichnis1.0.The history of globalization………………………………………………………………………………………………………….2

1.1. What is globalization?.....................................................................................................................3

1.1.1. The history................................................................................................................................3

1.1.2. Reasons for the globalization...................................................................................................4

1.2. Areas and aims of the globalization.................................................................................................4

2.0. Globalization critic Joseph Stiglitz………………………….……………………………………………………………………7

2.1. Joseph Stiglitz..................................................................................................................................7

2.2. Criticism...........................................................................................................................................7

2.3. Other famous publications..........................................................................................................8

3.0. The IMF, blessing or curse?............................................................................................................. 9

3.1. The history of Ethiopia....................................................................................................................9

3.1.1. The role of the IMF...................................................................................................................9

3.1.1.1. The Ethiopian bank system..............................................................................................10

3.1.1.2. Ethiopia needs foreign assistance?..................................................................................11

3.1.1.3. Ethiopia today..................................................................................................................11

3.2. Live Aid in 1985.........................................................................................................................12

Notes of Zimbabwe......................................................................................................................12

4.0. Privatisations and neoliberalism……………………………………………………………………………………………….13

4.1. General overview..........................................................................................................................13

4.1.1. The African electricity company in South Africa and its effects on the people...................18

4.1.2. The health system of the Philippines..................................................................................18

4.2.1. Privatisation of the British Railway.........................................................................................13

4.2.2. What does a life cost?............................................................................................................14

Cochabamba water wars..............................................................................................................14

5.0. Global warming as a consequence of globalization………………………………………………………………….15

5.1. Al Gore...........................................................................................................................................15

5.1.1. “An Inconvenient Truth”.........................................................................................................15

5.1.2. Other examples......................................................................................................................17

Vocabulary...........................................................................................................................................19

Index....................................................................................................................................................19

Christoph Schattleitner 13.04.2023|

1.0. The history of globalization

1.1. What is globalization?

1

The theory sounds great, but globalization is in society often known as something negative. That is not unfounded. The globalisation is jointly responsible for the social misery in the world. Especially small economists are affected. I will consider these critics in the second chapter, but firstly the history of globalization is of utmost importance.

1.1.1. The historyThe debate about if the globalization is still going on, is based on some experts that say there was a sort of globalization already in the 3rd millennium between the Sumer (nowadays Iraq) and the Indus Valley´s Civilization. By contrast others say that the real globalization started first in the modern area. Because of these differences in opinion I only consider the most general accepted theory of the history of globalization.2

Time Name CharacteristicsUntil 1500 Pre-global era Separate space of actions in the world: Eurasia – Africa,

America, Australia (without remarkable connections)1500- 1840 Proto-globalization Discovery and development of the Globus; Development of

modern structures for globalization1840- 1914 First globalization

phaseRevolutions in transport and Communication; Leading hegemonial power is Great Britain

1914- 1945 Controversial times INSERT !1945- 1990 Second

globalization phaseDevelopment of basic approaches of a global economy order in international Organizations; leading powers: USA, Soviet Union

1990- today

Third globalization phase

Breakdown of communism, digital revolution; rise of transnational companies (TNCs); leading powers: USA, China3

1 http://www.businessdictionary.com/definition/globalization.html 16.1.20112 http://en.wikipedia.org/wiki/Globalization#History 16.11.20113 Own researches: material of GPB, GWK and InternetChristoph Schattleitner 13.04.2023|

Globalisation is a worldwide movement toward economic, financial, trade, and communications integration. Globalization implies opening out beyond local and nationalistic perspectives to a broader outlook of an interconnected and inter-dependent world with free transfer of capital, goods, and services across national frontiers.

As you can see on the following chart, there are a huge amount of reasons, which have triggered the globalization. It is difficult to point out the main argument of globalizing, because experts are convinced, that the process is still going on. I think, globalization can´t be stopped, but we should write the history of our global economy with attention.

4

All in all, I think globalization can have an enormous potential not only for wealth but also for destruction:

“Globalizing a bad thing makes it worse. But globalizing a good thing is usually good.”5

In the following chapters I want to point out the negative aspects of the process of globalising the world.

1.2. Areas and aims of the globalization

Industrial - emergence of worldwide production markets and broader access to a range of foreign products for consumers and companies. Particularly movement of material and goods between and within national boundaries. International trade in manufactured goods increased more than 100 times (from $95 billion to $12 trillion) in the 50 years since 1955.

4 Own research: sources mainly from GWK5 STALLMANN, Richard in Znet interview: http://www.zcommunications.org/free-software-as-a-social-movement-by-richard-stallman 16.1.2011Christoph Schattleitner 13.04.2023|

1.1.2. Reasons for the globalization

technical innovations

communicationinformationtransport,

logistic

global neoliberalism

less welfareprivatisationsinfluence of: WTO, IMF, World Bank

Global Player

influence on states and

international organizationsenourmous

growth because of mergers and

pactsnew markets are available

social change

increased mobility increased flexibilitydifferent

educationdifferent use of

leisure time

standardization of production

uniform norms and standards

Financial - emergence of worldwide financial markets and better access to external financing for borrowers. As these worldwide structures grew more quickly than any transnational regulatory regime, the instability of the global financial infrastructure dramatically increased, as evidenced by the Financial crisis of 2007–2010.[17]

Economic - realization of a global common market, based on the freedom of exchange of goods and capital. The interconnectedness of these markets, however, meant that an economic collapse in one area could impact other areas. With globalization, companies can produce goods and services in the lowest cost location. This may cause jobs to be moved to locations that have the lowest wages, least worker protection and lowest health benefits. For Industrial activities this may cause production to move to areas with the least pollution regulations or worker safety regulations.

Job Market- competition in a global job market. Political - some use "globalization" to mean the creation of a world government which regulates

the relationships among governments and guarantees the rights arising from social and economic globalization. Politically, the United States has enjoyed a position of power among the world powers, in part because of its strong and wealthy economy. With the influence of globalization and with the help of the United States’ own economy, the People's Republic of China has experienced some tremendous growth within the past decade. If China continues to grow at the rate projected by the trends, then it is very likely that in the next twenty years, there will be a major reallocation of power among the world leaders. China will have enough wealth, industry, and technology to rival the United States for the position of leading world power.

Among the political effects some scholars also name the transformation of sovereignty.

Informational - increase in information flows between geographically remote locations. Arguably this is a technological change with the advent of fibre optic communications, satellites, and increased availability of telephone and Internet.

Language - the most spoken first language is Mandarin (845 million speakers) followed by Spanish (329 million speakers) and English (328 million speakers). However the most popular second language is undoubtedly English, the "lingua franca" of globalization: About 35% of the world's mail, telexes, and cables are in English. Approximately 40% of the world's radio programs are in English. English is the dominant language on the Internet.

Competition - Survival in the new global business market calls for improved productivity and increased competition. Due to the market becoming worldwide, companies in various industries have to upgrade their products and use technology skilfully in order to face increased competition.

Ecological - the advent of global environmental challenges that might be solved with international cooperation, such as climate change, cross-boundary water and air pollution, over-fishing of the ocean, and the spread of invasive species. Economic development historically required a "dirty" industrial stage, and it is argued that developing countries should not, via regulation, be prohibited from increasing their standard of living.

London is a city of considerable diversity. As of 2008, estimates were published that stated that approximately 30% of London's total population was from an ethnic minority group.

Christoph Schattleitner 13.04.2023|

Cultural - growth of cross-cultural contacts and the idea of participating in a "world culture". Spreading of multiculturalism, and better individual access to cultural diversity (e.g. through

the export of Hollywood). Greater international travel and tourism. WHO estimates that up to 500,000 people are on planes at any one time. [citation needed][36] In 2008, there were over 922 million international tourist arrivals, with a growth of 1.9% as compared to 2007.[37]

Spread of local consumer products (e.g., food) to other countries (often adapted to their culture).

Worldwide fads and pop culture such as Pokémon, Sudoku, Numa Numa, Origami, Idol series, YouTube, Orkut, Facebook, and MySpace; accessible only to those who have Internet or Television, leaving out a substantial portion of the Earth's population.

Worldwide sporting events such as FIFA World Cup and the Olympic Games. Incorporation of multinational corporations into new media. As the sponsors of the All-Blacks

rugby team, Adidas had created a parallel website with a downloadable interactive rugby game for its fans to play and compete.

Social - development of the system of non-governmental organisations as main agents of global public policy, including humanitarian aid and developmental efforts.

Technical Development of a Global Information System, global telecommunications infrastructure and

greater transborder data flow, using such technologies as the Internet, communication satellites, submarine fiber optic cable, and wireless telephones

Increase in the number of standards applied globally; e.g., copyright laws, patents and world trade agreements.

Legal/Ethical The creation of the international criminal court and international justice movements. Crime importation and raising awareness of global crime-fighting efforts and cooperation. The emergence of Global administrative law.

Religious The spread and increased interrelations of various religious groups, ideas, and practices and

their ideas of the meanings and values of particular spaces.6

6 http://en.wikipedia.org/wiki/Globalization Christoph Schattleitner 13.04.2023|

2.0. Globalization critic Joseph Stiglitz

2.1. Joseph StiglitzStiglitz was born in Gary, Indiana, to Jewish parents. He was a research fellow at the University of Cambridge from 1966 to 1970. In subsequent years, he held academic positions at Yale (1970–1974), Stanford (1974–1976, 1988–2001), Oxford (1976–1979), and Princeton (1979–1988). Stiglitz is now a Professor at Columbia University, with appointments at the Business School, the Department of Economics and the School of International and Public Affairs (SIPA), and is editor of The Economists' Voice journal with J. Bradford DeLong and Aaron Edlin. He also gives classes for a double-degree program between Sciences Po Paris and Ecole Polytechnique in 'Economics and Public Policy'. As of 2005 he chairs The Brooks World Poverty Institute at the University of Manchester. Stiglitz is a New-Keynesian economist.

In addition to making numerous influential contributions to microeconomics, Stiglitz has played a number of policy roles. He served in the Clinton Administration as the chair of the President's Council of Economic Advisors (1995 – 1997). At the World Bank, he served as Senior Vice President and Chief Economist (1997 – 2000), in the time when unprecedented protest against international economic organizations started, most prominently with the Seattle WTO meeting of 1999. He was fired by the World Bank for expressing dissent with its policies. He was a lead author for the Intergovernmental Panel on Climate Change in 1995.

He is a member of Collegium International, an organization of leaders with political, scientific, and ethical expertise whose goal is to provide new approaches in overcoming the obstacles in the way of a peaceful, socially just and an economically sustainable world.

Stiglitz has advised American President Barack Obama, but has also been sharply critical of the Obama Administration's financial-industry rescue plan. Stiglitz said that whoever designed the Obama administration's bank rescue plan is "either in the pocket of the banks or they’re incompetent."7 In 2001 he won the Nobel Prize for Economics.

2.2. CriticismThe reason why I´ve chosen Stiglitz as my main critic is the following: Stiglitz is different form all the other globalization-critics. He doesn’t hate liberalism, capitalism and economy itself. He doesn´t think, that globalization is something bad. It “can be a force for good and that it has the potential to enrich everyone in the world, particularly the poor”.8 Moreover he isn´t a crazy dreamer or conspiracy theorist. No, Joseph Stiglitz is an expert on economical questions. He was Chief Economist at the World Bank until 2000 and before that he was Chairman of President Clinton´s Council of Economic

7 Mainly adapted from: http://www.josephestiglitz.com/Joseph%20E%20Stiglitz%20Biography 8 STIGLIZ Joseph: Globalization and its discontents. New York: Penguin Books. 2002. S. IXChristoph Schattleitner 13.04.2023|

Advisors. So you see that’s why his criticism is so painful. He knows exactly what´s going on. In particular he criticizes the following matters:

2.2.1. General CriticismHis criticism doesn´t call globalization into question, it calls the way it has been managed, in particular the international trade agreements, which have played a large role in removing barriers, that have been imposed (dt. auferlegen) on developing countries in the name of freedom and liberalism. (See also: chapter two and three)

He is convinced that the so called “developing economies” are, in fact, not developing at all. He blames the IMF mainly for this issue. If the IMF really wants to help to develop this countries, that would mean that the IMF would mainly lose their wealth grab out of this situation. Personally I thoroughly understand Stiglitz´s criticism, but I think Stiglitz see the organizations too much black and white. For example he incriminates the IMF very badly, but he doesn´t curse the World Bank, probably because of his own work there. From my point of view, the World Bank is admittedly not as extreme with their claims, but they finance huge projects in developing countries, which not every time turned out good for the local folk.

In general he criticizes in the process of globalization that there is a lack of key information: "Recent advances in economic theory" (in part referring to his own work) "have shown that whenever information is imperfect and markets incomplete, which is to say always, and especially in developing countries, then the invisible hand works most imperfectly." As a result, Stiglitz continues, governments can improve the outcome by well-chosen interventions. Stiglitz argues that when families and firms seek to buy too little compared to what the economy can produce, governments can fight recessions and depressions by using expansionary monetary and fiscal policies to spur the demand for goods and services. At the microeconomic level, governments can regulate banks and other financial institutions to keep them sound. They can also use tax policy to steer investment into more productive industries and trade policies to allow new industries to mature to the point at which they can survive foreign competition. And governments can use a variety of devices, ranging from job creation to manpower training to welfare assistance, to put unemployed labour back to work and cushion human hardship.

Furthermore he carps at the too strong ideology of politicians. Stiglitz thinks that the debate about globalization needs more scientific and economic facts.

2.3. Other famous publications Making globalization work (2006) Stability with Growth: Macroeconomics, Liberalization and Development (2006) Whither Socialism? (1994)

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3.0. The IMF, blessing or curse?Shown by the example of Ethiopia

3.1. The history of EthiopiaFirstly, I want to point out, that Ethiopia suffered from 1974 to 1991 under the military junta (Militärregierung) of Mengistu. His regime claimed over 200.000 lives of people. After this brutal dictator and times of civil wars, Meles Zenawi gained power by using the military for a putsch. I know, that doesn´t sound very democratic or acting with a good intent, but Zenawi was an extraordinary politician. He has seen the poverty of his own folk and he wanted to help them. Therefore he recognised that Ethiopia needs an economic transformation to come out of the crisis. This was a very brave thinking, especially in times when the capita income of Ethiopia was $110 a year and droughts and famines had killed more than 2 million people. For his crucial aim he studied economic science to put Ethiopian´s politic to a new step. First of all he was committed to (festgelegt auf) the process of decentralization, because he was not an old-fashioned autocrat. He brought the government closer to the people and gave even each region the right to vote democratically to secede of Ethiopia. This constitution prevents that political elites in the capital city (Addis Adaba) could not risk ignoring the concerns of ordinary citizens in sealed of regions. The government was put to the proof when Eritrea (a former region of Ethiopia) declared its independence in 1993.

3.1.1. The role of the IMF

9

Part of the IMF mission is to help countries that experience serious economic difficulties. In return, the countries who are helped are obliged to launch certain "reforms," also known as "Washington Consensus" such as privatizations of government enterprises. Ethiopia relied on the lending program of the IMF. In 1997 Meles Zenawi was engaged in a heated dispute with the Fund, because it had suspended its borrowing. Quite frankly, this action was absurd. Meles Zenawi was the first African politician that had shown that with the right policies in place, even a poor African country could experience sustained economic growth. At this time there was no inflation, in fact, prices were

9 http://www.investorwords.com/2373/IMF.html Christoph Schattleitner 13.04.2023|

The International Monetary Fund (IMF) is an organization set up in 1944 to lower trade barriers between countries and to stabilize currencies by monitoring the foreign exchange systems of member countries, and lending money to developing nations.

MelesZenawi

Mengisturegime

falling. Moreover the output was growing steadily and international assistance was beginning to return to the country. Stiglitz mentioned that it´s important to know, that the IMF is particularly concerned about inflation, especially when a government tries to compensate their deficits by printing money. Unfortunately, they forget that there are other indicators which are of utmost importance. For example, a country can have low inflation but no growth and high unemployment. Therefore it is generally accepted, that inflation isn´t obsessive something bad. Only excessively high inflation often leads to low growth and low growth leads to high unemployment. Stiglitz thinks that the Fund loses sight of what is ultimately of concern, e.g. a country can get an “A” grade (on the degree of creditworthiness) even if it has double-digit unemployment for years, so long as the inflation seems in control. You may ask where is the problem, when only one financier suspends its lending program, whereas there are lots of other financiers. The problem is that other investors see the lending of the IMF as a seal of quality and when the Fund suspends its lending program, other donors do as well. As a result, developing countries like Ethiopia rely on the IMF and its Structural Adjustment Program (SAP). This program force developing countries to liberalize their economic policy. The credit of the Fund is linked with this program, which means that if a country doesn’t reduce its economic barriers, it doesn’t get money any more. And because other financiers only invest, when the IMF does, the Fund has an unbelievable power to develop an enormous pressure on developing countries. The motivation and reasons for this strategy are controversial. Officially they say that they want to “reduce poverty around the world” 10, but critics say that the industrial nations (USA, EU, China, etc.) which have superiority in the IMF, want to gain advantages of the liberalism in developing countries, e.g. they wanted Ethiopia to liberalize its financial market, that is, allow interest rates to be freely determined by market forces- something the USA and Western Europe didn´t do until after 1970, when their markets and the requisite regulatory apparatus, were far more developed. Critics like Stiglitz see in the will of neoliberalism of the industrial nations own interests to make profit.

3.1.1.1. The Ethiopian bank system

In the past the bank system in Ethiopia had one crucial purpose: Give cheap credits for farmers (85% of the population is working in the rural sector) to buy seed (Samen) and fertilizer (Dünger). The IMF wanted to “strengthen” the financial system by dividing the largest bank into several pieces for a better competition. The Ethiopian banking system was quite efficient; at least the lending rates were far lower than those in other developing countries that had followed the IMF´s advice. Ethiopia resisted the IMF´s demand that it “open” its banking system, for a good reason. It had seen what happened when one of its East African neighbours, namely Kenya, gave in to IMF demands. The IMF had believed that competition among banks would lead to lower interest rates. (Zinssatz) In the end 14 (!) banks failed in Kenya in the time between 1993 and 1994 and all in all, interest rates increased, not decreased. Therefore the government of Ethiopia said that they won´t follow the IMF´s advice, because they´re committed to improving the living standards of its citizens in the rural sector; they feared that liberalization would have a devastating (verheerend) effect on its economy. The government had the premonition (Vorahnung) that farmers would be unable to get their cheap credits any more. Unfortunately, the IMF was so certain about the correctness of its dogmatic position that it had little interest in looking at actual experiences. He thinks that the Fund makes use of “textbook economics” which doesn´t fit into every kind of country, especially when we´re talking about developing countries. – They have their own rules. As a result of the rejection of the advice,

10 http://www.imf.org/external/about.htm Christoph Schattleitner 13.04.2023|

the Fund suggested that the Ethiopian government was not serious about reform and suspended its program. Joseph Stiglitz was very disappointed of the IMF and criticized their actions blisteringly. In addition he managed to persuade his colleagues at the World Bank to lend more money to Ethiopia, because it makes good sense. He is convinced that Ethiopia was on the right way out of the crisis. For example it is remarkable that a government cut back military expenditures (Ausgaben), even though it had come to power through military. They did, because they knew that funds spent on weapons are funds that couldn’t be spent on fighting poverty.

3.1.1.2. Ethiopia needs foreign assistance?

A typical government of a developing country has two revenue (Einkommen) sources, namely taxes and foreign assistance. The IMF worried that if this aid dried up, Ethiopia would be in trouble. Hence it argued that Ethiopia´s budgetary position could only be judged solid if expenditures were limited to the taxes it collected. For Laypeople that would sound really logical, but experts – and the workers in the IMF claims about themselves they are- knew that international assistance is more stable than tax revenues in developing countries. This logic is not only paradox, but also it dictates Ethiopia to put money of international assistance into its reserves. Every country should have its own reserve for so called “rainy days”. That would be smart, but frankly, no international donor would give aid for. I don’t think that anyone would donor for increasing the gold reserves of a country. That doesn’t sound like real help. People and therefore nations and (non-governmental) organization donor, because they want to see for instance new schools and health clinics built. But also there is a hitch in it. When the aid money run out, there is no money to maintain these facilities. As a result, it should be the crucial aim to develop a permanent partnership with a low growth rate instead of a short growth explosion with a devastating yo- yo effect. (In this process, the dieter is initially successful in the pursuit of weight loss but is unsuccessful in maintaining the loss long-term and begins to gain the weight back. The dieter then seeks to lose the regained weight, and the cycle begins again11.)

3.1.1.3. Ethiopia today

From 1998 to 2000 were bloody conflicts between Ethiopia and Eritrea (a former region of Ethiopia). The United Nations Organization (UNO) intervened with the UNMEE program (UN Missions in Ethiopia and Eritrea). Badme, the center of conflict, awarded Eritrea. The UN started their mission in 2000 and broke up in 2008, because Eritrea capped the fuel supply of the UNMEE. At Christmas 2005 the IMF (frankly the nations behind the IMF) forgave the debts of Ethiopia and other 18 countries. Now Ethiopia tries to stand on their own feet by developing a so called “small government” which means that the government cancel lots of its expenditures. Therefore all departments have to save up, e.g. the embassy (Botschaft) in Vienna closed at the 31th of October, 2010, aiming to spare money.12

11 http://en.wikipedia.org/wiki/Yo-yo_effect 12 Diverse newspaer articles; for instance: http://www.america.gov/st/washfile-english/2005/December/20051209172454SAikceinawz0.7958643.html http://youthink.worldbank.org/category/tags/debt-forgiveness Christoph Schattleitner 13.04.2023|

3.2. Live Aid in 1985

“Live Aid” was a concert held on 13th of July 1985 in two venues. (Wembley Stadium, London, UK and John F. Kennedy Stadium, Philadelphia, Pennsylvania, USA)

It was organized by the two musicians Bob Geldof and Midge Ure as a charity concert to raise fund for the ongoing famine in Ethiopia (and nowadays Eritrea). It was a widespread famine all over the country, because they all received low rainfalls between 1984 to 1985. Meanwhile the Mengistu regime put 46% of the expenditures into the military. Therefore the people in Ethiopia suffered a lot. Bob Geldof, who also founded previously “Band Aid” (“Do they know it´s Christmas”), organized the Live Aid concert simultaneously held in USA and UK. Nearly every star of this time followed the invitation for example Sting, U2, Queen, David Bowie, The Who, Paul McCartney (first live performance after 8 years), Bryan Adams, Madonna, Neil Young, Mick Jagger, Keith Richards, Bob Dylan and USA for America (“We are the the world”). The concert was an unbelievable success. All in all, over 3 billion people over 60 countries watched the concert on TV or live. Therefore over 283 million $ were donated to Ethiopia to get rid of the bad conditions caused by the huge famine.

I picked out this example, because nothing else can show that also methods of the globalization can be used for good things. The whole world was brought together only with modern technology and the vision of two musicians.

("It's twelve noon in London, seven AM in Philadelphia, and around the world it's time for: Live Aid ...." Richard Skinner opened the show.)

5 days after the LIVE8 concerts the G8 leaders met. The following promises are mainly made by the huge crowd who attended the Live Aid:

$50 billion more aid per year by 2010 debt cancellation for 38 countries, with 18 benefiting this year (happened at Christmas 2005;

see Ethiopia today) Free, quality primary education and basic healthcare for all children. Treatment and bed nets to halve deaths from malaria. Vaccinations to eradicate polio.

Notes of Zimbabwe Work 48 hours a week.

o -> teachers are frustrated, bad or even don´t turn up to the lessons From 600 to 200 $ a month.

o -> sometimes corruption or crime is necessary to survive. Cutbacks in the health system “advised” by the IMF

o -> from 400 to 100 students From 19 to 14 teachers. More classes than teachers.

Christoph Schattleitner 13.04.2023|

4.0. Privatisations and neoliberalismBased on the film “The big sellout” by Florian Opitz

4.1. General overview“The big sellout” is a film by Florian Opitz, a German author and film maker, which tells stories of several people that are affected by the effects of privatisations and the neoliberalism. Joseph Stiglitz acts in the film as kind of guide trough the issue of the IMF and the World Bank and their Structural Adjustment Program (SAP). Opitz shows his findings by presenting stories with cases of hardship.

4.2.1. Privatisation of the British RailwayThe earliest concerted campaign against state-operated sectors began in Britain. Prime Minister Margaret Thatcher’s government began in 1984 with the mines, and then followed with other key areas.

Between 1994 and 1997 the (governmental) British Railway was smashed into over 150 small companies. One problem that turned up, was the missing responsibility for the preservation (Erhalt) of the tracks. “Railtrack” bought the tracks and signalling. Very important is the fact, that this company had remarkably few staff. This turned out badly in the so called Hatfield rail crash (2002), in which four

passengers and two workers died. The reason is as simple as tragical: The tracks had cracks. A high-speed train (185 km/h) went over them and the tracks came to nothing. Now the unbelievable background to this story: Over 300 critical cracks were found in the tracks and the problem was known about before the accident, and replacement rails made available but never delivered to the correct location for installation. (The cracks occur because of too much high loads crossing one track –> “overstress”) This stupid, because avoidable, accident led to 1,200 speed limits all over the UK and detailed checks of the tracks. The sad news: Similar cracks were found nearly in every section of England. Of course, this checks and the replacement program was very expensive for the British government and therefore the service for the tracks was again done by the British government from this time on.

Furthermore the competition between the companies was a huge problem. For instance one train driver complains about that he is driving a fast train, but he has to go slow, because in front of his train there is a local train of a other company.

The companies were more interested in the reputation (Ruf) of the shareholders (Aktieninhaber) than in the safety or comfort of the clients. This turned out extremely badly by savings in timetable adjustments. As a result this led not only to huge delays and cancellation of the trains, but also to devastating train accidents with fatalities (Todesopfer).

Margaret Thatcher, Prime Minster of UK (1979-1990), saw the privatisations of the British Railway as an act of utmost importance to fight communism, whereas the workers of the British Railway companies were unable to agree to this view: “This is an international movement of removing

Christoph Schattleitner 13.04.2023|

workers’ rights or anything which would cut profit”; whereas others are not as that polite: “This is like shit on democracy”. 13

4.2.2. What does a life cost?In 2000 the largest engineering US-company called “Bechtel” signed a contract with the Bolivian dictator Hugo Banzer Suárez for all water rights in the city called Cochabamba. Even the rain got privatized and therefore it was illegal to collect rain water. The police was ordered to punish “water collectors”, even those who drank from brooks, rivers and lakes. Many had to withdraw their children from school and stop using doctors because of higher costs for water. Water prices rose between 30 % and 300 % in one week and an average Bolivian spends one quarter of his income on water. The human right to live was limited by the complicated access to available drinking water. One woman is nearly speechless because of such an act against human nature: “How can one privatise water, a thing that is necessary for everyone’s survival, without which even animals cannot live. Water should not be privatised, either here or in any another country.”14

4.2.2.1. Cochabamba water warsAs a result in January 2000 a huge civil protest turned out, which was depressed by cruelty of the regime (6 people were killed, 170 were injured) to enforce the contract between Bechtel and the government.

After six months the local people dispersed the police and military. Bechtel had to leave immediately Cochabamba (a city in central of Bolivia). One of the revolution leaders said happily: “Now we are about to win the first victory against the neoliberalism.”

Hence privatisations got revoked. The local people had learned to organize themselves to get rid of superimposing Transnational Companies.

Even though the folk won in the end, such a phenomenal act against human nature raises the question, how far economy should go. Has everything in the world a price? If you ask me, I don’t think so. Water is a value and an essential good to live or how a Bolivian woman said: “Water is life. I would die for it.”15

13 http://en.wikipedia.org/wiki/Hatfield_train_crash http://www.guardian.co.uk/uk/2006/jul/25/hatfield.transport14 https://wsws.org/articles/2007/jul2007/sell-j17.shtml 15 http://en.wikipedia.org/wiki/Cochabamba_protests_of_2000 Christoph Schattleitner 13.04.2023|

5.0. Global warming as a consequence of globalizationBased on the findings of the film/book “An Inconvenient Truth” by Al Gore

5.1. Al Gore

Former US-Vice President Gore is the author of An Inconvenient Truth, a best-selling book on the threat of and solutions to global warming, and the subject of the movie of the same title, which has already become one of the top documentary films in history. In 2007, An Inconvenient Truth was awarded two Academy Awards for Best Documentary Feature and Best Original Song.

Since his earliest days in the U. S. Congress 30 years ago, Al Gore has been the leading advocate for confronting the threat of global warming. His pioneering efforts were outlined in his best-selling book ”Earth in the Balance: Ecology and the Human Spirit” (1992). He led the Clinton-Gore Administration's efforts to protect the environment in a way that also strengthens the economy.

Al Gore is cofounder and Chairman of Generation Investment Management, a firm that is focused on a new approach to Sustainable Investing.16

5.1.1. “An Inconvenient Truth”Although his book and film “An inconvenient truth” was in the USA very controversial, it has brought important findings about the coherence between global warming and the globalized lifestyle of the

world´s society. Gore is convinced, that the higher concentration of so called greenhouse gases like carbon dioxide have a huge impact on the increasing temperatures on earth. These gases trigger the so called greenhouse effect. (Explanation: see graphic)

Critics say that this is a natural cyclical phenomenon and to be honest, they are right. Normally, the greenhouse effect is something natural that protects our earth from coldness, but mind that exhausting gases worldwide have rapidly increased. It is scientifically proven that the anthropic greenhouse effect is “stronger” than the

16 Vgl. http://www.algore.com/about.html Picture of Al Gore: http://www.getoutdoorgear.com/images/Al-Gore-An-Inconvenient-Truth-documentary.jpg Graphic: greenhouse effect: http://www.co2crc.com.au/images/ccspics/greenhouseeffect_0.jpg Christoph Schattleitner 13.04.2023|

natural one.17 Reason for this concern is the increase in greenhouse gases, which were produced by the humans. Revolutions in technic (transport, communication) have caused an explosion of exhausts for example in one year 32. Mio. tons CO2 were thrown out into the atmosphere. All the worse is the fact, that carbon dioxide needs almost 120 years for cut backing. The only logical reason in the rise of pollution is the globalization and its consequences in all areas of our life. It´s not only the fumes of fossil fuel which is used in the transport sector, but also the pollution of the industry that frighten the ecologic balance in future. I think that´s the main message of Al Gore: The globalization and its revolutions and innovations have effects on the global temperature system. For this purpose I find the following graphic very interesting.

On the left handside there is a chart of the temperature of the last 1.000 years and in contrast to that there is a chart of the CO2 Concentration of the last 1.000 years. In fact, there is no better proof that there is coherence between an increased pollution triggered by the effects of globalization and global warming.

Furthermore Al Gore tries to prove his findings by presenting lots of examples that should show global warming triggered by humans.

The oceans are already heating up. This causes not only stronger storms and tornados but also the sea level is rising, which means danger, for example, for Venice or countries like the Netherlands. In general, you may be able to say, that the climate will be more extreme. The worldwide disparities will rise further. In particular there will be floods whereas others have to fight with droughts. Furthermore 40% of the glaciers melted in the last 40 years. In consideration of the world´s history of global warming and ice melting, these facts seem like a sensation. Important is the fact, that the ice

17 http://www.solarnavigator.net/greenhouse_gases.htm Christoph Schattleitner 13.04.2023|

has stories to tell. With special methods experts can measure back the CO2 content by exploring the ice. They found out that there was never such a CO2 concentration since the last 1.000 years. But, who is responsible for such a high pollution?

This graphic shows the very interesting fact that the so called industrial nations like the USA, EU or China have the highest rate of carbon emissions. If these pollutions count as a kind of an indicator of globalization, you can see, that only the rich nations are really “globalized”. A huge continent like Africa is nothing in contrast to a small country in size like the industrial nation Japan. In fact there is the point, where we should criticize the globalization. We are not talking about a process that “globalizes” all countries. No, we are talking about a few industrial nations (e.g. USA, EU, China, Japan, etc.) that have superiority over other (poor) countries. As paradox as it sounds, this chart shows that globalization is not a global, namely a worldwide, process.

If you ask me, Al Gore made a good job, because he had shown that the belief in natural balance and ecology is not an issue of crazy eco-freaks, but an issue that should concern everybody. With his scientific proofs he demonstrated that the wrong way of globalization can not only have negative effects on humans, but also on our environment.

Unfortunately, the way out of this is difficult. The reasons are varied, but the main reason is, that people won´t believe these facts. Why they don´t, Upton Sinclar (1878- 1968), a Pulitzer- winning US-author, explains very exactly: “It is difficult to get a man to understand something when his salary depends upon his not understanding it.”18

5.1.2. Other examplesThe documentary of the Austrian director Hubert Sauper “Darwin´s Nightmare” shows that global issues can destroy local economies. It tells the story of an experiment started in the 60s when they introduced the Nile perch to the Lake Victoria (Tansania). This fish was very profitable, but it destroyed the whole ecosystem in the Lake Victoria by killing off 400 other fish species. This real story demonstrates the fact that global pressure can diffuse the natural order and the local economic balance.18 All sources and charts borrowed from “An Inconvenient Truth“ by Al GoreChristoph Schattleitner 13.04.2023|

But also the nuclear tragedy in Fukushima (Japan) shows, that in the first time of history the technology is able to create a global misery by a seemingly local accident. Because of the process of globalization not only all advantages are reachable worldwide, but also the disadvantages.

Finally, I think that globalization has an unbelievable potential- for welfare, but also for destruction.

Insert of 4th chapter (not for Matura)

4.1.1. The African electricity company in South Africa and its effects on the peopleIn South Africa the government privatized the electricity market. The company “Eskom” has no competitors, namely it´s a monopole. When “Eskom” has taken over the electricity supplies of the city called Soweto, they promised that no house would be cut off. Unfortunately, they broke their assurance and today there are 20.000 households that get cut off every month. Since the takeover of “Eskom” the prices are rising and therefore many people can´t afford electricity any more. Mostly, “Eskom” pulls the plug in the wintertime, because it´s more likely that the people would pay at this time. An ex-employee even said: “The Company has no borders to make profit”.

4.1.2. The health system of the Philippines In this part of the film, Opitz tells the story of a mother called Minda, whose 19-year old son needs a dialysis. Unfortunately, she is unable to find work and as a result she lives at the rock bottom of society and therefore she can´t afford medical care for her son, because she knows: “No money, no medical assistance”. It´s important to know, that there is a two class medical system in the Philippines. On the one hand the public budget for the medical sector got cut 50%, because the government spent the money for their own personal wealth and national defense. On the other hand poverty is rising steeply. This triggers the paradox that in the Philippines 20.000 nurses graduate every year, but several hospitals got closed, because of lack of employees. Most of the nurses emigrate to western countries, because the private medical system doesn´t pay sufficient salary to survive.

Christoph Schattleitner 13.04.2023|

Vocabulary

Mergers ZusammenschlüsseSupply and demandReserve holdings WährungsreservenSmall government Schlanker StaatTo superimpose aufoktroyierenTo compete konkurrierenPrerequisite VoraussetzungBackfiring FehlschlagendGross national product BruttonationaleinkommenGross domestic product (GDP) BruttoinlandseinkommenTo astonish In Staunen versetzen

Index

A

advocateVertreter..........................................................16

assuranceVersprechen.....................................................19

C

capita income.........................................................9cases of hardship..................................................13coherence............................................................16cracks

Risse.................................................................13currencies

Währungen........................................................9cut backing...........................................................17

D

degree of creditworthiness..................................10demand

hereForderung....................................................10

devastating effect.................................................11dissent

hereMeinungsverschiedenheiten.........................7

dogmatic position.................................................11

E

economic barriers................................................10embassy

Botschaft..........................................................12emergence

Enstehung, Auftreten.........................................4Eritrea capped the fuel supply..............................11expenditures

Ausgaben.........................................................11

F

fatalitiesTodesopfer.......................................................14

frontiersGrenzen.............................................................3

G

goodsWaren................................................................3

got revokedrückgängig gemacht.........................................14

H

have been imposedauferlegen..........................................................8

he was committed tofestgelegt auf.....................................................9

hegemonial power.................................................3

I

impliesbesagt................................................................3

incriminate

Christoph Schattleitner 13.04.2023|

jdn. belasten......................................................8interest rates

Zinsen/Zinssätze..............................................10

L

lack of employees.................................................19lending program

Kreditprogramm................................................9

M

microeconomics"small economics" that studies the behavior of

how the individual modern household and firms make decisions to allocate limited resources.......................................................7

military juntaMilitärregierung.................................................9

N

natural cyclical phenomenon...............................16

O

obligedverpflichted........................................................9

overstressÜberbeanspruchung........................................13

P

polioKinderlähmung.................................................13

premonitionVorahnung.......................................................11

preservationErhalt(ung).......................................................13

pull the plug.........................................................19

R

reallocationUmverteilung.....................................................5

rejectionAblehnung........................................................11

revenue

Einkommen......................................................11rising steeply........................................................19rock bottom of society.........................................19

S

seal of quality.......................................................10Structural Adjustment Program (SAP).................10

T

takeover...............................................................19The government was put to the proof...................9there is a hitch in it...............................................11to be about

im Begriff sein..................................................14to criticize sth. blisteringly....................................11to disperse

vertreiben........................................................14to enforce

durchsetzen (den Vertrag)...............................14to secede

sich abspalten....................................................9to stand on their own feet....................................11to strengthen sth.

etw. stärken.....................................................10to suspend

etw. aussetzen...................................................9transnational companies (TNCs).............................3

U

UNMEE program (UN Missions in Ethiopia and Eritrea).............................................................11

V

VaccinationsImpfungen........................................................13

W

Whitherwohin?...............................................................8

withdrawabziehen, zurückziehen....................................14

worldwide disparities...........................................17

Christoph Schattleitner 13.04.2023|