A sociologist looks at what happens when a third of the world's wealth hides in tax havens. Scott McLemee watches him slice the globaloney.
Searching JSTOR for the term “globalization” yields well over 89,000 results, which hardly comes as a surprise. But its earliest appearance is odd: it's in an article from the September 1947 issue of The Journal of Education Research called “A Rational Technique of Handwriting” by H. Callewaert, identified by the editors as a Belgian medical doctor.
The article is the only thing he wrote that I have been able to locate, but it makes clear the man's deep commitment to good penmanship. To establish its teaching on a firm, scientific basis, Callewaert felt compelled to criticize “the notion of globalization” – which, in the first half of the 20th century at least, derived from the work of Jean-Ovide Decroly, a pioneering figure in educational psychology, also from Belgium. (Searching JSTOR for the variant spelling “globalisation” turns up a citation of Decroly in The Philosophical Review as early as 1928.) An interesting paper on Decroly available from the UNESCO website explains that globalization in his sense referred to something that happens around the ages of 6 and 7, as experiences of play, curiosity, exercise, formal instruction, and so on develop their “motor, sensory, perceptual, affective, intellectual and expressive capacities” which form “the basis of all their future learning.” In globalization, these activities all come together to form a world.
Callewaert’s complaint was that teaching kids to write in block letters at that age and trusting “globalization” will enable them to develop the motor skills needed for readable cursive is an error -- whereas teaching them his system of “rational writing,” with its “harmonious coordination of the movements of our fingers,” will do the trick. (There are diagrams.)
Two things sent me off to explore the early history of the term, which is also used in higher mathematics. One of them was a realization that many friends and colleagues -- most of them, probably -- cannot remember a time when references to globalization were not ubiquitous and taken for granted. They’ve heard about it since busy with their own globalization, a là Jean-Ovide Decroly.
Glancing back at JSTOR, we find that papers in economics and international relations begin mentioning globalization in the early 1950s, though not very often. Less than one percent of the items using it (in any of its senses) appeared before 1990. After that, the avalanche: more than 77 percent of the references have been in papers published since the turn of the millennium.
A new book by John Urry called Offshoring (Polity) includes a thumbnail intellectual history of the quarter-century or so since the term became inescapable. “At least a hundred studies each year documented the nature and impact of many global processes,” he writes, surely by way of extreme understatement. “Overall, it seemed that economies, finance, media, migration, tourism, politics, family life, friendship, the environment, the internet, and so on, were becoming less structured within nation-states and increasingly organized across the globe.” (Urry, a professor of sociology at Lancaster University, is the author of a number of such studies.)
Globalization was, so to speak, a social order with the World Wide Web as its template: “characterized by mostly seamless jumps from link to link, person to person, company to company, without regard to conventional, national boundaries through which information was historically located, stored, and curated.”
There were worriers, since sinister and even fatal things could also catch a ride in the flow: terrorism, organized crime, ferocious microorganisms, etc. But the prevailing wisdom seemed to be that globalization was an irresistible force, and an irreversible one; that we were getting more cosmopolitan all the time; and that the cure for the ailments of globalization was more globalization (as John Dewey said about democracy).
Such was the rosy color that the concept took on in the 1990s, which now looks like a period of rather decadent optimism. Offshoring is Urry’s look at what we could call the actually existing globalization of today. Its title refers to what Urry considers the central dynamic of the present-day world: a continuous “moving [of] resources, practices, peoples, and monies from one territory to others, often along routes hidden from view.” It is not a new term, and in common usage it calls to mind at least three well-known activities. One is the transfer of manufacturing from a highly industrialized country to one where the costs of production, in particular wages, are much lower. (In its first appearance in JSTOR, from 1987, “offshoring” is used in this sense.)
Another kind of offshoring is the concealment of assets through banks or business entities set up in countries where financial regulations and taxes are minimal, if they even exist. A company with its headquarters in the Cayman Islands, for example, is unlikely to have an office or personnel there; its affairs can usually be handled through a post-office box. And finally, there is offshore drilling for oil.
Distinct as these activities are, Urry understands them as converging aspects of a process that defines the dark underside of globalization. Forget the happy vision of goods, services, culture, and information being exchanged through channels that cut across and negate boundaries between nation-states. The reality is one of an increasingly symbiotic relationship between the economies of prosperous societies and the governments of various countries that serve as tax havens:
“[M]ore than half of world trade passes through these havens, almost all High Net Worth Individuals possess offshore accounts enabling tax ‘planning,’ [and] ninety nine of Europe’s largest companies use offshore subsidiaries…. Overall, one quarter to one third of all wealth is held ‘offshore.’ The scale of this offshored money makes the world much more unequal than previous researchers ever imagined. Fewer than 100 million people own the astonishing $21 trillion offshore fortune. This is equivalent to the combined GDPs of the U.S. and Japan, the world’s first and third largest economies.”
With enormous masses of wealth thus safely secured off in the distance -- far from the clutches of the nation-state, which might insist on diverting some of it to schools, infrastructure, etc. -- postindustrial societies must adapt to “offshored” manufacturing and energy resources. (The author has in mind dependence on fuel coming into a country from any source, not just the rigs pumping oil from beneath the seafloor.) At the same time, another sort of offshoring is under way: the ocean itself occupied by shipping platforms so huge that they cannot dock in any harbor, and “arcane ownership patterns at sea which make it almost impossible to pin down and ensure that ships are properly built, maintained, and kept seaworthy.”
Urry’s earlier work has explored the connections between social organization and the experience of space. Here, he seems to take aim at the old claims for globalization as a force for mobility, links across cultures, and even the emergence of a sense of planetary citizenship. The spaces created by offshoring are very different – characterized by concealment, restricted access, and distances between social strata that look like bottomless chasms. Urry's proposed remedy, in a nutshell, is for the nation-state to reimpose taxation on all that extraterritorial wealth. He must have felt obliged to suggest something, but it's like recommending that you escape from a threatening situation by learning to fly. One would appreciate a lesson in how it is to be done.
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