We?re all global players now

Britain was at the centre of an empire for 200 years. After its loss, the country has failed to grasp globalisation.The rules are different and the future complex

THE world has shrunk. The integration of economic activity across the planet, so that actions in one place have ever more rapid and ever more significant consequences in other places that are ever more remote, has been going on for a long time. It has turned the world into a faster-moving, more connected, smaller place. A good or bad coffee harvest in Brazil can mean impoverishment or enrichment for a New Guinea village within months. The colossal expansion of the toy industry in China has meant that ? even if they had wanted to ? my children could not grow up as I did with Dinky Toys and Meccano, while the fluctuations in the efficiency of the Chinese national grid can change the price of oil, and so the cost of filling up my car in Britain, in a matter of days.

Recently we have seen that in some areas a world labour market is appearing. A decision in the United States can move a call centre or an assembly plant from Ireland or Wales to India or Vietnam as wage costs dictate. Most fundamentally, the general abandonment of exchange controls has integrated capital markets, especially those of the most developed countries. At this most abstract level, human interaction is already a global rather than a national phenomenon: the daily turnover of the world?s currency markets, mainly based in London, is, at over $1,000 billion (?558 billion), rather greater than the annual budget of the British State.

Fear is a natural reaction to something as big as globalisation. We fear that money seems to be usurping all other values. We fear that a world market, dominated by multinational corporations, will have more influence over our lives than democratic institutions and the representatives we have chosen. We fear the loss of our local traditions and identity, submerged in a universal consumer culture. All these fears are misplaced. Not that there is nothing to fear ? but if our fear obscures from us the true nature of the great changes coming over the world our response to the changes will be irrelevant, or will even make matters worse.

In the first place, we should remember that globalisation, like any other economic process, is simply a consequence of what people ? many people, in many different places ? want. Economic relations are not a malign conspiracy of a few power brokers, nor are they an impersonal and irrational machine. They are the means which enable me to satisfy my own needs by working to satisfy the needs of others. Increasingly (and this is ?globalisation?), they relate what I want to what everybody wants ? and to the conditions of the work by which they try to get what they want. McDonald?s is everywhere because everywhere there are people who want to eat Big Macs, and everywhere there are people (such as myself when I invest the proceeds of my work in my pension fund) who want shares in the business of providing them. It is very difficult to be honest about what you want. The true measure is not what you say or think, but what you do ? above all, what you do with your money, and the work you do to get it. There is something wonderfully truthful about economic relations ? or, as Dr Johnson put it: ?There are few ways in which a man can be more innocently employed than in getting money.? By contrast it is churlish to the point of hypocrisy to express pious hopes for ?development? in the Third World and then, when that development takes on the form of Indian or Chinese competition, to demonstrate against it in the name of anti-globalisation. Indian writers of software, and Chinese manufacturers of shoes and toys, thrive ? and therefore Western providers of these goods and services go out of business ? because consumers everywhere, including consumers in the West, want to pay Indian and Chinese prices rather than the prices asked by Westerners. Globalisation happens, not because some mysterious agency imposes it, but because we want it. Globalisation means equally global competition and global development. Happily, therefore, and whether we like it or not, because we want Indian and Chinese prices, we want ? really want, not just say or think it would be nice or good ? the development of India and China.

Now of course playing fields are rarely level, pricing mechanisms are rarely fair, and wherever two or three gather together in a market they are plotting a cartel. Within states structures have been developed ? voting rights, representative institutions, legal codes ? to restrain the universal desire to compromise the purity of the exchange relationship and have a free ride at the expense of everyone else. There is a fear that a global market, transcending most national states, would not be subject to these restraints.

It is certainly true that there are grotesque distortions of the world market in prospect or already in existence. But the worst of these are of a much greater magnitude than, say, a price-fixing agreement between the major drug companies. The worst offenders by far are national, democratically elected governments. The agricultural subsidies of the United States and the Common Agricultural Policy of the European Union are not just crimes against the free market ? they are crimes against humanity. How else can one describe the deliberate decision to ruin and starve the cotton, sugar, wheat and cattle farmers of Africa and Latin America in order to preserve the peasant economy that gives us so many varieties of French cheese or Burgundy wine, or to maintain the picturesque lifestyle of Southern gentlemen and Austrian cowherds? Perhaps the grossest infringements of economic liberty in the world today are the immigration policies of national governments which prevent labour from moving to follow the best prices on offer. (There would be fewer women in Far Eastern sweatshops, and on better wages, if the employers had to compete with American families looking for maids or British hospitals looking for nurses.) Even the threat that biotechnology companies will use GM crops to stitch up the world market in seeds is dependent on the willingness of governments to pass and enforce the relevant patent legislation. The manipulation of genes is far less outrageous than the manipulation of the law.

In Why Globalization Works Martin Wolf has wisely observed that we have not too much globalisation but too little. Specifically, we need still more international agreements and still more powerful, supranational bodies, to prevent state governments from pursuing on the global stage the racketeering policies long outlawed in national economic life.

In Britain there is a rooted suspicion, indeed a fear, of supranational life, focused particularly on the institutions of the European Union. There is a feeling that through Europeanisation, Americanisation, or globalisation the world is conspiring to rob the British of their independence, their culture, and identity. Whether it is the advance of the Golden Delicious at the expense of native varieties of apple, or the craze for fast food instead of roast dinners, or children?s preference for playing Japanese video games rather than village cricket, everything seems to confirm the dissolution of what was specifically British, or even English, into an anonymous, transnational soup. The fear is tantamount to a national neurosis, and like most neuroses it is designed to conceal a deep trauma in the past. The British are indeed victims of globalisation, but not of the EU or of modern multinational companies. Globalisation has a much longer history than that, and for at least 200 years Britain was one of its principal instruments.

The British Empire, like the other great colonial empires of the nineteenth century, was an attempt to establish a political structure on a global scale to encompass a similarly worldwide economic system. But the nineteenth-century empires were based on a fundamental contradiction. On the one hand there was their ambition to centre their respective political structures on a single, privileged European nation. On the other there was the intrinsically global nature of the economic expansion that gave them their worldwide reach. The political structures of the European empires collided and destroyed each other in what I have called the Seventy-Five Years? War, from 1914 to 1989.

The only power to emerge unscathed, and dominant, from this terrible slaughter was the United States. By its founding ideology America was committed to free trade yet protected from the ambition to establish its own worldwide political structure, and by geographical good fortune (?manifest destiny?) it could content itself with territorial consolidation rather than venture into overseas colonialism.

Of all the European powers Britain suffered most from the loss of its empire, and not just because its empire was the largest and most successful. It was also one of the oldest, and the one that most deeply formed the national life of its metropolitan state. Most of what the elegists for a lost England think of as distinctively English is really distinctively imperial. Britain in 1945 had the grave disadvantage of believing it had been victorious in a global conflict from which it had actually retired bankrupt and despoiled. Ever since, the British have lived off that illusion, and every reminder of its illusory nature, every reminder of the reality that is the centuries-long onward march of globalisation, renews the pain of loss and the determination not to acknowledge it. Acknowledgement would bring an understanding of Britain?s reduced political significance in the world, its role as a component part in a worldwide interdependent economy, and the need for effective international agreements to regulate that economy for the benefit of everyone. But the British don?t want to understand that. And so they get the UK Independence Party (UKIP).

England made its first unilateral declaration of independence from Europe in 1534. The Act of Supremacy was not merely a redefinition of the Church, it was the first and founding definition of a nation. By denying that any legal, fiscal, or administrative authority could originate outside its territorial boundaries, Henry VIII transformed his kingdom into a unified state. By trade and empire, by exploration, and by exporting its local dialect, that state grew into one of the most powerful agents of the planetary unification of the human race. But everything it achieved was marked by that original claim to independence, and wherever the English flag and language went relations with the Church of Rome were at best uneasy. Catholicism represented a denial of the national autonomy that was England?s (and later Britain?s) foundational myth. The myth came to conflict ever more obviously with the reality created by the empire and its former colonies. States have only a relative independence, and only a limited hold over their citizens.

Economically, juridically, culturally, and spiritually, human beings belong to larger units than the nation-state; and for as long as they continue to trade with one another those larger ties will grow stronger and more evident. That is what ?globalisation? really means. But the results of the recent European elections suggest that there are still many in the United Kingdom who have yet to learn the significance of that day in 1972 when Edward Heath signed the treaty which brought England back to Rome.

Nicholas Boyle is professor of German literary and intellectual history in the University of Cambridge and a Fellow of the British Academy. He is the author of Who Are We Now? Christian Humanism and the Global Market from Hegel to Heaney. His latest book, Sacred and Secular Scriptures, A Catholic Approach to Literature, will shortly be published in the UK by Darton, Longman and Todd. This week he discussed Ian Linden?s book A New Map of the World with the author at the annual conference