What is Neoliberal Globalization?
Globalization refers to the growing interconnectedness of the world’s economies, cultures, systems of political governance and cooperation. At a basic level, globalization enables the exchange of resources, ideas, food, music, art, information, knowledge, and technology beyond a geographically local area. In this respect, globalization has its benefits — namely of bringing different peoples and societies into closer contact with one another and cementing mutually beneficial relationships. It is also not a new phenomenon; even millennia ago, the great civilizations of Asia, the Americas, Africa, and Europe developed complex trade routes that crossed continents.
"Neoliberal globalization can be understood as a 21st century form of imperialism — but the key players are businesses, not monarchs."
Globalization has been heralded as a way to lift millions around the world out of poverty with the promise of new economic opportunities or Western-style democracy. But there is also a dark side to globalization, and the social and environmental injustices associated with neoliberal globalization are particularly dire. Neoliberal globalization, in contrast to globalization in general, has a set of defining characteristics designed to create maximum profit through the strategic use of the world’s resources and global production processes. Neoliberal globalization can be understood as a 21st century form of imperialism — but the key players are businesses, not monarchs. It is facilitated by four mechanisms that play out on a global scale: 1) governments pursuing free-trade agendas (market liberalization); 2) an end to most governmental regulation of business practices (deregulation); 3) the takeover of former public services and state agencies by private corporations (privatization); and 4) reductions in social welfare programs and environmental protections in both global South and North countries (fiscal conservatism). In this way, global resources, people — and even governments — end up exploited for private profit. A key player in the process of neoliberal globalization is the transnational corporation — a privately-owned or shareholder-owned business that operates in numerous countries, often headquartered in the global North while relying on the resources and human capital of the global South.
Enabling Neoliberal Globalization
Due to the development of new global communications systems (the internet, etc.), modes of transportation (such as containerized shipping), and international finance (the rise of global banking), transnational corporations now possess unprecedented geographic mobility. With this ability to easily cross national borders, corporations can locate their dirty production facilities and destructive natural resource operations in virtually any corner of the planet, especially in countries where the cost of labor is cheaper and environmental regulations are weaker. (Incidentally, they also happen to be far from the eyes of their consumers and stakeholders.) As a result, people, governments, and nations are increasingly being pitted against one another like never before in the bid to attract corporate investment to their communities by further lowering wages, reducing business taxes, blocking significant climate protection measures, and sacrificing their own environmental regulations. We only need to look at the bidding war between cities created when Amazon was seeking a location for its second U.S. headquarters to understand this phenomenon is happening everywhere.
Neoliberal globalization seeks to allow transnational corporations to increase their profits by avoiding costly environmental regulations and climate policies.
Neoliberal globalization seeks to allow transnational corporations to increase their profits by avoiding costly environmental regulations and climate policies — especially by facilitating the dumping of hazardous industries and pollutants onto the global South. Sometimes, this startlingly exploitative logic is expressed publicly. Lawrence Summers (also known for being the former Undersecretary of the Treasury of International Affairs, a key economic policy advisor in the Obama administration and a former President of Harvard University) is infamous for writing a memo when he was a chief economist at the World Bank that argued:
“Just between you and me, shouldn’t the World Bank be encouraging more migration of the dirty industries to the LDCs [Least Developed Countries]? […] A given amount of health impairing pollution should be done in the country with the lowest cost, which will be the country with the lowest wages. I think the economic logic behind dumping a load of toxic waste in the lowest wage country is impeccable and we should face up to that.”
The Summers memo reflected the sentiments of many U.S. policymakers and multinational corporations: that human life in the global South is worth much less than in the United States. In this respect, the term “globalization” is often used as a cover word by policymakers to describe the imposition of neoliberal capitalist development models all around the world. And it is these development models which are the root cause of the global ecological crisis.
Neoliberal Globalization and Climate Injustice
The first imperative of businesses in this new vision of a global economy is not to increase prices or even production — but rather to lower production costs. Because domestic and international export markets are reaching more and more people while simultaneously becoming more cutthroat, cost minimization strategies now lay at the heart of business strategies for profit maximization. The increased displacement of pollution or the dumping of toxic waste onto poor people of color and working class neighborhoods is a key component of this larger strategy. It is simply most expedient to displace environmental harms (hazardous mining and production processes, toxic dumping, the construction of hazardous and polluting facilities, and even the continued use of highly polluting sources of energy because they are cheaper) onto those communities that lack the political-economic power to resist, both domestically and abroad. This results in a “race to the bottom” between workforces, regions, and nations pitted against each other to provide the cheapest labor, least environmental and social protection, and largest subsidies to globally mobile capital no matter how unsustainable those practices may be. Although morally reprehensible, under the system of neoliberal capitalism, it pays business to shift pollution and climate-related impacts onto the most economically marginalized populations of the world.
It is estimated that this environmental damage (or ecological/climate debt) owed by the United States and other advanced capitalist countries to the countries and communities impacted by the carbon emissions alone amounts to over $40 trillion per year. That is just the emissions debt of one wealthy nation. The cumulative debt owed by rich countries to the global South for raw materials, human labor, and other forms of exploitation since 1960 is estimated to be about $152 trillion. Moreover, the global North’s ecological and climate debts arising from excessive use of the South’s environmental space are accelerating, even as the economic debt owed by many poorer countries to U.S. banks continues to grow. The South’s economic debt and the North’s ecological/climate debt are symptomatic of the “unfair” trade-off brought about by neoliberal globalization. And as these climate debts mount, neoliberal globalization is threatening to undermine the ecological stability of the entire planet that is so fundamental to flourishing human life (not to mention neoliberal globalization itself). With this kind of a track record, the rise of environmental and climate justice struggles in the global South and North are a natural and protective response to the abusive practices of neoliberal globalization.
