Things We Don't Understand About Globilization

Things We Don't Understand
About Globalization

In order to get started we decided that we would first describe what we don’t understand about globalization.

We are having a very hard time understanding exactly what it is the protesters who have been creating so much static and dissension at meetings of world leaders are trying to accomplish. Jim’s generation spent their formative years on the streets of America protesting the war in Vietnam and racial discrimination. Both of those movements were extremely successful - the government was forced to come to it’s senses (is that an oxymoron?) and laws were enacted that made racial discrimination much more difficult to practice in the work place, education and many other venues and the military was withdrawn from Vietnam.

But, what is it that these protesters want? All we have seen so far is violence and destruction of personal property that, of course, does not belong to any of the protesters. In fact, this has been the case since the French farmer who was enraged about the proliferation of fast food restaurants in France decided to take out his frustration on the McDonalds in his town by physically damaging the building. This man is credited by the media as being the father of the anit-globalization movement. From what we have heard, he was (is) upset with the United States because they imposed a tariff on any Roquefort Cheese that is imported from France. If you are unaware, France is the only place Roquefort comes from - it is unique to France. He says that he is protesting the destruction of French cuisine by the proliferation of McDonalds and other such fast food restaurants throughout France.

OK, for the sake of argument let’s say that the imposition of this tariff is the singularly most heinous crime that has been committed in the history of man. Something must be done. What is destroying a McDonalds going to do?

Well, for one thing it gets you on the television news broadcasts and in the newspapers and news magazines.

What else does it do?

It ruins a fellow neighbors business (McDonalds hamburger stands are usually not owned by the McDonalds company - they are franchises that are sold to local business people who then are required to operate the business in conformance with the standards set forth in the franchise agreement . If you do not operate in conformance with the standards you loose the franchise and it can be sold to someone else).
It sets the tone for all who come after you - you have now advertised to the world that the way to show your dissatisfaction with something is to trash McDonalds (specifically) and any other multinational company.

If we understand it correctly, it was someone else who tied his protest to globalization - the media.

It would seem to us that if this gentleman is upset with the proliferation of McDonalds and other multinational companies in France he should understand a little bit about how business works.

Destroying a building is not going to deter the sale of Big Mac’s, McFlurry’s, Egg McMuffins or any other McProduct. The only reason McDonalds (or any other company for that matter) is where it is is because people are purchasing the products being offered for sale. Basic Business practices tell us that the objective of any business is to produce a profit. If the business does not produce a profit it will not be able to pay it’s bills. When a business cannot pay its bills that means that the companies that it purchases the items that it uses to produce its products from will not sell them anything and the business will no longer be able to produce a product. You can throw stones at a successful business all day and that is not going to put it out of business - it may make the insurance premiums they pay much higher but if they continue to sell their products and produce a profit they will continue to operate.

So, what is the strategy of the anti-globalization protesters? If the farmer is really upset about McDonalds and all the other fast food restaurants that he sees destroying his “Olive Tree”1 it would seem to us that he should be directing his wrath against his neighbors - they are the ones who are purchasing the Big Mac’s, McFlurry’s, Egg McMuffins and other McProduct’s. We will make a strong statement.

If the people in the town do not purchase anything at the McDonalds in question it will be gone in a very short period of time.

McDonalds, or any other business for that matter, is where it is because people are purchasing the products and they are making money. This is what Basic Business is all about. A very simple process but it appears to us that the farmer and the protesters do not understand this elementary concept.

But, having said all this, Friedman, in his follow on book, “The World is Flat²” states:

“What the world doesn’t need now is for the anitglobalization movement to go away. We just need it to grow up. This movement had a lot of energy and a lot of mobilizing capacity. What it lacked was a coherent agenda for assisting the poor by collaborating with them in a way that could actually help them. The activist groups that are helping alleviate poverty the most are those working at the local village level in places like rural India, Africa, and China to spotlight and fight corruption and to promote accountability, transparency, education, and property rights. You don’t help the world’s poor by dressing up in a turtl outfit and throwing a stone through McDonald’s window. You help them by getting them the tools and institutions to help themselves. It may not be as sexy as protesting against world leaders in the streets of Washington and Genoa, and getting lots of attention on CNN, but it is a lot more important. Just ask any Indian villager.”

Since we originally wrote the above we have been able to learn a little more about the “stuff” that the anti-globalization people are on about. Specifically, we have been able to listen to the two French women who take great pride in telling the world that they were the organizers of the demonstration that disrupted the World Trade Organization (WTO) meeting in Seattle, Washington in 2000.

The first thing we noticed is that there is a great deal of emotion about globalization among the French. What we found of particular interest in listening to these two women was that they were absolutely incensed that business, by way of the WTO, was making decisions about how things would be done that impacted France and other countries and not the governments of the countries where these businesses were operating.

So, with this in mind we offer the following as food for thought. Is it really surprising that businesses are making decisions that impact people world wide? In 1998 Jim had the opportunity to listen to one of the founders of Ben and Jerry’s Ice Cream speak at a conference. While the main thrust of his presentation was how difficult it was for a David (Ben and Jerry’s Ice Cream) to take on a Goliath (the chain supermarkets) in order to get their products into large supermarkets, the opening remarks were very interesting.

The opening remarks posed a rhetorical question, “Who does man worship today?” He then offered the following. If you look at history, man has always built his temples to the deity that was being worshiped at that time. Initially the temples were built for religion. Look at the number of Cathedrals, Mosques, Temples, etc., etc., that man built for centuries to celebrate religion. Following religion came government and the numerous public buildings that were built to celebrate government. He then suggested that today, we were in the third phase of temple building and that today we built our temples to business.

Based on the events of September 11, 2001, we would have to say that there is a sizable number of people in the world that agree. Is it a coincidence that the World Trade Center which was the symbol of business the world over was targeted? We think not - in fact because the “twin towers” symbolized free market capitalism they were targeted, not for the first time.

Having said that, we cannot help but wonder what it is that these two ladies really want. Do they really believe that government is capable of making better decisions than business? What we suspect is that they believe that when business makes decisions it is done behind closed doors and not in the public forum. Well, this does beg the question about how much input the public really has through any government when it comes to decision making.

We got the feeling that these two felt that government was the solution and that business should not be allowed to make any decisions - sounds a little socialistic to us, but then that is exactly what the French have done for years. Jim’s favorite all time French story is how the government of France outlawed encryption over computer networks. It took many of the brightest minds leaving France and emigrating to the US to work in Silicone Valley and many businesses screaming for the ban to be lifted because they were losing business because they could not do business over the Internet before the French government rescinded their law.

Now the French are finding that the 35 hour work week that labor was so in love with and business fought tooth and nail against is causing great problems for French businesses because they cannot compete because people are not on the job and their expenses for salaries have not gone down. We will continue to watch this one.

We will also watch what we are seeing in Italy at the present (late 2002). The labor unions in Italy are currently causing disruptions by going out on strikes because the government is proposing sweeping changes in the labor laws that will allow businesses to dismiss employees in order to improve their competitive stance. We have been able to read a fair amount about this in English translations of the Italian newspapers.

From what we have read to date, most of the arguments against letting businesses dismiss people revolve around what would happen to the work force going forward. The things we have read stress that many workers would become contractors and that this would be bad because as contractors they would not receive the benefits that employees receive, like training. These article used examples of American workers who had found themselves in similar positions and that without the benefits the employers provide their employees (health insurance and training being the big examples) the workers in America are struggling. REALLY?

Both of us were American workers who left the company we had worked for for 22 (Jim) and 16 (Verna) years. We both went to work as contractors. Within five years we were able to retire. We surely would still be working today had we not done this. Nothing was any different for us - we needed insurance coverage, training, etc., etc. The prices we charged for our services reflected this. Most people look at the money contractors make and get angry. We do not understand why. Contractors by definition must be paid more in salary in order to cover the additional expenses they have. But, even with the salaries that contractors demand, they are cheaper in the long run than full time employees because of all the benefits that employees receive and this is why business wants to use contractors.

What we really liked was the argument that the Italian newspapers made about how difficult it would be for workers to find work as contractors. We think that the major difference between ourselves and most other people is that we never thought that anyone, or any company, owed us a thing. Especially, training. While we both worked for the same company for many years neither of us felt that it was the company’s responsibility to see to it that we had job skills that were in demand in the market place. It would have been very easy for us to walk into work everyday and do the same thing over and over again until we retired. Neither of us ever did that. What we did do was continually educate ourselves and apply for different jobs in the company so that we would increase our ability to do more varied things. We do not think that other people look at what their job skills are and assess them against what is in demand in the market place. But, what people do is complain when they realize that the job skills they have are not in demand and look for someone or something to blame.

From what we have seen, there are very few people who are willing to take responsibility for themselves and do this. Jim has had the opportunity to work with several Silicone Valley manufacturing businesses where the primary employees were low skill laborers working on assembly lines. In every one of these companies the management, when asked, stated that their favorite employees were the Vietnamese. Why?

They came to work every day, and on time. Now this sounds like a no brainier but Jim was told that absentee workers were a major problem.
These same managers said that the Vietnamese did their jobs with a great deal of pride and had very few errors.
At night, the Vietnamese attended school to learn English and improve their education.
And, there were no drug problems.

The main form of employee attrition for the Vietnamese workers was due to people receiving university degrees and moving up in the work force.

So, having personal experience that is exactly the opposite of what is stated in the Italian newspapers we have to question the validity of the arguments being put forth. We cannot help but wonder if any of these concepts are anything new. Is it the responsibility of a company to care for its employees from “cradle to grave”? Is the concept of taking responsibility for what happens to you yourself any different today than it was years ago when men were clubbed over the head and “pressed” into service on a sailing vessel? Somehow, we think not.

Don’t understand what we mean by this? Go back to the Thoughts About Our Travels page and get the information about Friedman’s book The Lexus and the Olive Tree and read it!

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