'Nations and persons', The Hindu, July 4, 2003.

"Globalisation" said the artist "is as old as man". This simple truth appears to have escaped many in a craven approach to a barely two-decade young project of converting the earth's crust into nothing more than a production site. A new globalisation appears willy nilly to have crept upon us. Much is promised on its behalf, good and bad equally. Usually it revolves around the question of whether globalisation is the answer to faster economic growth. It appears to have escaped attention, however, that not all economic concerns are extinguished by reference to an expanding cake, even if it were forthcoming for sure. Even the dismal scientist may be curious as to how the gains from growth are being divvied up. The issue is whether the distribution of outcomes and opportunities accords with our notion of justice.

            In the wake of globalisation, we would be after the idea of a global justice. Upon reflection, we would be assailed by the anomaly that justice globally speaking is currently identified with inter-national equity. As Amartya Sen has pointed out, however, they are not the same. As notions these differ both in terms of their constitutive content and in terms of their policy implications. The contrast between global and international equity bring forth two issues. These are the domain of social justice and the concept of a person, the comprehension of both which are now up for negotiation.

As regards the domain of justice, the question is whether justice is to be applied only to individuals within nations with anything of cross-border significance being seen as relations between nations. As regards the concept of the person, we may wish to query whether a person's identity is to be contained by nationality, giving this aspect priority over any other identity that he or she might adopt. What are some of these other identities? Well, these may be based on the person's profession, political beliefs or gender. Are all of these to be resolutely ignored in favour of nationality? Once we acknowledge that individuals have plural affiliations, as Sen terms it, we see that international relations are a hopelessly inadequate basis for arriving at global justice or equity. As citizens of India we may choose to subscribe to global religions. As citizens of Singapore we may choose to lead what our leaders see as non-Asian lifestyles. An English labourer may empathise more with the rights of Indian workers rather than Britain-based multinationals, as some did in the nineteen forties when Gandhi explained to them the rationale of his swadeshi movement. A concept of justice based on a parity between nations as enshrined in the concept of sovereignty cannot handle these issues. Global equity means something far wider than the international equity that gets focussed upon in world fora today. It must address interpersonal equity among the people of the world.

I now turn to a strictly economic relation and point out that global justice is yet to be achieved, in fact is unattainable, under the new globalisation. I refer to a central relation in economics, that between capital and labour. In attempting to evaluate the extent of justice adhering to the rules governing their interaction in the current world order we are in need of a theory of justice, by which we mean a framework for the resolution of claims. While there are more than one, I am sufficiently persuaded by the Rawlsian notion of 'justice as fairness' to work with it.

 

It is easy to see that in the current world economic order the rules governing the relation between capital and labour are far from just. Not only is capital mobile across borders but its mobility as foreign direct investment in developing countries is now aggrandised as being central to their development. The latter is controversial, but this need not hold us back at this stage. We only need to remain aware that nothing like a similar freedom operates for labour. Entry restriction is rife with respect to unskilled labour. Compared to the barriers to immigration, capital today is spoilt for choice in terms of geography. The rules governing the movement of capital and labour are therefore asymmetric. This is so despite the case that some economies may be starved of labour resources as much as others need capital. Not just the territories of white colonisation during 19th century but also the economy of the UK as late as the ‘50s and ‘60s has benefited immensely from immigration. In fact, the UK has benefited from outflow in the mid-nineteen and inflow in the mid-twentieth centuries. Labour outflow keeps up the wage rate in basin of emigration. Though it must keep down the wage rate at the point of entry this need not always be disadvantageous to labour, for wherever there may be indivisibilities in the use of labour, immigration will actually help maintain employment levels when it enables production. This is the sense in which immigration is likely to have aided expansion of the US in the late 19th and early 20th centuries when it rose to become the world’s leading economic power.

The asymmetry between the respective rules for capital and labour demonstrates how in a globalising world economy justice means something other than international equity or equity between nations. While the absence of immigration opportunities for Indian labour protects the wage rate of American workers the mobility available to American capital ensures that their employment cannot be guaranteed. When capital moves just across the border to Mexico to take advantage of lower wages, lax environmental regulation and often lower taxes it is as if US jobs are being exported. Were labour free to move at will Mexican wages would be equalised with American ones. This example makes it clear to us that not all issues in the context of globalisation revolve with the narrow compass of international relations and national sovereignty. The domain of justice, or the terrain over which justice must be brought to bear, is broader and more complex than what is focussed upon in the United Nations, once accepted as the arbiter of global justice which abetted by the instrumental reasoning of the Cold War era was erroneously identified with international equity.

Many tend to see the restriction on the migration of labour to the US co-existing with the freedom to US-based capital to flow out as an issue of international equity. But they are wrong. There is actually a formal parity between nations here, for neither can American labour move internationally as Indian capital can and does to some extent. Only there is no parity between the globe's capital and labour. Workers are now left worse off. To return to some nuts and bolts economics, when the mobility of a factor is restricted the elasticity of demand for it rises. As an example, a small increase in the US wage-rate could lead US-based capital to relocate to Mexico. This leaves labour vulnerable, and insecure, in a way that it would not be were both labour and capital equally mobile. Capital has been freed to roam the globe while labour is locked into nations. Citizens of the world witnessing the new globalisation cannot be faulted when responding "nethi nethi".

Text, other than title and byline, is 1200 words.