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(en) globalization & colonialism - The Third Wave I (1/2)

From Ilan Shalif <gshalif@netvision.net.il>
Date Sat, 21 Feb 1998 12:17:37 +0200

     A - I N F O S  N E W S  S E R V I C E

FWDed From:  MichaelP <papadop@PEAK.ORG>
by HURINet - The Human Rights Information Network by Roberto Verzola

[Roberto Verzola is the coordinator of Interdoc, a loose international

network of non-government organizations (NGOs)  which is tracking the
impact of the emerging global information economy on developing
and on social movements. He is also the secretary-general of the
Philippine Greens, a political formation dedicated towards building
self-sufficient communities guided by the principles of ecology,
justice and self-determination. He makes a living operating an
mail service for NGOs, and is an electrical engineer by training. This

paper will be presented at the international conference "Colonialism
Globalization: Five Centuries After Vasco da Gama", sponsored by the
Indian Social Institute (ISI) on February 2-7, 1998, in New Delhi,

Our common colonial experience

     We are all familiar with colonialism. The dates may
     have varied; the colonizing country may have been
     different; but the main features of our common colonial
     experience were basically the same:

     - Using superior military technology, the colonizing
     power forcibly imposed its rule over our peoples, at
     great cost to us in terms of human lives and suffering
     and in terms of human and natural ecology.

     - Military conquest was very often preceded -- and most
     certainly followed -- by the imposition of new
     religions and cultures, which facilitated subjugation
     by dulling the impulse to resist or diluting the desire
     to free ourselves from colonial clutches. The effects
     of such cultural implantation on our minds have
     lingered and continued to do their damage, keeping us
     in mental bondage long after the last colonizing
     soldier has left our soil. Soon, the colonial mind
     started to take for real the masks worn by the
     colonizers and the words they used to deceive their
     victims, such as "we bring you Christianity"; "we bring
     you civilization"; "we will teach you democracy"; etc.

     - As soon as resistance was quelled, the colonizing
     power set up a colonial administration, run at lower
     levels by people culled from local elites, many of whom
     decided to work hand-in-hand with their colonial
     masters to preserve their wealth and privileges.

     - As the colonial bureaucracy was put in place, the
     process of drawing out our wealth then began. Over the
     centuries, the colonizing powers enriched themselves
     immeasurably by drawing human and natural resources
     from our lands -- human slaves, indentured labor,
     tributes, precious metals and other minerals, logs and
     lumber, colonial crops cultivated on seized indigenous
     lands, and so on. At the very foundations of the
     richest countries of today, are the broken remains of
     our own ancestors and the wealth plundered from their

     - The colonizers brought with them the practices of
     plantation agriculture, large-scale logging,
     large-scale mining, and other unsustainable
     technologies, which were meant for plunder and for
     maximizing exploitation and profits. These
     unsustainable practices replaced the sustainable
     indigenous practices our pre-colonial peoples had
     relied on for centuries.

     - The impact on the people and their communities was
     grievous. We lost our right to self-determination and
     our freedoms. We lost our wealth through colonial
     plunder. Our best lands were seized for colonial
     tillage. Indigenous communities lost their rights to
     their lands. The impact on nature was equally
     disastrous. Colonial occupation was invariably marked
     with plunder of our natural resources and the
     introduction of monoculture in direct contrast to the
     much more sustainable and ecological practices of our
     pre-colonial past.

     - During this period, the colonial powers that took
     over the globe were mercantilist and, later, early
     industrial powers. Often operating their own State
     monopoly corporations, they scoured the globe in search
     of slaves, tradeable goods or raw materials, and bases
     for their colonial operations.

     This period of colonialism may be called the first wave
     of globalization.

A range of anti-colonial responses

     The independence struggles waged by our peoples in
     response to this wave of globalization are also
     familiar to all students of history. Many of these
     independence struggles were eventually resolved through
     successful armed revolutions. We in the Philippines,
     for instance, commemorated in 1996 the centennial of
     our own revolution against Spain -- one of the first of
     the national independence movements that eventually
     emerged in this part of the globe.

     In other countries, a peaceful withdrawal of occupation
     forces and turnover of formal political power to the
     local elites was effected, very often retaining the
     same colonial set of laws, bureaucracy and armed forces
     that had served the foreign masters. Again recalling
     our own experience, the newly-born Philippine republic
     that emerged out of our 1896 revolution was aborted,
     and our painful colonial experience extended for
     another half a century, as the United States (U.S.)
     used superior military power to wage a genocidal war
     against the newly-independent Filipinos, imposing an
     equally plunderous colonial regime on our lands and
     peoples. In 1946, the Americans peacefully turned over
     formal political rule to the local elites, after first
     making sure that the 'newly-independent' Republic of
     the Philippines was bound by economic and military
     treaties that belied claims of genuine sovereignty.

     Where independence was won by arms -- in China, for
     example -- the colonial economic and political
     interests had to beat a full retreat. They lost their
     territorial rights and their businesses, their
     properties confiscated and nationalized. Where
     independence was 'granted' to a local elite which had
     been trained by their colonial masters, the latter
     still had to put up with some nationalist efforts by
     locals to regain control of their economy. These took
     the form of foreign ownership limits, profit
     remittances restrictions, local content requirements,
     export quotas, and other attempts to regulate foreign
     businesses. In the Philippines, for instance,
     foreigners were allowed a maximum of 40% ownership in
     corporations, and were excluded from specific areas
     like media and communications, natural resources
     exploitation, the professions, and retail trade. The
     latter restriction, by the way, exempted Americans by
     virtue of a post-war agreement the Philippines was
     forced to enter into, under threat by the U.S. to
     withhold any post-war aid if several treaties it wanted
     were not ratified.

The corporate counter-response

     During this post-colonial period, the role of global
     capital expanded, partly due to internal developments
     in their home countries, and partly as a
     counter-response to independence movements and economic
     nationalism. Having lost direct control over their
     colonies, global capital sought and became better at
     indirect control; military aggression was replaced by
     culture-aggression and economic control. By this time,
     internal developments within the colonizing powers
     themselves had prepared their economies for this shift:
     many of them had reached the late industrial stage of
     development. Huge private corporations in partnership
     with governments had accumulated vast amounts of
     financial wealth, turning money itself into a major
     commodity. These corporations needed new markets and
     investment areas, rather than colonial territories that
     were becoming more and more difficult and costly to
     retain politically and militarily.

     We are also familiar with these post-colonial

     - Again, they masked their real intention of drawing
     wealth from our lands and communities with such
     pretexts as: "we bring jobs"; "we bring technology";
     "we will lend you money for development"; "we will
     protect you from communism"; and so on.

     - Instead of relying on military conquest, these global
     corporations worked closely with elite- led
     governments, particularly those local classes whose
     economic interests coincided closely with their former
     masters. Often, the local police and armed forces were
     flooded with aid, to win their loyalty and service.

     - The post-colonial bottom line was no different: the
     extraction of wealth. This occurred through: unequal
     trade (depressed prices for our agricultural
     commodities, monopolistic prices for their industrial
     manufactures); high interest rates on foreign loans;
     using loan conditionalities to exact further
     concessions; quick and massive profit repatriation; and
     low wages. By retaining post-colonial dominance and
     control in the economic and cultural spheres,
     post-colonial wealth extraction could proceed unabated.

     - Chemical agriculture was introduced to intensify the
     production of export crops, causing widespread
     poisoning and damage in the countryside. Exploitation
     of our natural resources intensified, and energy
     generation projects such as huge dams, coal and oil
     plants, and nuclear plants in some cases ravaged the

     - The development of a natiowide mass media
     infrastructure served to further strengthen the
     colonial hold on local minds, to create and expand
     markets, and to ensure a friendly environment for
     foreign investments and foreign products.

The second wave of globalization

     This post-colonial wave may be called the second wave
     of globalization, where industrial countries and global
     corporations would range across the globe for
     investment areas, industrial markets, trading partners,
     and sources of cheap labor and raw materials.

     This wave has gone through several phases, reflecting
     the progress of an unequal contest between powerful
     countries strengthened by the immense wealth they had
     drawn from colonial victims on the one hand, and the
     newly-independent nations weakened by centuries of
     plunder and exploitation on the other hand.

     The early-independence phase was often marked by
     intense economic nationalism, as local economic
     interests tried to mobilize their government to enhance
     their economic sovereignty while global corporate
     interests fought to retain their colonial
     privileges.This phase saw the adoption of economic
     protectionist measures meant to strengthen local
     capital vis-a-vis foreign capital.

     The second phase saw a succession of crises that
     included the oil shocks of the 70's, the debt crises of
     the 80's, the socialist crisis of the early 90's, and
     the financial crisis of the late 90's, which is still
     going on. Socialism had earlier provided a
     counter-balance to global corporations and their
     governments, as well as a possible alternative path for
     independence movements. These crises weakened the
     capacity, the will, and the overall position of the
     former colonies and enabled global corporations to
     launch major counterattacks in order to regain much of
     the colonial power and privileges they had lost during
     the economic-nationalist phase.

     The post-colonial counterattacks by global corporations
     mark the third phase of this second wave. Many
     countries, despite having freed themselves from
     centuries of colonial rule, then lost much of their
     economic sovereignty to corporate-controlled
     international institutions such as the International
     Monetary Fund (IMF), the World Bank (WB) and the World
     Trade Organization (WTO). Through loan
     conditionalities, structural adjustment programs, and
     other means, many nationalist laws and provisions
     gained by earlier anti-colonial independence movements
     were undermined and dismantled. Some authors --
     Chakravarty Raghavan, for example -- have called this
     phase a process of "recolonization", a return of
     colonial privileges for global corporations.

     The impacts of this wave of globalization are no less
     destructive than the colonialism that preceded it. Our
     agricultural products consistently suffer from low
     prices; our workers from low wages. We are losing much
     of our capital due to profit repatriation and the debt
     crisis; chemical farming is taking away our food
     security and putting it in the hands of global chemical
     and seed conglomerates. We enjoy national sovereignty
     in name only. We are suffering from widespread
     ecological disasters, triggered by intensive resource
     extraction, disruptive energy projects, and toxic
     pollution. Our forests, mines and quarries are being
     quickly depleted; our air, water and soil heavily
     contaminated; and pervasive monoculture is seriously
     threatening our biodiversity.

     This part of our history and current events should also
     be familiar to most of us.

Alert: the third wave is coming

     We are still in the midst of the second wave of
     globalizaation, yet a third one has already emerged.
     The third wave of globalization began to be felt
     worldwide in the last half of the 1990's and will
     probably express its overwhelming presence in full
     force at the dawn of the 21st century. This looming
     third wave is the global information economy.

     Like the first two waves, the third globalization wave
     arose from internal developments within the hearts of
     the global powers. It is important to look at these
     internal developments, because they will, as in the
     past, eventually impinge on the rest of the world --
     including our own -- often shaping our destinies and
     steering our development in directions we never wanted
     to take.

     The colonial powers were mercantilist and, later,
     industrial countries in their early expansionist
     stages. The post-colonial powers were industrial
     countries in their late stages, when capitalism had
     developed further, combining industrial and finance
     capital into huge monopolistic conglomerates in
     continual search for new acquisitions, sources of cheap
     raw materials and labor, and markets. The third wave of
     globalization is marked by the emergence and eventual
     dominance, within the most advanced industrial
     countries, of the information sector -- the sector that
     produces, manipulates, processes, distributes and
     markets information products.

     There is enough literature that describes the dominance
     of the information sector in the U.S. One of the
     earliest is a landmark study by Marc Porat, who
     analyzed some 201 industries in the United States in
     1967. Here's an account of Porat's study (Megatrends by
     John Naisbitt, 1982):

          "Porat sorted through some 440 occupations in 201
          industries, identified the information jobs, and
          compiled their contribution to the GNP.
          Questionable jobs were excluded so that the
          study's conclusions err on the conservative side.

          "Porat's study is incredibly detailed. He begins
          with the obvious sorting-out and tallying-up of
          the economic value of easily identifiable
          information jobs such as clerks, librarians,
          systems analysts, calling this first group the
          Primary Information Sector. According to Porat's
          calculations for the year 1967, 25.1 percent of
          the U.S. GNP was produced in the Primary
          Information Sector, that is, the part of the
          economy that produces, processes, and distributes
          information goods and services. Included here are
          computer manufacturing, telecommunications,
          printing, mass media, advertising, accounting and
          education, as well as risk-management industries,
          including parts of the finance and insurance

          "But Porat's study goes on to deal with the more
          difficult questions that have overwhelmed other
          researchers. How does one categorize those
          individuals holding information jobs with
          manufacturers and other noninformation firms? To
          answer this question required 'tearing firms apart
          in an accounting sense into information and
          non-information parts.'

          "Porat creates a new information grouping called
          the Secondary Information Sector. It quantifies
          the economic contribution of information workers
          employed in noninformation firms.

          "These workers produce information goods and
          services for internal consumption within
          goods-producing and ohter companies. In effect
          their information products are sold on a
          fictitious account to the goods-producing side of
          the company. The Secondary Information Sector
          generated an additional 21.1 percent  of the GNP.

          "Porat's study concludes, then, that the
          information economy accounted for some 46 percent
          of the GNP and more than 53 percent of the income
          earned. This was in 1967."

     This was also before the widespread use of satellite
     communications, fax machines, cell phones, cable
     television, personal computers and, of course, the
     Internet. Today, there is no doubt that the information
     sector is the dominant sector of the U.S. economy,
     making the U.S. the leading information economy in the

A global information economy

     The increasing dominance of the information sector in
     what had been industrial economies is turning them into
     information economies. These emerging information
     economies -- principally the U.S. and to a lesser
     extent some countries of Europe -- are at the core of
     the third wave of globalization. Because of the way
     these economies are so closely interconnected, they are
     better seen as a single emerging global information
     economy. The Internet is perhaps the most visible
     portion of this economy -- and certainly the one which
     has received the most media attention. This emerging
     global information economy includes the global
     infrastructure for telecommunications, data exchange,
     media and entertainment; the knowledge industries; the
     publishing industries; the computer hardware and
     software industries; the emerging financial systems
     that will support online transactions; the emerging
     global legal infrastructure based on the WTO, including
     the GATT and the agreements in information technology,
     telecommunications and financial services; and the
     biotechnology and genetic engineering industries.

     Unlike the first two waves, the implications and
     consequences of the global information economy are an
     unfamiliar phenomenon to most of us. There are so many
     new things, so many new possibilities, that it is quite
     difficult to separate the chaff from the grain, the
     hype from the substance.

     This is what this final portion of my paper will try to

Information: a closer look

     Let us look closely at the archetypal information
     product: information stored in a magnetic medium. It
     can be software on a diskette, databases on hard disks,
     an audio casette, or a video casette. Remember that the
     product is not the medium but the message; it is
     neither the disk nor the tape, but their contents. The
     same medium with a different message is a different
     product; the same message on a different medium is the
     same product. Other forms of information, like books
     and other printed publication, live audio and video
     information, drawings and designs, and genetic
     information may now be easily transformed into their
     archetypal equivalent.

     The distinctive feature of an information product is
     that it can be copied at little cost. The cost of
     copying books is still on the high side, but the cost
     of copying electronic data is nearly zero. Furthermore,
     we can give copies away without losing our own copy.
     This is true of software, databases, songs, videos,
     designs, and most other information goods -- including
     genetic information.

     In short, the cost of reproducing information -- what
     the economist calls its marginal cost -- is very low
     and oftentimes approaches zero.

     In the last analysis, this feature is due to the very
     essence of information itself. Information is
     non-material in its essence -- a numeric measure of the
     uncertainty which it resolves. The non-materiality of
     information is the basis of its low reproduction cost,
     which may be driven lower and lower by adopting
     representations that can be manipulated at lower cost.
     With today's digital representations, the costs of
     reproducing and distributing information have reached
     historic lows -- as low as the cost of copying a
     diskette or downloading a file from an online server.

Low marginal cost leads to sharing

     The low marginal cost of information has two major
     implications: one for those who use it, and another for
     those who sell it.

     For users, it encourages sharing. Many cultures, in
     fact, see knowledge as social wealth -- a collective
     asset that is meant to be shared. These cultures --
     including most Third World and indigenous cultures --
     are therefore in close harmony with the very nature of
     information. When we share software, for example, we
     are only being true to the nature of information and to
     our own cultures.

     But there are other cultures, where private property
     concepts have become more absolute and where almost
     everything may be commodified. In these cultures --
     often with capitalism at their core -- information has
     become an object of commodification and privatization.
     Culture itself has become commodified, together with
     knowledge and life. They have become vehicles for

Profit-making mechanism: the monopoly

     Let us look more closely at the mechanism of
     profit-making through information. First, the seller
     turns information from a collective asset into private
     property. Then, copies are sold on the market, at
     prices set by the "owner"/seller. The near-zero
     marginal cost of reproducing information now makes its
     selling price nearly pure profit. A diskette of
     software that may be copied for cents is sold for fifty
     dollars. A CDROM that may be reproduced for three
     dollars is sold for three hundred.

     To realize these extremely high profit margins made
     possible by the low marginal cost of information
     products, however, the seller must create an artifical
     scarcity of the product. We have seen that information
     can now be easily copied by users themselves at
     practically no cost, creating a natural abundance which
     drives prices down. To keep prices and profit margins
     high, this natural abundance that proceeds from the
     essence of information itself must be prevented. The
     seller does it by essentially prohibiting sharing among
     users and acquiring from the State a monopoly in using
     and making copies of the information product. This
     creates the artificial scarcity that drives prices up
     and realizes for the seller the potential profits from
     high margins.

     It is monopoly that creates the scarcity. Such
     monopolies are euphemistically known as "intellectual
     property rights (IPR), the main form of ownership in an
     information economy. They are the mechanism for
     maintaining the high profit margins of those who
     control and sell information products. IPRs have two
     major forms: copyrights (historically, limited
     monopolies covering literary materials), and patents
     (historically, limited monopolies covering inventions).
     In recent years, as the information sector gained
     dominance and the propertied classes of this sector
     increased their political and economic power, IPRs have
     been strengthened and extended to new areas.

     IPRs are, in reality, statutory monopolies. They are
     monopolies over information granted through statutes,
     by the State. Those who control information through IPR
     are basically rentiers: they make money by charging
     monopoly rents from users, who are threatened by State
     action should they continue to practice information
     sharing. In the Philippines, monopolies represented by
     the Business Software Alliance (BSA), in collaboration
     with the Philippine government, have actually raided
     educational institutions and commercial shops to
     enforce their information monopolies.

Conflicts within the information economy

     Still, enforcing information monopolies is not simple.
     After all, information monopolies are incompatible with
     the social nature of information. The deeply-ingrained
     cultural habits of information sharing and exchange
     continue to assert themselves, regardless of the will
     of monopolists and their State protectors.

     This is the dilemma within the emerging global
     information economy.

     On the one hand, information itself is a highly social
     good; on the other hand, the forms of ownership are
     highly monopolistic. On the one hand, users tend to
     share information goods; on the other hand, IPR holders
     insist on their monopolies. On the one hand, developing
     countries need the widest access to various technology
     options at the least cost; on the other hand, rich and
     powerful information economies control almost 90% of
     all the IPRs in the world today, and want to increase
     their control further.

     The basic conflict within the information sector is the
     incompatibility between the highly monopolistic forms
     of information ownership and the social nature of
     information. This conflict is also expressed between
     users who want to share information freely and monopoly
     claimants who want to prevent free sharing of
     information. It is further reflected in the conflict
     between developing countries who need low-cost access
     to major bodies of information and information
     economies which have established virtual monopolies
     over information. Historically, these information
     economies are basically the same colonial powers that
     have exploited developing countries over the centuries.

     The socializing tendency emanates from the nature of
     information itself, and can therefore never be
     suppressed. The monopolizing tendency emanates from the
     potentially high profit margins in selling information
     and the economic and political power concentrated in
     information monopolies. The conflicts arising from
     these two opposing tendencies will drive the historical
     development of the third wave of globalization.

Internal engine

     Within the U.S., the high profit margins in the
     information sector is attracting more investment
     capital towards this sector, away from the agricultural
     and industrial sectors. This is the internal engine
     that is slowly transforming the U.S. economy into an
     information economy.

     Within the emerging global information economy itself,
     monopoly concepts are already well-established and are
     even expanding their coverage. One item, for instance,
     is always non-negotiable in the U.S. diplomatic agenda:
     intellectual property rights (IPR). These concepts are
     increasingly dominating international legal systems
     through bilateral negotiations with the U.S. and
     through the World Trade Organization (WTO). Thus,
     worldwide, pressure is increasing on countries with
     non-monopolistic attitudes towards information to adopt
     the same U.S. legal system that strictly protects IPRs.

     However, the social nature of information continually
     asserts itself. Information abundance created through
     user sharing and exchange keeps breaking through the
     artificial scarcity created by information monopolies.
     The latest releases of popular software, songs or video
     immediately find themselves being copied in every
     corner of the globe. In effect, information
     automatically globalizes itself regardless of the will
     of those who insist in monopolizing them. Ironically,
     information monopolists find their products better
     distributed in those parts of the globe where they
     could not enforce their monopoly. They therefore insist
     on imposing monopolistic legal systems upon the rest of
     the globe, so they can realize the same profit margins
     they enjoy in their monopoly areas. Even one country
     that refuses to be part of this global legal system
     will pose a threat to their global monopoly, thus they
     will exert every effort to bring it in. These
     monopolists will never leave any country -- or any
     community -- alone.

     They are the real engines of globalization's third

     This is also what makes the information sector
     qualitatively different from the industrial and
     agricultural sectors. It justifies why the emergence of
     the global information economy must be considered a
     distinct wave in itself, instead of simply a part of
     the second wave of globalization.

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