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Current Conflict is Essentially between Global and Local


The western world view has dominated for the last 200 or so years and hence their idea of “modern man’ is accepted as the “idea”. It is supposed to transcend territories and cultures. It assumes that “one size” fits all and enunciates “one model” works for all. In many seminars I am asked by foreigners about India becoming “Europe” or USA after a few decades and how it will impact Indian “values”.

Basically it is assumed that the whole world needs to have or follow one model since all humans are same “rational “animals. The main Abrahamic faiths like Christianity and Islam evolved out of this belief. So they went around conquering the world to fashion it in their own mirror image. The Marxian model also believes the same. The concept of sovereignty evolved as Westphalian consensus in 1548 after the Thirty Years’ War, in which the major continental European states – the Holy Roman Empire, Spain, France, Sweden and the Dutch Republic – agreed to respect one another’s territorial integrity. This obviously did not include later colonies. Christianity and Islam wanted to spread all over the world by sword or colonies or deceit. Both wanted to be global religions. Hence there was a fierce battle between these globalizers for “converting” people to their way. There is the idea of ‘my way or highway’. The colonization project was justified since it was to “civilize” the world and converting faith/religion of people was encouraged in the name of “freedom to choose”. Of course that freedom should be exercised to choose the desert faiths. Some times with swords sometimes with subterfuge and inducement.

From the Church evolved the modern corporations which in the Post 2nd World War wanted to be “global” and institutions like IMF and World Bank were created to facilitate the process. These institutions reinforced the theory of one size fits all. Modern globalization project got accelerated in the seventies by multinational corporations tried to formulate theories which are applicable to all societies with perhaps some local variation – as a concession. Ernst Kantorowicz, in his well-argued and celebrated essay The King’s Two Bodies: A Study in Medieval Political Theology, analyses how the mystical body of Christ, which is central to Christian liturgy, acquired sociological meaning in the later middle Ages. The corpus mysticum became the organised body of Christian society and created, in due course, the greatest of artificial persons, namely, “the state.” Out of this modular structure or building block, Western capitalism emerged, along with other fictional entities such as the `Joint Stock Company’ and `public corporation’ (Princeton, 1957). Hence, it is a medieval Christian Anglo-Saxon construct that says that `corporations’ are more evolved forms than, say, joint families or cooperatives or trusts. One is not sure why India should continue to accept this European medieval evolution, which was essential for colonial conquests, driven by joint stock companies such as the East India Company, which considered India `unorganized’ and went about organizing it, with results known to us. So Church handed over idea of “globalization” to corporate.

In these days of political correctness, perhaps the so-called unorganized sector can be termed “corporate challenged”, while corporates themselves are “disclosure – and transparency – challenged”. They even propounded an idea of “glocal”. This is mainly global models but will try to take into account local sensibilities. Whether it is market efficiency or asset valuation every human being in the world should behave as per western models. If not there is a problem with that person or group. They were to be identified as “deviation” from norm. The entire edifice of modern economics/finance assumes market to solve all problems since all men are “rational” — in the western sense – and profit maximisers. They have homogenous expectations etc. The poor segments when they become rich behave exactly similar to the current rich people. That assumption helps in “forecasting” income and consumption growth. Societies were expected to behave as per model rather than modeling societal behavior.

Wounded civilizations like India suffered a double whammy. Its youngsters were taught about the superiority of the Renaissance rationality and they began to fully imitate the homogenous model. Most got educated in Western Universities and this helped a lot for the globalisers. Hence we have Christian globalisers, Islamic globalisers, multinational corporate and Marxists. All using the premise of a global man and one size fits all. All of them can be called homogenizers. Among them Marxists are on the retreat after the fall of Berlin Wall. But there is a problem. All these Homogenizers are run by a clique or elites who look down upon masses with contempt. Why so? Because they are confident that they have the solutions available in their books or models. The modern corporations have modeled academic institutions to suit their requirements. Recruitment, promotion etc. are dependent on reinforcing the belief system through research and training. Within this so called ‘Left Wing’ and ‘Right Wing’ have evolved. Both are homogenizers. One is state based and other is big corporate or so called “market“ based.

But of late Left Wing has got twisted due to being politically Right—it became friendly to Radical Islam and also to other “modernities” like LGBTQ groups. Interestingly soviet model of Stalin shunned these categories. The globalisers also created categories like economically “conservatives” but socially “liberal “or socially conservative but economically liberal – but all within their framework of homogenizing. Also the Christian leaders would accept “Islamic Contribution” and nothing more than that.

For instance Obama claimed in Cairo (June, 2009) that algebra, the decimal system and printing technology were the inventions of the land of sands [Arabia] when these accomplishments owe as much to India and China.

Assertion of the Average: But the globalisers are on retreat. One is the conflict or rather war waged by radical Islam which would like to establish a Caliphate in Europe. Church is in retreat in Europe since many are becoming agnostic. Modern versions of Church getting active in the form of evangelicals like Pentecostal etc. Post economic crisis of 2008 the big corporates are on the retreat. The average school educated person is unhappy and angry. He is unhappy about unemployment which is running high in G-7 countries—more so in Europe. He is angry about mass migration and what he perceives as Islamic invasion of Europe and even USA. EU, which is one of the earliest “Project Europe” to bring together “globalization” within Europe, is under threat. The rural, ‘school only’ educated and unwashed in Britain rejected the rule from Brussels. The sophisticated elite of London wanted to be in EU. In France and Italy similar situation is developing. In the USA the assertion of average was extra-ordinary. All elites and financial system supported Hillary but she was defeated by again ‘’school only educated and poor segments.

Globalization crowd is desperate. Davos meet this year had, of all persons, Chinese President Xi and he was requested to “lead” globalization. One can imagine the level of desperation of the Davos crowd. Homogenization/one size fits all and Western model is THE model– is the major mantras of globalisers. Radical Islam says the same thing except using its own book. Tony Blair the then Prime Minister of UK in his famous Chicago Address in 1999 suggested, “The most pressing foreign policy problem we face is to identify the circumstances in which we should get actively involved in other people’s conflicts. Non-interference has long been considered an important principle of international order… but the principle of non-interference must be qualified in important respects”. The NATO intervention in Kosovo and Afghanistan as well as US intervention in Iraq provide recent examples of breakdown of idea of Westphalia.

Interestingly radical Islam also considers that the world order based on Westphalian consensus will collapse. In the aftermath of the 11 March 2004 Madrid attacks, Lewis ‘Atiyyatullah, who claims to represent the terrorist network Al-Qaeda, declared that “the international system built up by the West since the Treaty of Westphalia will collapse; and a new international system will rise under the leadership of a mighty Islamic state.” The spread of ISIS across countries and activities of Boko Haram based in Nigeria in Kenya and Chad re-emphasis this point. Radical Islam does not accept territorial boundaries since it works for a global regime for global Ummah. The talk about Caliphate indicates that they are trans-border organizations.

On the other side we find global corporations transcending sovereignty in search of global profits. For this they use tax havens as a tool. Tax havens – numbering more than 70 jurisdictions – facilitate bank facilities with zero taxes and no-disclosure of the names and in many cases anonymous trusts holding accounts on behalf of beneficiary. In the case of Bahamas one building seems to have had tens of thousands of companies registered there.

USA is literally waging war with major Giants like Amazon, Google, Microsoft etc. for not paying adequate taxes in USA in spite of being US based companies. Most of these companies have moved their profits to other Tax Havens. A simple method of trade mis-invoicing by global companies using tax-havens have impacted developing countries nearly 730 billion USD in 2012 says Global Financial integrity. There is an increasing clamour in USA and EU about closing down these tax havens. Most of America’s largest corporations maintain subsidiaries in offshore tax havens. At least 358 companies, nearly 72 percent of the Fortune 500, operate subsidiaries in tax haven jurisdictions:

  • All told, these 358 companies maintain at least 7,622 tax haven subsidiaries.
  • The thirty companies with the most money officially booked offshore for tax purposes collectively operate 1,225 tax haven subsidiaries.

Fortune 500 companies currently hold more than $ 2.1 trillion in accumulated profits offshore for tax purposes. Just thirty Fortune 500 companies account for 65 percent of these offshore profits. These thirty companies with the most money offshore have booked $ 1.4 trillion overseas for tax purposes. Only fifty-seven Fortune 500 companies disclose what they would expect to pay in US taxes if these profits were not officially booked offshore. In total, these fifty-seven companies would owe $ 184.4 billion in additional federal taxes. Based on these fifty-seven corporations’ public disclosures, the average tax rate that they have collectively paid to foreign countries on these profits is a mere 6 percent, indicating that a large portion of this offshore money has been booked in tax havens. If we apply that average tax rate of 6 percent to the entirety of Fortune 500 companies, they would collectively owe $ 620 billion in additional federal taxes. Some of the worst offenders include: Apple, Nike, American Express, PepsiCo, Pfizer, Morgan Stanley, Citi Group, Wall Mart, Bank of America, Google, Microsoft, Goldman Sachs etc.

So Globalisation is Stuck between Tax Havens and Terrorists.

The middle class in UK revolted against EU – seamless borders and trade – and in US the victory of Trump is a big blow to globalisers; he is unenthusiastic about Davos. The rise of Le Pen in France and Geert Wilders in Holland represent ‘back to national sovereignty’. Le Pen recently said in Koblenz “nation state” is back. In this, the traditional division of Left and Right has lost its meaning. In BREXIT we saw Left supporting EU and part of Right opposing it. Now, the new divisions are globalisers versus nation states both from Left and Right. There was an agitation by supporters of Gorbyn, the rabid left wing leader of Labour Party in UK, against the most venerable left wing intellectualism personified “New Statesman”. Actually this extreme left-winger Corbyn opposed BREXIT and wanted Britain to be in EU. While as the conservatives in large numbers supported Brexit and from that point the calling of referendum by Cameron was even questioned. Corbyn was supposed to be part of “Remain and Reform” EU group. Anyhow Britain and labour force of Britain overwhelmingly voted for going out of EU which is perceived as a “globalizing menace”.


Le Pen in France wants to come out of EU since it is impacting “French” charecteristics. She is considered “extreme” Right by the main stream media in France. She wants France to come out of EU; opposed to radical Islam; opposed to immigrants and against large French Govt. Interestingly one of her opponent Melonchon who is considered as left extreme also wants to re-negotiate EU and possibly pull out. He is also against large central French Govt. and surprisingly not for the “veil” for the women!! Both Extreme Right and Left are against large global corporations and globalization by the Davos crowd.

In the USA the divisions are becoming interesting with large number of Trump supporters viewing Russia favorably while as Democrats are upset with Russia. Trump supporters view Russia as a good ally against radical Islam. Not that Russia is any more “socialist”. Trump is as unhappy as Obama was about large US companies like Google, Amazon, Microsoft etc. not paying adequate taxes in the USA but showing large profits in Tax havens like Cayman Islands. Large portions of Left in Europe are split regarding its attitude to radical Islam. One segment arguing for total “understanding” of Islam while another segment wanting to uphold traditional values of Europe on women issues, on Homo-sexuality and contraception. This single model groups are being opposed by smaller “national and community” sovereignty groups. For instance, in Britain poorer rural and less educated segments, and working class voted for BREXIT since all of them felt big Government at Brussels is trampling on their sovereignty. Similarly school educated, older aged, less income segments supported Trump. Both cases it is against “globalization” and “large corporate”. Similarly one witnesses raise of such political forces in Holland, France, Italy and Germany. All these will have far reaching impact in the coming year due to elections in France and Germany.

Hence today the world is divided between globalisers – be it corporate or radical Islam or evangelists and “localisers” both Right Wing and Left Wing. Globalisiers want homogeneity – all wear Jeans and all drink Coke or all women have Burqa and all men pray 5 times. Localisers want variety and pluralism- respect for local tradition and customs, and recognition of small businesses. The current conflict is between Globaliser Wing [GW] and Localiser Wing [LW]. Hence do not use the old clichéd Right Wing and Left Wing paradigm – it is dead.

By Prof R Vaidyanathan, Dean, Centre for Economic Studies,                              Vivekananda International Foundation (VIF)