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Globalization: The Third Wave

by Roberto VerzolaThe Philippine Greens
February 5th, 1998

This paper was presented at the international conference "Colonialism To Globalization: Five Centuries After Vasco da Gama", sponsored by the Indian Social Institute (ISI) on February 2-6, 1998, in New Delhi, India.

Our common colonial experience

Today's debates about globalization recall our experience against colonialism. We are all familiar with the latter. 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 might, 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.

  • The colonial bureaucracy then began the process of drawing out our wealth. Over the centuries, the colonizing powers enriched themselves immensely 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 communities.

  • The colonizers brought with them the practices of plantation agriculture, large-scale logging, large-scale mining, and other powerfully destructive 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, our freedoms and our wealth. 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. Similar armed struggles erupted in Indonesia and China.

In countries like Malaysia and India, colonial forces peacefully withdrew and turned over formal political power to the local elites, who often retained the same colonial set of laws, bureaucracy and armed forces that had served the foreign masters. Again recalling our own experience, the United States used superior military power to wage a genocidal war against us in 1898, aborting the newly-born Philippine republic that emerged out of our 1896 revolution, imposing an equally plunderous colonial regime on our lands and peoples, and extending our painful colonial experience for another half a century. 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 negated 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, their territorial rights and businesses lost and their properties confiscated and nationalized.

Where independence was 'granted' to a local elite which had been trained by their colonial masters, the latter nonetheless 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 and import 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 they forced the Philippines 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, 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 developments.

  • 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 the same: 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 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 were set up in the countryside.

  • A nationwide mass media infrastructure helped 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 enhance their economic sovereignty through protectionist measures, while global corporate interests fought to retain their colonial privileges.

The second phase saw a succession of crises that included the oil shocks of the 1970's, the debt crises of the 1980's, the socialist crisis of the early 1990's, and the financial crisis of the late 1990'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. This counteroffensive forced many countries to surrender 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 -- Chakravarthi 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 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. We enjoy national sovereignty in name only.

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 globalization, 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 businesses.

"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 non-information 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 non-information firms.

"These workers produce information goods and services for internal consumption within goods-producing and other 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 world.

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 new 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 do.

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 cassette, or a video cassette. 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 much lower than the cost of initially producing the information -- its development cost. The marginal cost of information is so low that it oftentimes approaches zero.

In the last analysis, this feature is due to the very nature 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 costs. 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 has been 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.

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. Once the initial sales have covered the development costs, 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 CD ROM 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 artificial 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 acquiring from the State a monopoly in using and making copies of the information product, and by criminalizing sharing among users. 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 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 by criminalizing cultures that treat information as collective wealth.

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 and want to criminalize the Third World culture of sharing knowledge and 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 wave.

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.

Cyberlords

Information monopolies may be established not only by staking monopoly claims over information content through IPR, but also by controlling the hardware infrastructure for manipulating or distributing information. This infrastructure includes computer centers, voice and data switching centers, communication lines, television and radio stations, satellite networks, cable networks, cellular networks, movie houses, etc. Like their software counterparts, most owners of the hardware infrastructure make money through monopoly rents, in the form of subscription fees or per-use charges.

Because they earn their incomes from monopoly rents, the propertied classes of the information sectors are rentier classes. They are the landlords of cyberspace, or cyberlords. The content monopolies are owned by information cyberlords, and the infrastructure monopolies are owned by industrial cyberlords.

The richest man in the world, Bill Gates -- as well as several others among the ten richest -- is a cyberlord. The economic powers of cyberlords are immense, and these powers are increasingly being felt in the political and diplomatic arena. Among U.S. negotiators, for instance, IPR -- the mechanism which gives software cyberlords their power -- is invariably a non-negotiable item in their agenda. It is the partnership between information cyberlords, industrial cyberlords, and finance capitalists which is the at the core of the third wave of globalization.

To sum up: an information economy is one whose information sector has become the main source of wealth, eclipsing its industrial and agricultural sectors. The products of industrial and agricultural economies are material goods; the products of an information economy, however, are non-material goods. The reproduction cost of information goods is very low. This has led to the widespread social practice of freely sharing and exchanging information. On the other hand, it also promises extremely high profit margins, if the seller can monopolize information. Information monopolies have become the main form of ownership in the information sector. The high profit margins that they realize have led to a continuous movement of investment capital towards the information sector, eventually making it the dominant sector of the economy and transforming the economy into an information economy. The products of this information economy spread worldwide, as people freely share and exchange information goods. Thus an information economy needs a global system for enforcing its monopolies as well as for gathering information materials, tapping intellectuals and of course collecting payments worldwide. This leads to the globalization of the information economy and is the engine of the third wave of globalization. The main propertied classes within the information economy are information cyberlords, who control information content, industrial cyberlords, who control information infrastructures, and finance capitalists, who control investment funds.

First to third waves: a comparison

Let us compare the emergence of the global information economy with the two previous waves of globalization:

  • The first wave was after slaves, previous metals and lands for raising export crops; the second wave was after new investment acquisitions, sources of raw materials and labor, and industrial markets. The third wave is after sources of mental labor, sources of information raw materials, and markets for information products. This is why the WTO pushed very hard to conclude as soon as possible the agreements on information technology, telecommunications and financial services.

  • The third wave requires freer movement of information across national boundaries. This has helped erode further the power of the State. While the State itself operated corporate monopolies during the first wave, and continued to be dominant over corporations during the second wave, it is finding itself less powerful during the third wave. Global corporations are now assuming the dominant role in the State-corporate partnership, in close collaboration with supra-national institutions like the International Monetary Fund (IMF), the World Bank (WB) and the WTO.

  • As in the first two waves, the extraction of wealth from the rest of the world is likewise done under a mask that hides real intentions. The third wave hides behind such phrases as "information at your finger tips", "world without borders", "global village", instant access to the world's libraries", "free flow of information", or "TV with a million channels."

  • Behind the mask, the global information economy imposes its own global rule to facilitate the wealth transfer. The role of the nation-state shrinks, many of its functions taken over by private corporations. Global corporations continue to strengthen their political voice and clout, and directly enter into partnerships with local elites and local governments, often bypassing the host government as well as their own government. Corporate control of information, communications, and media infrastructures is strengthened through privatization and deregulation. National sovereignty is further curtailed by supra-national institutions like the IMF, WB, and the WTO.

  • In addition to the earlier forms of wealth extraction practised during the first and second waves, new forms emerge or old forms acquire new importance. Monopoly rents become the main form of wealth extraction. Royalties from IPRs and other income from information rents assume major significance. Because of the huge disparity in costs, trade between information economies and other economies become even more unequal. Compare, for instance, a CD ROM which might sell for three hundred dollars, but is produced for around three dollars, to a typical Philippine product like sugar, which might sell for fifteen cents per pound. Much of the three hundred dollars in the price of 2,000 pounds of sugar would barely cover production costs, while much of the three hundred dollars in the price of a CD ROM would be profit. Technology also makes possible high-speed, finely-tuned financial speculation. As the importance of the nation-state recedes and national currencies buffeted by devaluation and other woes, corporations are able to purchase State assets and public properties at bargain prices.

  • New technologies of exploitation are introduced. First wave technologies were designed for the immediate plunder of our natural resources and human communities. Second wave technologies were based on material exploitation and intensive energy utilization. Third wave technologies are invariably information-based, centered on extracting the highest monopoly rents from the control of information infrastructure or information content. The best example of a technology that is at the leading edge of the third wave of globalization is the Internet. Advanced information and communications technologies make possible the convergence of media, entertainment, data, and communications. The application of information technology to genetic engineering and biotechnologies has transformed these fields into fertile areas for information monopolies, best illustrated by the patenting of life forms.

  • We are already starting to feel the impact of the third wave. Stronger IPR mechanisms is increasing the cost of new technologies and making access more difficult. As the global information infrastructure reaches the remotest corners of our countries, all kinds of junk culture are flooding in and cultural homogenization is reaching new levels. In the race to introduce new commercial biotechnology products and services, reckless experimentation with new life forms is leading to biological pollution from genetically-modified organisms. Their potential for damage is infinitely greater than chemical pollutants because these organisms can reproduce by themselves, mutate and evolve. Driven by the logic of profit-making and rent-seeking, biotechnology will pose the greatest threat to human health and survival.

Super-exploitation

The global information economy will also enable those with vast resources to concentrate wealth further into their hands. To illustrate this capacity for super-exploitation unleashed by third wave technologies: imagine a corporation which can afford to automate its international financial transactions so that its computers could do a round-the-clock, unattended scan of the global financial markets for opportunities, make decisions automatically, and conclude a financial transaction within one second or a buy-then-sell transaction pair within two seconds, and execute such transactions 24 hours a day, 365 days a year. Compare such a corporation with less capable investors who might be able to do transactions only once a minute, once per hour, or perhaps once a day. The following table shows how soon each investor would be able to double their investment funds:

Table: Time needed to double investment funds

                                  Frequency of transactions
                           ----------------------------------------
Profit Margin for every    Once per    Once per   Once per  Once per
buy-then-sell transaction  day         hour       minute    second

          1%               4.6 mos.    5.8 days   2.3 hrs.  2.3 min.
          0.1%             46 mos.     58 days    23 hrs.   23 min.
          0.01%            38 yrs.     19 mos.    9.6 days  3.9 hrs
          0.001%           380 yrs.    16 yrs.    3.2 mos.  1.6 days
          0.0001%          3,798 yrs.  158 yrs.   2.6 yrs.  16 days
          0.00001%         37,983 yrs. 1,583 yrs. 26 yrs.   5.3 mos.

Even with the thinnest margins of profit, a suitably-equipped finance firm can double its investment funds within days, if not hours. Who but the largest financial conglomerates would have the resources and the connections to set up and maintain automated, round-the-clock facilities with a global reach that can conclude a transaction every second? We had better think again, those among us who imagine that the Third World can leap-frog second wave economies and ride the third wave by surfing the Web or by selling our agricultural and manufacturing commodities and our cheaper labor over the Internet. While we are still saving money to upgrade our obsolete computers, they will have multiplied their investment funds many times over.

What we face here is really a new personification of greed, one that has freed itself of distracting human feelings like love, compassion, charity, guild, fear and other emotions, leaving only pure greed, unencumbered and free to pursue singlemindedly the one and only thing that motivates it: profit. It is the search for profit by global corporations that is powering the whole process. These corporations have even acquired their own rights, which are often more favorably recognized than the rights of real persons. They have learned to nourish themselves and to grow by feeding on nature, people, and information. They have become increasingly aggressive in asserting their freedoms ("liberalization"), overcoming government controls ("deregulation") and in taking over government activities ("privatization").

Corporations had earlier shared global rule with governments. Now, they want to rule it by themselves ("globalization").

The colonization of our countries that began in the 16th century hasn't really stopped. It has just changed forms, coming in waves of globalization that intrude into our communities, impose their unwanted rule, and squeeze the wealth out of our people and environment. Each improvement in technology, each transformation of capital, creates new ways of extracting wealth from us, continually enriching those who control the technology and our economy while impoverishing us, destroying local livelihoods, ravaging our natural resources, and poisoning our environment. The first wave has ebbed, but we are still deep within the second wave, and the third wave has already started lapping our shores.

Responding to the third globalization wave

How do we respond to globalization? To the first wave, we responded with independence struggles, ranging from armed revolutions to peaceful lobbies for independence. Economically, our responses ranged from outright confiscation and nationalization of foreign property, to negotiated purchases of foreign corporations at full commercial prices. Thus, historically, we can identify a period of economic nationalism worldwide, when newly-independent countries in Asia, Africa and Latin America tried to regain control of their economies through a range of policies favoring local economic interests and institutions.

Then came the post-colonial second wave of globalization, both in response to our independence struggles and as a consequence of internal developments within the economies of powerful countries themselves. Responses to this second wave have ranged from communist-led armed struggles, to elite-led protectionist regimes. Many of these responses have floundered as crises upon crises beset our countries, enabling former colonial masters to recover much of their early privileges. In general, the second wave of globalization remains dominant over our national and community life, having managed so far to counter all the various responses that have confronted it.

We're still under the second wave, and now comes the third wave. How do we respond to this new wave, and how should our response be related to our continuing efforts to confront the second wave of globalization?

A Green response

We can learn from some of the responses of social movements which have confronted specific issues involving the information economy. An illustrative set of responses can be seen in the program of the Philippine Greens for a non-monopolistic information sector. The following are the major elements of this program (Society, Ecology and Transformation by the Philippine Greens, 1997):

  1. "The right to know. It is the government's duty to inform its citizens about matters that directly affect them, their families or their communities. Citizens have the right to access these information. The State may not use 'national security', 'confidentiality of commercial transactions', or 'trade secret' reasons to curtail this right.

  2. "The right to privacy. The government will refrain from probing the private life of its citizens. Citizens have the right to access information about themselves which have been collected by government agencies. The government may not centralize these separate databases by building a central database or by adopting a unified access key to the separate databases. Nobody will be forced against their will to reveal any information they do not want to make public.

  3. "No patenting of life forms. The following, whether or not modified by human intervention, may not be patented: life forms, biological and microbiological materials, biological and microbiological processes."

    Life form patenting has become a major global issue, as biotechnology corporations move towards the direct manipulation and commercialization of human genetic material. Biotech firms are engaged in a frantic race to patent DNA sequences, microorganisms, plants, animal, human genetic matter and all other kinds of biological material, as well as in all kinds of genetic modification experiments to explore commercial possibilities. We much launch strong national and international movements to block these monopolistic moves and experiments, and to exclude life forms and other biological material from our patent systems.

  4. "The moral rights of intellectuals. Those who actually created an intellectual work or originated an idea have the right to be recognized that they did so. Nobody may claim authorship of works or ideas they did not originate. No one can be forced to release or modify a work or idea if he/she is not willing to do so. These and other moral rights of intellectuals will be respected and protected.

  5. "The freedom to share. The freedom to share and exchange information and knowledge will be recognized and protected. This freedom will take precedence over the information monopolies such as intellectual property rights (IPR) that the State grants to intellectuals."

    A specific expression of the freedom to share is the "fair-use" policy. This policy reflects a historical struggle waged by librarians who see themselves as guardians of the world's storehouse of knowledge, which they want to be freely accessible to the public. Librarians and educators have fought long battles and firmly held their ground on the issue of fair-use, which allows students and researchers access to copyrighted or patented materials without paying IPR rents. They have recently been losing ground due to the increasing political power of cyberlords.

  6. "Universal access. The government will facilitate universal access by its citizens to the world's storehouse of knowledge. Every community will be enabled to have access to books, cassettes, videos, tapes, software, radio and TV programs, etc. The government will set up a wide range of training and educational facilities to enable community members to continually expand their knowhow and knowledge.

  7. "Compulsory licensing. Universal access to information content is best implemented through compulsory licensing. Under this internationally-practiced mechanism, the government itself licenses others to copy patented or copyrighted material for sale to the public, but compels the licensees to pay the patent or copyright holder a government-set royalty fee. This mechanism is a transition step towards non-monopolistic payments for intellectual activity."

    Many countries in the world have used and continue to use this mechanism for important products like pharmaceuticals and books. Compulsory licensing is an internationally-recognized mechanism specifically meant to benefit poorer countries who want to access technologies but cannot afford the price set by IPR holders, but even the U.S. and many European countries use it.

  8. "Public stations. Universal access to information infrastructure is best implemented through public access stations, charging at subsidized rates. These can include well-stocked public libraries; public telephone booths; community facilities for listening to or viewing training videos, documentaries, and the classics; public facilities for telegraph and electronic mail; educational radio and TV programs; and public access stations to computer networks."

    Information infrastructures are very expensive. Building national networks from scratch may take several billion dollars. Providing a personal computer to each family may take a few more billion dollars. Yet, much of these hardware will become obsolete within a few years of use, after which we will again be forced to update the entire hardware infrastructure for several billion dollars more. The act of participation seems to entrap us at once into becoming captive markets of information economies. How do we ensure access at a much lower cost? The answer is in universally-accessible public facilities. In the same way that the problem of Third World transport is solved by public transportation and not by a "one-family/one-car" policy, the problem of universal access in the information sector can be solved by public work/access stations and not by a "one-family/ one-computer" policy.

    Another approach in building public domain information tools is to support non-monopolistic mechanisms for rewarding intellectual creativity. Various concepts in software development and/or distribution have recently emerged, less monopolistic than IPRs. These include shareware, freeware, "copyleft" and the GNU General Public License (GPL). The latter is the most developed concept so far, and has managed to bridge the transition from monopoly to freedom in the information sector. In the personal computer arena, for example, the most significant challenger to the absolute monopoly of Microsoft Windows is the freely-available Linux operating system, which is covered by the GPL.

    The first step in breaking up monopolies may be competition. But competition eventually leads to domination by the strong and those who can compete best, leading us back to monopolies. Isn't it better to transcend competition and move further towards cooperation? This means a stronger public sector and sharing meager resources to be able to afford expensive but necessary facilities. In the information sector, this means building information infrastructures, tools and contents which are in the public domain.

  9. "The best lessons of our era. While all knowledge and culture should be preserved and stored for posterity, we need to distill the best lessons of our era, to be taught -- not sold -- to the next generations. This should be a conscious, socially-guided selection process, undertaken with the greatest sensitivity and wisdom. It is not something that can be left to a profit-oriented educational system, circulation-driven mass media, or consumption-pushing advertising."

These responses must also be linked with ongoing struggles against the second wave of globalization. By doing so, we can bring together the widest range of people, whose unity and joint action can bring about a political structure that can comprehensively address the challenges of globalization.

As the Philippine Green program indicates, one of the tasks of such struggles is to develop a non-monopolistic information sector, where intellectual activity is rewarded through non-monopolistic mechanisms which are more consistent with the social nature of information. This will involve a radical rethinking of property concepts in the information sector, reinforcing similar demands for property restructuring in the industrial and agriculture sectors.

Eventually, enough social forces must be mustered to confront squarely the powerful forces of globalization. We can expect this historic confrontation to demand from us the same kind of courage, sacrifice and heroism which the earlier anti-colonial struggles demanded from our national heroes.

How we rise up to this challenge will determine whether our children and grandchildren will live as neo-slaves under a global system as cruel and heartless as the colonial system of old, or as free citizens living in communities where knowledge and culture are again freely-shared social assets, where industrial machinery is appropriately designed to serve and not to enslave human labor, and where ecology -- as it had been in earlier times and still is in some communities -- is the organizing principle in agriculture.

Final lesson

There is one final lesson, among so many, that our own colonial past teaches us. The first Spanish colony was set up in the Philippines in 1565. Over the next three centuries, colonization would encroach on most of the archipelago, except the Muslims of Mindanao and the upland indigenous tribes. Isolated rebellions would occur but could not shake Spanish rule. In 1864, a public manifesto by a Filipino priest began a Propaganda Movement, which eventually awakened our people's anti-colonial consciousness. In 1896, a full-scale revolution broke out. By 1898, the revolution had for all intents and purposes defeated Spanish colonialism.

It took some three hundred years before we Filipinos shook off the colonial mentality that immobilized most of our people and made them vulnerable to Spanish rule. The campaign for the Filipino mind took another thirty years to win. Within three years of anti-colonial armed struggle against Spain, victory was in sight.

The struggle to unmask the colonial monster was ten to a hundred times more difficult than the struggle to bring it down.

Let us keep this lesson in mind today, when we are yet at the early stages of unmasking the monster of globalization. Let not the seeming immensity of this task cloud our vision of the future, when our communities and nations shall at last be free to chart their own destinies guided by the principles of ecology, social justice and self-determination.

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 countries and on social movements. He is also the secretary-general of the Philippine Greens. He operates an electronic mail service for NGOs, and is an electrical engineer by training. He may be contacted via email at rverzola@phil.gn.apc.org