Archive for the ‘Technology and Inequality’ Category

Global Capitalism is Killing Democracy

Monday, March 10th, 2014


Democracy basically means rule of the people living in a state by the citizens of that state. But as not even only two individuals can ever agree exactly what they want, democracy can never be perfect. Indeed, the first democracy in the world –Ancient Athens–was far from a perfect democracy, especially as many of the people living in that “democracy” were slaves and not citizens and had no say at all in how they were ruled.

When once states grew beyond the size of comparatively small City States like ancient Athens , direct democracy in which, in principle, all the people lounged around in a forum and decided what they wanted, direct democracy became impossible. Instead states which aspired to be democracies turned to some form of representative democracy in which, for example, the people elected representatives who were to represent their views in some form of Parliament which itself had some role in electing or controlling a government.

I am not proposing to discuss forms of representative democracy today: these vary greatly in the numerous purportedly democratic states in the world. Nor am I going to discuss limitations of the autonomy of a state’s citizens caused by the diplomatic or military intervention of other states, such as Russia’s current intervention in the affairs of Ukraine.

Rather, I am going to discuss the general decline in the role of democratically elected governments in the governance of the states which they purport to rule, and the rapidly increasing role of large capitalist corporations in that governance.
I am concerned here with the ability of representative democratic institutions to devise and implement policies related to the economic and social welfare of a state’s citizens. The state’s capability in such roles can never be absolute. If, as is general, people in one country work to create products and services to be bought by citizens of other countries; and if they also want to buy some of the goods and services produced by citizens of other states, the terms of such trade cannot normally be determined unilaterally by any one state, or by the citizens who work in it. But the growing power of often huge transnational corporations affects the welfare of people in several states by their unilateral decisions taken in order to increase their own profits.

A central tenet of democracy is that everybody should have equal rights. It might be reasonable to suppose that an “ideal” democratic economic system would take as its first priority the satisfaction of every person in the world’s basic needs before it went on to satisfy people’s less urgent wants and desires. But no conceivable economic system could approach close to such an ideal. However, the central contention of this talk is that the extent to which modern capitalism diverges from such an ideal is excessive; and that, a better world in which movements towards such an ideal would be more rapid and coherent is feasible.

Economic and social inequality is extreme throughout the world, and is becoming more extreme.. To some extent, the world’s economy is moving in the direction of improving the welfare of poor and disadvantaged people through the benefits of economic growth being extended to many more poor people, for example in China and India. But there are several ways in which it is moving in different, far less desirable directions.

I want to talk about five important groups of “ weapons” which large transnational corporations use in combination very effectively to sustain and increase their influence over economic decision making at the expense of democracy.

These are:
1. Control over the direction in which technology is developed, exercised by their ownership of Research and Development laboratories and resources used to design and develop new products
2. The enormous and effective effort and expenditure they deploy in lobbying governments and international organisations to influence them to implement policies favourable to capitalism in general and to their own particular industries and activities.
3. Cost reduction. Traditionally, companies have achieved cost reductions by putting increasing pressure on workers to work faster; also through mechanisation, and subsequently automation of production and other processes. Since the 1970s, the transfer of manufacturing operations in particular from developed countries, where labour is relatively expensive, to developing countries where labour is cheap – in some cases, very cheap indeed – has played an increasing role. None of these “weapons” is inherently bad. But it is the ways in which these resources are deployed in combination which has been having an increasingly damaging effect on the interests of people (especially poor people) and on democracy, especially in the last sixty years or so.
4. Arranging transactions between their branches in different countries so as to minimise the total taxes they pay. For example, Amazon has a huge operation in Britain but pays no Corporation Tax because its profits are allocated to countries such as tax havens where much lower taxes are exacted.
5. Decisions whether particular products or services should be provided by private corporations, by public corporations or by voluntary or mutual organisations are surely decisions that should be made democratically by the people in a country. But that is not always so. Health services are a prime example of external influences from other countries and Inernational Organisations being brought to bear on Governments in favour privately provided provision rather than state provision.

1. Technological change

As Joseph Schumpeter wrote about sixty years ago:
“the capitalist engine is first and last an engine of mass production which unavoidably means also production for the masses” It is the cheap cloth, boots, motorcars ,and so on that are the typical achievements of capitalist production… The capitalist achievement does not typically consist in providing more silk stockings for queens but in bringing them within the reach of factory girls in return for steadily decreasing amounts of effort.”(Schumpeter, 1954: 67)

Revolution in production methods and in the products available result in “an avalanche of consumer goods”. “the capitalist process… virtue of its mechanism, progressively raises the standard of life of the masses.” (page 68). A modern workman can buy a far greater quantity and variety of goods per hour worked than his forefathers could have bought.
So far so good, but let us take the case of agriculture and food production.

Soil conditions and climate in developing countries are very different (and diverse) throughout the world. But many millions of people are deprived of opportunities of gainful employment by the control of a high proportion of food amd agricultural production by a few enormous corporations which concentrate it on a very restricted range of crop varieties, produced intensively using capital and input intensive large scale production methods. Technology is developed and deployed on a large scale to support these production methods. This in turn accelerates rural unemployment and stimulates the movement of huge numbers of people from the countryside into already overcrowded huge cities in which there is already massive unemployment. Intensive food marketing efforts result in the creation of markets for foods of little nutritional value.

Perhaps the largest social movement the world has ever known is the Food Sovereignty Movement. Its principal manifestation is La Via Campesina, a loose association of peasants and small farmers which has at least 200 million members, and possibly as many as 300 million. The principles of Food Sovereignty can be summarised as “the right of peoples to healthy and culturally appropriate food produced through ecologically sound and sustainable methods and their right to define their own food and agriculture systems”

But the principal organisations which deploy Research and Development for agricultural production are large multinational corporations. For example, such organisations develop and apply Genetic Modification. principally to meet the demand from food processors and farmers in developed countries.). They use GM to try to develop and market standard solutions (for the whole world) that involve the intensification of agriculture which is often environmentally disastrous.

The enormous numbers of people in the Food Sovereignty movement worldwide have very little power in contrast with the transnational agriculture and food corporations.

2. Lobbying National Governments and the EU

In the United States in the 1920s lobbyists from the oil, tire and automobile industries persuaded federal and state governments to undertake the huge expense of constructing highway networks.(In addition, General Motors took over and dismantled competitive public transport systems , including railways and tramways ).

In November 2013, George Monbiot reported that the British government’s subsidy system for gas-burning power stations is being designed by an executive who has been seconded into the Department of Energy: he works for ESB International which builds gas-burning power stations. And that a government minister, Nick Boles, has privately assured the gambling company Ladbrokes that it need o’t worry about attempts by local authorities to stop the spread of betting shops. His new law will prevent councils from taking action. Lord Green, a government trade minister requires that large companies have ministerial “buddies”, who have to meet them when the companies request it. Previously, Lord Green was chairman of the HSBC Bank.

The European Union and the USA are negotiating a huge trade deal – the Transatlantic Trade & Investment Partnership (TTIP). If agreed, TTIP will give corporations the power to overturn democratically decided laws on everything from environmental protections to food safety, through a system of secret courts that only corporations would have access to. The Transatlantic Trade and Investment Partnership will include investor-state dispute settlement. Where this has been included in other trade agreements, it has allowed big corporations to sue governments before secretive arbitration panels composed of corporate lawyers, which bypass domestic courts and override the will of parliaments.

Thismechanism could threaten almost any means by which governments might seek to defend their citizens or protect the natural world. Already this sort of mechanism has been included in trade treaties. It is already being used by mining companies to sue governments trying to keep them out of protected areas; by banks fighting financial regulation. In Australia, the huge tobacco corporation Phillip Morris is suing the government , challenging its tough anti-smoking laws. The German government is being sued by Vattenfall, a Swedish nuclear power group, for wanting to phase out nuclear power.

The corporations have most of the power over decision-making already, and their power is increasing almost daily.

3 Cost reduction
Especially since the 1970s,companies have outsourced operations –especially manufacturing – from developed to developing countries primarily to increase profitability by lowering employment costs. This has generated huge amounts of employment in developing countries, in particular in China, which are very much to be welcomed. But the power of large companies to offer significant amounts of employment –or to withdraw it –offers companies very considerable power over nation states in relation to a wide variety of policies –from employment, taxation to environmental policies. Companies also achieve lower costs by operating in less regulated environments, and such environments may also involve increased pollution and decreased safety for workers than would be acceptable in developed countries.

The most important industry where this has happened is clothing. The biggest clothing manufacturing country is China, with India and Bangladesh growing fast. Massive employent has been created in sch countries, and rich countries benefit from being able to buy very cheap clothing. But corporations keep wages low, and resist Government regulations and trade union pressure for better working conditions. In the extreme case, this can result in the tragic loss of life which happened as a consequence of the factory collapses in Bangladesh last year.

Often, corporations negotiate with national governments, and put pressure on them to compete with other governments to offer “good terms” to secure employment for creating employment in their countries. “Good terms” for the corporations include avoiding the need to spend money on the health and safety of workers and avoiding the need to spend money on reducing pollution of the environment, and, of course, paying low wages to workers. What does that do to the democratic rights of workers in those countries to enjoy safe ,healthy and fulfilling lives?

The Headquarters of most such corporations are based in developed countries, but increasingly that are based in rapidly developing countries such as India and China. Tata, a huge Indian conglomerate, owns a vast variety of companies in 80 countries, including Jaguar Rover which manufactures luxury vehicles in Britain and Tata Global Beverages which own Tetley Tea. Tetley Tea owns tea plantations in Northern India where people, including children, are paid less than $3 a day to pick tea .they work very long hours, often have to spray noxious pesticides with little protection. Their homes are decrepit, open to wind and rain. Overflowing latrines have created cesspools in the areas where employees and their families live. The Human Rights Institute at Columbia Law School, which visited 17 of 24 Tata plantations during two years of its own investigation. Senior plantation managers told the researchers not to listen to the workers because they had “low IQs” and were “like cattle.” These comments reflect the caste system which exists in the plantations in Assam. The tea workers come from two marginalized communities — Adivasis (indigenous people) and Dalits (the so-called “untouchable” caste). They remain trapped in the lowest employment positions on the plantation, where they are routinely treated as social inferiors, even though discrimination against lower castes is illegal in India.

Such appalling conditions are not confined to developing countries Slaughterhouse and meat packing workers are poorly paid for long hours and for tedious, dirty, repetitive work using dangerous tools. They often work in excessively hot or cold temperatures and sustain injuries from animals, other workers and their own errors in a pressurized environment in which speed is of the essence.

Is all this democracy at work?

The World Bank is launching a full investigation into what it calls the “potentially significant adverse” environmental and social impacts on plantations owned by Tata. But the influence of international organisations such as the World Bank is not generally benign. They have exerted influence in favour of low priority for expenditure on health care in relation to expenditure on promoting economic growth based on stimulating international trade. The influence of international organisations –and pressures exerted by them – have generally favoured private delivery over public delivery of goods and services such as clean water and health care, and this has generally been against the interests of poor people and especially of those living in developing countries. The World Trade Organisation believes that public services should be opened up to international capital and that this would benefit both globalization and education However, further opening up the markets of poor nations to transnational corporations is liable to create greater inequalities between rich and poor nations. Education is increasingly treated as a tradable commodity as opposed to a public good in wealthier parts of the globe, with learners increasingly referred to as customers, clients or consumers. Indeed international organisations actively promote policies which look after the interests of capitalism rather than the , intersts of people , because a high proportion of the leaders of these organisations are now committed to the mistaken belief that close co-operation with major trans national corporations is invariably beneficial to the economies of developing countries.

In addition, International organisations such as the World Bank have often backed massive programmes of dam building in developing countries so as ot stimulate economic growth. This has meant displacing millions of people from areas which have to be flooded to permit construction of dams. The displaced people have little scope to express their resistance to such projects which usually wreck their lives.

4..Allocation of Corporations’ profits between the various countries in which they operate.
States compete with other to offer lower taxes to corporations to encourage them to locate in their countries. This denies the democratic rights of set the taxes they pay.

5. Decisions whether services should be provided privately or not
The World Bank, the World Health Organisation, the Pan Amercan Health Organisation and the U.S, National Institutes of Health have been influential in persuading developing country governments, especially in Latin America to adopt voluntary health insurance as the best way of coping with developing countries’ problems of health provision. Privatisation has not generally succeeded in improving access to health services for vulnerable groups in Latin America. Although its impact has differed among Latin American countries, expansion of private insurance has generally worsened access to needed services. Privatisation, either through conversion of public sector to private sector insurance, or by expansion of private insurance through enhanced participation by corporate entrepreneurs, has usually improved conditions for private corporations and has led to higher administrative costs.

State –run health systems are likely to offer better services to the community as a whole than systems based on private health insurance. But developing countries depend heavily on aid from external donors to provide the resources for improving health, and such donors generally exert influence in favour of private provision. This denies people living in those countries the right to determine whether private or public organisations should provide them with health care.

Do any significant areas of the economy remain where the will of the people –democracy -still has some influence on policy?

Technology and Inequality in the Age of Neo-Liberalism

Tuesday, October 8th, 2013


Over the last 250 years, capitalism has been responsible for rapid economic growth and technological change in many countries. As Schumpeter suggested, the capitalist process progressively raised the standard of life of the masses. The consequent increase in production of an ever-changing and expanding range of products and services lifted hundreds of millions of people out of poverty and deprivation.

But since the 1980s, neo-liberalism has become increasingly dominant in political leaders’ thinking and policies throughout the world. Neo-liberals believe in the benevolence of the free market, and advocate minimal state intervention and regulation of the economy. They have been very successful in convincing political leaders of the benefits of adopting the policies they advocate. As a consequence, there have been trends toward inequality, and to concentration of the benefits of technological change and economic growth on a small minority of the world’s population. International organisations such as the World Bank and the World Trade Organisation pursue the interests of multi-national corporations in promoting neo-liberal policies that are against the interests of poor people.


As Schumpeter argued:

the capitalist engine is first and last an engine of mass production which unavoidably means also production for the masses… .It is the cheap cloth, the cheap cotton and rayon fabric, boots, motorcars, and so on that are the typical achievements of capitalist production… The capitalist achievement does not typically consist in providing more silk stockings for queens but in bringing them within the reach of factory girls in return for steadily decreasing amounts of effort…the capitalist process… virtue of its mechanism, progressively raises the standard of life of the masses. (1954: 67-68)

Schumpeter also emphasized that the engine of economic growth is innovation in products and production processes, rather than price competition:

….markets reward mainly the large organisations which own and control massive agglomerations of land, capital, and resources devoted to innovation and product and service design. (1954: 81)

Since Schumpeter wrote, the long tradition of “worship” of economic growth has become even more dominant. However, the worldwide focus on securing economic growth has been far from completely successful in terms of its contribution to the welfare of the whole world’s population, amongst whom poverty and deprivation are still prevalent. Moreover, economic growth has been enormously extravagant in the use of resources and the environment has been degraded.
Everywhere in the world, inequality is of great significance. When analysts consider inequality, they often only consider differences in income between average living standards in various countries. This can be misleading. For example, while average living standards in rapidly developing countries such as India and China have increased very rapidly in recent years, there are still hundreds of millions of people in such countries living in poverty and suffering from deprivation.
Neo-liberalism is becoming increasingly dominant in political leaders’ thinking throughout the world. Neo-liberals believe in the benevolence of the free market and that there should be minimal state intervention and regulation of the economy.


Information and Communications Technologies (ICTs) provide a vast new range of products and services, and also offer ever more powerful potentials for increasing productivity. They help to meet needs for information, communications and entertainment. The huge attention that has been lavished on these technologies is a consequence of many factors, including sheer fascination with the activities they have made possible and the extraordinary opportunities that their exploitation has offered for making profits. This is well known, so I concentrate on the “hidden underside” of some of these activities in this paper.


The ICT industry relies heavily on rare minerals which have to be extracted from the earth. The supply chains involved in the production of commodities such as ICT devices are not apparent to the consumers of these items, and the price that manufacturers of electronic products pay for precious metals such as gold do not reflect the huge human costs paid by the miners –men women and children –who work in terrible, dangerous conditions for low pay to mine those metals. As the gold on the surface of the earth has been mined, so men, women and children have to go deeper into the earth to extract it. Much of this mining is in countries with loose health and safety regulations. A quarter of the gold is mined by poor migrant workers in small-scale mines. The majority of accidents go unrecorded because of the itinerant nature of the workforce and the often illegal areas in which they work. Buyers of ICT devices and services do not perceive the poor pay of the miners who extract these minerals, nor the dangerous conditions in which they work, nor the impact that mining has on these workers’ health and on the environment. Some ICT device makers try to “ethically source” their precious metals – they buy from certified suppliers. However, there can be between four and eight levels in the supply chain of materials before they reach manufacturers. Manufacturers depend on the adherence of all levels in this supply chain to make claims that they buy ethically. But supply chains can never guarantee that the gold is extracted ethically. Much commercial activity now relies on networks, software and electronic transfer of capital. But this activity depends for its existence on mineral extraction and manufacturing processes previously associated with heavy industry, and the repetitive work in arduous conditions which this involves.


In the light of the threat of terrorism and ever increasing demands for security, Closed Circuit TV (CCTV) monitoring, screening technologies, tracking devices and biometric tools are used ever more extensively. New technologies of surveillance often appear to be deployed as means of policing marginalized sections of society for whom there are few opportunities in the new global economy, in preference to supporting and investing in them.


The contested relationship between technologies and development is another theme of this paper. The leadership of Organisations such as the World Bank and the World Trade Organisation (WTO) has been captured by the ideology of neo-liberalism. The World Bank tries to persuade developing countries that they should invest heavily in ICTs as an engine of growth.

Such propositions rely on the belief that ICTs can help developing countries to narrow the gaps in productivity and output that separate them from industrialised countries – and even that they can “leapfrog” stages of development into the information economy. But most developing countries are unable to cope with the new technological paradigm or to exploit its potential. They lack appropriate infrastructures and the capacity to adopt, adapt and to innovate in their own environment.

A few countries such as South Korea and Singapore have used production of consumer electronics to transform the standard of living of a large proportion of their populations. But elsewhere, there is little evidence that ICTs can help those with no ownership and control of this technology and who do not possess the capability to innovate to achieve their development goals. Indeed, many ICT initiatives and projects in developing countries have failed to meet such objectives. Moreover, developing country consumers are influenced to deploy fashionable technologies without considering critical issues such as user capabilities and cultural feasibility. It is generally unrealistic to expect developing countries to achieve development through ICTs without policies and support in place to ensure equitable access and training, something which merely opening up markets does not necessarily ensure: in general, consuming ICTs reinforces existing social and economic inequalities.


Neoliberalism includes the belief that the only legitimate purpose of the state is to safeguard individuals, especially commercial, liberty, as well as strong private property rights; and that the state should be drastically reduced in strength and size. These beliefs apply internationally: there should be free markets and free trade.

Political leaders of the United States and the United Kingdom – Ronald Reagan and Margaret Thatcher –were world leaders in the coherent application of neo-liberal principles to the policies of their own countries in the 1980s. But much of what has become recognized as neo-liberal ideology had been important influences on United States’ governments’ foreign policies long before President Reagan was elected in 1980. Since the end of the Second World War, the United States has had strong influences on agriculture, healthcare, development and education policies in developing countries. This influence had been transmitted through the United States’ strong representation in International Organisations such as the World Bank, the International Monetary Fund and the World Trade Organisation.

ICT producers have promoted their products as means through which excellent education can be made available to diverse and widespread communities. The World Trade Organisation believes that public services should be opened up to international capital, and that this would benefit both globalization and education. However, opening up the markets of poor nations to transnational corporations further is liable to create greater inequalities between rich and poor nations. In accordance with neo-liberal ideology, education is increasingly treated as a tradable commodity as opposed to a public good. Learners are increasingly referred to as customers, clients or consumers. In the UK, the introduction of computers into all school classrooms as part of face-to-face teaching has been promoted as the way to educate children to be the knowledge workers of the future. Yet despite the widespread integration of ICTs at all levels of schooling and into all subjects, there are still large numbers of children leaving school with low levels of literacy and numeracy. Moreover, insufficient attention has been paid to the purposes for which communities need knowledge, and what knowledge is appropriate for particular groups. The use of new technologies is not always the right answer. It is essential to consider what education and training is needed for the population to achieve sustainable development before considering which technologies should be used to deliver them. Governments. Policy makers need to consider the best methods for educating their citizens, taking into account the local infrastructure and which modes of delivery would be most appropriate in any given situation.

Indeed, opening up the markets of poor nations to transnational corporations further is liable to create greater inequalities between rich and poor nations. Choices between private and public delivery systems are crucial determinants of the effectiveness of delivery of products and services to meet the needs of the whole population. In spheres such as healthcare, education and the communications sector, the United States and international organisations have exerted strong influences in favour of private delivery, and this has generally been against the interests of poor people, and especially of those living in developing countries. Multinational corporations are pushing developing countries to rely more on ICTs for development of their economies, and for improving education, when adapting development and education to specific national needs may well be better approaches, especially for contributing to the welfare of poor and disadvantaged people.


Despite some noticeable improvements in recent years, technological change still continues to benefit rich people more than poor and disadvantaged people in most countries. Neo-liberal influence has been exerted in favour of low priority for expenditure on healthcare in relation to expenditure on promoting economic growth based on stimulating international trade. Such policies have tended to restrain developing countries expenditure on the provision of clean water which is absolutely fundamental to improving health. In developed regions of the world, resources such as clean water and refrigeration which are also essential for conventional storage and delivery of some vital health supplies such as drugs, vaccines and injections, are readily available. In many areas of developing countries, clean water, refrigeration and other resources which are essential for safeguarding human health are scarce. The main causes of illness and death in developed countries are cancer and diseases of respiratory, cardiovascular and nervous systems. In the developing world, communicable diseases are the main health problem, and many fatal diseases could be prevented by public health measures, especially through the provision of clean water. Although some progress has been made, there is still an inbuilt tendency arising from market forces which ensures that pharmaceutical development is international and continues to concentrate on treating the diseases of the relatively affluent. Policies in developed countries, notably the United States, fail to contribute sufficiently to the promotion of technological innovation in relation to the diseases that afflict developing countries disproportionately. Numerous technologies are available which could offer better, more effective treatment for diseases prevalent in developing countries, but, insufficient resources are devoted to development and exploitation of such technologies. United States expenditure on health care per capita is immense, but this has resulted in a population whose average levels of health are poor relative to several other countries in which health expenditure is far less, but where the distribution of both income and health care has been much less unequal.


A global food and farming system fit for purpose should ensure that the world’s 7 billion population (expected to rise to 9 billion by 2050) has access to sufficient food to enable everyone to live healthily, without causing more than the minimum of damage to the environment and biodiversity. The present system is dysfunctional.

28 per cent of the world’s population suffer from having too little food to eat
The health of 14 per cent of the world’s population suffers because they eat too

At least a billion people suffer from obesity and other diseases caused by eating too
much. For at least two hundred years, food processing has always involved some
adulteration. But never on the scale which exists now, High fructose corn syrup is
very sweet and very cheap, so food manufacturers put huge quantities in packaged
food, and this makes people fat.

Inequality is very harmful to those people whom it deprives of appropriate food – one of the most basic necessities for sustaining a healthy life. Prominent in this group of about a billion people currently in developing countries are those whom poverty and landlessness deprive of the basic necessities for pursuing a healthy life –those who lack sufficient food and clean water to eliminate hunger, starvation and disease. The world’s climatic conditions, soils, water availabilities are extremely diverse. It would surely be reasonable to expect that technological change would be developed, adapted and implemented so as to extract the most nutritious food from nature in the light of these diverse conditions. In practice, however, the prevailing vision is of a standardized worldwide ‘modern’ agriculture extending from the Green Revolution to the current Gene Revolution as a preferred pathway to development. The overwhelming majority of choices of which technologies to develop and deploy are made centrally by large multinational corporations.

The modern world agri-food ‘system’ involves a wide array of external expensive inputs such as fertilizers, seeds and irrigation. Centralized technology-driven economic growth through sustained innovation led by major multinational corporations, and trade are envisaged as providing pathways out of agriculture; or a shift of subsistence-oriented ‘old’ agriculture to a modern, commercial, ‘new’ form of agriculture.. This vision perceives the role of agriculture as an ‘engine of economic growth’ and looks forward to the economic and social transformation of the agrarian economy – from backward to modern, from subsistence to market-orientated, from the ‘old’ to ‘new’ agriculture.


Alternative visions of Food Sovereignty emphasize working locally with natural systems, generating improved livelihoods with local agricultural production attuned to local ecological conditions. Many millions of peasants and small farmers work for small rewards in bad, sometimes appalling conditions in agriculture. Hundreds of millions of peasants and small farmers are organising themselves in, for example, La Via Campesina, to secure increase in their opportunities to be more self-sufficient by producing a higher proportion of the foods that they and their families eat.. According to La Via Campesina “food sovereignty “requires agrarian reform in favour of small producers and the landless, the reorganization of global food trade to prioritize local markets and self-sufficiency; much greater controls over corporations in the global food chain; and the democratization of international financial institutions” (Branford, 2011:28). Food Sovereignty envisages the empowerment of small farmers locally as central to achieving both economic and ecological sustainability. If the emphasis on world agricultural production were to shift to the preservation and technological development of low input systems, world food needs might be met more fully, to the great advantage of billions of small farmers, and with far less environmental damage.

The rewards received by peasants and small farmers are often so poor that many millions of them have migrated
to cities in the hope of finding better paid work in manufacturing and other occupations. To a considerable extent, such migration may well be inevitable, but some improvements of the pay and conditions experienced by peasants, small farmers and their families could be secured through feasible changes in the direction of technological change and agricultural production towards “Food Sovereignty”, and away from the use of intensive methods of food production; and this might secure some significant reductions in the rate of migration of people from the countryside to cities.


The world economic system is extraordinarily complicated, and it has only been possible to consider a few examples in a short paper. The primary purpose of the current worldwide system of production and distribution is not to satisfy the most pressing human needs, but to create a never-ending stream of marketable commodities and the ever-increasing profits they generate for the owners of capital. In practice, markets reward mainly the large organisations which own and control massive capital resources. which they use to exert monopolistic control over markets. Major corporations exert power and influence over Governments and International Organisations to structure markets in their favour. They profit disproportionately from trade and technology transfer between advanced and developing countries.

Capitalism has been responsible for extremely rapid technological change over the past two hundred and fifty years. But there is substantial evidence that the pace and directions of innovation and technological change are under human control and not autonomous. Moreover, it is inevitable that any changes –whether technological or not – bring with them some benefits and some costs. Some of those costs are labeled by economists as “externalities” – for example costs and damage inflicted on the environment. Many such allocations of costs and benefits are unfair to many millions of people who suffer poverty and deprivation of numerous kinds.

It is beyond human power to eliminate all the costs of technological change. But human intervention is capable of mitigating and reducing some such costs. It is also capable of modifying and adjusting the allocation of costs and benefits between the various groups of people involved.

This paper constitutes a case for radical transformations in the determination of the ways in which resources and rewards for economic activity are allocated, for significant changes in the constitutions of large enterprises; and in the legal frameworks and regulations which control their activities. Above all, there is an urgent need for growing decentralization of the control of the direction of technology from huge monopolistic corporations to smaller enterprises wherever possible. If large organisations are inevitable, for reasons such as economies of scale, then those organisations need to be regulated to force them to act in the public interest. This need is general, but perhaps most obvious in relation to agriculture and food, in which there is urgent need for far more local small-scale production and distribution to match better with the huge biological, geographical and climatic diversity of the earth’s surface. Whilst the institutions , practices and mindsets of neo-liberal capitalism and its imperatives of profit seeking and increased consumption seem increasingly entrenched in our lives, they are not inevitable.

Harvey (2005: 203-204) points out serious problems arising from the neoliberal agenda :

“The idea that the market is about competition and fairness is increasingly negated by the fact of the extraordinary monopolization, centralization and internationalization of corporate and financial power. The startling increase in class and regional inequalities, both within states(such as China, Russia, India, and Southern Africa) and internationally between states, poses a serious political problem that can no longer be swept under the carpet as something ‘transitional’ on the way to a perfected neoliberal world. The more neoliberalism is recognized as a failed utopian project for the restoration of ruling-class power, the more the basis is laid for a resurgence of mass movements voicing egalitarian demands and seeking economic justice, fair trade, and greater economic security”

An alternative future – of more socially and culturally appropriate technologies harnessed for increasing equality and social justice – is possible.


This paper was presented at a seminar at Aalto Business School, Helsinki, on 10 October 2013. It draws heavily on Erika Cudworth, Peter Senker and Kathy Walker (editors) Technology, Society and Inequality, New Horizons and Contested Futures, New York, Peter Lang, 2013.

Other References:

Branford, S.,2011,. Food sovereignty: Reclaiming the global food system. London, UK., War on Want.
Harvey, D., 2005, A Brief History of Neoliberalism, New York, Oxford University Press.
Schumpeter, J. A. (1954). Capitalism, socialism and democracy (4th ed.). London, UK: George Allen and Unwin.
Thorsen, D.E., and A.Lie. What is Neoliberalism downloaded from : on 1 September 2013

Evgeny Morozov: The net delusion

Sunday, November 20th, 2011

The Net Delusion provides extensive evidence to refute the myth of technological determinism – specifically the myth that technology can solve enormous political problems.The myth that the internet will liberate the world is typical of the dreams of utopia that have accompanied the initial diffusion of many radical technologies over the past 150 years.

The use of the internet developed rapidly during the period of United States euphoria following the collapse of the Soviet Union. In the popular imagination, the role of the policies of the United States Government in bringing this about was overestimated in comparison with the role of internal weaknesses in the Soviet Union. In some respects, this was analogous to the exaggeration of the role of the Bolshevik Revolution in bringing about the collapse of the very  weak Tsarist regime in 1917.

 Generally, revolutionaries learn to use new media before established authoritarian powers. New social media provide powerful weapons to the  opponents of established  political powers for as long as the opposition exploits these new media better than the authorities. But authoritarian governments soon see possibilities for turning the new technologies against the opposition, and  have access to greater resources.

Many people suppose that the internet will help to free oppressed people, but The Net Delusion shows that it has also  become a tool for control.

 The net delusion: how not to liberate the world, by Evgeny Morozov, London, Allen Lane,  2011, xvii + 408 pages.

The full review was published in Prometheus, Volume 29,  issue 2, 2011, pages 194-197

Tim Wu: The Master Switch

Sunday, November 20th, 2011

Wu believes that we need to understand the past if we are to anticipate  the future.  He is surely right to claim that to understand how the use of current information technologies is likely to develop – in particular, the internet – it is necessary to understand the historical patterns of development of previous technologies, and the reasons behind such patterns. The state should support and stimulate the Schumpeterian dynamic of creative destruction, and that impeding this dynamic is never in the public interest. But the concentration of power in relation to the creation, transmission and exhibition of information constitutes a special case for regulation  because  ‘a song, a film, a political speech or a private conversation’ can change lives. Political revolution or genocide may be facilitated by the mass media. Control of mass media works to decide who gets heard and who does not. This makes  regulation of information and communications services in services fundamentally different from regulation of products such as orange juice, electric toasters or running shoes. But the US  Government has always been relatively indifferent to the dangers of abuse of private power. This book includes valuable analysis of the history of information technologies, concentrating on the United States.

 The master switch: the rise and fall of information empires, by Tim Wu, London, Atlantic Books, 2010, 366 pages.

The full review was published in Prometheus, Volume 29, issue 2, 2011,  pages 194-197 

Technology is brilliant – for the rich

Wednesday, June 30th, 2010


Peter Senker

(Chapter 10 in S.Wyatt et al (Editors) Technology and In/equality: Questioning the information society, Routledge, 2000.)

Technology is now enormously powerful. People travel to the moon and rockets are sent to the planets; it is possible to travel right around the world by jet airliner for less than £1,000. For a similar sum, a very powerful computer can be bought and connected to the internet, giving access to a vast store of knowledge and information.

This chapter attempts to provide some tentative answers to a question which has worried many people for a long time: why do many millions of poor people lack the means of satisfying their most basic needs such as nourishing food and clean water in an era when many people have access to such powerful technological capabilities?

One of the most fundamental reasons for the persistence of large scale poverty is that the distribution of wealth and income in the world is very unequal, to the extent that there are hundreds of millions of people living in poverty and a tiny number of extremely rich people. Some indications of the extent of economic inequality follow. There are those who believe that the present economic system based on free markets works for everyone. (for example, see OECD, 1997). Admittedly, many benefits flow initially to the rich, but they then ‘trickle down’ to the poor.

There are, however, reasons to believe that this is not so. Science and technology play key roles in economic development. Forces which influence the directions in which science and technology are exploited are discussed, to try to explain why most of its benefits continue to flow to relatively affluent people.

Nevertheless in the last hundred years or so, many millions have been lifted out of poverty. Some brief examples are then given of the contributions which Information and Communications Technologies (ICTs) have made to economic growth.. But other clusters of technology, such as those applied to agriculture and the development of pharmaceuticals, are significant in terms of economic growth and the distribution of its benefits and costs. Accordingly, the forces affecting the development and application of such technologies are considered, followed by a brief discussions of some significant constraints to ‘trickle down’.

In conclusion, it is suggested that, as corporations operate primarily to secure profits for their shareholders, they perceive that satisfying the needs of the hundreds of million of relatively affluent people living in the developed world offers the most attractive markets. For this reason, they direct the Research and Development, (R and D) they control primarily to meeting the long term needs of those markets, and to exploitation of resources such as the biodiversity in third world countries to satisfy markets in developed countries. Such corporate behaviour represents a barrier to the development and application of technology for the relief of poverty and deprivation. Some tentative suggestions are made for tackling this enormous problem.


Since 1945, the majority of the people in many industrialised nations have enjoyed substantial increases in living standards. Mass production has made available a wide range of products at prices most people in these countries can afford – from cheap clothes and food to products such as vacuum cleaners and washing machines which make household tasks less arduous. By the 1950s, most of Europe enjoyed full employment and welfare states. In the 1950s and 1960s, the end of colonialism was followed by improvements in education and health and accelerated economic development that led to dramatic declines in poverty in several developing countries.

But the advances have been very uneven .(UNDP1997: iii). In the hundred years to 1989, disparities between the income of the richest countries and the poorest widened substantially (Pritchett 1995). In the last twenty years, the disparities between the incomes of those who live in the richest countries and those in the poor developing countries where most of the world’s population live have become even greater.(Castells 1998:75 and 78)

The concern of this chapter with economic inequality is primarily because of relationships between gross inequality in wealth and income and poverty and human deprivation in both advanced and developing countries. Poverty implies severe deprivation because poor people have access to inadequate means to pursue their well-being. Defining poverty and deprivation is not easy. Poverty can be seen as ‘the failure of basic capabilities to reach certain minimally acceptable levels.’ (Sen1992:109). But the extent of real inequality of opportunities people face cannot be deduced from inequality of incomes alone because what they can or cannot do or achieve depends on the various physical and social characteristics which affect their lives as well as on their incomes. Low income tends to cause poverty and deprivation, but even people with relatively high incomes can suffer from real deprivation.
Living may be seen as consisting of a set of interrelated ‘functionings’ consisting of beings and doings. Functionings can vary from such elementary ones as being adequately nourished, being in good health, avoiding escapable morbidity and premature mortality, to complex achievements such as being happy, having self-respect, being able to appear in public without shame, and to take part in the life of the community.

Capability to achieve functionings depends on a wider range of factors than income. One of the most basic functionings is being able to stay alive for a reasonable length of time, and this is not solely dependent on income: Brazil has much higher income per head than China, but, on average, people live longer in China. There can even be quite remarkable differences within countries. Within India, Kerala, one of the poorer Indian states has much higher than average life expectancy than India as a whole. Deprivation can affect large groups of people, even those living in the most affluent countries. Men living in Harlem in the prosperous city of New York in the United States, one of the most prosperous countries in the world, have much higher incomes on average than Bangladeshi men. But they have less chance of reaching the age of 40 than Bangladeshi men because of factors such as the inadequacy of medical care and the prevalence of urban crime. Despite the fact that even the poorest groups in the United States have higher incomes that the middle-classes in many poorer countries, malnutrition persists in the United States. This is largely because hunger and malnutrition are related not only to food intake, but to the ability to make nutritious use of that intake, and this in turn is deeply affected by general health . ( Sen 1992:20, 28-29, 32-49, 109-115,125-127 ).

Although the world has become much more prosperous in the last fifty years, hundreds of millions of people are still shut out from the great gains which can be secured from economic growth (UNDP 1997:9-12). The share of world income of the poorest 20 per cent of the world’s people has halved since 1960. The numbers of people who have incomes of less than $1 a day, who lack access to clean water, and who die before they reach forty years of age each exceeds one billion. Nearly as many – more than 800 million people – are malnourished.(UNDP 1999:28). South Asia has the most people affected by poverty. Unemployment is also persistent, and low yields from subsistence agriculture and low wages in employment are major factors keeping millions of people in poverty.

There are also millions of people suffering from poverty and deprivation in advanced countries, and the proportion of the population living in poverty has increased in some Western countries. In developed countries, the adverse effects of intensified competition have tended to fall more on the poor than the rich, and on the unskilled more than on the skilled: for example there are 18 million unemployed in the European Union (ILO 1998:9). Throughout the OECD area profits have risen faster than wages since the middle of the 1970s. (OECD, 1994: 22 and 23) . In most European countries, the unemployed have not benefited from general prosperity: the proceeds of economic growth have mainly been absorbed by those in employment.

.Unemployment is rising in many industrial countries and traditional protections against poverty are being undermined by pressures on public welfare spending and falls in real wages. Inequality has increased markedly in some countries and effects have been worst amongst certain sections of the population – in particular amongst children, women and the aged. Eastern Europe and the Commonwealth of Independent States have suffered great increases in poverty in the last decade.

The European Commission’s White Paper on ‘Growth, Competitiveness and Employment’ suggested that we are ‘passing through a period in which there is a gap between the destruction of jobs’ and ‘our capacity to think up new individual or collective needs which would provide new job opportunities’. (Commission of the European Communities 1993 11) But the problem is not limitations in ‘our capacity to think’, but in the constraints imposed to devising and implementing institutional arrangements for meeting poorer people’s needs more fully. The forecasts adopted as a basis for the White Paper showed unemployment as either stable or increasing. The target of 15 million new jobs by the year 2000 was intended to halve unemployment. To achieve it would have involved an unprecedented rate of employment creation of 2 per cent per annum .(Commission of the European Communities 1993 9-16) Moreover, differences in income between rich and poor regions in Europe remained substantial through the eighties. Poor regions of Europe tend to have high unemployment

In contrast, the total wealth of the world’s 358 billionaires exceeds the combined annual incomes of 45 per cent of the world’s people.(Elliott, 1997) The worlds’ top 500 companies employ 0.05 per cent of the world’s population but control a quarter of the world’s economic output. In eight sectors including cars, aerospace, electronics, steel, armaments and media, the top five corporations now control half of the global market. (Vidal, 1997)


The conventional wisdom is that the development and use of new technology leads to economic development and that the benefits of economic development ‘trickle down’ to benefit the whole of society. The best way to alleviate poverty is to provide the maximum freedom for individual entrepreneurs and corporations to create as much wealth as possible as quickly as possible. The poor and the poorest all benefit from wealth creation eventually because of the trickle down of wealth and income from the rich and very rich to the poor and the very poor. Any measures which restrict entrepreneurs and corporations from pursuing competitive advantage are likely to reduce growth in wealth and income. The Organization for Economic Co-operation and Development (OECD) is a club of the richest nations in the world. OECD policy recommendations epitomise this philosophy and influence the policies of governments and international organisations. ‘An open, competitive domestic industrial base is an important means of creating jobs and enhancing public welfare. Industrial competitiveness policy helps to create conditions conducive to achieving these objectives by providing the broad framework for competitive markets. Governments must increasingly formulate domestic policy in a global context; improve the business environment and enhance the competitiveness of markets.’ Technological change is beneficial because declining costs of communications, transport and logistics are among the factors which can offer lower costs, better quality and more choice to consumers.(OECD, 1997: 2-3).

Meeting the demands of the relatively rich provides employment and thus income to the relatively poor. The creation of mass markets gives opportunity for the deployment of technology to produce high quality goods at low prices, which often benefit quite poor people. Indeed ‘….benefits of intensified competition and accelerated learning are growing productivity, lower prices and a higher level of consumption…… In newly industrialised areas there may be quite dramatic increases in per capita consumption especially for the well-educated segments of the labour force.’ (Lundvall 1998:5)

This prevailing ideology reached its culmination in the OECD’s plans for a Multinational Agreement on Investment (MAI) (OECD 1998), which it claimed would give a new impetus to growth, employment and higher living standards. MAI would have imposed very severe restrictions on the right of any contracting state to regulate the operations of companies in its territory. For example, it would have prevented the imposition of requirements to export a given proportion of goods or services, to achieve any particular percentage of domestic content, or to transfer technology.(OECD 1998:18-20). It would have enabled multinationals to sue national governments in respect of laws which discriminate against them. It could, for example, have enabled them to challenge the UN Convention on Biological Diversity which is designed to protect developing countries’ genetic resources.(Rowan 1998).

There are, however, grounds for hope that the tide has turned, and that MAI has been abandoned. It was launched in 1995, at a time ‘when optimism about ever-greater liberalisation was at its zenith’. A French boycott of international discussions about MAI which had been due to start again in October 1998 were reported as resulting in ‘extreme pessimism’ about its future amongst officials from governments involved. (Elliott, Denny and Webster 1995).


Over the past several hundred years, with the aid of technology, several hundred million people have been lifted out of poverty. But why have hundreds of millions been left behind ? To answer this question, it is necessary to consider the forces which drive the development of technology and its use.

Multinational corporations seek large markets because these offer the most profitable opportunities. The largest markets are offered by richer people because they have more buying power. Many large markets are offered by the relatively affluent populations who live in advanced industrial countries such as the United States, Japan and Western Europe. A high proportion of the R and D carried out in the world is directed by large multinational corporations based in advanced industrial countries such as the United States, Japan and Western Europe. Understandably, therefore, most Research and Development is directed by multinationals towards creating and satisfying large markets in these countries. Indeed, Whiston(1993a :252-256) suggests that about 95 per cent of R and D is concentrated amongst Northern rich (OECD) countries, and that the vast majority of this expenditure is directed to meeting the needs of those nations. The share of developing countries in global R and D actually fell between the mid-1980s and the mid 1990s -from 6 per cent to 4 per cent. (UNDP 1999:67) .

Even within Europe, R and D is very unevenly distributed : there is little or no R and D in most poor regions. Without well-developed R and D capabilities, backward regions will find it increasingly difficult to gain from advanced technology developed elsewhere. An adequate infrastructure including high quality labour and higher education institutions are prerequisites for undertaking R and D, and these also are generally lacking in poorer regions.(Fagerberg, Verspagen and Canolis, 1997) .
Corporations are directed by individuals or small groups of people. Accordingly, they vary considerably in terms of the determination, intelligence and, sometimes, ruthlessness, with which they pursue their goals. (Senker, 1989). However, the principal aims of all multinational corporations include making profits for their shareholders.

Having developed products and production processes to stimulate and meet the needs of the largest markets in developed countries, multinational companies then try to create and satisfy markets for those products and processes in developing countries. Their marketing and public relations include attempts to persuade governments and international organisations to create the best conditions in which those products and processes can be sold. Multinational corporations also try to persuade international organisations to lower the tariffs confronting those products and processes when they are exported to other countries, including developing countries.


The development, application and use of Information and Communications Technologies (ICTs) has stimulated economic growth in numerous countries throughout the world. In advanced countries, the ICT industry has accounted for most of the recent growth in employment of highly skilled workers. Introduction of new technologies, especially computers has been associated with increases in skills and educational requirements of jobs, particularly in service sectors such as finance. In manufacturing, expanding use of computers and automation has continued to result in lower demand for production workers. There has been an extremely rapid rise in employment of professionals and technicians. There is a vast and growing global market for people with software skills largely as a consequence of rapidly rising demand for software accompanied by failure to increase productivity in the production of software very fast. These trends have resulted in persistent skills shortages. (ESF Info Review, 1999:1-2).

In 1995, the developed world accounted for over three quarters of world ICT production. There are substantial markets and job opportunities emerging in the manufacture of ICT products which include telecommunications equipment, computers defence and transportation electronics, factory automation and electronics products for use in home, office and car. Services are leading manufacturing industries in terms of their expenditure on ICT, in particular on computer services, packaged software and networks. More extensive use of ICT in service industries may result in labour saving productivity gains and severe reductions in employment as they have in manufacturing. There have already been severe employment reductions in sectors such as finance and insurance. There may be significant increasing employment in emerging occupations, but these tend to be hard to identify as such employment may be diffuse and unstable.

It seems likely that ICT- based innovations will require workers to have broader and higher levels of skill than in the past across a wide range of service industries in developed countries, and, increasingly formal service quality standards are being articulated. This may lead to an improvement in the quality of work, as employers invest more in training in order to meet rising quality demands. However, such trends raise questions about the accessibility of such work to less qualified people. If trends in manufacturing are repeated in service industries there may be a steady erosion of demand for lower skilled workers as quality thresholds rise. Those who remain in employment need more knowledge and higher skills. (Ducatel 1997)

To consider the implications of ICTs for development, it is necessary to take globalization into account because there is an intimate and complex relationship between globalization and the diffusion of ICTs. From an economic perspective, globalization encompasses trade liberalization, the removal of non-tariff barriers and the levelling of tariff rates, and involves increasing freedom of capital to move across national boundaries. Direct investment flows are generated increasingly by firms shifting production across national boundaries to locations which are most cost-effective and profitable.

In essence, economic globalization involves significant lowering of some important barriers which tend to prevent activities being moved around the globe. Prominent amongst these barriers are the costs of transport and communications, both of which have been falling rapidly. ICTs have played major roles in the globalization of financial markets: they have been used to reduce the costs of communication and increase its speed. The communications costs involved in financial markets are now so low that financial transactions can, in principle, be carried out anywhere in the world which has a modern telecommunications infrastructure. Low transport costs, low tariffs and low communications costs also remove constraints on the location of functions such as production. In an era of low costs of communications and movement of goods, competition between various locations is intensified. Intensification of international competition has been stimulated by rapid growth in world trade and international investment flows and this stimulates further diffusion of ICTs by putting pressure on corporations to cut their communications costs still further.(International Labour Office 1998 12 and 33) .

Low transport and communications costs makes it economic to relocate some ICT production processes to developing countries. As a consequence, demand for skills has been growing rapidly in high technology electronics production in East Asia where the production and use of ICTs has been one of the most important means of achieving competitiveness and growth. (ILO 1998 33-41).

Software markets seem to offer particularly attractive prospects for developing countries, as the world market for software is large and growing rapidly. Several developing countries including Chile, India, Singapore and Taiwan have entered low-value segments of the international software export market with the expectation that cheap labour would help them to secure competitive advantage. (Millar, 1998) Claims processing, electronic publishing, secretarial work airline ticketing and customer support are examples of applications being undertaken by developing countries for countries in advanced industrial countries. Taking advantage of excellent telecommunication and low wages , the Eastern Caribbean carries out computer work such as data entry for many US companies. India’s output of ICT products especially software, has increased dramatically in the last decade. (UNDP 1999;61).

Production of software requires abundant resources of sophisticated skills, which India possesses as a consequence of its heavy investment in education. An additional advantage has resulted from the use of English as the language of instruction in higher education. Early success in exporting software was facilitated by economic reform which removed controls which had previously stifled enterprise; and by various measures taken by the Indian government including the provision of improved communications facilities, tax exemptions for profits from software exports, reduction of import duties and the creation of software parks. Growth of the industry was fuelled by substantial expansion in IT training financed by the Indian Government, by large companies and international organisations, which built on an infrastructure of ample supplies of educated scientific manpower.(ILO 1998:128-129) .
Although developing countries only account for a quarter of world ICT production, they have been increasing their share especially in consumer electronics where they produce nearly half of world production. Local production of both hardware and software has been made possible through the availability of a few highly educated and trained engineers supported by small skilled workforce.


ICTs have played major roles in the virtual eradication of poverty in the tiger economies of Singapore, Hong Kong, Taiwan and South Korea. But ICTs are not the most important technologies for developing countries. ‘Information is only one of many needs. Email is no substitute for vaccines and satellites cannot provide clean water’(UNDP 1999:59).

Accordingly, to try to arrive at a balanced view of the implications of technology for inequality and poverty in the world, it is necessary to take technologies other than ICTs into account, in particular agriculture which is so vital to the economies of developing countries.

Since the mid-twentieth century, a group of agricultural technologies have been developed by scientists in international research centres, adapted in national research institutions adopted by extension agencies and agro-chemical and seed companies and marketed to farmers. These technologies include uniform high-yield variety crops, mechanical and energy inputs and synthetic chemical pesticides – the principal means of controlling pests, especially on commercial crops. Agricultural genetic engineering is now part of this package encompassing international legislation and trade restrictions designed to tighten corporate control over food production. Predominant agricultural development patterns and technologies have resulted in ill-effects from use of agricultural chemicals, water depletion and erosion of soil and genetic resources. These impacts raise costs to agricultural producers and undermine their profits. Despite yield increases, millions of people still go hungry. (Corner House 1998)

These technologies have been developed and marketed successfully world-wide by large corporations. They have lobbied governments in favour of chemical -intensive approaches. In many countries, this chemical dependency has been encouraged by government incentives such as tax subsidies and by agricultural credit policies that require farmers’ to use prescribed chemicals. Although some pesticides can help raise productivity, their continued use has had several severe adverse ecological and socio-economic effects. Farmers’ costly inputs of chemicals become ineffectual and self-defeating as a consequence of pest-resistance. Many pesticides harm human health. The technologies do not meet farmers’ needs and local conditions in the risk-prone diverse environments where most of the world’s rural people live. (Thrupp 1996:1-7)

In countries such as the Philippines, commercial export agriculture was encouraged at the expense of subsistence food crops. Between 1960 and 1976, the acreage devoted to subsistence agriculture fell while that devoted to export crops rose.(Mitter 1996) This trend has been intensified with the progressive removal of import restrictions which, in the past protected domestic food producers from competition. In a recent research report, Oxfam estimated that the average household incomes of maize farmers could be reduced by as much as 30 per cent over the next six years as a consequence of cheap maize imports from the US driving down prices. This is leading to migration to commercial estates where some of the displaced may find employment as casual labourers producing fruit and vegetables for export to industrialised countries. The US ability to compete with Philippines maize farmers results more from the heavy subsidies received from the Federal Government than from any comparative advantage in the production of maize. Moreover, U S production of maize is heavily dependent on the use of chemicals, and free trade policy has the result of providing them with substantial markets for their products. (Watkins 1997)

Over the last 30 years, commercially-bred hybrid seeds have been bought by farmers from seed merchants increasingly. In Northern parts of the world , almost all farmers use them. In Southern countries, although non-hybrid crops are commonly used by smallholders for growing vegetables and staple foods , hybrid seeds have become the norm for many grain crops. Hybrids do not breed true in the second generation; they are either sterile or their seed is not uniformly like the parent seed and thus there is a reduction in overall performance when hybrid seed is saved and replanted. In Northern countries, many farmers no longer use farm-saved seeds – partly because of lower yields but also because of the insistence of food processors and retailers on crop uniformity.(Corner House 1998).

Biotechnology is likely to increase rapidly in significance in the early years of the twenty first century. It is unlikely that poorer countries will benefit disproportionately in terms of employment: indeed, such trends as it is possible to discern indicate that advanced countries may well benefit at their expense. Rand D and market potentials are concentrated in highly industrialised countries. Research tends to be concentrated in areas where it is thought likely to open up big markets in developed countries -e.g. to produce slow-ripening tomatoes -rather than in those which would benefit developing countries such as anti-malarial vaccines or drought-resistant crops for marginal lands.
Genetic engineering in agriculture is motivated by the aim of securing profits from rich markets in the developed world rather than by any drive to feed the hungry. Research has been directed at meeting the commercial needs of food processors rather than the nutritional needs of poorer people. For example Monsanto’s high-starch potato has been developed to make commercially-grown potatoes more suitable for the deep-fry vats of Northern fast food outlets, not to be a better or cheaper food. Few of the foods produced so far or being researched and developed are foods which the hungry can afford. Moreover, the high costs of genetically-engineered crops are likely to squeeze many small farmers out of business, with the result that fewer people will be able to grow or pay for the food they need. (Corner House 1998)

Genetic engineering is being used increase poor peoples’ dependence on the corporate sector for seeds, agricultural inputs and produce, reinforcing farmers’ dependence on chemical herbicides and fertilizers. Like the green revolution of the 1960s and 1970s, it is liable to set in train the further evolution of plants and insects resistant to the chemicals, resulting in unprecedented pest outbreaks and weed problems. At the same time, it is likely to reduce crop biodiversity and to trigger crop failures and cause ecological degradation, thereby exacerbating food security for the poor.
A further threat posed by genetically-engineered crops to the livelihoods of small farmers arises from attempts by the industry to deny farmers the possibility of saving seeds from previous harvests, forcing them to buy their seeds annually from seed companies. Companies such as Monsanto are trying to prohibit farmers from saving seed for their own use. When farmers buy seed engineered to be tolerant to the company’s proprietary herbicide, Roundup they have to sign a contract stating that they will not save any transgenic seed for the next year’s planting. ( Lappé 1985)

There have recently been widespread protest against such policies, and they may have some effect. For example, Monsanto has bowed to pressure to renounce the ‘terminator’ plant technology that had led to accusations the company was trying to dominate world food supplies by forcing farmers to buy fresh seed from it each year. Monsanto made a public commitment not to commercialise sterile seed technologies such as the one dubbed ‘terminator’. (Brown 1999)

Like companies operating in agricultural markets, pharmaceuticals companies are also mainly interested in large, profitable markets, and these are most readily secured by developing and marketing treatments for the illnesses prevalent in the developed world. While 18 per cent of the global disease burden is accounted for by pneumonia, diarrhoeal diseases and tuberculosis, mainly in developing countries, only 0.2 per cent of the world’s health related R and D is devoted to developing treatments for these diseases. (UNDP 1999:68) . Finch (1998) suggests that it is unsurprising that drug firms concentrate on the developed world’s needs, on cardiovascular treatments, antidepressants, cholesterol -lowering drugs and ulcer-related treatments. ‘Sadly this is a commercial business’ said the UK chief executive of an international drugs company, ‘We do concentrate on Western diseases. That is what drives us. If you want to be a major player, you have to concentrate on the big areas. There would be a lot more research into Aids if it were as a big a problem in the western world as elsewhere.’
Drug companies have developed expensive HIV treatments for rich western markets which extend the life-spans of many AIDS patients. Sufferers in developing countries cannot afford to use these medicines.(Senker, 1999)

The extent to which drug companies normally neglect developing countries is illustrated by ‘an exception which proved the rule’ which is considered in Finch’s article – a case where a drugs company is proposing to contribute generously to the cure of elephantiasis, a disease which affects developing countries. Elephantiasis is a crippling and disfiguring tropical disease whose grotesque effects result in sufferers becoming social outcasts. It affects 120 million people and more than one billion are at risk of contracting it. SmithKline Beecham announced it was to donate £1 billion over 20 years to a project designed to eradicate it by 2020.(Finch 1998). ‘The three drugs used to treat elephantiasis are out of patent and individually cost less than 10p each. Although SKB might lose some £50 million a year over 20 years, this is seen as a small price to pay for the humanitarian kudos it will garner’ . (Mihill 1998)

Several multinational companies are at present exploring and seeking to exploit the biodiversity of the developing world. In particular, they are seeking to exploit the potential of the active ingredients of plants used in traditional herbal medicine Through patent protection, they seek to appropriate traditional remedies for exploitation in developed countries which offer the most profit potential , and try to prevent people in the developing world from using their traditional remedies. The neem tree which yields natural pesticides and medicines and which has been used by Indian villagers for over two thousand years is a prime example. Chewing neem tree shoots protect teeth from bacteria. Indian cottage industries have been selling neem products for 40 years ,and Calcutta Chemicals has been selling neem toothpaste for decades. Since 1985, however, several patents have been taken out by U.S. and Japanese companies for exclusive rights to neem tree products. Such patents are supported by a multilateral agreement on intellectual property – Trade -Related Aspects of Intellectual Property Rights (TRIPS) – which came into effect under the World Trade Organization (WTO) which was established in 1994. The Neem Campaign was initiated in 1993 in India to mobilise worldwide support to protect the neem tree from piracy by Western and Japanese companies utilising property rights regimes established under WTO and TRIPS. ( UNDP 1999:67, Shiva 1997).

Major corporations seeking competitive advantage are also likely to introduce a wide range of new materials which have performance advantages over traditional materials. Those likely to have the most impact include strong engineering plastics, adhesives, composite materials and advanced high performance technical ceramics. The leading countries in the exploitation of new materials are likely to be Japan and the United States, followed by Germany. Most estimates and forecasts show Japanese production accounting for about half of a rapidly growing world market for advanced ceramics in the next decade. There is no evidence so far that developing countries will benefit substantially. (Senker 1995)


In advanced countries, high technology ICT products and services are initially bought mainly by people with high incomes, and then diffuse rapidly to most of the rest of society as the learning curve economies of scale rapidly make them cheaper. But rapid diffusion depends on a relatively equal pattern of income distribution. Latin American countries have an average income about a seventh of that in advanced countries. Few people, therefore, can afford the rapid succession of high technology goods which are continually introduced into advanced countries’ markets and diffuse rapidly within them. As a consequence, the introduction of high technology goods and services has had only a very slight impact on the well being of the general population in Latin America (Dagnino and Thomas, 1998).

A further significant barrier to the development of ICT industries in developing countries relates to difficulties of transferring knowledge between software producers in developing countries and their clients in the developed countries to whom they export. Research has shown that learning and innovation results from interactions between software producers and users. Innovation provides a foundation on which international competitiveness and new opportunities for trade can be built. Such conditions rarely exist in developing countries such as India which generally lack thriving technologically sophisticated domestic markets for software. Constraints on learning from users in developing countries result in domestic producers failing to secure a strong foundation for competing in the higher value added segments of the international software market.

Knowledge inputs to software development are context specific, and the learning process through which software producers must progress through takes place most effectively if the producers are physically located near the users. It has been suggested producers can only learn from users if they all operate in the same environment with common characteristics which facilitate effective communication, such as language, the legal system and educational system, work organisation, and even religion. For such reasons, after a decade of concentrated effort, developing countries’ share of total world software production and trade remains very small. (Millar 1998)

As shown above, the low communications costs afforded by advanced telecommunications systems do create some opportunities for countries which have cheap resources of highly skilled labour to compete with more expensive skilled labour elsewhere. Information and Communications Technologies (ICTs) have played, and will probably continue to play significant roles in stimulating economic growth in many countries. But constraints on producers in developing countries learning from users result in domestic producers failing to secure a strong foundation for competing in the higher value added segments of the international software market. Extreme doubts have been expressed about the feasibility of overcoming such constraints. Advanced countries still dominate production and use of higher value added ICTs, and examples of economic success in developing countries are exceptional and very small in scale in comparison with the extent of world poverty.

While markets for goods and services are becoming increasingly globalized –especially in relation to ICT – international trade, investment and financial flows are concentrated in Europe, Japan and North America and this dominance seems likely to continue. Real commodity prices in the 1990s were much lower than in the 1980s. The terms of trade for the least developed countries have declined substantially over the past 25 years. Average tariffs on industrial country imports from the least developed countries are much higher than the global average. Developing countries lose about $60 billions a year from agricultural subsidies and barriers to textile imports in industrial countries. The Uruguay Round (of tariff reductions) left most of the protection for industry and agriculture in industrial countries intact. Tariffs are much higher for the goods with the greatest potential for the poorest countries such as agricultural commodities, textiles and leather. The United States and the European Union have applied anti-dumping measures against a wide range of developing country exports -everything from steel to colour television to toys. There is little enthusiasm for removing the bias in the rules of international trade in favour of industrialised countries in relation to barriers to international trade. Two thirds of foreign direct investment in developing countries has gone to only eight countries, and half of developing countries have received hardly any foreign direct investment at all. (UNDP 1997:9)

With the exception of a small minority of newly industrialising countries, the Third World remains marginal in respect of both investment and trade: capital mobility is not producing a massive shift of investment from advanced to developing countries, and labour mobility between countries and regions is very low.(Hirst and Thompson, 1996, 2-6 Castells 1996:95, Walters 1995:93) Research and development relevant to meeting the basic needs of the majority of the world’s population in areas such as food agriculture and shelter is grossly neglected.(Whiston, 1993a)


Technological change stimulated by competitive markets has been instrumental in achieving substantial increases in the living standards of the majority of people in developed countries. But hundreds of millions of people are shut out from the great gains which can achieved from economic growth and technological change. In general, technological change is being guided in directions which represent a continuing process of favouring already affluent people and regions. A high proportion of the world’s R and D is carried out by large multi-national companies in pursuit of profits. Understandably, major corporations place the vast majority of their R and D investments in projects which they perceive as likely to yield them the greatest long-term profits – in applications where there are large potential markets of relatively rich consumers with high disposable incomes who can afford to buy the products which are developed.

The trickle down theory assumes that unregulated markets are always beneficial because firms compete to meet customers’ needs, and competition results in the production of high quality low cost products. Consumers everywhere benefit from buying low cost products wherever they are made But this theory does not allow for the real possibility that some products and processes developed primarily for the benefit of affluent people threaten the livelihoods of poor people in developing countries.

In agriculture, far from corporations competing to meet customers’ needs, people in many developing countries have fought corporations supported by governments to introduce sustainable agricultural practices – in particular Integrated Pest Management (IPM) which can be beneficial to farmers’ profitability and the welfare of the population in general. (Watkins 1997). Similarly, the Neem Campaign tries to protect indigenous knowledge systems and resources of the Third World from multinational corporations who wish to exploit these resources for the benefit of their largest markets in the developed world. (Shiva 1997).

R and D directed at the improvement of the standard of living of subsistence farmers has very low priority for corporations , as potential markets are perceived as too small and heterogeneous to justify significant expenditures. Genetic engineering is unlikely to be developed primarily to help stave off world starvation, primarily because poor people cannot offer profitable markets. On the contrary, application of genetic engineering is liable to threaten crop yields, to force farmers to pay for their rights to fertile seed, to reduce foreign demand for some Third World produce and to contribute to environmental degradation. (Corner House 1998).

Both multinational corporations and protesters against their policies are rational, but corporations and protesters are operating under different logics. Disputes mainly arise because the logic under which multinational corporations operate – the search for profits – dictates that they seek to develop and exploit the largest markets, and direct their R and D towards those objectives. When once multinational corporations have developed products and processes which have large markets in the developed world, they seek to secure further profits by exploiting their products and process in the developing world. Similarly, when once corporations become aware of assets in developing countries, their primary goal is to exploit them in the developed world, principally because wealthier countries offer larger markets.

The ideology sustaining the views and policies of organizations such as OECD and WTO is that unbridled international competition will lead to trickle down of wealth and income from rich to poor. Trickle down does occur to a considerable extent, and, indeed, has been responsible over the years for lifting hundreds of millions of people out of poverty. But corporations direct the R and D they control primarily to meeting the long term needs of markets in developed countries, and exploitation of resources such as the biodiversity in third world countries to satisfy larger markets in developed countries.

Technology has not succeeded in eliminating poverty mainly because the alleviation of poverty is not a major goal of those who direct multinational corporations which play such a large role in directing the world’s technological efforts. Protests may sometimes succeed in stopping the exploitation of technologies which people in both developed and developing countries regard as undesirable. International regulation could possibly be designed to play a far greater role in controlling the inappropriate exploitation of technology. Technologies are rarely good or bad in themselves. There are opportunities for developing and shaping them in various ways. For example, in relation to genetically modified crops, Sir Richard May, the British government’s chief scientist was reported as saying. ‘It seems unclear, at this point, whether GM crops have the potential to be a further notch up in (agricultural) intensification and as such, not good. But equally, they have the potential to enable us to redesign crops so that we work with nature and shape the crops to the environment rather than shape the environment to the crops in ways which are unsustainable…..I take a rather different view of this from Greenpeace, who see it as a prime campaign issue and necessarily bad.’

Development and exploitation of new technology is extremely expensive. In the current world market regime, no way has yet been found of directing technology towards the alleviation of poverty. This has the consequence of depriving millions of very poor people of possibilities for substantial improvement of their lives through the application of technology.

It is unreasonable to look to the workings of unregulated free markets to play the main role in alleviating world poverty and deprivation. Major multinational corporations, the principal players in the world’s markets, do not pursue the objective of alleviating world poverty, primarily because they are essentially market creating and market satisfying organizations. Their neglect of the poor is not because corporations are inherently evil, but because the poor do not offer attractive markets.

Technological development could conceivably be used to alleviate poverty much more rapidly. But this would require much stricter and more coherent regulation of international finance, trade, agriculture and industry in the interests of the world’s poor than has so far been contemplated. Even such measures might well be inadequate, as regulation is only capable of preventing technology from being used inappropriately. Means for deploying substantial technological resources positively towards the alleviation of deprivation and poverty under international control are surely worthy of consideration . This could involve major changes in the goals and operations of existing international organizations, and, quite possibly the creation of new ones. It would also involve the abandonment of policies based on ‘trickle down’ on the basis of its demonstrated inadequacy, and their replacement by policies based on significant transfer of resources from rich to poor. The adoption of such policies on an international basis would require massive political barriers to be surmounted.

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