One global market, deregulation of government market intervention, privatization and public welfare cuts lie at the heart of neoliberal thought on economic globalization. The opening of China's markets is one concrete link in the implementation of neoliberal globalization. Many economists believe that neoliberal economic globalization is leading to the creation of M-shaped societies, with a vanishing middle class.
In Taiwan, income disparity has widened in recent years, with the income of the lower and middle classes dropping while the rich become richer. Many also feel that living standards are falling. As incomes in China and other developing countries rise, the demand for raw materials and food products have increased sharply, resulting in imported inflation on a global scale further adding to the financial burden in Taiwan.
The globalization of Taiwan's economy is in fact taking place in step with cross-strait economic integration. There has been little shift in economic policy despite the change in government from the Chinese Nationalist Party (KMT) to the Democratic Progressive Party (DPP) eight years ago. The problems facing Taiwan today are still the same - low investment, the undermining of industry and shrinking domestic demand, resulting in growing unemployment and falling national income. All these can be attributed to two reasons: excessive investment in China and an ineffective administration. President-elect Ma Ying-jeou's (馬英九) policy of comprehensive economic cross-strait integration will only result in a further deterioration of the nation's economic problems.
Both the DPP regime's and Ma's future strategy for economic development continues to adhere to this neoliberal framework for economic globalization. This kind of thinking will only lead to further economic integration with China and the formation of a "one China" market. The problem has nothing to do with the independence/unification issue; instead, it is related to the idea of a political economy.
Sweden is a good negative example. Sweden's social democracy and public welfare system are often praised as exemplary, but starting in the 1990s, the country's intellectual and political elite lost their way in the neoliberal myth of economic globalization. Ignoring the wishes of the lower and middle classes, the government started an energetic push for globalization that resulted in the public welfare system collapsing. The belief that markets would regulate themselves effectively hurt the Swedish economy and full employment turned into double-digit unemployment.
Taiwan is facing a situation that is different from Sweden. The Swedish public is opposed to globalization and wants to return to the old social democratic and public welfare paradigm, while the Swedish elite is enamored with globalization. In Taiwan, however, the public supports the political and intellectual elite's dogmatic pursuit of globalization and the comprehensive opening and integration of the cross-strait economies. They do this to the point that they do not detect that Ma's economic policies in fact do not differ very much from the policies of the DPP with which they are so dissatisfied. Ma will only lead the nation in a direction resulting in more economic suffering and hardships.
Taiwan's suffering public has a right to know the truth about neoliberal globalization and a right to choose a path that leads to social democracy and public welfare. This, however, is not happening, and is a result of laziness among the intellectual and political elite. Four years from now, will we be able to choose another path if we realize that Taiwan has taken a wrong turn?
Allen Houng is a professor at National Yang Ming University.
Translated by Perry Svensson
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