A paper prepared for the House Of Lords Select Committee On Economic Affairs and the Inquiry into The Global Economy by Glenn Rikowski.

1. Introduction

1.1     This paper examines the nature of globalisation and analyses its consequences for education. The paper explores the proposition that `globalisation' is essentially capitalist globalisation: the globalisation of capital, which is at the core of all the economic, social, political and cultural trends that have been associated with conventional (and more superficial) notions of `globalisation'.

1.2     In this sense, globalisation and education relate in quite specific ways. The World Trade Organisation (WTO) facilitates globalisation through opening up all spheres of social life - including the public services - to international capital. The WTO `education agenda', therefore, is to facilitate the penetration of education services by corporate capital. The key WTO agreement for this purpose is the General Agreement on Trade in Services (GATS). This Agreement incorporates the aim of unleashing progressive liberalisation of trade in services, including public services such as education. In the long-term, no area of social life is exempt from these developments.

1.3     Meanwhile, nation-states have to deal with and plan for the business takeover of public services. Governments, or collective state organisations such as the European Union (EU), also have to manage the politics of the corporate takeover of public services. They have to open up all aspects of social life to corporate capital whilst simultaneously `reassuring' their populations that this does not entail the privatisation of public services. The progressive privatisation of state enterprises, functions and services over the last fifteen years makes this task an onerous one. However, the political management of the process is made easier by the fact that the GATS is opaque regarding whether public services are exempt from the Agreement's trade rules and sanctions, or not. If it were the case that the GATS was inapplicable to public services, and that services like health, education and libraries were exempt from the GATS imperatives, then it would be clear that commercialisation, privatisation and capitalisation of public services was a Governmental choice and strategy. Hence, objections to these processes could be made on that basis. On the other hand, if it were the case that public services such as education were clearly included in the GATS then the programme for subjecting the whole of social life to takeover by corporate capital would be obvious. Thus, the complexity and unclarity of the GATS Agreement actually aids the translation of the GATS into national contexts. It allows Governments to proceed under a cloak of obfuscation and uncertainty. For Governments, this aids the task of drawing up and re-forming the national faces of the GATS for each public service.

1.4     The UK Government, like all governments, is unlikely to forge any legislation that clearly derives from GATS imperatives. This would blow the cover on the whole process and invite political backlash. Rather, the UK Government has the task of devising national faces of the GATS - detailed mechanisms for each public service that facilitate business penetration and takeover. For Government, the links between the GATS and their national enablers must remain an enigma. Such links must be denied or evaded, otherwise the full force of the WTO's impact on national life becomes apparent, leading to the likelihood of a significant national politics of resistance to the WTO in general and the GATS in particular. This paper goes on to identify the key mechanisms and enablers making for the capitalisation of education.

1.5     The UK Government is not just concerned with smoothing the way for the `businessification' of education to the extent that profit making for `edubusinesses' becomes possible. It is also concerned to build up indigenous edubusinesses, and to develop export potential for these.

1.6     The speed of these developments is forced by the fact that the current round of GATS negotiations ends in March 2003. By December 2004, a more powerful version of the GATS is likely to be in place.

1.7     The overall effect of these processes and developments for education is that the business takeover of education services is our future, unless we decide to provide clear limitations to the process. Education services will be progressively commercialised, privatised and capitalised. This is what `globalisation' means for education, and this is the WTO's education agenda as pursued through the GATS, aided and abetted by Governments and promoted by corporate lobbying machines.

1.8     These points are examined in detail below, with reference to what is happening in education in England. The paper begins with an analysis of globalisation.  

2. Globalisation: Its four dimensions

2.1 Over the last twenty years the academic literature on globalisation has burgeoned. It will not be summarised here. The initial aim is to indicate that globalisation is a process that has a number of dimensions. It can be approached from various degrees of abstraction. At least four dimensions to globalisation as a set of social processes can be identified. There may well be more than four - but that misses the point. The key point is to uncover what is at globalisation's core, for only in this way can the full extent of the threat to public services in contemporary social life be appreciated. This core is the value-form of labour.
2.2     First Dimension

2.2.1     As Peter McLaren (2001) and others have indicated, for postmodernists and those interested primarily in cultural phenomena, globalisation has been associated simultaneously with the cross-fertilisation and increasing hybridity of cultural forms and identities on the one hand and the homogenisation of culture on the other. The latter trend is manifested in the standardisation of culture, summed up by the concept of McDonaldisation - the product is the same wherever you are. On this basis, globalisation as the embrace of consumer products such as Nike, the GAP, Nokia, Sony and McDonalds incorporates cultural conformism. Globalisation in this sense points towards global markets, consumer identities and choice.

2.2.2     Of course, billions throughout the world cannot afford many of the products associated with upbeat lifestyles and cool dude poses. Drawing on the work of Teresa Ebert, Peter McLaren argues that globalisation as a set of cultural processes emphasises `global symbolic exchanges relating to values, preferences, and tastes rather than material inequality and class relations' (2001, p.4). Therefore, notes McLaren, in this sense it refers to a `cultural logic' that stops short of analysing the production relations that power it. To explore this first dimension of globalisation alone is not erroneous, but it is certainly superficial. Furthermore, the focus on market identities, relations and choices becomes ideological if the underlying social relations of production are masked or avoided in the analysis. What is required is an analysis of globalisation from the perspective of political economy.            
2.3     Second Dimension

2.3.1     The second dimension of globalisation is the familiar ground of much political economy, sociological analysis and studies in international relations. The focus is primarily on the way that the powers and significance of the nation-state are eroding in the face of forces of global capital that have been let loose in the last twenty years or so. Again, drawing on recent work by Peter McLaren, the essence of this perspective on globalisation is that it incorporates a focus on the state and `explores the relationship between the local and the global and whether globalization means the reorganization or disappearance of the nation-state' (2001, p.4). These political theorists of globalisation, argues McLaren, `generally argue about the sovereign status of the nation-state. They argue that local legal codes, local currencies, and local habits and customs that enable the rise of capitalism now serve as constraints on capital, so that now the new transnational institutions more suitable to the new phase of capitalism are developing' (ibid.). The new transnational organisations are primarily the WTO, the International Monetary Fund (IMF) and the World Bank, which, the story goes, are increasingly taking on world governmental roles for the interests of capital in general and transnational corporations in particular.
2.3.2     To complete this form of analysis, economic factors such as the deregulation of labour and financial markets, the `communications revolution' through the Internet, the growth of e-commerce, knowledge as a leading factor of production, and many other economic developments are brought in. The speed, intensity and volume of economic transactions increase, and the markets never sleep. The point is that in this form of analysis these technological and economic trends, together with the rise of transnational institutions regulating world trade, finance, competition and investment, are seen to be undermining the political integrity of the nation-state. Since the integration of the old Eastern Bloc countries and China into the world economy, global capitalism has become a reality. Werner Bonefeld (1999) has summarised many of these interrelating political and economic trends that together summarise what many take as `globalisation' (see Box 1 below).  

2.3.3     This second dimension completes the descriptive account of globalisation. We can pinpoint its trends, developments and characteristics. Yet no real explanation of why capital becomes global can be derived from such descriptions - however detailed. Without a deeper analysis, global capitalism remains an enigma and appears as an overwhelming force, as inevitability, such that attempts by Governments to run against it in the interests of labour or the environment seem Quixotic.  

Globalisation:

The increasing importance and significance of the financial structure and the global creation of credit, leading to the dominance of finance over production.
The growing importance of the `knowledge structure': knowledge is said to have become a significant factor of production.
The increase in the rapidity of redundancy of technologies and the increase in the transnationalisation of technology: an emphasis on knowledge-based industries with increasing reliance on technological innovation.
The rise of global oligopolies in the form of multinational corporations: corporations appear to have no choice but to `go global', and multinational corporations and transnational banks have become the significant power centres beyond national states and economies.
The globalisation of production, knowledge and finance is viewed to have led to a decline in the regulative power of national states. This is accompanied by the rise of global authority structures - such as the United Nations, the G7 (now G8) group of industrial powers and the WTO, International Monetary Fund (IMF) and World Bank.
The `new freedom' of capital from national regulative control and democratic accountability is held to have lead to increased ecological destruction, social fragmentation and poverty - as well as having effects for personal identity as global media corporations homogenise, customise and niche market their products.
                                                                                                 (Adapted from Bonefeld, 1999, pp.76-77)
2.4     Third Dimension

2.4.1     The third dimension of globalisation appears to yield a more abstract account. It rests on an appreciation of our living within a particular social universe (Postone, 1996): the social universe of capital (Rikowski, 2001b, 2002a). Furthermore, globalisation is not just an a-historical process; it takes a particular social form. It is capitalist globalisation, the globalisation of capital.  

2.4.2     The substance of capital's social universe is value, specifically surplus value that is created in the labour process and is incorporated in commodities, which are either material or immaterial. Thus, the question of whether the main focus of globalisation is the `real economy' (hard commodities) or the `financial economy' (immaterial commodities, services) is irrelevant. Value is created through both. Surplus value is value over-and-above that incorporated in commodities equal to that represented by the wage. Thus, it represents unpaid labour. Surplus value is also the first form of the existence of capital, and it has a social existence that is transformed into other forms of capital - money being its universal form. Value and surplus value are created as we transform our labour-powers into concrete labour through commodity production. Out of surplus value come corporate taxes, rent, and revenue for the next production cycle and other deductions, but also, and most importantly profit - distributed to owners and shareholders. Increasingly (historically) the whole of social life is drawn into the orbit of capital, and all of civilisation becomes increasingly capitalised. Through our labour we create a social force and set of social relations - capital - that come to dominate us (Postone, 1996).

2.4.3     Capital's social universe is an expanding one, and `globalisation' on this third dimension summarises this. This expansion takes three main forms. First, spatially as capital fills all known socio-physical space (and this is not just confined to this planet). This is capital's extension. Secondly, capital expands as the differentiated form of the commodity, through the invention of new types of commodity. It expands through variegated and differentiated examples of itself. This is capital's differentiation. Thirdly, capital expands through intensification; it deepens and develops within its own domain. Of course, explaining why capital expands and how the mechanisms of its expansion function requires much complex analysis that cannot be pursued here. The key point is that the processes of capital's expansion outlined above take over and suck in, like a social vortex, all forms of social life such that they become commodified, become incorporated within capital's social universe.     
2.5     Fourth Dimension

2.5.1     Globalisation's fourth dimension is that our labour takes a particular social form - the value-form. This is also an historical process; it deepens as the capitalisation of social life - the turning of all and any activity into a commodity that incorporates value - takes hold. The value-form of labour entails the creation of value so that profit can be drawn off from the surplus value created. This is at the core of `globalisation'.

2.5.2     Translated into the world of education, it is value (not values) that becomes crucial. Old traditional modes of working, professional values, notions of public service and putting community needs before the drive for profit - all become liabilities for capital accumulation as educational institutions shift from becoming public goods to private commodities. Community needs are placed within the context of the market and profit making potential. They are reconfigured.

2.5.3     The key point is that the globalisation of capital ultimately results in a particular form of labour and a specific form of social life. These entail the sacrifice of human capacities for the generation of a set of oppressive and limiting social relations and social forces: capitalist social life - governed by the laws of value and money. Labour in educational institutions is subjected to these laws as capital incorporates them within its orbit.  

3. The World Trade Organisation and the GATS

3.1     The World Trade Organisation (WTO) facilitates and enables the capitalisation of all areas of social life. In particular, one of the WTO's key agreements, the General Agreement on Trade in Services (GATS) functions to open up public services to capital and its value-form of labour. It nurtures the operations of corporations that search the globe for profit-making opportunities. As I have explored the WTO and its education agenda in detail elsewhere (Rikowski, 2001a, 2002b) I shall offer only the briefest summary of these here.   
3.2     What distinguishes the WTO among international agreements is its Dispute Resolution Panel. The panel possesses far-reaching sanctioning powers over member countries, which it uses to ensure compliance with WTO commitments. No other international body has such strong enforcement capabilities. The WTO is ` the only global institution that even the US and the EU are supposed to obey', whereas the World Bank and the International Monetary Fund have influence only over `weak developing countries', notes Martin Wolf (1999), a journalist for the Financial Times.

3.3     The WTO provides an `enforceable global commercial code' based on close relations with transnational capital, making it `one of the main mechanisms of corporate globalization' (Working Group on the WTO/MAI, 1999: 1). It is a `forum for trade rights of capital, on terms negotiated by the agencies of governments that represent the interests of capital. No other rights count' (Tabb, 2000, p.6). Trade barriers are essentially `anything that can limit profits made via trade or investment' (Puckett, 2000). Major corporations have lobbyists settled permanently at the WTO's lair in Geneva, and representatives of corporations sit on some of the many WTO committees and working groups.

3.4     The outlook underpinning the WTO is deregulation, with incremental `freedom for transnational capital to do what it wants, where and when it wants' (Tabb, 2000, p.5). As William Tabb has noted, the `WTO's fundamental postulate is that trade and investment liberalization lead to more competition, greater market efficiency and so, necessarily, to a higher standard of living' (ibid.). In practice, standards of living for many countries in the poorer South have declined absolutely or relatively (compared to the richer Northern nations) in recent years. These principles and propositions are the essence of the concept of "neo-liberalism" in international economy.

3.5     Despite debates about security risks the WTO summit in Doha in the Gulf State of Qatar went ahead last November. For public services such as education, Doha was a stepping stone to the consolidation of the GATS that underpins the opening up of public services to corporate capital (Griffiths, 2001). Specifically, the GATS aims to create a `level playing field' so that there is no discrimination against foreign corporations entering the services market. The process of trade liberalisation in services (including currently public ones) is progressive; it will be deepened and strengthened over time, and Part IV of the GATS Agreement makes this clear (WTO, 1994). As Tibbett (2001) argues, given the dot.com failures of the last eighteen months and the risks involved in lending to developing (and even fairly developed countries, e.g. Argentina), investors and corporations are looking intensely for new profit-making options. The billions (trillions world-wide) involved in financing public services constitutes a huge temptation for business interests, which is one reason why the GATS `is currently top of the agenda of the WTO' (Tibbett, 2001, p.10).

3.6     The significance of the failed Seattle Ministerial Meeting in November 1999 was that WTO GATS negotiators and pro-business lobbyists had hoped to strengthen the development of the GATS - to give the Agreement more powers. As The Economist indicated, Seattle has `cast a long shadow over the WTO' (Economist, 2001). However, post-Seattle the WTO's Council for Trade in Services (CTS) got to work in Geneva very quickly to try to repair the damage. Since February 2000, a whole series of GATS negotiations have taken place. These discussions were consolidated in March 2001 through an intensive series of meetings, and there will be a final deadline of December 2002 for an agreement on a strengthened GATS process. This explains the urgency regarding privatisation of public services in the UK today. As Matheson (2000) notes:

Backed by the US and UK Governments, the WTO aims to liberalise the service sector further. The immediate impact would be the privatisation of some services that have so far been provided by governments. Governments would be obliged to sell off such services as housing, education and water. (p.9).

The drive to privatise public services is powered by a number of forces, but in terms of the GATS the urgency derives from two main considerations. First, home-grown operators need to be nurtured - and quickly - so that when a more powerful GATS process exists then UK operators in education, health, social services and libraries can fend off foreign enterprises. This is not just because the Government believes that more of the profits from these privatised public services are likely to remain in the UK; it is primarily because of the need to `sell' the idea of private companies running schools, hospitals, libraries and social services to the British public. Whilst French companies might be tolerated in providing electricity or water, the UK Government perceives there may be more of a problem with American or other nation's companies running schools as profit-making ventures. Secondly, as George Monbiot (2002) indicates, drawing on the work of Richard Hatcher (2001), the Government is also mightily concerned that the fledgling UK businesses currently taking over our public services can develop rapidly into export earners. This is already happening. For example, the education business Nord Anglia is already exporting its services to Russia and the Ukraine as well as running schools and local education authority services here in the UK. Many UK universities have franchised operations and a whole raft of deals with other colleges and universities in other countries. UK University Schools of Education generate income through consultancies that advise countries like Chile, Poland and Romania how to restructure school systems. The Government is keen to maximise this export potential across all the public services. The WTO has identified 160 service sectors, and British and US businesses would benefit particularly if the GATS could liberalise trade in services still further by incorporating currently `public' services into their export drives. In 2000, Britain exported £67 billion worth of services. New education, health, library, and social services business would provide `new opportunities for this export trade to expand massively' (Tibbett, 2001, p.11). Thus, `International businesses have now seized on service provision as a money-making opportunity' (Matheson, 2000, p.9). As the WTO Services Division Director David Hartridge said in a speech in 2000: `[GATS] can and will speed up the process of liberalisation and reform, and make it irreversible' (ibid.).

3.7     The pressure from corporations on the US, British and other EU governments to deliver on the GATS is colossal. As Allyson Pollock argues: `[business] sponsors and the Treasury are clear that the future of British business rests on trading in public services on an international scale regardless of the social costs' (Pollock, 2001).

3.8     Finally, the leading capitalist powers (the "Quad" - the US, EU, Japan and Canada), driven on by major corporations and business interests, are:

…trying to revise GATS so it could be used to overturn almost any legislation governing services from national to local level. ... Particularly under threat from GATS are public services - health care, education, energy, water and sanitation... A revised GATS could give the commercial sector further access and could make existing privatisations effectively irreversible. (Sexton, 2001, p.1)

This is what the end game is for the GATS timetable in late 2002. This explains the Government's determination to push through privatisations, to provide de-regulatory frameworks for state services (e.g. the recent Education Bill) and to nurture the growth of indigenous businesses that can virus public sector operations.

3.9     Of course, the UK Government has to tread carefully. As Richard Hatcher (2001) explains, each step in the business takeover of public services has to be prepared ideologically. The public needs to be taken along with the GATS process, and any anti-GATS revolts stifled.

3.10     The UK Government is meeting GATS requirements by stealth. In each public service there are specific mechanisms, or enablers and developers of the GATS process. In relation to schools, for example, one such mechanism is Ofsted (e.g. identifying `failing' schools and local education authorities for transfer to the private sector). The point is that the GATS transfigures the whole landscape for the public services. New initiatives, new forms of inspections and new de-regulatory frameworks might appear to have nothing to do with the GATS - and for Government this is most handy - but in fact play out its logic. Thus, in each of the public services, and in each country, we must locate the national faces of the GATS. We must uncover and critique the precise mechanisms that facilitate the GATS and smooth the way for the business takeover of public services.

4. The National Faces of the GATS for Schools

4.1     An appropriate example of capital's rapid expansion is what is happening today in education in England; it is being capitalised at an increasing speed (Rikowski, 2001a; Monbiot, 2002). The WTO's education agenda is to speed up the business takeover of education through its commercialisation, privatisation and capitalisation (Rikowski, 2001a). In England, this involves capital's extension in particular (into new fields through the Private Finance Initiative, competitive tendering and so on in the UK), differentiation (especially through the development of new information and technology products designed specifically for educational institutions, something universities are engaged in) and intensification.

4.2     In relation to schools, the national faces of the GATS include:
Ofsted (e.g. identifying `failing' schools and local education authorities for eventual transfer to the private sector)
The Private Finance Initiative (PFI) (for building new schools and for their long-term maintenance)
ICT capital entering schools on a massive scale (through the National Grid for Learning and other initiatives), such that schools become significant generators of profit for the companies involved
Competitive tendering and outsourcing, and
New types of school (e.g. City Academies).
Furthermore, the recent Education Bill smoothes the way for the business takeover of schools as it allows federations of schools to form. In effect, these will function like education chain stores with a headquarters somewhere, perhaps located in one of the UK's many offshore tax havens. Together, these organisations and developments constitute some of the leading national faces of the GATS for schools in England.

4.3     Some critics might argue that, for example, Ofsted (The Office for Standards in Education) could not be a GATS enabler of facilitator as it preceded the GATS. However, although Ofsted existed before GATS the point is that it has been re-configured as a GATS facilitator. It is now being used as a method for pinpointing schools, local education authorities and education services ripe for business takeover. Its purpose has been transfigured in the light of the GATS.

4.4     A more comprehensive analysis would require also an exploration of the national faces of the GATS for the further, adult and higher education sectors. It is to be hoped that those with a detailed knowledge of these sectors of education would produce such analyses. Secondly, a complete analysis would also involve a detailed examination of each of the GATS' national faces for schools in terms of how exactly they enable and facilitate GATS imperatives and priorities. Such detailed analysis will be undertaken in Rikowski (2002c).  

4.5     Finally, as Dave Hill (2001) makes clear, the business takeover of schools and their restructuring along neoliberal principles is occurring on a truly global scale, as each country, in various ways, opens education to business interests. Thus, what is required ultimately is that the national faces of the GATS are pinpointed in each country and for each sector of education. This would yield a comprehensive analysis for comparison and deeper understanding of the problems. It is probably up to education activists, trade unions and progressive education researchers to do this work. Mainstream education research and other funding bodies could not be expected to nurture a process in which they are heavily implicated, and which they are positively sponsoring.        

5. Commercialisation, Privatisation and Capitalisation

5.1     The processes and mechanisms described above - education's GATS enablers - make for the commercialisation, privatisation and capitalisation of education. Commercialisation describes the ways that educational institutions will become foci for marketing and advertising campaigns. Companies will promote their corporate image. Privatisation involves the takeover (either directly of indirectly) of schools, colleges and universities for the business of generating profits. Capitalisation entails labour taking the value-form: the generation of value, and the surplus value out of which profits arise. Capitalisation involves the erosion of all values - such as public service ones - to the process of producing value. It changes the nature of labour (its motivation, its purposes, and its organisation and management) in educational institutions. Education labour becomes value-creating and profit-making labour. Labour-power (the capacity to labour) becomes more deeply commodified in the process. Indeed, as Teresa Ebert (in McLaren and Farahmandpur, 2001, p.297) explains: `Globalization begins with the commodification of labour-power itself'. As Peter McLaren and Ramin Farahmandpur note, in capitalism `Human labour becomes a commodity like all other commodities and is exchanged for wages' (2001, p.207).
5.2     The strategy for school privatisation is particularly interesting. It is clear from the White Paper and Education Bill that the Government is speeding up the business takeover of schools in its second term of office. Places like Islington, Surrey and Hackney are already facing substantial privatisation of their schools and LEAs. The model of privatisation involved is not direct payment for services (as with the independent and `public' schools such as Eton and Harrow). Neither is Government going for vouchers that buy entitlement to education and can be cashed in by schools and colleges. Rather, it is all about contracting out education services and frontline classroom operations to private companies. It is privatisation behind closed doors; the contracts with private sector outfits not open to public scrutiny due to "commercial confidentiality" considerations.

5.3     The Government attempts to justify opening up education to corporate capital on the grounds that private sector management methods are best, and that business people are needed to `modernise' education for a "knowledge economy" based on information technologies. But these arguments divert attention away from the privatisation that is occurring in education, and they can be challenged easily.  

6. Conclusion

6.1     If we want our schools, colleges and universities to remain in the public sector and under democratic control we have to question seriously the WTO/GATS education agenda. The links between schools being taken over by Edison, Cambridge Education Associates or Nord Anglia and the WTO education agenda will not be made by the major parties. They will not discuss the Private Finance Initiative, Best Value, schools for profit, contracting out education services and electronic learning run by private companies as methods and means for carrying out the WTO/GATS education agenda. These mechanisms are the national faces of the GATS in England's education service. None of the major parties want to admit that their education policies are primarily shaped and contained according to the needs of business. Ultimately, "democracy" will be about which party is best at negotiating the sharpest contract for previously public services - and ordinary people will never be in a position to make an informed judgement on this either! Education will be run primarily for the benefit of shareholders and corporate `image'. In the process, education itself will be de-valued and narrowed for business interests. This is what globalisation ultimately means for education.  

6.2     The Select Committee should consider limits to the business takeover of education and regulation of the role of business in educational institutions so that business interests do not corrupt educational goals and processes. Finally, exempting educational institutions from the GATS altogether is ultimately for the good of education and democracy, and the Committee and the House of Lords might explore possible strategies for effecting this.

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Note: A version of this paper will be published in the Final Report of the House of Lords Select Committee on Economic Affairs Inquiry into the Global Economy, in late 2002.
Glenn Rikowski is a Visiting Lecturer at University College Northampton. He also teaches at the Loxford School of School & Technology, London Borough of Redbridge. Dr. Rikowski is author of The Battle in Seattle: Its significance for education (2001, London: Tufnell Press). See: http://www.tufnellpress.co.uk http://www.tufnellpress.co.uk
Contact:  rikowski@tiscali.co.uk