Global business activity picked up last month at its fastest pace since early 2011 as “sustained strengthening in the service industry offset a mild deceleration in factory output. The July manufacturing and service sector PMI surveys signal a robust start to the second half of the year,” J.P.Morgan big cheese Joseph Lupton told Reuters four days ago. They do nothing of the kind of course (the Markit survey measures expectation, not reality) and – looking at the disastrous German export figures – it would seem that the Wishful Unthinking Tendency was in sixth gear among Markit’s respondents.
But just five days before that, Reuters pumped out what in my view is a far more interesting figure: global business travel spending will reach a record $1.18 trillion this year, up nearly 7% from 2013. Thus, the only part of globalism that’s actually growing is the business of flying around being a globalist. And as one who has undertaken this task, I can tell you that on the whole, it’s a pretty pointless (and reality-stifling) activity.
Now fair enough, China is still growing – and probably most of the increase is down to them. But the Chinese are only one sixth of all business travellers: so the other five-sixths are still swanning about on black Amex cards, growing deep-vein thromboses….and the result of their efforts is diddly-squat at best. None of that surprises me – but nearly one point two trillion bucks – that’s huge. Nearly 2.4% of world GDP involves flying around saying yes, no, I’m not sure, and “Is it OK to drink the water here?”
What makes that figure even more staggering is how many regular business travellers there are – the heaviest users, you see, travel nearly five times more often than the average.
The G20 countries’ travellers represent 86.7% of global business travel, and most of the so-called ‘heavy users’. Business travel is 30% of all global travel, which means there’s around a billion of them, but one-sixth account for 80% of all journeys. So the big-cheese globalists are spending $800,000 each on travel. And that’s just their expenses. They probably earn at least that much again in salary.
Just think what one could achieve economically in the struggling economies and smaller communities of the planet with that kind of money. Very few small producers can get a decent crack at world trade because 9 out of 10 deals and business decisions are being taken by the biggest global combines from the richest 20 countries. Monopololistic supply chains, globally coordinated business awards, and a severe lack of finance mean that the smaller, more creative suppliers are trapped in a vicious cycle: they can’t get onto the merry-go-round because the banks won’t lend them money, the multiple retailers won’t deal with small volume manufacturers, and so they can’t make the profits that would earn them the capital to get onto the merry-go-round….and on and on.
The EU represents a quarter of all trade, and as is its wont (because it knows no other way) it is looking at the top-down model of economic stimulation…..having decimated consumption in the ClubMed countries and thus exacerbated the problem. But if one took the smaller, peripheral member states and gave their banks $280 billion for small businesses only….um, the banks would probably find a way to steal it. Yes, quite.
It was this tiny coterie of largely market-ignorant fliers that caused Ted Levitt to invent his global village – and thus persuade a gullible audience that such was the only way. The result is economic colonisation, because the local producers are forced out of the game by a deadly duo of deal-greedy bankers and share-price fixated Bourse big boys. By definition, if nobody will give you the money to make a better product at a more honest price, then you too will become a wage-slave….at best. Most likely, you’ll wind up with fewer hours, fewer employment rights, and a smaller salary. Sooner or later you’ll fall back into welfare….only to discover that the neoliberal fraternity want it cut back.
But the most damaging result of all is stagnation in product development, more mergers to please investors and fire employees, and fewer people to consume. So the entire construct comes apart, financial services keep the whole show on the road, and their drug of choice – credit – gives the impression of growth when there simply cannot be any real growth.
The fat-cat frequent fliers are merely another expression of the 3% principle so central to neoliberal globalist unreality. In my experience of working with them over some eighteen years, my feeling was that they added little or no value, usually dodged important decisions, or simply turned up to tell the local management to reduce the headcount.
While these bubble-occupiers cost shareholders $800,000 a head themselves, young entrepreneurs struggle to get off the ground. Maybe, therefore, it’s their heads that should be counted, and then rolled down the hill.
It doesn’t have to be like this, it really doesn’t.