GLOBALIZATION:                                                                                                           TV NEWS SAYS CANADA WILL FARE POORLY IN WORLD ECONOMY

GLOBALIZATION IS A LIKELY CANDIDATE for "buzzword of the 1990s." For some, globalization is a panacea; for others, globalization heralds the downfall of Canadian society. It crops up in a myriad of debates, from football to foreign relations to women's issues, and everybody seems to have an opinion.

For example, the Globe and Mail recently cited a French journalist who blamed globalization for the crippling public-sector strikes: "The French are revolting against globalization . . . against the loss of a traditional way of life that global trade and the multimedia revolution are destroying." [Stephen Strauss, "Neither French side willing to back off," Globe and Mail, December 7, 1995, p. A11.]

Local newspapers entered the fray as well. The Vancouver Courier's Geoff Olson linked widespread social malaise with the emergence of a global economy: "There's this messy little problem, you see, regarding a shrinking middle class. [But] it's best not to draw too much attention to it until the game is played out. Instead, media people like to talk about "harmonization," "globalization," [and] a "level playing field." [Geoff Olson, "Poor people needed so rich experts can feel comfortable," Vancouver Courier, December 10, 1995, p.9.]

Trade increases the welfare of all participants, and trade is really what globalization is all about. Canada stands to benefit a great deal from increased trade. Therefore, it stands to reason that the globalization of the world economy is a development which should be applauded rather than lambasted. Were the two previous citations of the term "globalization" anomalies, or does the Canadian news media have preconceived and erroneous notions about the implications of a global economy?

Globalization used in increasingly negative manner

To determine how the terms "globalization" and "global economy" are used in Canadian television news, the National Media Archive examined eight years of CBC and CTV national news coverage. We found that these terms have been used in an increasingly negative manner over the course of time.

As figure A shows, references to the terms "globalization" and "global economy" occurred 112 times on CBC and 24 times on CTV between 1988 and 1995. The majority of these references-70 percent on CBC and 88 percent on CTV-were neutral. For example, on the November 24, 1991 "CTV News," Liberal Leader Jean Chretien stated: "Protectionism is not left-wing. Protectionism is not right-wing. It is simply passe. Globalization is not left-wing. Globalization is not right-wing. It is simply a fact of life."

Click here to view Figure A: The Impact of Globalization

The remaining commentary linked globalization with either an enhancement or a deterioration of life in Canada. The vast majority of this commentary-three-quarters on CBC and all on CTV-was negative. In aggregate, this presented the position that Canada is ill-prepared for a truly global economy.

Only one-quarter of CBC's assessments and predictions foretold a brighter future, while CTV did not provide a single optimistic comment in conjunction with either of the terms "globalization" or "global economy" between 1988 and 1995.

Furthermore, almost all of the positive commentary occurred more than six years ago. In 1988, six statements with optimistic assessments of the emerging global economy were heard from CBC, compared to only one negative statement. In 1995, the opposite scenario occurred: CBC journalists and commentators made 10 negative and only one positive assessment of the impact of globalization for Canadians.

Has the Canadian economy fared so badly in recent years that it should warrant such pessimism? And has television news provided an accurate representation of Canada's future in the global economy? This study will address these and other questions.

A word without boundaries

The word "globalization" officially entered the English lexicon in 1983 with the publication of the article "The Globalization of Markets" in the Harvard Business Review. The article referred to the emergence of global markets for standardized consumer products.

Since that time, "globalization" has taken on a much broader meaning. Stories about American corporations using data entry clerks in the Republic of Ireland and cars manufactured with parts from three continents became common knowledge. These were the tales of a global economy which captured the public's imagination and made the term "globalization" familiar to all.

In the late 1980s, sources and journalists on TV news used the terms "globalization" and "global economy" in a relatively positive manner. The standard economic argument of gains through trade due to the efficient allocation of resources was espoused.

However, since then, Canada has experienced a recession and a significant loss of jobs, especially in the manufacturing sector in Ontario. Perhaps this accounts for the increasingly negative manner in which the term "globalization" is being used on TV news.

All ailments blamed on globalization

Maude Barlow, Chair of the Council of Canadians, believes that the development of a global economy will eventually erode national boundaries. She argued on the May 21, 1993 "CBC Prime Time" that: "The power of the nation-state is being directly challenged by giant transnational corporations who are seeking a global economy with no rules. They are creating a new form of feudalism in which the resources and the human productivity of the world are being harnessed in the service of an increasingly small elite."

Many of the other references to "globalization" and a "global economy" took on the tone of Ms. Barlow's argument. Sunera Thobani, representing the National Action Committee on the Status of Women, stated on August 29, 1995 CBC "Prime Time" that: "The number one, biggest issue, I think for Canadian women, is the globalization of the economy, the restructuring of Canadian society, women's unemployment, poverty, what is happening to women's work-those are number one issues for us."

Ms. Barlow's allegations and Ms. Thobani's inferences were made without substantive supporting evidence. Nonetheless, the term began to take on negative connotations and eventually became a scapegoat for firms undergoing restructuring.

Executives also blame globalization

When Bell Canada announced that 10,000 jobs were being eliminated, CBC interviewed Richard French, the Vice-President of Corporate Development. He stated on the March 30, 1995 "Prime Time News" that "What is so painful, of course, is the importance of work to our self-esteem and our sense of place in society. . . . What's happening to those employees is through no mental or moral fault of their own, but rather, the globalization of capital markets, and of our business which happens to be telecommunications."

French also added, "From 1945 to, say, 1985, we could reasonably expect that job security was a part of the moral contract that employers had with employees. That economic period is very clearly over." Perhaps's Bell Canada's monopoly in the provision of telephone services was a factor in this ability to provide job security.

Leaner, meaner but also mightier

Although Canada is a highly developed and wealthy economy, many Canadians appear to be apprehensive and afraid of competition. On the August 2, 1993 CBC "Prime Time" Bill Cameron discussed cut-backs to social programs and asked if the "world's going to be just that [much] meaner?" The response from Richard Gwyn, columnist with the Toronto Star, was: "The brutal truth is . . . the answer is 'yes' . . . the 1990s are the global economy, et cetera. And what you've just said is correct. It's painful but it's true."

To his credit, Gwyn also said that Canada was going through an adjustment period which would likely generate more wealth in the long-term. However, the fact that Canada is already well-positioned in the global economy was rarely highlighted.

Globalization and Canadian corporations

One exception was Andrew Willis, Associate Business Editor for Maclean's. On the June 6, 1995 CBC "Prime Time" he said, "There are some very, very good Canadian firms-Seagram's is one that jumps to mind, or Bombardier-which are doing international acquisitions and doing them really, really well. Bombardier has enormous European operations. Seagram's has just done a fabulous deal in the entertainment industry. So this idea of globalization as being a one-way street, well, it's not that way. Canadians actually do pretty well going overseas."

Canada has five corporations in the world's top 500: Alcan, BCE, George Weston, the Royal Bank, and the CIBC. All ranked higher in profits than in total revenues. However, we pale in comparison to the United States or Japan who have 151 and 149 companies in the top 500, respectively. Spain, whose economy is closest to Canada's in magnitude, has six companies in the top 500. ["Fortune's Global 500: The World's Largest Corporations," Fortune, August 7, 1995, pp. F1-F41.]

This leads to questions of nationalism and whether foreign-owned corporations operating in Canada are any less desirable than Canadian-owned companies. Alan Rugman, of the University of Toronto, stated on the March 26, 1991 "The Journal" that, "The ownership of a company is not as important as its performance. We have many foreign-owned firms in Canada which are tremendous companies. If you work for IBM Canada or Dupont Canada, if you work for Kodak Canada, these are companies which train Canadians, which contribute to our R&D, which contribute to our performance. These are just as good as Canadian-owned companies like Northern Telecom or Alcan."

Even for those individuals who believe that Canadian-owned companies are intrinsically better, the evidence shows that Canadian firms are expanding operations abroad at a faster rate than foreign companies are moving into Canada. Figure B shows the ratio of direct investment in Canada to direct investment by Canadians in the United States or overseas. In 1960, foreigners invested $5.50 in Canada for each $1.00 we invested abroad. By 1992, foreigners invested only $1.38 for each $1.00 we invested outside of Canada.

Click here to view Figure B: Dollar for Dollar—The Level of Foreign Investment in Canada for Every $1.00 Canadians Invested Abroad

Catch up with the facts

Although the Canadian manufacturing sector went through a difficult transition during the early 1990s, there has been a marked improvement since that time. According to the OECD, the Canadian manufacturing sector is now "highly competitive" and it predicts that the "restored international competitiveness is likely to allow exporters to continue to gain market share in the face of projected slower market growth." [OECD Economic Outlook, March 1995, p.76.]

Figure C shows recent developments in the labour markets of the manufacturing sector in Canada, the U.S., Japan, the U.K., and Mexico. A fall in the unit labour cost indicates an enhancement of one's competitive position. Of the five countries shown, Canada's competitive ability improved the most.

Click here to view Figure C: Recent Developments in Unit Labour costs in Manufacturing, Selected Countries, 1991 = 100 (A decrease in unit labour costs represent an increase in competitive ability)

Despite that, TV journalists continue to blame the global economy for Canada's ills rather than present it as an opportunity to preserve and enhance our high standard of living. On May 24, 1995, CBC's Joe Schlesinger stated, "people are losing control. They're being forced to give it up because of the global economy and new technologies, by changes in the workplace and in society."

Global financial markets

Over the past decade there has been an indisputable "globalization" of the trade in currencies. In 1983, less than $100 billion dollars of foreign exchange were traded daily. Today, daily trade in foreign exchange exceeds $1 trillion dollars. ["A Survey of the World Economy," The Economist, October 7, 1995, p. 30.]

On March 9, 1995, the CBC's Pamela Wallin asked economists Lloyd Atkinson and Pierre Fortin whether the Canadian government was at the mercy of the international money markets. Both responded "yes," and went on to explain that the money markets work as a check on governments, because they buy currency when prospects are good, and sell when they're not. The end result is that these traders, many of whom have no personal interest in the well-being of Canada, are ensuring that the Canadian government adopts economic and political policies which promote Canada. [For an in-depth discussion of this issue, please see "A Survey of the World Economy."]

However, although an accurate description of the reality of Canada's high-level of foreign indebtedness was presented on TV news, calls for government intervention continued. This is ironic given the fact that federal and provincial government debt is one of the primary factors in the volatility and sensitivity of the exchange rate.

The public's response to the program, aired on CBC on March 16, 1995, showed that many Canadians do not understand that Canada is inexorably linked to international money markets and any move to alter this relationship would lead to a drastic fall in living standards.

For example, Terry Stewart of Glenwood, Alberta, said, "I'm getting a little tired of foreign people dictating what the Canadian economy is going to do. It's time for Canada, the government, and the Bank of Canada to stand up on their own hind legs and say it's time for a 'Made in Canada' policy."

Along a similar vein, Kevin Rae of Vancouver, B.C., said, "The government is losing control over our economy. The globalization of the marketplace has led to drastically unacceptable levels of underemployment and unemployment. I personally believe that government must reassert control over the marketplace."

Globalization, the information age and the human condition

One of the most vocal and radical commentators on globalization is author and activist Jeremy Rifkin. On the March 30, 1995 CBC "Prime Time" Rifkin stated: "What we have to understand is that the global economy is undergoing a fundamental transformation in the very nature of work. We're moving into a third industrial revolution-the information age."

However, the future foretold by Rifkin is not substantiated by the facts. On September 4, 1995 CBC's "The National" Rifkin said, "Let me explain what's happening now and what could happen. What's happening now in every country is the polarization between the 'haves' and 'have-nots,' and the creation of a dangerous two-tiered society."

However, as figure D illustrates, there has been an increase in incomes across all levels of Canadian society. In fact, the gap between the rich and the poor, as measured by after-tax income, declined between 1972 and 1992. This evidence contradicts the claims made by Rifkin. [The standard measure of equality, the Geni coefficient, was 0.301 in 1972 and 0.295 in 1992. A geni coefficient of zero is perfect equality, ie., all families have the same income. A geni coefficient of 1.0 is perfect inequality-one family has all the income and the rest of the families have no income.]


Globalization linked to bombing

The majority of discussions which referred to globalization dealt with economic issues. However, the term has pervaded the English language to such an extent that CBC reporter Gavin Hewitt linked globalization to the Oklahoma City bombing which killed 168 Americans. In his May 23, 1995 profile of Timothy McVeigh, one of the men believed to be responsible for the bombing, Hewitt stated: "Many middle Americans saw their jobs disappearing before the impersonal forces of the global economy and they blame the federal government for it."

Fancy words from Bernice and Fred

The final example of how the term "globalization" is used and abused by journalists, commentators, and the man or woman on the street alike occurred on November 4, 1992. "CTV News" aired a report about a Manitoba woman who refused to pay the GST on her hydro-electric bill and was facing the prospect of a rather cold and dreary winter as a result.

Identified on screen as a "GST Protester" Bernice Baldwin stated: "No, of course I don't matter. People don't matter. Don't you realize that? People don't matter. It's just dollars that matter. This is what I'm trying to get across to people. It's the bottom line, it's competitiveness, it's globalization, all these fancy words, not people."

CBC's "Venture," realizing that many people neither understood nor believed the implications of a truly global economy, decided to produce a spoof of the "latest business jargon." While this parody may have incited a few smiles, it certainly did little to further the understanding of the general public.

The report, aired first on November 7, 1993, and again May 8, 1994, ended with this statement from Fred Langon: "Read my lips. You're the CEO of a world class organization. At this point in time you're cogitating the veritability of globalization. How would a strategic move to the global marketplace impact your bottom line? Quite frankly, this could be on the cutting edge of the level playing field. The repositioning, no, the empowerment, of your human capital. And they wonder why no one understands them."

One of the primary functions of the news is to enlighten the public on such issues. Instead, television news has left Canadians with the false impression that we are unprepared for the global economy and unable to compete in the international marketplace.

Click here to view Figure D: Average After-Tax Family Income, by Quintiles, 1977-1992

The Canadian identity crisis

The United Nations rated Canada as "the best" country in the world. And, according to the OECD, Canada has the sixth highest level of per capita spending power in the world. We are number two in television sets per capita, number five in cars per capita and have the seventh lowest infant mortality rate in the world. Given these facts, one can reasonably ask, why all the gloom?

Canada is well-positioned for a globally integrated economy. We are not "Number One" in every category, but we are almost always near the top of the list. The majority of countries in the world are simply trying to keep pace with Canada. Globalization is an opportunity for enhanced success for Canada, but this message was eclipsed on television news by the concerns of people who are afraid of change.

Methodology

Results are based on 18 CBC "Prime Time News," 13 "The National," 26 "The Journal," 4 "Sunday Report" and 13 "Venture" as well as 22 "CTV News" stories from January 1, 1988 to December 31, 1995.

All stories appearing during that time were analyzed, representing a total population rather than a random sample of stories.

For further information on coding procedures, contact the National Media Archive.

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Last Modified: Wednesday, October 20, 1999.