Globalization

1. Globalization

2. What is globalization? • There is a lot of confusion about the term, and about the rhetoric of the ‘new world order’ following the end of the Cold War. • Hence, globalization can be conceived as a myth, a rhetorical device, a phenomenon, an ideology, a reality, an orthodoxy, a rationality.

3. Globalization is a process of interaction and integration among the people, companies, and governments of different nations, a process driven by international trade and investment and aided by information technology. • This process has effects on the environment, on culture, on political systems, on economic development and prosperity, and on human physical well-being in societies around the world.

4. In both academic and popular discourses globalization has become one of the catchwords of the 1990s. • In fact, globalization is a short form for a cluster of related changes: economic, ideological, technological, and cultural.

5. Economic changes include the internationalization of production, the greatly increased mobility of capital and of transnational corporations, and the deepening and intensification of economic interdependence. • The economic manifestations of globalization include the spatial reorganization of production, the interpenetration of industries across borders, the spread of financial markets, the diffusion of identical consumer goods across distant countries, and massive transfers of population.

6. Ideological changes include investment and trade liberalization, deregulation, privatization, and the adoption of political democracy in the institutional realm. • Technological changes include information and communi-cations technologies that have shrunk the globe and the shift from goods to services. • Finally, cultural changes involve trends toward harmonization of tastes and standards, a universal world culture that transcends the nation-state.

7. According to Holm and Sorensen, globalization can be defined as the intensification of economic, political, social, and cultural relations across borders. • In this sense it involves more than the geographical extension of a range of phenomena and issues. • It implies not only a significant intensification of global connectedeness but also a consciousness of that intensification, with a concomitant diminution in the significance of territorial boundaries.

9. Globalization is pushed by several factors, the most important among which is technological change. • The process is uneven in both intensity and geographical scope, in its domestic and international dimensions. Hence, we might obtain different types of globalization across a rich regional variation. • It is important to draw a distinction between the qualitative and the quantitative dimensions of globalization: more of the same (quantitative change) or qualitative shifts (quantum leaps). For instance, true economic globalization invokes a qualitative shift toward a global economic system that is no longer based upon autonomous national economies but relocates production, distribution, and consumption of goods in a consolidated global market-place.

10. To sum up, the concept of globalization is frequently employed but seldom clearly defined. It means many different things for different people. Among the possible definitions we might include: • 1) intensification of economic, political, social, and cultural relations across borders; • 2) the historical period (or historical epoch) launched since the end of the Cold War;

11. 3) the transformation of the world economy epitomized by the anarchy (literally defined) of the financial markets; • 4) the triumph of the US values, through the combined agenda of neoliberalism in economics and political democracy;

12. 5) an ideology and an orthodoxy about the logical and inevitable culmination of the powerful tendencies of the market at work; • 6) a technological revolution, with social implications; • 7) the inability of nation-states to cope with global problems that require global solutions, such as demography, ecology, human rights, and nuclear proliferation.

13. The economic side of globalization, which receives most of the scholarly attention to the subject, is found in “that loose combination of free-trade agreements, the Internet, and the integration of financial markets that is erasing borders and uniting the world into a single, lucrative, but brutally competitive, marketplace”. • It is a small world after all, and that global world is a MacWorld with MTV, CNN, PCs and Macintoshes. Beyond this economic dimension, we might study globalization in the political sense and in the sociological sense as a qualitative shift in the conditions of people’s lives.

14. Neoliberals believe that globalization has been the inevitable result of technological change; moreover, that global economic liberalization will strengthen and lead to political democracy. Globalization will open up societies to democratic tendencies, while economic liberalization will provide the material bases for subsequent democratic consolidation.

15. Even if this assertion is true, it conceals a conceptual and normative trap: paradoxically, the economic forces of globalization in themselves are undemocratic if not antidemocratic. The lack of accountability of global forces poses a serious political problem. By condensing the time and space of social relations, economic globalization transcends territorial states and is not accountable to elected political officials. The only form of accountability is given to unelected market forces, regulated by the logic of economics, which resonates with the Darwinist tendency of the ‘survival of the fittest.’

16. Globalization is not a new phenomenon. • For thousands of years, people—and, later, corporations—have been buying from and selling to each other in lands at great distances, such as through the famed Silk Road across Central Asia that connected China and Europe during the Middle Ages. • In fact, many of the features of the current wave of globalization are similar to those prevailing before the outbreak of the First World War in 1914.

17. However, many believe the current situation is of a fundamentally different order to what has gone before. • The speed of communication and exchange, the complexity and size of the networks involved, and the sheer volume of trade, interaction and risk give what we now label as 'globalization' a peculiar force.  

18. Since 1950 the volume of world trade has increased by 20 times, and from just 1997 to 1999 flows of foreign investment nearly doubled. • Distinguishing this current wave of globalization from earlier ones, Thomas Friedman has said that today globalization is “farther, faster, cheaper, and deeper.”

19. This current wave of globalization has been driven by policies that have opened economies domestically and internationally. • In the years since the Second World War, and especially during the past two decades, many governments have adopted free-market economic systems, vastly increasing their own productive potential and creating myriad new opportunities for international trade and investment.

20. Governments also have negotiated dramatic reductions in barriers to commerce and have established international agreements to promote trade in goods, services, and investment. • Taking advantage of new opportunities in foreign markets, corporations have built foreign factories and established production and marketing arrangements with foreign partners. • A defining feature of globalization is an international industrial and financial business structure.

21. Technology has been the other principal driver of globalization. • Information technologies have given all sorts of individual economic actors—consumers, investors, businesses—valuable new tools for identifying and pursuing economic opportunities, including faster and more informed analyses of economic trends around the world, easy transfers of assets, and collaboration with far-flung partners.

22. Globalization, thus, has powerful economic, political, cultural and social dimensions. Here four themes should be underlined: • de-localization and supraterritoriality;  • the speed and power of technological innovation and the associated growth of risk;  • the rise of multinational corporations; and  • the extent to which the moves towards the creation of (global) free markets to leads to instability and division. 

23. Globalization is deeply controversial, however. One debate is between supporters and opponents over whether globalization is actually happening and, by extension, about the forces that are driving it. • The supporters argue that globalization draws attention to a profoundset of economic, cultural, technological and political shifts that have intensified since the 1980s.

24. Chief amongst these are much higher levels of world trade and the advent of new information and communication technologies that provide instant access to images and messages across the globe; and the emergence of global commodities that are available almost anywhere in the world.

25. In its most extreme version, hyper-globalism, this view subscribes to a form of technological determinism that suggests that new, globalized cultural and economic patterns became inevitable once technology such as computerized financial trading, satellite communications, mobile phones and the Internet became widely available. •  Nevertheless, there is evidence of a slowdown in the pace of globalization since the 1990s, which has been further strengthened by the impact of the events of September 11, 2001 on, for instance, the global economy and interstate security measures.

26. On the other hand, the sceptics or opponents, often subscribing to a traditional or 'old' left analysis of capitalism, argue either that there is little that is new about globalization or that its impact has been exaggerated for political reasons. • Moreover, despite the undoubted growth in world trade from the late nineteenth century onwards, the sceptics point out that the overwhelming bulk of economic activity still takes place within, not across, national boundaries.

27. National economiesare not as irrelevant as globalization theorists usually suggest. From this perspective, globalization is often seen less as a revolutionary economic or technological force and more as an ideological device used by politicians and theorists who support neoliberal economics and wish to advance corporate interests.

28. The globalization thesis has two major advantages in this respect. • First, it shows certain tendencies as inevitable and therefore irresistible. • Second, it suggests that such shifts are part of an impersonal process, and not one linked to an agent, such as a big business, whose interests might be seen to drive, and be served by, globalizing tendencies.

29. The most intense debate about globalization nevertheless concerns its implications for equality and poverty. • Critics of globalization have drawn attention to the emergence of new and deeply entrenched patterns of inequality: globalization is thus a game of winners and losers.

30. The winners are invariably identified as multinational corporations and industrially advanced states generally, but particularly the United States; the losers, in contrast, are in the developing world, where wages are low, regulation is weak or non-existent, and where production is increasingly orientated around global markets rather than domestic needs.

31. On the other hand, globalists point out that the rich may have got richer but the poor are now also, in most cases, less poor. • From the perspective of liberal pluralism, the emergence of a global economy is to be welcomed because free trade allows each country to specialize in the production of those goods and services that it is best suited to produce. This leads to international specialization and mutual benefits. • In this view, the only parts of the world that fail to benefit from globalization are those that remain outside it.

32. Globalization has also been criticized because of its tendency towards risk, uncertainty and instability. • In this view, the uncertainty and insecurity that are associated with the emergence of a global economy are likely to decline as more stable patterns of economic activity take shape.

33. Nevertheless, globalization has been associated with increased risk and uncertainty in at least three deeper ways. • In the first place, economic decision-making is increasingly influenced by global financial markets that are inherently unstable. This is because much of their activity is speculative, and they are driven by short-term economic considerations.

34. A second form of uncertainty is summed up in Ulrich Beck's idea of a 'risk society' that is characterized by rising individualism and an associated weakening of tradition, community and established institutions. •  Uncertainty goes beyond an increase in the pace and a reduction in the predictability of economic and social change, in that it has a personal, even psychic dimension: when all fixed points are undermined, people's basic values and even sense of identity are called into question.

35. A third form of instability is the alleged tendency of globalization towards environmental crisis and destruction. • Ecosocialistsexplain this by reference to capitalism's blind concern with profit and its insensitivity towards ecological issues.

36. Radical ecologists believe that globalization is merely an extension of industrialism, an economic system that is characterized by large-scale production, the accumulation of capital and relentless growth. By spreading materialism and entrenching absolute faith in science and technology, industrialism undermines human values and deadens ecological sensibilities. • Reformist ecologists call for global environmental protection. However, as the faltering process of implementing the 1997 Kyoto Protocol on climate change demonstrates, concerted state action in this area is difficult to achieve because of the economic sacrifices involved.

37. The most significant political debate associated with globalization concerns its impact on democracy. • Supporters of globalization argued that it is a major factor underpinning the trend towards democratization.

38. Globalization can nevertheless be seen to have undermined democracy in two important ways. • First, it has concentrated economic power, and therefore political power, in the hands of multinational corporations (MNCs). These are business organizations that produce output in more than one state. MNCs now dominate most of the world's markets.

39. Such economic and financial power is also allied to the ability to manipulate consumer tastes and entrench materialist values through the development of brands. • However, it is the capacity of MNCs to relocate capital and production elsewhere in the world that gives them a decisive advantage over national governments and enables them, effectively, to escape democratic control. • Developing-world states are particularly vulnerable in this respect, as they provide MNCs with a source of cheap labour and low production costs without being able to oblige them to make long-term investments or shift decision-making power from the 'home' country to the 'host' one.

40. Second, democracy is threatened by the fact that the pace of economic globalization far outstrips that of political globalization. • Whereas economic activity increasingly pays little attention to national borders, politics continues to operate largely within them, the international organizations that do exist being too weak to call global capitalism to account. • This has led to calls for a cosmopolitan conception of democracy.

41. The extension of democratic forms and processes across territorial borders would require not merely the strengthening of organizations such as the European Union and the United Nations, but also the reduction of democratic deficits from which these bodies currently suffer. • Moreover, the institutions of global economic governance, such as the IMF, the World Bank, the OECD and the G7, need to develop some independence from the interests of MNCs and give greater attention to issues such as human rights, economic justice and environmental protection.

42. Regionalization • One view of globalization suggests that it is biased in favor of cooperation and harmony, in which case more and more parts of the world will be integrated into patterns of economic and political interdependence. •  However, an alternative view is that globalizing trends generate new forms of tension and conflict. In the light of the declining effectiveness of national governments, these tensions are usually evident in the growth of regionalization. •  However, the relationship between globalization and regionalization is not clear.

43. An international region can be broadly defined as a limited number of states linked by a geographical relationship and by a degree of mutual interdependence. •  Accordingly, for each state in the region, the activities of other members of the region (be they cooperative or antagonistic) are significant determinants of its foreign policy. •  Regional subsystems are characterized by clusters of states coexisting in geographical propinquity as interrelated units that sustain significant security, economic, and political relations.

44. Regions can be thus conceived as an ‘intermediate form of community,’ between the national community of the state and the potential global community of humankind, as is clearly evident in the cases of pluralistic security communities. • One of the difficulties in dealing with any region is the problem of delineating its exact spatial borders. Although many regions are denoted by obvious geographic or cultural boundaries, there is always some arbitrariness in their definition.

45. The major criteria remain geographical contiguity, interaction, and a subjective perception of belonging to a distinctive community and having a collective regional identity.

46. In addition several common characteristics can be suggested, such as: (1) a certain amount or degree of social and cultural homogeneity; (2) similar political attitudes or external behavior toward third parties; (3) common political institutions, as an expression of political interdependence; (4) a certain degree of economic interdependence; and (5) common behavioral criteria, such as the identification of norms pertaining to conflict management and resolution.

47. Regionalization can be considered as the growth of societal integration within a given region, including the undirected processes of social and economic interaction among the units. •  As a dynamic process, it can be best understood as a continuing process of forming regions as geopolitical units, as organized political cooperation within a particular group of states, and/or as regional communities such as pluralistic security communities.

48. Similarly, the term regionalism refers to the proneness of the governments and peoples of two or more states to establish voluntary associations and to pool together resources (material and nonmaterial) in order to create common functional and institutional arrangements. •  Furthermore, regionalism can be best described as a process occurring in a given geographical region by which different types of actors (states, regional institutions, societal organizations and other non-state actors) come to share certain fundamental values and norms.

49. These actors also participate in a growing network of economic, cultural, scientific, diplomatic, political, and military interactions. •  Regionalization (the tendency or process to form regions) and regionalism (the purposive proneness to create regional institutions and arrangements) find expression in the economic and security domains, including convergent motivations toward both political/security and economic forms of integration.

50. Some of the common factors that might explain the trend toward economic regionalism (‘the new regionalism’ of the 1980s and 1990s) are the effects of the end of the Cold War, the shifting balance of world economic power, the uneven effects of globalization, and the shift toward outward-oriented economic policies in many parts of the developing world.