Futures 31 (1999) 905–912

www.elsevier.com/locate/futures

The ambiguities of globalization

Stephen Toulmin
Center for Multiethnic and Transcultural Studies, University of Southern California, Los Angeles, CA
90089-1694, USA

Abstract

Current discussions of globalization are flawed by confusing two issues: (1) the economic
competition among sovereign nation states—so-called “global competitiveness”—which is
used as an excuse to reduce social support budgets; and (2) the value of worldwide inter-
national organizations set up on a non-state basis—humanitarian, environmental or human
rights NGOs, professional, sporting, labor or whatever. Opposition to “globalization” in the
first sense is no obstacle to support for the second (NGO) development: on the contrary, NGOs
can be the best instrument for countering inhuman governmental policies. The cogency of
these economic arguments rests, this paper argues, on confusing two interpretations of the
terms “global” and “globalization”. In multinational businesses or other global enterprises,
these terms imply that the economic role of governments will be reduced, and global compe-
tition will take place between corporations: Fuji vs Kodak, Boeing vs Airbus, Compaq vs
Toshiba. In governments, by contrast, the same terms imply a continued—even, enhanced—
economic role for governments, so that global competition takes place, rather, between coun-
tries: Britain vs Germany, Japan vs the United States, Europe vs America. Business and
Government talk at cross-purposes. The steps that multinational corporations take to reduce
other “non-wage” labor costs—notably, their taxes—are seen by politicians and journalists as
unpatriotic. Rather than follow business onto the global stage, defenders of environmental and
labour interests retreat to the domestic stage, and leave governments to bring the corporations
into line. If tackled on this level alone, the economic arguments are, indeed, hard to undercut:
addressed “one nation state at a time” (so to say) matters of “comparative advantage” tempt
rival governments to engage in competitive cost cutting, and the costs of social services are
an obvious target for cost cutting, e.g. in France or Sweden. Tackled on a wider (“global”)
level, however, the same issues can be stated in terms less damaging to labour and environmen-
tal interests. A Global Labour Office capable of looking the World Trade Organization in the
eye, for instance, could set standards protecting those interests as strongly as those insisted
on by international agencies for “transparency” in accounting, “fair” competition and the like.
Excessive cutbacks in social protections, indeed, can then be judged to be “unfair” competition,
and penalized as such.  1999 Elsevier Science Ltd. All rights reserved.

0016-3287/99/$ - see front matter.  1999 Elsevier Science Ltd. All rights reserved.
PII: S 0 0 1 6 - 3 2 8 7 ( 9 9 ) 0 0 0 4 9 - X
906 S. Toulmin / Futures 31 (1999) 905–912

1. The ambiguous concept of “globalization”

These days, “globalization” is both an historical fact and a political football, and
the terminology of the global is ambiguous. In recent decades, people’s engagement
in a wide range of activities has widened in ways that increasingly overlap, or even
ignore, the political boundaries of particular states. Travel and communication, fin-
ance and trade, sporting competitions, the professions, insurance, and even popular
music, are no longer confined by the domestic frontiers of any single country: rather,
they operate on a multinational or transnational scale. So globalization, as a process,
is by now an historical fact, which enriches the interactions of people in many differ-
ent countries: they meet, swap goods and ideas, play football matches, borrow or
buy resources, build medical clinics, listen with pleasure to each other’s bands and
ballads. For people of an internationalist rather than a nationalist frame of mind,
little in the resulting cross-fertilization and prosperity need be regarded as a threat.
In the politics of developed countries, meanwhile, the political and economic impact
of globalization has become contentious. Speaking of multinational and transnational
phenomena from the viewpoint of a single country, journalists and politicians use
the statist language of “national interest” and see their countries as locked in postures
of inescapable rivalry. So understood, the term global is linked with “competi-
tiveness”: the entity America competes with (say) the entity Japan, and success in
maintaining a favourable trade balance or exchange rate is taken as a measure of
the “competitiveness” of a particular nation. It is then a goal of “national policy” to
help the country meet the demands of “the global market” more effectively than its
rivals. Here, we can already see crucial ambiguities in the idea of globalization. The
very “global” activities that enrich the experience of people in different countries,
regardless of nationality, are treated as “domestic” possessions, and sources of
“national” pride. So, global relations of all kinds—in politics, finance or economics,
the professions, communications, or even sport—are still discussed in terms that treat
the nation state as the unit of analysis. The paradigmatic example of this habit is
the Olympic Games. Contests initially created as an opportunity to test the athletic
prowess of individuals are interpreted politically, and presented journalistically, as
matters of national rivalry. Individual performances are displaced as a focus of con-
cern by “medals tables” for the competitors from different countries, and it is a
matter of international (i.e. inter-state) politics for one state (Australia, say) rather
than another (China, say) to be granted the privilege of hosting the next Olympic
Games.
To take a narrowly statist point of view, and consider globalization as the contrast
between activities within the boundaries of different nation states is, however, to
miss a central point. It is a mistake, for instance, to see “comparative advantage” as
referring solely to comparisons between two given countries—Japan and the United
States, say. Historically, this mistake is understandable. When Adam Smith
developed the concept of comparative advantage, he focused on The Wealth of
Nations, or (more exactly) on the respective wealth of nation states. But, for nearly
100 years, it has been clear that this reading of “comparative advantage” is too
narrow: before the First World War, the Nobel Peace laureate, Norman Angell,
 S. Toulmin / Futures 31 (1999) 905–912 907

emphasized, in his book, The Great Illusion—which helped to create the League of
Nations—that industrial or commercial activities generally overlapped the boundaries
of states, so that their economies are unavoidably interdependent. Given the world-
wide origin of the parts and materials used in all automobiles today, Angell would
not accept a contrast between (say) American and Japanese cars: rather, he would
compare “economic advantages” of a country (between Microsoft and IBM) and
among different corporations (between General Motors and Toyota). The recent dis-
putes between the American and Japanese governments about, for example, the mar-
ket for photographic materials were more disputes between Kodak and Fuji as cor-
porations than between Japan and America as countries.
Meanwhile, critics of multinational corporations adopt an equally chauvinist point
of view focused on one nation state at a time. The dispute over the Eurodisney theme
park near Paris became a struggle between the cultures of France and America.
Critics looked to the French Government to frustrate the “antinational” activity of
multinational corporations; and so failed to recognize the possibility of pursuing
those corporations onto the global playing field and exposing them to transnational
criticisms that would directly affect their worldwide operations, as was done, for
example, by Greenpeace in its criticisms of Royal Dutch Shell. Our way of displaying
countries on political maps, likewise, represents them as distinct territories with well-
defined frontiers. The states are treated as omnifunctional: the contrast between
“domestic” and “foreign” is applied in similar ways to economic or financial, social,
industrial or personal interactions, and nation state governments are seen as having
the power to control them all.
By now, however, this way of mapping nation states is misleadingly out of date.
To show how human affairs operate today, we must disaggregate different economic
activities and political functions, and represent them using maps—or trans-
parencies—organized in equally distinct geographical patterns or “networks”.
Increasingly, cities or regions that are political foci of nation states coincide only
partly or accidentally with those that serve as nodes in the other networks: the sig-
nificant agents in many non-political activities exert an influence that owes little or
nothing to their national loci or connections. By playing down the role of national
governments, and broadening our picture of global activities and enterprises, we shall
apply the term globalization to many kinds of activities, over and above those of
industrial or commercial corporations, on the one hand, and governmental—includ-
ing international or inter-governmental—agencies, on the other. Consider, for
example, how currency and exchange transactions are carried out nowadays. The
scale of such transactions exceeds the capacity of any state treasury to control them.
Informed observers estimate the global volume of foreign exchange transactions at
$US 1,300,000,000,000 or $1.3 trillion each day. The reserves of no government,
not even the USA, can support an effective intervention in these transactions: at
most, they allow any state to divert part of the flow of funds in a slightly different
direction, and so can delay—but not prevent—exchange rate adjustments forced on
the market by the realities of the economic situation.
Correspondingly, a map of the locations where currency and exchange transactions
occur yields a network that only partly fits the standard political map of nation states.
908 S. Toulmin / Futures 31 (1999) 905–912

Its nodes are located less in Washington DC and Bonn, than in New York, London,
Frankfurt, Singapore or Tokyo; while an increasing fraction of the transactions takes
place electronically, by communication channels that evade attempts by governments
(even the People’s Republic of China) to monitor or block them. So, there is tension
between actual business dealings and the wishes of governments for financial control.
To cite a frivolous example, while the governments of the European states grumbled
about “unscrupulous currency dealers”, George Soros was using his profits to finance
a new Central European University in Budapest and Prague: meanwhile, sponsored
by those governments, the European Bank for Reconstruction and Development spent
its time and money buying the marble chosen to line its grandiose entrance.

2. The emerging post-national system

Elsewhere, I described the relationship between non-governmental organizations

and nation state governments using an image from Swift’s book Gulliver’s Travels.
Lemuel Gulliver is cast ashore on an unknown land, and falls deeply asleep. Waking,
he finds himself anchored to the ground by a hundred tiny cords: an object of fear
and curiosity to the miniature humans who inhabit Lilliput. His size and strength
terrify the Lilliputians, who restrict his movements using constraints, none of which
can hold him down by itself, but which collectively limit his ability to put his strength
to use.
The nation state is Gulliver. Non-governmental organizations and other agencies
are Lilliputian institutions: they have no deadly force at their disposal, but collec-
tively limit the power of governments to use deadly force as an instrument of policy.
Instead of the “politics of violence“, they use the “politics of shame”: exposing
governments and corporations to criticism by publicly denouncing their offenses
against human rights or the environment, and subjecting them to ridicule of a kind
they are unwilling to endure. (A recent example of the power of shame was President
Chirac’s embarrasment, when mocked in the European Parliament for restarting
nuclear testing at Muroroa Atoll.) So, the political map of the world itself has been
re-drawn.
All that is left of the traditional map of omnifunctional nation states is a map of
the territories in which the governments of states exercise police authority. To show
how the world’s financial or economic institutions, professions, humanitarian organi-
zations (and the rest) exert their influence, we may overlay the traditional map with
other maps of unifunctional networks—international, multinational, or transnational.
Nation state governments may seek to prevent such agencies from operating on their
territory; but, by refusing to do so, they expose themselves to criticism. Trying to
“purge” Amnesty is a sure way for a government to invite banishment to the category
of “pariah” states.
Already, many of the functions traditionally performed by governments are being
disaggregated and privatized. In advanced industrial countries, the official system of
judges and courts is overloaded, and informal judicial institutions take up the load—
unofficial forums like the Rabbinical Courts of the diamond trade or the irrigation
 S. Toulmin / Futures 31 (1999) 905–912 909

court (Tribunal das Aguas) at Valencia, the non-state arbitrators whose rulings are
accepted as binding in the Swiss system of labour–management relations, or the
community tribunals that act as courts in, for example, the largely unpoliced favelas
of Rio de Janeiro.
Such changes will not soon be undone. Whether or not the European Union adopts
a common currency, in actual practice banks or businesses now put their trust and
their investments in whatever currency is advantageous. (In the bond market, “Euro-
bonds” are denominated in US dollars, Swiss francs, or Deutschemarks, as need
requires.) So, surreptitiously, financiers are realizing Friedrich von Hayek’s dream
that money can be a commodity, to be traded in the same way as all material com-
modities. Several currencies can be “current” in a given country at any given time,
and their relative value can be determined pragmatically. With multiple currencies,
multiple court systems and so on, the resulting picture of future states is quite unlike
the Westphalian picture that most of us grew up with; and, most likely, circumstances
will continue to carry us in this unforeseen direction.
If this representation of political interactions is correct, it prompts new questions.
The Westphalian view was simple: each country was separated from its neighbours
by frontiers: interaction took place at or across the frontiers. On a post-Westphalian
view, there are no such separations: interactions take place within different “trans-
national” networks. Multinational banks are monitored by international institutions;
domestic police forces are open to outside criticism by transnational human rights
organizations: Amnesty vs the Turkish police. Governments have a choice of
accepting, or resisting, the constraints imposed on their institutions by unifunctional
“non-state” organizations: the Beijing Government resists Amnesty’s attacks on its
Tibet policy, the Government of Malaysia bans demonstrations against the policy of
its Indonesian ally in East Timor. While these Lilliputian NGOs tend to operate
chiefly as single-issue organizations, they do not lack effective allies. In the years
since the Rio Conference on Environment and Development in 1992, significant
cooperation has grown up between major NGOs and the Secretariat of the United
Nations Organization. Both the head offices of the UN in New York and its technical
agencies (e.g. UNHCR) turn to NGOs for help. Sadako Ogata, as head of UNHCR,
has regular meetings with the NGOs that share in its care of refugees, and senior
UN headquarters staff draw on NGOs in preparing and documenting the conferences
that have been a feature of the 1990s, from Rio to Vienna and from Cairo to Beijing.
Even the communications network serving these meetings was developed by NGOs,
and can now be accessed on the World Wide Web, via its principal address—
http://www.igc.apc.org.

3. The new realm of global politics

Let us return to the issues about globalization from which this paper began: (1)
the preoccupation of governments with “global competitiveness”; and (2) the persist-
ence of “statist” attitudes in, for example, trade union and consumer organizations.
If we broaden our viewpoint to embrace transnational and supranational, as well as
910 S. Toulmin / Futures 31 (1999) 905–912

international and purely national activities, we can see our way ahead: recognizing
the need to extend the territory of politics on to a larger playing field, and replayng
on this global stage, for example, the disputes between labour and management that,
over the last 150–200 years, were more typically played out on the purely
national level.
For a start, (1) the governmental emphasis on dismantling social services, so as
to boost “global” competitiveness, is not entirely new: it is one more stage in a series
of policies by which countries at similar stages of development have set out to
increase their prosperity and undermine their rivals. After the world abandoned
exchange rates tied to gold or to the US dollar, these policies relied on competitive
devaluations of the national currency. By “floating” their currencies to make exports
cheaper, states improved their ability to compete in international trade; but, in doing
so, they exposed their domestic economies to inflationary pressures. In the 1990s,
however, the desire to eliminate inflation, and return to more stable exchange rates,
has made competitive devaluations unacceptable, and an alternative way of achieving
the same result has been the current competitive attack on the costs of social services.
This result is achieved only at a price. Most particularly, it undermines the humane
traditions of European liberal democracy by penalizing citizens at large, while man-
agers of corporations reward themselves at the expense of their employees and the
citizenry at large. Whereas competitive devaluation relied on beggaring one’s neigh-
bours in other countries, the practice of demolishing social services relies on beg-
garing the citizens of one’s own country, undercutting the economic position of rival
countries by turning one’s own country into a “low cost” producer.
These anti-welfare policies were not an intended part of (say) the European Union:
on the contrary, from early on, the founders of the Union understood the social costs
of such policies. The debate over the Maastricht Treaty, for instance, was shaped
by the tradition of Catholic social ethics shared by the Dutch Prime Minister, Ruud
Lubbers, and Jacques Delors, President of the European Commission. On this view,
the states of the European Union agreed to provide the minimum level of individual
protection in social welfare, education, health and other services proper to a fully
developed state: hence the Social Chapter of the Treaty, which the British Conserva-
tive governments of Margaret Thatcher and John Major were unable to accept.
Nor are these ideas confined to industrialized countries. At a meeting of the World
Trade Organization in Singapore in December 1996, the issue of “labour standards”
was raised. Lettng individual member states lower these standards without external
criticism, it was argued, meant tolerating “unfair competition” in international trade.
Again, the British government sided with those developing countries, like Malaysia,
that resisted any imposition of such labour standards. It remains to be seen how this
conflict develops, or whether, in the years ahead, the World Trade Organization or
the International Labour Office takes on a responsibility for monitoring labour con-
ditions in the industries of its member states. Meanwhile, (2), radical critiques of
multinational corporations are blunted by the fact that trades unions and consumer
organizations continue to operate within a nation state framework, attack the abuses
of industry or commerce as anti-national and look to national governments to penal-
ize them. On the supranational stage, there are no global trades unions that can
 S. Toulmin / Futures 31 (1999) 905–912 911

confront industry on a global terrain: merely confederations of essentially state-based

trades unions. In the long run, however, the only organizations that can monitor or
restrain the multinational corporations will be equally multinational labour organiza-
tions. The same is true in fields like consumer protection. At present, there exist
only state-based consumer organizations, which follow (and to some extent
coordinate) one another’s activities. But there is room, equally, for a global consumer
movement, which can extend its research and its critiques beyond national bound-
aries. As matters stand, we lack both any global journal like (say) Consumer Reports
in the USA, or Which? in Britain, and the research structure required in order to
give their critiques scientific support.
For a start, it would be helpful to have a European research organization and
journal that monitored the performance of goods and appliances sold throughout the
European Union, and the strange differences between countries of the Union in, for
example, car prices. In the long run, after all, the issues for consumers are as global
as other human issues: those that face human rights organizations like Amnesty
International, or environmental organizations like Greenpeace; and these issues can
be effectively handled only on the fully global stage. To mention just one area of
industrial activity: at present, little stops the manufacturers of hazardous chemicals,
which cannot be made and sold in industrial countries, from shifting their production
and sale to other, underdeveloped countries. The Union Carbide catastrophe at Bho-
pal, India, involved a product previously made at a similar plant in Pennsylvania,
which was closed down for safety reasons; agricultural pesticides and insecticides
whose use is no longer permitted in the USA and Europe are likewise still sold for
use in Africa or South America; and tobacco companies that face shrinking domestic
markets are enthusiastically expanding sales in Eastern Europe. Only a transnational
organization for consumer protection could counter these activities, in the way that
is now done on the national scale. So it is no good merely complaining about the
power of multinational corporations. Instead, we should copy them: they are the
scouts who have shown how the land lies for the future. Rather than relying on
national governments to restrict their activities, we should follow their example:
creating, on a transnational stage, institutions parallel to those that now exist on a
“one-state-at-a-time” basis. So we should welcome the rise of transnational trades
unions, supranational consumer organizations, and all the rest, alongside the Univer-
sal Postal Union, the International Committee of the Red Cross, the International
Courts of Justice, and the World Trade Organization.

4. Conclusion
Multinational and transnational networks of business organizations, accountants,
financiers, journalists, physicians, humanitarian agencies and the like are nowadays
placing fresh limits on the traditional governmental autonomy of the European States.
None of these networks has the state’s access to deadly force; but, in a world that
is increasingly dominated by economic and technological considerations, it is clear
that the use of deadly force—for so long the crucial monopoly of governments—
has at most a marginal utility.
912 S. Toulmin / Futures 31 (1999) 905–912

So understood, the phenomenon of “globalization” does not need to be resisted.

This expansion in the scope of economic, political and other actions is only begin-
ning: in developed and developing countries alike, other sectors of life have the
opportunity to move creatively onto the global stage, in the wake of the multinational
corporations. The institutions so created should have a continent-wide, or even a
worldwide scope, staff and concerns. At the least, they can be transnational organiza-
tions, with networks of local and regional offices, on the model set by Greenpeace
and Amnesty in the field of human rights or the environment, or McKinzie among
management consultants. This is only the beginning of a longer story. To some
extent, NGOs already play the roles of future transnational agencies: Greenpeace
is a self-appointed transnational counterpart of national Environmental Protection
Agencies. Still, this paper does not pretend to give a full account of the destinations
toward which we are moving: its aim is only to draw attention to a few outcomes
of this move away from the familiar norms of the Westphalian system of nation
states, and to pose—rather than answer—some of the questions that will arise as
a result.