Globalization

Globalization is the emergence of a complex web of

interconnectedness that means that our lives are increasingly
shaped by events that occur, and decisions that are made, at a
great distance from us. The central feature of globalization is
therefore that geographical distance is of declining relevance and
that territorial borders, such as those between nation- states, are
becoming less significant.
By no means, however, does globalization imply that ‘the local’ and
‘the national’ are subordinated to ‘the global’. Rather, it highlights
the deepening as well as the broadening of the political process, in
the sense that local, national and global events (or perhaps local,
regional, national, international and global events) constantly
interact.
Globalisation – An Introduction
Globalization is a complex, elusive and controversial term. It has
been used to refer to a process, a policy, a marketing strategy,
a predicament or even an ideology. Some have tried to bring
greater clarity to the debate about the nature of globalization by
distinguishing between globalization as a process or set of
processes (highlighting the dynamics of transformation or change,
in common with other words that end in the suffix ‘ ization’, such
as modernization) and globality as a condition (indicating the set
of circumstances that globalization has brought about, just as
modernization has created a condition of modernity) (Steger
2003). Others have used the term globalism to refer to the
ideology of globalization, the theories, values and assumptions
that have guided or driven the process (Ralston Saul 2005). The
problem with globalization is that it is not so much an ‘it’ as a
‘them’: it is not a single process but a complex of processes,
sometimes overlapping and interlocking but also, at times,
contradictory and oppositional ones. It is therefore difficult to
reduce globalization to a single theme. Nevertheless, the various
developments and manifestations that are associated with
globalization, or indeed globality, can be traced back to the
underlying phenomenon of interconnectedness. Globalization,
regardless of its forms or impact, forges connections between
previously unconnected people, communities, institutions and
societies. Held and McGrew (1999) thus defined globalization
as ‘the widening, intensifying, speeding up, and growing
impact of world-wide interconnectedness’.
The interconnectedness that globalization has spawned is
multidimensional and operates through distinctive economic,
cultural and political processes. Globalisation has many
dimensions. Although globalization theorists have championed
particular interpretations of globalization, these are by no means
mutually exclusive. Globalization has been interpreted three main
ways

Globalisation

Economic Cultural Political

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National Policymaking
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have, to a have
‘flatten out’ been passed
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been absorbed
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to
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organizations

Hyperglobalism
Hyperglobalism portrays globalization as a profound, even
revolutionary set of economic, cultural, technological and political
shifts that have intensified since the 1980s. Particular emphasis,
in this view, is placed on developments such as the digital
revolution in information and communications, the advent of an
integrated global financial system and the emergence of global
commodities that are available almost anywhere in the world.
Hyperglobalism is often based on a form of technological
determinism, which suggests that the forces creating a single
global economy became irresistible once the technology that
facilitates its existence was available. The chief image of
hyperglobalism is captured in the notion of a ‘borderless world’
which suggests that national borders and, for that matter, states
themselves have become irrelevant in a global order increasingly
dominated by transnational forces. ‘National’ economic strategies
are therefore virtually unworkable in a global context. Resistance
to the dictates of global markets is both damaging – countries
prosper to the extent that their economies are integrated into the
global economy – and ultimately futile. Hyperglobalizers
therefore have a strongly positive attitude towards
globalization, usually assuming that, in marking the triumph of
markets over the state, it is associated with economic dynamism
and growing worldwide prosperity.
Nevertheless, hyperglobalism offers an unbalanced and
exaggerated view of globalization, in at least two senses. First, it
overstates the extent to which policymakers have been dominated
by ‘irresistible’ economic and technological forces,
underestimating the importance of values, perceptions and
ideological orientations.
Second, the images of the ‘end of sovereignty’ and the ‘twilight
of the nation-state’ can be said to feature amongst the myths of
globalization (sometimes called ‘globalony’).
Although states may increasingly operate in post-sovereign
conditions, in a context of interdependence and permeability, their
role and significance has altered rather than become irrelevant.
States, for example, have become ‘entrepreneurial’ in trying to
develop strategies for improving their competitiveness in the global
economy, notably by boosting education, training and job-related
skills. They are also more willing to ‘pool’ sovereignty by working
in and through international organizations such as regional
training blocs and the WTO. Finally, the advent of global terrorism
and intensifying concern about migration patterns has re-
emphasized the importance of the state in ensuring homeland
security and in protecting national borders.
The sceptics, by contrast, have portrayed globalization as a fantasy
and dismissed the idea of an integrated global economy. They point
out that the overwhelming bulk of economic activity still takes
place within, not across, national boundaries, and that there is
nothing new about high levels of international trade and cross-
border capital flows (Hirst and Thompson 1999). Sceptics have,
further, argued that globalization has been used as an
ideological device by politicians and theorists who wish to
advance a market-orientated economic agenda. The
globalization thesis has two major advantages in this respect.
In the first place, it portrays certain tendencies (such as the shift
towards greater flexibility and weaker trade unions, controls on
public spending and particularly welfare budgets, and the scaling
down of business regulation) 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 big
business, whose interests might be seen to be served by globalizing
tendencies. However, although such scepticism has served to
check the over-boiled enthusiasm of earlier globalization theorists,
it is difficult to sustain the idea of ‘business as normal’. Goods,
capital, information and people do move around the world more
freely than they used to, and this has inevitable consequences for
economic, cultural and political life.
‘Transformationalist’ stance offers a middle road view of
globalization. It accepts that profound changes have taken place
in the patterns and processes of world politics without its
established or traditional features having been swept away
altogether. In short, much has changed, but not everything. This
has become the most widely accepted view of globalization, as
it resists both the temptation to over-hype the process and to
debunk it. Major transformations have nevertheless taken place in
world politics. These include the following:
 The breadth of interconnectedness has not only stretched
social, political, economic and cultural activities across
 national borders, but also, potentially, across the globe.
Never before has globalization threatened to develop into a
single worldwide system.
 The intensity of interconnectedness has increased with the
growing magnitude of transborder or even transworld
activities, which range from migration surges and the growth
of international trade to the greater accessibility of Hollywood
movies or US television programmes.
 Interconnectedness has speeded up, not least through the
huge flows of electronic money that move around the world
at the flick of a computer switch, ensuring that currency and
other financial markets react almost immediately to economic
events elsewhere in the world.
ECONOMIC GLOBALIZATION
The development of transborder and transnational economic
structures has been a central feature of imperialism, and,
arguably, the high point of economic globalization came in the late
nineteenth century with the scramble of European states for
colonies in Africa and Asia.
Nevertheless, modern and past forms of globalization differ in
important ways. Earlier forms of globalization, sometimes seen as
‘proto-globalization’, usually established transnational
economic organizations on the back of expansionist political
projects. Regardless of their spread and success, empires never
succeeded in demolishing boundaries and borders, they merely
readjusted them to the benefit of politically dominant powers, often
establishing new boundaries between the ‘civilized’ world and
the ‘barbarian’ one. In the case of the contemporary phenomenon
of globalization, in contrast, the web of economic
interconnectedness and interdependence has extended so far that
it is possible, for the first time, to conceive of the world economy
as a single global entity. This is the sense in which economic life
has become ‘borderless’ (Ohmae 1990).
The modern globalized economy came into existence in the second
half of the twentieth century. It was a product of two phases. The
first phase, which lasted from the end of WWII to the early 1970s,
was characterized by new arrangements for the management of the
international financial system in the post-war period which
became known as the Bretton Woods system. Through a system
of fixed exchange rates, regulation and support, Bretton Woods
aimed to prevent a return to the ‘beggar-thy-neighbour’ economic
policies that had contributed to the Great Depression of the 1930s
and, in the process, helped to fuel political extremism and
aggression. Together with the Marshall Plan, which provided US
financial aid to Europe, in particular to support post-war
reconstruction, and the wide adoption of Keynesian economic
policies aimed at delivering sustained growth, the Bretton
Woods system underpinned the so-called ‘long boom’ of the post-
1945 period. In substantially expanding productive capacity and
helping to fashion a consumerist form of capitalism, it laid the
basis for the later ‘accelerated’ economic globalization.
Nevertheless, the collapse of Bretton Woods in the, allowing major
currencies to float instead of staying fixed, initiated the second
phase in the development of globalized capitalism. The Bretton
Woods system had been based on the assumption that the world
economy consisted of a series of interlinked national economies:
its purpose was to guarantee economic stability at the national
level by regulating trading relations between and amongst nation-
states. However, the breakdown of the system weakened national
economies, in that the shift from fixed to floating exchange rates
exposed national economies to greater competitive pressures. As a
result, and in conjunction with others factors, such as the growing
significance of transnational corporations, national economies
were increasingly drawn into a web of interconnectedness. This
economic interconnectedness achieved truly global dimensions in
the 1990s thanks to the collapse of communism in eastern Europe
and elsewhere and the opening up of the Chinese economy.
However, although there may be broad agreement about the events
through which the global economy came into existence, there is
much more debate about the deeper forces and underlying
dynamics that helped to shape, and perhaps determine, these
events. These debates reflect competing perspectives on global
political economy and contrasting positions on whether economic
circumstances are best explained by structural factors, such as
the organization of production, or by the free choices made by
economic actors, be these states, firms or individuals.
In practice, complex economic developments such as the
emergence of the global capitalist system are best explained
through the dynamic relationship between structures and agents
(O’Brien and Williams 2010). The most influential structuralist
explanation of the emergence of a global economy is the
Marxist argument that capitalism is an inherently universalist
economic system. In short, globalization is the natural and
inevitable consequence of the capitalist mode of production.
As Marx put it in the Grundrisse ([1857–58] 1971), the essence of
capitalism is to ‘pull down every local barrier to commerce’ and,
‘to capture the whole world as its market’. This occurs because the
underlying dynamic of the capitalist system is the accumulation of
capital, which, in turn, creates an irresistible desire to develop new
markets and an unquenchable thirst for new and cheaper
economic resources.
According to Marxists, just as imperialism in the late nineteenth
century had been fuelled by the desire to maintain profit levels, the
acceleration of globalization from the late twentieth century
onwards was a consequence of the end of the post-1945 ‘long
boom’ and the onset of a global recession in the 1970s. Although
liberals fiercely reject the critical Marxist view of capitalism, they
nevertheless accept that globalization is fuelled by an underlying
economic logic. In their case, this is linked not to the impulses of
a capitalist enterprise but, in essence, to the content of human
nature, specifically the innate and rational human desire for
economic betterment. In this view, the global economy is merely a
reflection of the fact that, regardless of their different cultures and
traditions, people everywhere have come to recognize that market
interaction is the best guarantee of material security and improved
living standards. This is particularly expressed in the doctrine of
free trade and the theory of competitive advantage.
As far as explaining when and how this inclination towards
‘globality’ started to be realized, liberals often emphasize the role
of technological innovation. Technology, needless to say, has long
played a role in facilitating transborder and even transworld
connections between peoples – from the introduction of the
telegraph (1857), to the telephone (1876) and the wireless (1895),
the development of the aeroplane (1903), television (1926) and the
liquid-fuelled rocket (1927), and the introduction of
containerization in sea transport (1960s and 1970s). However,
advances in information and communications technology (ICT) –
notable examples include the invention of optical fibres in the late
1960s, and the introduction of commercial silicone chips in 1971
and of personal computers (PCs) in 1981 – have played a
particularly important role in spurring progress towards
globalization, especially by facilitating the development of global
financial markets and the global administration of corporations. In
the view of so-called hyperglobalists, globalized economic and
cultural patterns, in effect, became inevitable once technologies
such as computerized financial trading, mobile phones and the
Internet became widely available. Nevertheless, the global economy
is not the creation of economic and technological forces alone;
political and ideological factors also played a crucial part. Realist
theorists, reviving the ideas of mercantilism, have countered the
liberal and Marxist idea that globalization represents the final
victory of economics over politics by emphasizing that in crucial
ways the global economy is a product of state policy and
institutional regulation. Far from having sidelined states,
globalization may, in certain respects, be a device through which
powerful states, and especially the USA, have achieved their
objectives.
For example, the USA was instrumental in both the creation of the
Bretton Woods system and its collapse. In this sense, globalization
may be a response to the relative decline of the US economy in
the 1970s and 1980s, the shift towards a more open and
‘liberalized’ trading system being a means of widening
opportunities for US-based transnational corporations, thereby
underpinning the health of the US economy. Indeed, much of this
was achieved through, rather than in spite of, the institutions of
economic governance that were constructed in the post-1945
period. The disproportionate influence that the USA exerts over the
World Bank and the IMF, and the role played by the USA in
transforming the General Agreement on Tariffs and Trade (GATT)
into the more strongly pro-free-trade World Trade Organization
(WTO), demonstrates the extent to which economic globalization
was structured in line with US priorities, laid out through the
Washington consensus.
Finally, these developments also have an ideological dimension.
Unlike, for example, nineteenth-century imperialism, twentieth-
and twenty-first-century globalization has not been brought
about through coercion and explicit political domination.
While liberals may argue that ‘globalization by consent’ –
reflected, for example, in an eagerness of states to join the WTO –
reflects an underlying recognition of mutual economic benefit,
critical theorists, who emphasize that the benefits of globalization
are unequally shared, argue that this consent is manufactured
through the spread of pro-market values and a culture of
consumerism and materialism. In this view, the progress of
economic globalization is underpinned by the advance of the
ideology of neoliberalism which preaches both that there is no
viable economic alternative to the global capitalist system and that
the system is equitable and brings benefit to all.
Does economic globalization promote prosperity and
opportunity for all?
FOR - The magic of the market. From an economic liberal
perspective, the market is the only reliable means of generating
wealth, the surest guarantee of prosperity and economic
opportunity. This is because the market, competition and the
profit motive provide incentives for work and enterprise and also
allocate resources to their most profitable use. From this
perspective, economic globalization, based on the transborder
expansion of market economics, is a way of ensuring that people
in all countries can benefit from the wider prosperity and expanded
opportunities that only capitalism can bring.
Everyone’s a winner. The great advantage of economic
globalization is that it is a game of winners and winners. Although
it makes the rich richer, it also makes the poor less poor. This
occurs because international trade allows countries to specialize
in the production of goods or services in which they have a
‘comparative advantage’, with other benefits accruing from the
economies of scale that specialization makes possible. Similarly,
transnational production is a force for good. TNCs, for instance,
spread wealth, widen employment opportunities and improve
access to modern technology in the developing world, helping to
explain why developing world governments are usually so keen to
attract inward investment. Economic globalization is thus the
most reliable means of reducing poverty.
Economic freedom promotes other freedoms. Economic
globalization does not just make societies richer. Rather, an open,
market-based economy also brings social and political benefits.
Social mobility increases as people are able to take advantage of
wider working, career and educational opportunities, and the
‘despotism’ of custom and tradition is weakened as individualism
and selfexpression are given wider rein. Economic globalization is
thus linked to democratization, the two processes coinciding very
clearly in the 1990s. This occurs because people who enjoy wider
economic and social opportunities soon demand greater
opportunities for political participation, particularly through the
introduction of multi-party elections.
AGAINST- Deepening poverty and inequality. 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. Critical theorists argue that the
winners are TNCs and industrially advanced states generally, but
particularly the USA, while the losers 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. Economic globalization is therefore a
form of neo-colonialism: it forces poor countries to open up their
markets and allow their resources to be plundered by rich states.
The ‘hollowing out’ of politics and democracy. Economic
globalization diminishes the influence of national governments
and therefore restricts public accountability. State policy is driven
instead by the need to attract inward investment and the pressures
generated by intensifying international competition. Integration
into the global economy therefore usually means tax reform,
deregulation and the scaling back of welfare. The alleged link
between global capitalism and democratization is also a myth.
Many states that have introduced market reforms and sought to
integrate into the global economy have remained authoritarian if
not dictatorial, conforming to the principles of state capitalism.
Corruptions of consumerist materialism. Even when economic
globalization has succeeded in making people richer, it is less clear
that it has improved, still less enriched, the quality of their lives.
This is because it promotes an ethic of consumerism and material
selfinterest. Cultural and social distinctiveness is lost as people
the world over consume the same goods, buy from the same stores
and enjoy similar working practices and living conditions. This is
particularly evident in the development of a ‘brand culture’, which
pollutes public and personal spaces in order to create a culture of
unthinking consumerism, even managing to absorb radical
challenges to its dominance by turning them into consumer
products (Klein 2001).