Globalization
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.
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.
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.
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.
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.
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.
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.
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;
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;
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.
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.
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.
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.’
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.
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.
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.”
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.
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.
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.
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.
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 profound set of economic, cultural, technological
and political shifts that have intensified since the
1980s.
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.
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.
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.
National economies are 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.
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.
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.
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.
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.
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.
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.
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.
A third form of instability is the alleged tendency of
globalization towards environmental crisis and
destruction.
Ecosocialists explain this by reference to capitalism's
blind concern with profit and its insensitivity towards
ecological issues.
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.
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.
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.
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.
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.
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.
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.
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.
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.
The major criteria remain geographical contiguity,
interaction, and a subjective perception of belonging to
a distinctive community and having a collective
regional identity.
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.
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.
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.
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.
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.
Regionalization may merely be a step on the road to
globalization: the growth of economic interdependence is
likely, initially, to have a regional character, regional
organizations being able to manage the relationship between
nation-states and global forces.
On the other hand, regionalization may be a counter-global
trend, a form of resistance to globalization. The most
ominous historical precedent for the latter interpretation
was the erosion and destruction of the open international
economic order in the late nineteenth century through the
spread of economic nationalism.
Growing protectionism and economic rivalry
contributed significantly to the intensifying
international tensions that eventually led to the First
World War.
As the nation is no longer an effective means for
protecting or advancing economic or other interests,
this role may in future fall to the region.
Regionalization has been fuelled by strategic,
economic and, possibly, cultural factors.
Regional defense organizations emerged in the early post1945 period and gave expression to the new strategic
tensions that were generated by the Cold War.
NATO and the Warsaw Pact were the most prominent such
organizations, although other bodies, such as the South-East
Asian Treaty Organization (SEATO), were also formed.
Nevertheless, until the collapse of communism in 1989-91,
NATO and the Warsaw Pact did little more than ensure a
military standoff between the US dominated West and the
Soviet-dominated East.
The end of the Cold War has led to profound changes in the role
and purpose of NATO, as the sole remaining regional defense
organization of any significance. In the absence of the Soviet
threat that it was set up to contain, NATO appears to be simply
redundant.
Nevertheless, the borders of NATO expanded, with the Czech
Republic, Hungaria and Poland joining in 1999 and Baltic states,
Slovenia, Slovakia, Bulgaria and Romania joining in 2004.
Moreover, its security-protecting role seems to have been replaced
by an emphasis upon humanitarian intervention and
peacekeeping, as in Bosnia and Kosovo in the 1990s. In 2003,
NATO took its operations outside Europe for the first time in
Afghanistan.
However, the most significant impetus towards
international regionalization is economic
regionalization. International trade can both foster a
harmonization of interests and provoke deep
suspicions and resentment.
Although countries always wish to penetrate the
markets of other countries, they have an equally strong
incentive to protect their own markets from foreign
competition.
The cause of free trade has traditionally been embraced by
economically dominant powers, which wished to encourage
weaker states to open up their markets while they themselves had
little to fear from foreign competition.
This, nevertheless, can fuel protectionism, as less developed states
seek to protect themselves from what they perceive as unfair
competition: for instance, the rise of economic nationalism in late
nineteenth-century Europe was in part a reaction against the UK's
industrial preeminence.
If national protectionism, or 'protectionism in one country', is no
longer regarded as a viable option, regionally based economic
cooperation is increasingly attractive as a means of both
facilitating international trade and providing protection against
intensifying global competition.
Some regional trading blocs, such as the EEC, developed in the
aftermath of the Second World War, but most of them have come
into existence since 1990 and have been a response to economic
globalization, notable examples including NAFTA, APEC, and the
proposed FTAA.
The implications of economic regionalization clearly depend on
whether such trading blocs become inward-looking 'economic
fortresses' that resist globalization, or develop into outward-looking
bodies that help to manage the integration of their regions into
the global economy while also fostering internal cooperation.
This will also be influenced by the success of the institutions of
global economic governance, especially the WTO and the IMF, in
promoting trade liberalization.
The European Union
The 'European idea' is not a new concept.
Before the Reformation in the sixteenth century, common
allegiance to Rome invested the Papacy with supranational
authority over much of Europe.
Even after the European state system came into existence,
thinkers championed the cause of European cooperation,
and in some cases advocated the establishment of Europewide political institutions.
However, until the second half of the twentieth century
these aspirations were seen as an utopia.
Since the Second World War, Europe has undergone a
process of integration, aimed at the creation of what
Winston Churchill in 1946 called a 'United States of
Europe'.
Indeed, it is sometimes suggested that European
integration provides a model of political organization
that will eventually be accepted worldwide as the
deficiencies of the nation-state become increasingly
apparent.
The European Coal and Steel Community was
founded in 1952 on the initiative of Jean Monnet.
Under the Treaty of Rome in 1957, the European
Economic Community came into existence.
The ECSC, EEC and Euratom were merged in 1967
and then it was called as the European Community.
The Original Six (France, Germany, Italy, the
Netherlands, Belgium and Luxemburg) was expanded
in 1973 with the inclusion of the UK, Ireland and
Denmark.
In 1986 Single European Act was signed. This
proposed an unrestricted flow of goods, services and
people throughout Europe.
The Treaty of European Union became effective in
1993 and the EC became the European Union. This
committed the EU’s 15 members (with the inclusion of
Greece, Portugal, Spain, Austria, Finland and Sweden)
to both political and monetary union. As a result, a
single European currency, the Euro, took place in
1999, with notes and coins being circulated in 2002.
Bulgaria and Romania joined the Union in 2007.
Negotiations are still continued with Croatia,
Macedonia and Turkey. Albania, Bosnia, Montenegro
and Serbia are called as the potential candidate
countries.
It’s very hard to categorize EU as a political
organization. It’s not a simply intergovernmental
organization or a confederation of independent states.
The sovereignty of member states was transferred.
The EU law is binding on all member states and that
the power of certain EU bodies has expanded at the
expense of national governments. The result is a
political body that has both intergovernmental and
supranational features.
EU is the world’s most advanced experiment in
regional integration.
However, the EU is also confronted by a number of
problems such as its Common Agricultural Policy and
enlargement process.