Topic 2
The Formation
of the Global System
Themes:
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The changing historical form of
political globalization
The growth of economic
globalization
The development of the
transnational organizations
Questions:
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What is a modern nation-state?
What are the transnational political
processes?
What are the principles of economic
globalization?
What is the history of the development
of the global organization
What is the implication of studying the
global system
Modern Nation-state
and World Order
Rise of the west: the growth of a European worldview
effective enough to lend to the economic domination of
the globe
Since the Second World War the modern nation-state has
become the principal type of political rule across the
globe.
The modern nation-states had a particular form- liberal
or representative democracy, bureaucratic administration
and monopoly of legitimate means of violence.
Modern Nation-state and World
Order (Cont’)
•
In the arena of national politics, liberal democracy is
featured by a cluster of rules and institutions:
•
•
•
•
•
governing by elected representatives;
the right to vote for all adults in elections
the right to run for public office
the right for each citizen to freedom of expression and
association
the accessible sources of information.
Dynamics: The enormous flows of people national boundaries
generate the problem of migration, immigration and creation of
different identities. e.g. disapora, refuguees, refugees, exiles and
nomads
Modern Nation-state and World
Order (Cont’)
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liberal democracy became
the dominant type of
modern nation-state in
19th and 20th century.
There are three “waves” of
democratization marking
out the reach of liberal
democracy over time:
• from the early 19th
century to the mid-1920s;
• from Second World War to
the early 1960s;
• from 1974 until now.
•
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by 1995, nearly 75% of all
countries had established
and adopted formal
guarantees of political and
civil rights.
modern nation-state
system: the development
of liberal democracy was
taken place within a
bounded political space.
States are institutions,
nations are cross-class
collectivities which share a
sense of identity and
collective political fate
The Emergence of Global Politics
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Today the global transformation of
politics had greatly changed the
nation-state system.
A new kind of global order marked
by new patterns of power, hierarchy
and unevenness became dominant.
World Order and Military
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1945-89: Cold War ideology
--NATO (USA)
--Warsaw (USSR)
--Arab-Islamic (Middle East)
1989: collapse of Soviet Union
--Rise of Japan
--Rise of Pacific Rim (East Asian Countries)
--Development of EU
2000: Industrialized Warfare
--Four politico-economic ‘Core’ : North America, Europe, East
Asia and Middle East
The Emergence of Global Politics
(Cont’)
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Global politics is a term, using to
capture:
“the stretching of political relations
across space and time, and the extension
of political power and activity across the
boundaries of modern nation-state.”
It challenges the traditional distinctions
between domestic/international,
inside/outside, territorial/non-territorial
politics.
The Emergence of Global Politics
(Cont’)
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The state is confronted by a great number of
intergovernmental organization (IGOs), international
agencies and quasi-supranational institutions, like the
European Union or World Bank.
Transnational bodies, such as multinational corporations,
transnational pressure groups, transnational professional
association, international social movements also participate
intensively in global politics.
In the global arena, there emerged a “polyarchic mixed
actor system” in which political authority and sources of
political action are widely diffused.
The concept of global governance:
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“refers not only to the formal state
institutions and organizations, but also all
organizations and pressure groups- from
MNCs, transnational social movement to
non-governmental organizations (NGOs)
which pursue goals and objectives for
transnational rule and authority.”
the United Nations System, the World
Trade Organization, World Health
Organization, Greenpeace (the
globalization actors) are the central
components of global governance.
rapid expansion of transnational links and
the demand for international governance to
deal with collective policy problems.
In 1997 G7 summit met in London to
discuss the problem of unemployment.
This a symbolic importance at the time in
bring unemployment to the top of
international political agenda.
Responses to the
ideology of globalization
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Far from the end of ideology:
Religious fundamentalism (911 trategeries)
Extreme Right (Market fundamentalist)
Extreme Left (Marxism)
Others: globalization from below and
beyond
This led to significant changes in the decisionmaking structure of world politics.
New forms of multilateral and multinational politics
have been established involving governments.
In 1909 there were 37 IGOs and 176 INGOs, while
in 1996 there are nearly 260 IGOs and 5472
INGOs.
State thus appears not so much as a single actor
on the world stage but as a multiplicity of actors in
many different forums (refer to supplementary).
Global Social Movements
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The extension of the concept of human
rights, the development of global civil
society, the recognition of worldwide
problems and social protest against
governments or transnational corporations
Spread of global social movements:
friends of Earth, the Greenpeace, Feminist
movements and Peace Movement
Conclusion:
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Globalization of politics is transforming the
traditional forms of sovereign statehood and
reordering international political relations.
But these transformative processes are neither
historically inevitable nor by any means fully
secure.
As a result, the contemporary world order is best
understood as a highly complex and contested
process.
Economic Globalization
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After industrial Revolution, states were
independent politically but interdependent
economically.
An integrated system based on international
division of labor, like Taylor’s scientific
management and Ford’s assembly line
manufacturing
Development of TNC (Transnational corporation),
e.g. the use of credit card and rise of fast food
Creation of weight-ness economy: information
trading
Economic Globalization
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There is a corresponding transnationalization of economies,
civil societies and communities.
This transnationalization is most conspicuous in relation to
the globalization of finance and production and the
development of MNCs. Eg. 1973, 239 national banks
established the SWIFT (standard world interbank and
financial transactions); by 1989 SWIFT had 1,000 members
in 51 states.
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Dual Effect: involving of people as consumers and producers
whilst excluding people from substantive participation in the
global economy
The historical development of the spread of economic
globalization (see supplement)
Consumption and Economy
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The outcome of mass production is mass
consumption—American Dream
The direct advertising of products and the
transmission of idealised images of
consumer culture have been carried out
through media
The 20th Century witnessed the
development of global communications
and media networks, especially the
electronic revolution and ‘informationsuper highway and the cyberworld
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Three principal ways of Economic Globalization:
• The emergence of a global market discipline in contrast
with a mere global market-place;
• The economic activities are being re-conceptualized and
re-organized:
•
a) “real-time” activities where distance and location
are no longer relevant as a determinant of economic
operations,
•
b) “material” activities where there is still some
‘friction of space’ that limits choice of location.
• 3. Money itself has become a “real-time” resource.
International mobility of finance is qualitatively different
from the previous eras.
A Global Market Discipline
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A market-place: international division of
labor and an international market
exchange between different goods and
services that are produced in different
nations.
This is a pattern of inter-product trade.
(countries that specialized in the export of
one type of product would exchange that
product for other types that they did not
produce themselves.)
A Global Market Discipline
(Cont’)
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A global market discipline: a pattern of
intra-product trade.
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At first, multinational companies adopted
simple integration strategies.
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They set up foreign affiliates producing
the same standardized commodities.
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Next, multinational companies adopted
complex integration strategies.
A Global Market Discipline
(Cont’)
They turned their fragmented production systems
into regionally or globally integrated production
networks.
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In this way, multinational companies often farmed
out different parts of the production process to
different affiliates in different national locations.
Each subsidiary took part in the production
process, but not one single affiliate produced the
whole product from beginning to end.
In the early 1970s intra-product or intra-firm
trade was accounted for 20% of world trade, by
the early 1990s that share was around one-third.
Flexible Accumulation Through Global Webs
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Relocation of factories and companies almost anywhere in
the globe due to the decreasing cost of transporting
standard products and communicating information.
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The fusion of computer technology with telecommunications
makes this possible.
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Firms relocate an ever-widening range of operations and
functions to wherever low cost of production.
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Production capacity viewed as commodity, something that
can be instantly bought and sold on the market.
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This is flexible accumulation through global webs. eg, Nike
footwear company.
Global Financial “Deepening”
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The growth of the financial or "symbol"
economy outpaced the growth of trade
and investment.
Total annual value of transactions in the
world's financial markets is now twice the
total value of world production.
As Peter Drucker said, "90% or more of
the transnational economy's financial
transactions do not serve what economists
would consider an economic function."
Global Financial “Deepening”
(Cont’)
•
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Money is increasingly being made out of
the circulation of money, regardless of
traditional restrictions of space and time.
The financial revolution since the 1980s
has been characterized by financial
deregulation on the one hand with
information technology on the other.
This led to a rapid increase in international
mobility of capital.
Global Financial “Deepening” (Cont’)
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This mobility refers not only to the
speed and freedom with which
money can now move across
frontiers.
It refers to the way it is being
disconnected from social
relationships in which money and
wealth were previously embedded.
5 Ideological Claims of Globalism
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G is about liberalization and global
integration of markets
G is inevitable and irreversible
No one is in charge of Globalization
G benefits everyone
G furthers the spread of democracy
in the world
To conclude:
rethinking globalization
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Globalization today
drives cross-border
economic integration
to new levels of
intensity.
But globalization is a
process, not an endstate affairs.
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There is no such thing
as a global economy
or a global society yet.
On what direction the
process of
globalization will go, it
really depends on
whether and how we
resist the process or
go along with it.