GLOBALIZATION SINCE THE 1970s
Definitions and Economic
Dimensions
Manfred B. Steger
Royal Melbourne
Institute of
Technology
Consultant on
globalization to U.S.
State Department
Globalization
• Marks: “the process by which markets,
politics, values, and environmental change
are integrated across the globe” (2007: 203)
• Steger: “the expansion and intensification
of social relations and consciousness across
world-time and world-space” (2009: 15)
Different waves or phases
Contemporary
Marks (Corrected): 3rd. Wave since
1945, 4th. Wave since 1991 (2007: 203205)
Steger: since early 1970s (2009: 36)
Different ideologies or projects
Different “imaginaries”
• Market globalism – “globalization from
above,” “corporate,” “neoliberal”
• Anti-globalization
• Justice globalism – “globalization from
below”
• Jihadist globalism
Multiple dimensions
•
•
•
•
economic (chapter 3)
political (chapter 4)
cultural (chapter 5)
ecological (chapter 6)
I: What are the main economic
characteristics of contemporary
globalization?
II: How have they come about, and why?
INCREASING CONNECTION
Increasing density, frequency, and speed of
cross-border flows of:
•
•
•
•
Money
Goods
People
Images & ideas
INCREASING POLARIZATION
Increasing:
•
•
•
•
Poverty and hunger
Inequality
Volatility and insecurity
Concentration of economic power
• TNCs
• IMF, World Bank, WTO
POVERTY:
WORSE THAN PREVIOUSLY THOUGHT
“There is a lot more poverty in the world than previously
thought. The World Bank reported in August [2008] that in
2005, there were 1.4 billion people living below the poverty
line — that is, living on less than $1.25 a day. That is more
than a quarter of the developing world’s population and 430
million more people living in extreme poverty than previously
estimated. The World Bank warned that the number is unlikely
to drop below one billion before 2015.”
New York Times, An Even Poorer World, Editorial, Sept. 2, 2008
INCREASING INEQUALITY
Share of global income
1965
1970
1980
1990
Richest 20%
Poorest 20%
69.5%
2.3%
70.0%
2.2%
75.4% 83.4%
1.7%
1.4%
1997
90.0%
1.0%
Source for 1965-90: Roberto P. Korzeniewicz & Timothy P. Moran, 1997, “World
Economic Trends in the Distribution of Income, 1965-1992.” American Journal of
Sociology 102 (4): 1000-1039; for ‘97, Wayne Elwood, 2001, No Nonsense Guide to
Globalization, p. 101.
INCREASING INEQUALITY
“The new numbers show global inequality to be significantly
greater than even the most pessimistic authors had thought.
Until the last month, global inequality, or difference in real
incomes between all individuals of the world, was estimated at
around 65 Gini points – with 100 denoting complete inequality
and 0 denoting total equality, with everybody’s income the same
– a level of inequality somewhat higher than that of South Africa.
But the new numbers show global inequality to be 70 Gini points
– a level of inequality never recorded anywhere.” (emphasis
added)
Branko Milanovic (Lead Economist in the World Bank research
group), Developing Countries Worse Off Than Once Thought,
YaleGlobal, February 11, 2008
INCREASING INEQUALITY IN THE UNITED STATES
“According to estimates by the economists Thomas Piketty and
Emmanuel Saez--confirmed by data from the Congressional
Budget Office--between 1973 and 2000 the average real income
of the bottom 90 percent of American taxpayers actually fell by 7
percent. Meanwhile, the income of the top 1 percent rose by 148
percent, the income of the top 0.1 percent rose by 343 percent
and the income of the top 0.01 percent rose 599 percent. (Those
numbers exclude capital gains, so they're not an artifact of the
stock-market bubble.) The distribution of income in the United
States has gone right back to Gilded Age levels of inequality.”
Paul Krugman: The Death of Horatio Alger, The Nation, Jan. 5, 2004
Average Income of Top 0.01% of US Families as Multiple of
Bottom 90% of Families
The Nation, June 30, 2008
II: How have these changes come about,
and why?
Double shift in capitalism since early 1970s:
• increasing reach
• First World and parts of Third World
• entire planet – North and South
• shifting character
• “controlled”
• “free-market” or “neoliberal”
Why have these
changes come about?
Crisis of controlled
capitalism, mid 60s +
Econ: falling rate of
profit
United States
Source: Doug Henwood, “The New
Economy,” Left Business Observer #106
• Dominant responses to crisis –
promotion of “market globalism”
• Lack of effective challenges until mid1990s
CONTROLLED CAPITALISM
NEOLIBERAL CAPITALISM
Mid-1940s to early 1970s
Early 1970s to present
I: EXPANDING THE REALMS OF PROFIT-MAKING
Profit via industry:
-- agric, manufacturing
More emphasis on profit via finance
-- lending to governments (debts)
-- lending to consumers
-- financial speculation
More emphasis on profit via services
-- e.g. restaurant chains, fast food outlets,
cafes
-- global expansion of food services
CONTROLLED CAPITALISM
NEOLIBERAL CAPITALISM
Mid-1940s to early 1970s
Early 1970s to present
II: CUTTING THE COSTS OF PRODUCTION
National production systems
Transnational production
Relocating industrial assembly
Going “offshore”
National labor recruitment
Relying more on immigrant labor
“In-house” production
Outsourcing & subcontracting
Stable employment
Flexible employment
Temporary, short-term
CONTROLLED CAPITALISM
NEOLIBERAL CAPITALISM
Mid-1940s to early 1970s
Early 1970s to present
III: EXPANDING CONSUMER DEMAND
Mass marketing in First World,
marketing to elites in Third World
Extending demand via global
marketing
Intensifying demand, e.g. by
speeding up fashion cycles
Extending reach of commercial
media, advertising
CONTROLLED CAPITALISM
NEOLIBERAL CAPITALISM
Mid-1940s to early 1970s
Early 1970s to present
IV: RESTRUCTURING GOVERNANCE -- late 1970s +
(Neoliberalism)
State as buffer between capital and labor
State supporting capital
Growing power of IMF, WB, WTO
Public ownership of key assets
Used in public interest
Privatization of key assets
Used to make private profit
State regulation of capitalist activities
Deregulation of capitalist activs.
CONTROLLED CAPITALISM
NEOLIBERAL CAPITALISM
Mid-1940s to early 1970s
Early 1970s to present
IV: RESTRUCTURING GOVERNANCE – late 1970s +
(Neoliberalism)
Social investment by state (& employers) Slashing social safety net
-- public administration of services
-- privatization of services
-- access by right
-- access via market
Compromises with organized labor
Increasing constraints on organized labor
Why have these developments brought
• Increasing connection
• Increasing polarization?