PowerPoint Presentation
prepared by
Terri Petkau, Mohawk College
CHAPTER NINETEEN
Globalization
Josée Johnston
INTRODUCTION
• Will examine:
 Globalization’s time-space compression and
the digital divide
 Top-down versus bottom-up globalization
 Effects of casino capitalism
Copyright © 2011 by Nelson Education Ltd
 Role of international financial institutions in
globalization
 Social and environmental consequences of
globalization*
19-3
GLOBALIZATION
DEFINED
• Globalization: A social, economic, and political
process that makes it easier for people, goods,
ideas, and capital to travel around the world at an
unprecedented pace
Copyright © 2011 by Nelson Education Ltd
• Has given rise to time-space compression:
 Diminished importance of geography and time lags
 Traced back at least to 1500s with beginning of
transoceanic European exploration
 Current phase not radically different in form but
radically different in pace (e.g., Internet usage)*
19-4
WORLD INTERNET USAGE
AND POPULATION
STATISTICS
Copyright © 2011 by Nelson Education Ltd
19-5
THE DIGITAL DIVIDE
• Despite rapid pace of space-time
compression, access to means of
communication that facilitates globalization
is unequal
Copyright © 2011 by Nelson Education Ltd
• Not all people and ideas have access to
channels of globalization like the Internet or
even the telephone
• Inequality of access is known as the digital
divide*
19-6
TIME-SPACE COMPRESSION
AND THE DIGITAL DIVIDE
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19-7
THE GLOBAL AND THE
ETHICAL
• While globalization is neither inherently good nor
bad, it does create conditions that affect human
lives and the environment
• Ethical debates about globalization are more
pronounced after terrorist attacks of Sep. 11/01
Copyright © 2011 by Nelson Education Ltd
 While no agreement over motivation of attacks,
critical questions raised about inequities of
global capitalism and role of United States in
global system*
19-8
TOP-DOWN
GLOBALIZATION
• Top-down globalization: Involves actions
of groups promoting globalized capitalism
and free trade
Copyright © 2011 by Nelson Education Ltd
• Has been dominated by neoliberal
economic policies
• Is strongly associated with United States
because of role in promoting neoliberal
policies domestically and internationally*
19-9
TOP-DOWN
GLOBALIZATION:
NEOLIBERAL POLICIES
• Neoliberal policies support:
Privatization of state resources
Dismantling of the welfare state
Copyright © 2011 by Nelson Education Ltd
Reduction in state regulation
Faith in power of the market
Profit motive in creating wealth*
19-10
BOTTOM-UP
GLOBALIZATION
• Bottom-up globalization: Describes actions of
groups that criticize injustices that result from
globalization processes
 Not wholesale rejection of globalization (e.g.,
supports global labour standards)
Copyright © 2011 by Nelson Education Ltd
• Advocates more democracy, environmental
protection, and social justice in global system
• Rejects neoliberal forms of globalization*
19-11
BOTTOM-UP
GLOBALIZATION
• Lack of consensus among supporters of bottomup globalization makes it more of broad
framework that encompasses multiple
perspectives, including:
 Moderate critiques of neoliberalism
Copyright © 2011 by Nelson Education Ltd
 Radical anti-capitalist positions
 Various forms of anarchism
 Armed peasant uprisings
 Fair trade coffee projects, etc.*
19-12
CAPTIALISTS GO GLOBAL:
RISE OF FINANCIAL CAPITAL
• In globalized economy, financial capital (money
used for investment, currency trading, etc.) has
grown much faster than production and trade
Copyright © 2011 by Nelson Education Ltd
• Rise of financial capital dubbed “casino
capitalism” since speculators – like casino
gamblers – can make or lose millions of dollars
in short periods
 Facilitated since 1980s by financial deregulation
 Tends to destabilize financial systems*
19-13
OVERCAPACITY AND
CENTRALIZATION
• Growth of casino capitalism is linked to declining
profits and global corporations producing more
than world’s consumers can afford to purchase
Copyright © 2011 by Nelson Education Ltd
• Concern that excess capacity accompanied by
poverty (that constrains consumption) may lead to
global recession
 To survive overcapacity and ruthless competition,
corporations have centralized, diversified, and
become “leaner and meaner”*
19-14
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FOREIGN
DIRECT
INVESTMENT
AND CROSSBORDER
MERGERS
AND
AQUISITIONS
19-15
GROWTH OF THE
CORPORATE GIANTS
• Corporations have become bigger and more
powerful than many national governments
• Corporate taxation has declined across all
developed countries in response to threats to
relocate production to more favourable locations
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 Forces governments to rely on taxes paid by less
mobile individuals and small businesses
 Reductions in corporate taxes between 2000 and
2010 will decrease Canadian government’s
revenues by $12.5 billion/year*
19-16
CORPORATE TAX RATES
WORLDWIDE
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19-17
CRITICS OF
CORPORATE POWER
• Examples of responses by bottom-up globalizers
to growth of global corporations:
 Emergence in 1990s of anti-sweatshop movement
in North America
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 Kraft boycott in 1994 to expose practices of parent
company, Philip Morris, accused of promoting
tobacco use to children
• Corporate responses to criticism include changing
name and joining corporate movement for
“corporate social responsibility”*
19-18
STATES IN A GLOBAL WORLD
Copyright © 2011 by Nelson Education Ltd
•
Critics of neoliberal policies question extent to
which states (main instrument of democratic
governance) are being replaced by “global
governance”
•
Is concern that real power belongs to unelected
officials of world’s three biggest international
financial institutions: the International Monetary
Fund (IMF), the World Bank, and World Trade
Organization (WTO)

Result is democratic deficit in which ordinary
citizens are disenfranchised from process of
governance*
19-19
1. INTERNATIONAL
MONETARY FUND
• Was established after World War II to
maintain stability of international monetary
system
• Since 1980s, has become gatekeeper of
the institutional financial system
Copyright © 2011 by Nelson Education Ltd
• IMF loans are conditional on countries
instituting neoliberal policies, or risk being
excluded from international lending circles
and unable to service nation’s debt*
19-20
STATES OF UNREST:
RESISTANCE TO IMF POLICIES IN
POOR COUNTRIES (1999–2000)
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19-21
2. WORLD BANK
• Also established after World War II
for purpose of making loans to
assist with postwar reconstruction
Copyright © 2011 by Nelson Education Ltd
• Most loans made to poor countries
and were tied to large development
projects, such as hydroelectric dams
• Like the IMF, also requires certain
structural adjustment criteria be
met*
19-22
3. WORLD TRADE
ORGANIZATION
• Emerged in 1995 out of postwar trade treaty
 Purpose: Lower trade barriers in order to increase
international trade and presumably, prosperity
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• Poor countries claim international trade benefits
rich and ignores unfair protection of corporate
agribusinesses at expense of farmers
 Has elicited huge protests at every major meeting
since 1999’s “Battle of Seattle” protest*
19-23
UNITED STATES AS
EMPIRE?
• Critics argue United States benefits the most in
global economy
• Is debate over whether United States is a
modern-day empire or a fading superpower
Copyright © 2011 by Nelson Education Ltd
• Uncontested though is United States high
degree of political, economic, and military power
that allows it to:
 Make unilateral foreign policy decisions
 Adopt unorthodox economic policies, and
 Maintain substantial military presence globally*
19-24
U.S. MILITARY BASES
WORLDWIDE
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19-25
GLOBAL INEQUALITY
Copyright © 2011 by Nelson Education Ltd
•
Asymmetries among world’s countries today has
given rise to new terminological distinctions:
i.
Division between “global north” and “global
south,” or between developed and developing
countries
ii.
Division between “majority world,” which is
generally poor and lacks basic social goods, and
“minority world,” which is generally welleducated and has access to good jobs and
public goods
iii. Marginalized populations and regions that are
not competitive in global economy sometimes
referred to as the “fourth world”*
19-26
THE GLOBAL CONSUMER
• Global commodity chain: Worldwide network of
labour and production processes, the end result
of which is a finished commodity
 Chains are not readily transparent
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• Consumption plays critical role and drives
growth in the global economy
 Given saturation of North American and
European markets, consumerism is being
exported to world’s middle and working classes*
19-27
CULTURE AS
COMMODITY?
• Globalized consumerism treats culture (e.g.,
films, magazines, books, music) as a commodity
Copyright © 2011 by Nelson Education Ltd
• Biggest United States export consists of massproduced products of popular culture
 United States used WTO to successfully thwart
attempts by countries (including Canada) to
protect their cultural products through subsidies
and quotas
• But is a growing movement to resist this
commodification of culture*
19-28
CULTURAL IMPERIALISM
• Global spread of consumerism criticized as form
of cultural imperialism that exports Western way
of life throughout the world
 Often is associated with liberal values around
sexuality, feminism, and secularism
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• Is concern about U.S. cultural dominance and
resulting loss of global diversity
 However, is some cultural competition from Arab
television news station, al-Jazeera, and Indian
movie industry dubbed Bollywood*
19-29
U.S. MARKET SHARE OF FILM
INDUSTRY FOR SELECTED
COUNTRIES, 2001
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19-30
GLOBAL BRAND
BACKLASH
• Visible signs of antagonism toward Westernstyle consumerism exist through:
 Backlash against corporate brand names, such
as Coke, Barbie, and Nike
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 Street protests worldwide against McDonald’s,
the Gap, and Starbuck’s
• Extent to which anti-consumer activism disrupts
global flows is unclear*
19-31
CONSUMER ALTERNATIVES:
FAIR TRADE
• Bottom-up globalizers seek to disrupt global
commodity chains by focusing on
developing consumer products that are:
 Environmentally sustainable, and
 Produced by well-paid workers
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• Is reflected in the fair-trade movement that
argues producers should be paid fair price
rather than free market price
 Movement has paid special attention to
coffee*
19-32
FAIR TRADE AND FREE TRADE
COFFEE PRICES, 1989–2006
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19-33
ECOLOGICAL
CONSEQUENCES OF
CONSUMERISM
• Global consumerism criticized for being based on
Western high-consumption lifestyle that is
ecologically unsustainable:
 20% of world’s population living in industrialized
developed world consume two-thirds of world’s
resources and create 75% of all waste and
pollution
Copyright © 2011 by Nelson Education Ltd
• Challenge of promoting sustainable consumption in
midst of:
 Corporate push to expand global consumption
 Desire of consumer class to maximize individual
consumption possibilities*
19-34
GLOBAL WORKERS
• Are relatively immobile and politically fragmented
• Unions struggle to protect these workers but are
hindered by own organization; i.e., are organized
primarily within rather than across states
 Also, most unions primarily organized to protect
domestic workers and wages against “threat” of
foreign workers
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• Many global workers work largely in nonunionized
underregulated sectors (e.g., nannies, agricultural
workers), leaving them vulnerable to exploitation*
19-35
WAGE LABOUR AND
WAGE INEQUALITY
• Concept of wage labour is new to sizable segment
of world’s population
Copyright © 2011 by Nelson Education Ltd
• As use of wage labour spreads globally, so does
segmentation of labour markets:
 Women, people of colour, rural workers, and
people from developing world in general are
overrepresented at bottom of wage hierarchy
• Is tremendous disparity when comparing ordinary
workers’ pay with salaries of Chief Executive
Officers (CEOs)*
19-36
CEO’S AVERAGE PAY,
1990-2005
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19-37
THE SEARCH FOR
CHEAP LABOUR
• In less developed countries, states have set up
export processing zones (EPZ) where
government provides special incentives for
corporations to help promote export-oriented
manufacturing
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• Have witnessed low-cost manufacturing leave
Mexico’s maquiladora (most famous EPZ in
North America) and move to Asia where labour
is even cheaper
• Wage competition pits workers against one
another in a “race to the bottom”*
19-38
GLOBAL ECOLOGY:
GLOBAL FOOD SUPPLY
• Larger global ecology connects people, resources,
and commodities
Copyright © 2011 by Nelson Education Ltd
• Global agriculture is accompanied by serious
environmental costs, including:
 Increased carbon emissions (and its attendant
climate change) from increased fossil fuel
consumption needed for:
 Industrial methods of food production processes
 Travel required from production to consumption
 Packaging of commodities
 Intensive livestock operations*
19-39
SOIL, WATER, AND
GENETIC ENGINEERING
• Industrial methods of food production
also associated with following global
environmental problems:
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Deforestation
Soil erosion
Declining water tables*
19-40
GLOBAL SOIL
DEGRADATION
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19-41
GLOBAL HUNGER AMIDST
PLENTY
• World grows enough grain to provide nearly
3000 calories per person, yet number of
undernourished people globally has risen since
early 1980s
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• Per capita grain production – a general measure
of global food security – has been falling since
1984, while overall grain production was flat
between 1996 and 2003
• Concerns about world grain production are
intensified by projected population growth,
environmental degradation, and increased grain
prices*
19-42
THINK GLOBALLY, EAT
LOCALLY
• Alternative to current system of global
agriculture found in growing movement to eat
foods locally grown, and produced with organic
farming techniques
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• Move to promote organic, locally grown food has
spread to India and Africa
 Paradox between peasant and farmer
movements that encourage local food
consumption and defend local agricultural
ecosystems but use global networks to fight
battles**
19-43