GLOBALIZATION

 Definition

The act or process of globalizing : the state of being globalized; especially : the development of an increasingly integrated global economy marked especially by free trade, free flow of capital, and the tapping of cheaper foreign labor markets

Process by which the experience of everyday life, marked by the diffusion of commodities and ideas, is becoming standardized around the world.

Anthony Giddens (1990: 64) has described globalization as 'the intensification of worldwide social relations which link distant localities in such a way that local happenings are shaped by events occurring many miles away and vice versa'.

Globalization' has become a particularly fashionable way to analyze changes in the international economy and in world politics. Advances in technology and modern communications are said to have unleashed new contacts and interaction among peoples, social movements, transnational corporations, and governments. The result is a set of processes which have affected national and international politics in an extraordinary way.

Globalization many argue is really not so new. In order to understand what is new about globalization, we need carefully to distinguish two aspects of change: a quantitative dimension and a qualitative one.

Quantitatively

Quantitatively, globalization refers to an increase in trade, capital movements, investments and people across borders. Some refer to these new forces as `transnationalism' and `interdependence'. Yet as many sceptics point out, there is little that is new here.

Qualitatively

So what is new about globalization at the end of the twentieth century? The answer lies in qualitative changes in international politics i.e. changes in the way people and groups think and identify themselves, and changes in the way states, firms, and other actors perceive and pursue their interests.

Factors that have contributed to globalization

Factors that have contributed to globalization include

·       increasingly sophisticated communications and transportation technologies and services,

·       mass migration and the movement of peoples,

·       a level of economic activity that has outgrown national markets through industrial combinations and commercial groupings that cross national frontiers,

·       international agreements that reduce the cost of doing business in foreign countries.

Globalization offers huge potential profits to companies and nations but has been complicated by widely differing expectations, standards of living, cultures and values, and legal systems as well as unexpected global cause-and-effect linkages.

Core elements of `globalization

1.     The expansion of markets

A first core aspect of globalization is the transformation of global economic activity. Technological change and government deregulation have permitted the establishment of transnational networks in production, trade and finance. Some have gone so far as to call this the new `border-less world.

The new `production' network describes firms and multinational enterprises (MNEs) who use advanced means of communication, and new, flexible techniques of production so as to spread their activities across the globe.

In trade, globalization refers to the fact that the quantity and speed of goods and services traded across the globe has increased, and so too the geographical spread of participants, the strength and depth of institutions which facilitate trade, and the impact of trade on domestic economic arrangements.

In finance, globalization has been facilitated by new financial instruments which permit a wider range of services to be bought and sold across the world economy. Overall financial globalization is characterized by an increasing speed, quantity, geographical spread, and impact of international finance - the creation of what can rightly be called a global financial system. One consequence is that national currencies - for so long thought of as a corner-stone of sovereignty - have become deterritorialized leaving governments to compete in a global marketplace of currencies for control and usage of their currency.

It is important to recall that technology alone has not driven this expansion in global markets. Rather technological advances, together with governments' policies have produced these effects.

2.      The transformation of politics

A second element of globalization is political. Some argue that a new `global politics' is emerging which, like the `border-less world economy', is characterized by a global political order in which states' political boundaries become much less important. In the old system, sovereign states interacted with each other according to rules which they - as states - agreed upon. In the new interconnected global political order, political power and political activity are said to extend across the boundaries of nation-states.

Global issues' have emerged which require states to coordinate policy-making at levels above the nation-state. These issues include human rights, environmental degradation, and nuclear safety. Furthermore, the same technologies and policies which make new kinds of economic activity possible also facilitate the spread of transnational crime, weapons, drugs and illegal immigrants. All of these issues are such that no one state can effectively regulate on its own.

The globalization of politics describes a shift in the locus of decision-making up to either the regional or the international level. At the regional level, the past decade has seen a flourishing of regional arrangements, in trade for example; virtually every country in the world is now part of some regional trade arrangement. At the international level, increasing `institutionalization' has taken place, with an increase not just in the number of institutions, but also in the depth and breadth of issues they are being required to address. These shifts in decision-making do not necessarily imply an erosion of existing state power and authority. Rather, what has changed is the way in which states use their power and authority - with states now choosing to participate in regimes in which they make decisions in coordination or cooperation with other states.

Modern communications systems mean that national (or even sub-national) decision-makers can interact horizontally with officials in other countries. Where previously international linkages were made either at the top or through diplomatic channels, officials may now communicate directly across borders with one another, across an ever-wider range of issues. It is not only governments that are interacting horizontally. A multitude of non-state actors are interacting in a similar way, including multinational enterprises, non-governmental organizations, and sub-national groups such as trade unions or indigenous minorities. The increasing linkages among these groups have strengthened their international presence, making these non-state actors another aspect of globalized politics

3.      The emergence of new social and political movements

Globalization affects more than markets and states. It is altering the lives of people across the globe and affecting their culture and values. New communications systems mean that media, music, books, international ideas, and values can all disseminated in a global and virtually instantaneous manner. This is producing what some describe as a `global culture'.

One of the ramifications of this is the emergence of what could be described as a `global civil society'. What is new are social movements that can emerge with much less regard for territory. Territorial location, territorial distance and territorial borders have lost their determining influence.

Common to all elements of globalization is the sense that activities previously undertaken within national boundaries can be undertaken globally or regionally - to some extent `deterritorialized'.

Impact on world economy and politics

The impact of globalization is the source of endless debate. In particular, debates revolve around competing interpretations of the impact of globalization on investment, capital flows, jobs, profits, and welfare.

i.          One major assumption is that globalization reduces the capacity of states to promote welfare objectives within their own boundaries: The technological advances driving globalization, it is often argued, enable multinational enterprises to behave in a more efficiency-maximizing way. This means they can respond faster and more radically to changes in wage and tax costs. In turn, this compels governments to deregulate in their competition for investment - a competition described by some as a `race to the bottom' as governments dismantle regulatory structures which keep wages and taxes high.Some say that this deregulation results primarily in greater `allocative efficiency', less government, lower costs, higher profits and greater job opportunities. Others point to the accompanying disadvantages of lower wages, declining welfare standards, and increasing inequality.

ii.          Firms who previously relied on government investment (e.g. where governments wished to spread economic growth more evenly across a country, or to protect jobs through subsidizing `national producers') are likely to lose out over time, for whilst not all government intervention is being reduced by globalization, this kind of investment certainly is.

iii.          In the workforce, it is widely thought that workers who rely upon government-set minimum wages or working conditions will lose out since such government policies become anachronistic in a new era of global competition. Many workers do lose out - at least in the short-term - from globalization. Even the most optimistic accounts of economic integration and transformation accept that workers who are not mobile, or whose skills are not transferable, may suffer in a globalizing world economy. For example, in industrialized countries the evidence suggests that low-skilled workers are already paying the price.

iv.          Globalization has also affected politics among states, creating winners and losers at the international level. In one study, the result is described as a world comprising a `zone of peace' and a `zone of turmoil'.

v.          At the international level, globalization provides some smaller states with new opportunities, but also highlights the existing power and advantages of large and powerful states.

vi.          Globalization involves economic, political and social processes, all of which play into the emergence of new winners and losers. Increased communications technology, travel and contact present new opportunities for many seeking emancipation or positive change.

vii.          A central concern about globalization is that it will exacerbate inequalities so as to render groups within developing countries, and groups of countries themselves, both poorer economically, and politically less able to influence the rules of the game.

viii.          Globalization it is argued is eroding the sovereignty and autonomy of the state. Since `the state' is the core unit of analysis in much political science and most international relations, this concern is crucial. On the one hand, `the borderless world economy', `global politics', and `global civil society' all describe a world in which the sovereignty of the state and the capacities of any government are being eroded.

Clearly, the impact of globalization will depend in most cases on the strength and adaptability of the state, not just as a locus of power and authority, but also of representation and democracy. The impact of globalization varies, and one particular determinant is state strength. All states are affected by globalization insofar as it alters their possibilities and opportunities. However, a much greater erosion of autonomy is occurring in respect of weak states than strong. `Strong' states, in this context, have a capacity to influence the rules of the international economy, and/or a capacity to control their own integration into the world economy. The Unites States and other industrialized countries, for example, have played a crucial role in shaping globalization.

Globalization imposes limits even on strong states. A key example is the way international capital markets can exact a swift and devastating punishment on any government running a deficit. `Strong' states are also those which can control - to some degree - the nature and speed of their integration into the world economy. For example, some states have managed to slow down or to control the speed and terms on which they have integrated in world capital markets. Often these states are also ferocious guardians of their independence in foreign policy, human rights and security issues, as well as their own domestic political arrangements. Such relatively `strong' states include not just industrialized countries such as France but also a wide variety of developing countries from the likes of Brazil to Malaysia, China, Iraq, and Iran.

By contrast, weak states suffer from a lack of choice in their international economic relations. They have little or no influence in the creation and enforcement of rules in the system and they have exercised little control over their own integration into the world economy. Rather, in the aftermath of the debt crisis of the 1980s, many weak states opened up their economies, liberalized and deregulated, more as a result of the `coercive liberalization' mentioned above, than of democratic policy choice.

Weak states have been further weakened by an inability to deal with the political and social turmoil and rebellion resulting from globalization. Often economic liberalization and deregulation have been accompanied by a reduction in the role of the state - in both the economy and society, in the developing world. In developing countries where governments were often weak to begin with, `rolling back the state' in order to enhance global competitiveness has left a vacuum of political authority.