Globalization

Globalization
For some.......
it is myriad forms of connectivity linking global to local, the West to the
East, and the North to the South.

Another view......
It is a techno-economic juggernaut spreading the logic of capitalism and
Western values by eradicating local traditions and cultures.

Globalization is a more contested than an accepted

concept.
Globalization is a very uneven process: people in various
parts of the world are influenced/affected differently.
Different disciplines define differently:
Anthony Giddens: Intensification of social relations worldwide
David Held: Exercise of power
Economists: expansion of market and economic services

Interpretations of Globalization

The Economic Dimension of

Globalization
1. Emergence of the global economic order
dominated by USA & UK
Created a stable money exchange system: the value of
the currency of each country was attached to the fixed
gold value of the USD
Establishment of international economic organizations
IMF: to administer international monetary system
World Bank: to provide loans for Europes post-war reconstructions
GATT: Enforcing multi-trade agreements

This era is called as control capitalism

1970s faced severe economic crisis
Moved towards control capitalism to liberation: USA
abandoned gold-based fixed rate system.

2. Internationalization of trade and finance

Removal of trade barriers (free trade)
The idea is that free trade would increase global wealth
and enhance consumer choice.
Integration of market would promote technological
innovations, which would benefit people.
There are evidences that some nations increased their
productivity as a result of free trade practices.
A World Bank report shows that first time in the history,
during 2005-2008, the proportion of people living below
$1.25 per day in every developing region went down.
MDG of reducing poverty by half was achieved before
the deadline (2015).

What happened to Global South:

Total debt in developing countries
In 1970: $70.2 billion
In 1980: $569 billion
In 2013: $ 6857 billion

Cost of the war in Iraq and Afghanistan (2001-12): $1.35 trillion

Cost required to provide renewable wind energy to 1 billion HHs: $1.2
trillion
% of Lebanons GDP spent on debt servicing: 19
% of Lebanons GDP spent on health: 4
Mozambiques gross debt in 2012: $6.18 billion
Googles net profit in 2011: $9.74 billion
Gap between poor and rich (income inequality) is widening at a fairly
rapid pace.
Top wealthiest 20% of the global population controls 64-80% of the total
global income
The poorest 20% population controls 1 3 % of the total global income.

3. Global Financial Crisis:

1990s: Countries ran out of gold reserve; lack of FDI
1997-98 (East Asian):
Overestimation of stock and real estate market;
Prices inflated more than real value;
Market withdrew $105 billion from their economies

2007-08: American real estate

4. The Power of Transnational Corporations (TNCs):

Increased from 7000 in 1970 to 80000 in 2012.
Top 200 TNCs account for half of the worlds industrial
output
Most of them are headquartered in US, Europe, Mexico,
Japan, South Korea & China.
In 2009, a list of 100 GDPs and Corporations revenue was
furnished: 44 worlds largest economies were corporations,
56 were countries.
For example: Toyota Motors revenue was greater than Egypt
GDP; Phillips Oil was greater than Malaysia, BP Oil UK was
greater than SA.
5. Enhanced role of international financial institutions:
WTO, WB, IMF

Theories of Global Capitalism

Leslie Sklair: the theory of global system with transnational
practices at its core, originate with non-state actors and cross-state
borders
Transnational practices are involved at three levels:
Level/Activity
Agent/s
Institution
Economic Transnational capital
Transnational Corporations
Political
Transnational capitalist classCapitalist Class
Cultural
Transnational cultural elites
Culture of
consumerism
Transnational corporations bring together other social groups who
seeks their interests in global capitalism.
State has no role to play in this process.

Theories of Global Capitalism..

Global Capitalism involves three different layers (William I. Robinson):
Transnational production
Transnational capitalists
Transnational state

In earlier times, economic relations among nations were operated

through the trade of products.
In the world of global capitalism, one country has access to production
process of another.
This shapes a global system of production and accumulation: by
breaking national circuits of production and integrating into a global
circuit.
Transnational capitalist class takes shape around global circuit. [Just
like local and national elites]
Transnational institutions [international political and planning agenciesEU, WEF] work with national governments
These institutions work as intermediary actors who facilitate the
process of global capitalism

Political dimension of globalization

Two questions to be answered:
1. Has the power of nation-state been curtailed by the
massive flow of capital?

Trade liberalization and deregulation have constrained the states

space in the Global South.

Global market undermined the capacity of governments to impose

domestic standards.

However, nation-state has not become a bystander.

States still control sectors like taxation, financial transactions,

infrastructure, defense, population movement and ICT.

Post-9/11, strict security measures taken by many states

hampered global business drastically.

Global market functions on consent of the state than confrontation

Nation-state still remains significant.

2. Are we witnessing the emergence of a new global

governance structure?

Sub-state and municipal level cooperation

Regional level cooperation

City-level cooperation [Varanasi & Kyoto]

State level cooperation [vibrant business summits by Gujarat, MP, UP, etc. ]

Geography : SAARC, ASEAN, etc.

Strategic importance: BRICS

Global civil society

World-system theory

It doesnt deal with globalization directly but tries to explain the

rise of global capitalist economy.

Proposition: A unit of analysis for macro-social enquiry is neither

class nor state/society, or country, but the larger historical system in
which these categories are located.

Two key elements:

The capitalist world-system is the division of the world into three

regions:
Core (powerful and developed nations)
Periphery (forcibly subordinated regions)
Semi-periphery (moving regions from core to periphery or from periphery to core)

Does not recognize the centrality of the nation-state in the larger

global system.

Immanuel Wallerstein predicts that early 21 st century would be a

moment of transition: entire capitalist world-system will be
transformed into something else. [Terminal crisis]

Cultural dimension of globalization