Nature of globalization

The Nature of Globalization Fachhochschule Coburg, 2005


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Page 1: Nature of globalization

The Nature of GlobalizationFachhochschule Coburg, 2005

Page 2: Nature of globalization

Main strands of the globalization process

Increasing and deepening interconnectedness of societies in different parts of the world

Almost unimpeded flows of financial capital, news and cultural images across the world

Rising activity and power of multinational companies (MNCs)

Rising economic growth accompanied by rising inequalities in many countries

A global consumer cultura in the making

More travel and migration by more people from more countries to more countries; faster methods of transport and electronic communication so that time and space is increasingly being compressed

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Greater awareness by the public of what is happening in the world and of the possible implications for their own country.

The rapid growth of government and non-government supranational organizations that supplement, supplant and support the activities of the nation-state.

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Aspects of globalization definitions origins driving forces effects of globalization the future

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Approaches to globalization Technological enthusiasts Marxisant pessimists Pluralist pragmatists Sceptic internationalists

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Technological enthusiastsDefinitions:G means the increasing transnationalization of

the world economy that has come about the second half of the 20th century as a result of advances in technology and the adoption of an individualistic market ethic.

Transnational (global) economy has replaced national economies in a ´borderless´ world, free of national constraints.

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A post-1945 process, the result of the new technologies in transport and telecommunications that made capital and markets far more mobile than before

Faciliated by an enabling ideology – aggressive individualism – which stressed private enterprise at the expense of state protection and provision

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Driving Forces:

Technology, particularly telecommunications and computers

National borders are meaningless for financial markets and trade. Wriston: ‘Markets are no longer geographical locations, but data on a screen transmitted from everywhere in the world.’

Technological and economic aspects of globalization are primary and determinant of the political and the cultural.

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Effects of globalization:

Globalization has certain economic, political and social imperatives

In the economic domain:It demands that labour costs be low, that management styles

be mean and lean and that state expenditure be reduced to encourage enterprise and national competitiveness.

Political imperatives:1. the triumph of capitalism over socialism2. the nation-state will lose most of its power to the rising

might of the MNCs

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The social sphere:

the changes to the economy, the polity and culture are seen as beneficial to all in the world

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The future:

Globalization is an irresistible processThe very idea of a national economy

becomes meaningless, as are notions of a national corporation, national capital, national products, and national technology. (Reich,1999)

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Marxisant pessimistsDefinitions:

G ‘is not a condition or phenomenon; it is a process’.

‘If imperialism is the latest stage of capitalism, globalism is the latest stage of imperialism’.

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G has its origins in the beginnings of capitalism in Western Europe, it has gained speed and momentum during the post-war period

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Driving forces:

Two different levelsat the basic level – the logic of capitalism – its

inherent tendency to expand, to intensify and to involve all aspects of life.

at the secondary level – the current financial, production and consumption arrangements of the world system become DF for a globalized world-system.

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Effects of Globalization:

are, at best, negative and, at worst, destructive, both in the short term and the long term.

1. G has increased poverty and inequality in both AICs and IDCs.2. G affects not only the material aspects of people’s lives but

their attitudes, values and behaviour through the global media dominated by large corporations. It leads to the homogenization of cultures, the standartization of lifestyles and to conformity.

3. There is disagreement whether G affects the authority of the nation-state.

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The Future:

G is set to continue in the foreseeable future with increasing undesirable consequences for most of the world’s population in terms of exploitation, poverty, environmental destruction and social breakdown.

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Pluralist PragmatistsDefinitions:

G is a long, multifaceted process, with diverse, at times conflicting, effects, with an assured future but whose future form is not possible to predict.

G as a concept refers both to the compression of the world and the intensification of consciousness of the world as a whole. (Robertson, 1992)

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Some trace the process of world interconnectedness back to ancient times.

G gained momentum from the 1960s onwards because of technological changes, the political decisions concerning free trade and capital flows and the colapse of the Soviet Union.

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Driving forces:

DF behind G are diverse: they include technology, capitalist production, political forces, and ideology. They are of equal power.

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Effects of globalization:

Though ‘the world is undergoing a process of ever-increasing interconnectedness and interdependence’(Axford,1995), it does not mean that local influences disappear from people’s lives.

People are seen as active ‘reflexive’ agents that respond thinkingly to the globalizing influences that come their way.

G does not mean westernization. There is a dialectic relationship between the global and the local.

‘The world economy is being systematically globalized, but by a process which is neither homogenizing nor symmetrical.

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Nation-states still remain important actors both within and beyond their borders. At a time when the world is getting closer together, it is also fragmenting into a greater number of nation-states.

G is neither good nor bad. It spreads technology, economic growth and democracy; it also spreads crime, AIDS and environmental destruction.

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The future:

G will probably intensify in the future. It will continue to be both a unifying and a fragmenting process; a homogenizing and a liberating force.

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Sceptic InternationalistsThis approach is essentially a reaction against

the views of the first group of writers – a rejection of the view of a borderless world where markets operate on a transnational basis and where nation-states become obsolete.

They accept the increasing internationalization of the economy but they reject the claim that it has been transnationalized already.

1. They argue that extreme views are based on statistics with short-time horizons.

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2. MNCs are not ‘footloose’, not TNCs, they are based in their home country.

3. the free migration of labour has not happened4. governments have always been subject to constraints by

both internal and external forces – it does not mean total paralysis of state power.

5. g in its extreme form has been used as an ideological tool to convey the message that governments and people should accept the neoliberal approach to the economy and the welfare state.