Globalization

Contents What is Globalisation? 2 What are the different types of globalisation? 4 Types of Globalisation 4 Economic Globalisation 5 Political Globalisation 8 Cultural Globalisation 9 Social Globalisation 11 Discuss the impact of globalisation on modern nation-state. 12 What are the positive and negative aspects of globalisation? 16 Positive aspects 16 Negative aspects 18  What is Globalisation? Globalization - the 'big idea' of the late 20th century - lacks precise definition. There is no single universally agreed-upon definition of globalization. The term globalization captures elements of a widespread perception that there is a broadening, deepening and speeding up of world-wide interconnectedness in all aspects of life, from the cultural to the criminal, the financial to the environmental. At issue appears to be a global shift, i.e., a world being moulded, by economic and technological forces, into a shared economic and political arena. The IMF describes globalization as “the growing economic interdependence of countries worldwide through its increasing volume and variety of cross border transactions in goods and services and international flows and also through the more rapid and wide spread diffusion of technology”. According to Andrew Heywood, globalization refers to the emergence of a complex web of interconnectedness, which implies that events and decisions in one part of the world are increasingly affecting people and societies located far away. Immanuel Wallerstein says that the global system is a hierarchy of power in the international system: core, periphery and semi-periphery. The system of hierarchy is based on inequalities between the rich and poor nations. What are the different types of globalisation? Types of Globalisation The basis of globalization is the emergence of a single social system characterized by worldwide network of economic, political, cultural, and social relationships.  Economic Globalisation Economic globalization is the increasing economic integration and interdependence of national, regional and local economies across the world through an intensification of cross-border movement of goods, services, technologies and capital. It refers to global economic processes, especially the rise in international trade, the international flow of capital, economic practices and the increasing number of role played by multinational corporations (MNCs). The current phase of the economic internationalization in historical context, we do need to recognize the massive socio-economic transformations that occurred in the second half of the 20th century. The golden age of capitalism stretching from around 1950 to 1973 saw a remarkable flourishing of productivity and gradual move toward a genuinely global free-trade order. The General Agreement on Tariff and Trade (GATT) was a central element in creating a stable international trading regime following the Second World War, in spite of its weakness. With trade tariff already reduced to a minimum by the 1990s, interest shifted for the more powerful nations to the question of democratic regulations governing competition. This led to the creation of World Trade Organization (WTO) in 1995, changed with harmonizing competition and business rules across nations to promote global free trade in more sectors. Along with the extension of trade went an enormous leap based on Foreign Direct Investment (FDI) in particular. The major characteristic of the post war period was the rise of the Multinational Corporations (MNCs) that now account for the majority of the world’s exports. As John Dunning explains ‘the strategic response of MNCs to the emerging global economy has been increasingly to integrate their sourcing, value-added and marketing activities and to harness their resources and capabilities from throughout the world.  Political Globalisation Political globalization is when governmental action takes place on a global level, where responsibilities, such as the welfare of citizens and economic growth, are acted upon by an international political body. It signifies a redefinition of politics in the sense that political activity is increasingly transcending national borders and taking place at the global level. The globalisation of politics is occurring in several ways: Firstly, there has been a significant institutionalization of inter-governmental and transnational networks of political interaction. Secondly, there has been a great increase in the emphasis on collective defense and cooperative security with regard to national security and defense policy. There has also been a globalisation of military technology, based on the transnationalization of defense production.  Cultural Globalisation Cultural globalisation refers to “the emergence of a specific set of values and beliefs that are largely shared around the planet”. It refers to the greater international cultural exchange and the intensification of global flaws of cultural goods. It signifies the global recognition of prominent symbols and icons of popular culture. A series of new technological innovations in communications and transportation have generated a global telecommunications infrastructure and greater transfer in data flow. The English language provides a linguistic infrastructure for the global transmission of ideas and cultures. It has become the dominant language in politics, law, computing, business and science. The driving forces behind contemporary forms of cultural globalisation are the mass media – both print and visual. Global media organizations have been able to spread powerful images, sounds and advertising to the remotest parts of the globe. There has been a great increase in international travel and tourism. There has been a massive growth in cross-border movements of people – migration.  Social Globalisation The economic and political transformations associated with the development of globalization have a huge social impact especially on people. The degree of equality or inequality within and among nation-states is today the main issue at stake when the future prospects of globalization are discussed. Goran Therborn puts: “To the extent that it is actually operating, globalization puts on the agenda equality and inequality for the whole of human kind”. The second major social effect after inequality generated by globalization is interconnectedness. According to Ash Amin, “perhaps the most distinctive aspect of contemporary globalization is precisely the interconnectedness, multiplexity, and hybridization of social life at every level”. Discuss the impact of globalisation on modern nation-state. The nation state is constituted by the government assuming a legal and moral right to exercise sole jurisdiction, supported by force in the last resort, over a particular territory and its citizens. Manfred B. Steger advocates “globalization is confined to a set of complex and sometimes contradictory social processes that are changing our current social condition based on modern system of independent nation-state”. An essential link between globalization and the nation state is the concept of sovereignty. Sovereignty is the central organizing principle of the system of states. Sovereignty is the quality of having supreme, independent authority over a territory. It can be found in a power to rule and make law that rests on a political consensus in a nation. The notion of state sovereignty is laid down on the basic principles of territorial integrity, border inviolability, and supremacy of the state. Globalisation led to a significant rise of multinational corporations which many believe undermined the ability of states to manage their own economies. Multinational corporations integrate national economies into global networks; therefore nation states no longer have total control over their economies. Multinational corporations have expanded drastically; the top 500 corporations now control almost ⅓rd of global GNP and 76% of world trade. These multinational corporations, such as Standard & Poor’s, are admired but also feared by nation states for their immense power. Multinational corporations, such as Coca-Cola, wield great global power and authority as they effectively 'place a claim' on the host nation state. Since 1960, new technologies have developed at a rapid rate, compared to the previous fundamental shifts which lasted for two hundred years. These shifts mean that states can no longer successfully manage the changes caused by globalisation. Trade blocs, such as North American Free Trade Agreement (NAFTA), reduced nation state's management over their economy. WTO and IMF have a huge impact on a nations' economy, therefore weakening its security and independence. Overall, globalisation has diminished the nation state's ability to manage its economy. Globalisation within the neoliberal agenda has provided nation states with a new and minimalist role. It appears that nation states have little choice but to give away their independence to the demands of globalisation, as a cutthroat, competitive environment has now been formed. Whilst many argue that the nation state's role in managing its economy is diminishing, some reject this and believe the state still remains the most dominant force in shaping its economy. Nation states implement policies to expose their economies more or less so to the international financial markets, meaning they can control their responses to globalisation. Therefore, it can be said that strong, efficient nation states help ‘shape’ globalisation. Some believe nation states are ‘pivotal institutions’ and argue that globalisation has not led to a reduction in nation state power but has altered the situation under which the nation state power is executed. What are the positive and negative aspects of globalisation? Positive aspects As Western society is becoming more knowledgeable of the issues taking place in developing countries, there is greater opportunity for the people in those countries to economically succeed and increase their standard of living. Increase in competition, forces companies to lower their prices. Increase in media coverage draws the attention of the world to human right violations. Global competition encourages creativity and innovation and keeps prices for commodities/services in check. Developing countries are able to reap the benefits of current technology without undergoing many of the growing pains associated with development of these technologies. Governments are able to better work together towards common goals now that there is an advantage in cooperation, an improved ability to interact and coordinate, and a global awareness of issues. There is a greater access to foreign culture in the form of movies, music, food, clothing, etc.  Negative aspects The benefits of globalization are not universal. The rich are getting richer and the poor are becoming poorer. Outsourcing, while it provides jobs to a population in one country, takes away those jobs from another country, leaving many without opportunities. Although different cultures from around the world are able to interact, they begin to meld, and the contours and individuality of each begin to fade. There may be a greater chance of disease spreading worldwide, as well as invasive species that could prove devastating in non-native ecosystems. Fast food chains, such as McDonalds and Burger King, are spreading in the developing world. It means more consumption of junk foods from these joints resulting in an adverse impact on people’s health. Globalisation Page 1