Globalization: A Very Short Introduction VERY SHORT INTRODUCTIONS are for .. Third, globalization involves the intensification and acceleration of social in the and editions of the UN Human Development Report show that, . Globalization: a very short introduction / Manfred B. Steger Steger, Manfred B., ยท View online 11 editions of this work 3rd fully updated new edition. Get this from a library! Globalization: a very short introduction. [Manfred B Steger] -- Annotation Globalization has become one of the defining buzzwords of our.

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This Very Short Introduction has been fully updated for a fourth edition, to include recent developments in Presenting globalization as a multifaceted process encompassing global, regional, and local No eBook available . ); the award-winning Globalisms: The Great Ideological Struggle of the 21st Century, 3rd ed. This new edition has been fully updated, incorporating all the major global About the Series:Oxford's Very Short Introductions series offers No eBook available . The Great Ideological Struggle of the 21st Century 3rd ed. It is by its nature a dynamic topic - and this Very Short Introduction has been fully updated for a third edition, to include recent developments in.

Routledge, Toggle navigation. New to eBooks. How many copies would you like to download? A Very Short Introduction 4th ed. Steger Series: Very Short Introductions. Add to Cart Add to Cart. Add to Wishlist Add to Wishlist. It is by its nature a dynamic topic. This Very Short Introduction has been fully updated for a fourth edition, to include recent developments in global politics, the global economy, and environmental issues. Presenting globalization as a multifaceted process encompassing global, regional, and local aspects of social life, Manfred B.

Steger looks at its causes and effects, examines whether it is a new phenomenon, and explores the question of whether, ultimately, globalization is a good or a bad thing.

As the Spanish sociologist Manuel Castells has pointed out, the current rise of the global 'network society' would not have been possible without a technological revolution - one that has been powered chiefly by the rapid development of new information and transportation technologies.

Proceeding at an ever-accelerating pace, these innovations are reshaping the social landscape of human life. Fourth, the creation, expansion, and intensification of social interconnections and interdependencies do not occur merely on an objective, material level. As Roland Robertson notes in his definition, globalization processes also involve the subjective plane of human consciousness.

Hence, we must not forget that globalization also refers to people becoming increasingly conscious of growing manifestations of social interdependence and the enormous acceleration of social interactions.

Their awareness of the receding importance of geographical boundaries and distances fosters a keen sense of becoming part of a global whole. Reinforced on a daily basis, these persistent experiences of global interdependence gradually change people's individual and collective identities, and thus dramatically impact the way they act in the world.

It seems that we have now identified some of the essential qualities of globalization. This allows us to offer the following definition: More areas of contestation Although we arrived at an adequate working definition of globalization by drawing out some common insights that appear in other influential definitions, we must not lose sight of the fact that there still remain several areas of contestation. After all, globalization is an uneven process, meaning that people living in various parts of the world are affected very differently by this gigantic transformation of social structures and cultural zones.

Hence, the social processes that make up globalization have been analysed and explained by various commentators in different, often contradictory ways. Scholars not only hold different views with regard to proper definitions of globalization, they also disagree on its scale, causation, chronology, impact, trajectories, and policy outcomes.

For example, the academic dispute over the scale of globalization revolves around the question of whether it should be understood in singular or differentiated terms.

This notion of 'multidimensionality' appears as an important attribute of globalization in our own definition; still it requires further elaboration. The ancient Buddhist parable of the blind scholars and their encounter with the elephant helps to illustrate the nature of the academic controversy over the various dimensions of globalization. Since the blind scholars did not know what the elephant looked like, they resolved to obtain a mental picture, and thus the knowledge they desired, by touching the animal.

Feeling its trunk, one blind man argued that the elephant was like a lively snake. The third person took hold of its tail and insisted that the elephant resembled a large, flexible brush.

The fourth man felt its sharp tusks and declared it to be like a great spear. Each of the blind scholars held firmly to his own idea of what constituted an elephant. Since their scholarly reputation was riding on the veracity of their respective findings, the blind men eventually ended up arguing over the true nature of the elephant. The ongoing academic quarrel over which dimension contains the essence of globalization represents a postmodern version of the parable of the blind men and the elephant.

Even those scholars who agree that globalization is best thought of as a singular process clash with each other over which aspect of social life constitutes the primary domain of the phenomenon.

Some scholars argue that economic processes lie at the core of globalization. Others privilege political, cultural, or ideological aspects. Still others point to environmental processes as the essence of globalization. Like the blind men in the parable, each globalization researcher is partly right by correctly identifying one important dimension of the phenomenon in question. However, their collective mistake lies in their dogmatic attempts to reduce such a complex phenomenon as globalization to a single domain that corresponds to their own expertise.

To be sure, one of the central tasks for globalization researchers consists of devising better ways for gauging the relative importance of each dimension without losing sight of the interconnected whole.

But it would be a grave mistake to cling to a one-sided understanding of globalization. Fortunately, more and more researchers have begun to heed this call for a genuine multidimensional approach to globalization that avoids pernicious reductionism.

Since globalization contains multifaceted and differentiated processes, it is safe to say that virtually no areas of social life escape its reach. Or is it? The globalization scholars and the elephant.

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Before we come to this important conclusion, let us consider several objections raised by those scholars who belong to the camp of the 'globalization sceptics'.

These objections range from the accusation that fashionable 'globalization talk' amounts to little more than 'globaloney' to less radical suggestions that globalization is a much more limited and uneven process than the sweeping arguments of the so-called 'hyperglobalizers' would have us believe. In many ways, the most radical globalization sceptics resemble the blind scholar who, occupying the empty space between the elephant's front and hind legs, groped in vain for a part of the elephant.

Finding none, he accused his colleagues of making up fantastic stories about non-existent things, asserting that there were no such animals as 'elephants' at all.

However, evidence pointing to the rapid intensification of worldwide social relations is mounting. Hence, I will not attempt to refute those few globalization sceptics who go so far as to deny its existence altogether.

On the other hand, I am rather sympathetic to the notion that globalization may be a geographically limited and uneven process. In that sense, then, globalization is associated with inequality. Nevertheless, even if it can be shown that the intensification of social interconnections and interdependencies appears to be concentrated in the economically advanced countries of the global North, it would still be entirely justified to engage in extensive 'globalization talk'.

After all, the existence of patterns of rising interdependence in the global North does reflect a partial globalization trend, one that is likely to have significant impacts on other regions of the world. In my view, the most challenging question that has emerged from the camp of globalization sceptics is the following: Critics would respond to this question in the negative, adding that the concept of globalization has been applied in an historically imprecise manner.

In a nutshell, this thoughtful group of sceptics contends that even a cursory look at history suggests that there is not much that is 'new1 about contemporary globalization. Hence, before we explore in some detail the five main dimensions of globalization in subsequent chapters of this book, I suggest we give this weighty argument a fair hearing. Indeed, such a critical investigation of globalization's alleged novelty is closely related to yet another difficult question hotly debated in the fledgling field of globalization studies.

What does a proper chronology and periodization of globalization look like? Let us turn to Chapter 2 to find answers to this question. If we asked an ordinary person on the streets of London, New York, Bangkok, or Rio de Janeiro about the essence of globalization, the answer would probably involve some reference to growing forms of political and economic interdependence fuelled by 'new technologies' like personal computers, the Internet, cellular phones, pagers, fax machines, palm pilots, digital cameras, high-definition televisions, satellites, jet planes, space shuttles, and supertankers.

As subsequent chapters will show, however, technology provides only a partial explanation for the existence of contemporary forms of globalization. Yet, it would be foolish to deny that these new innovations have played a crucial role in the creation, multiplication, expansion, and intensification of global social interconnections and exchanges.

The Internet, in particular, has assumed a pivotal function in facilitating globalization through the creation of the World Wide Web that connects billions of individuals, private associations, and governments. Since most of these technologies have been around for less than three decades, it seems to make sense to agree with those commentators who claim that globalization is, indeed, a new phenomenon.

At the same time, however, the definition of globalization we arrived at in the previous chapter stresses the dynamic nature of the phenomenon.

Steger Manfred B. Globalization: A Very Short Introduction

For example, the engineers who developed laptop computers and supersonic jet planes stand on the shoulders of earlier innovators who created the steam engine, the cotton gin, the telegraph, the phonograph, the telephone, the typewriter, the internal-combustion engine, and electrical appliances.

These products, in turn, owe their existence to much earlier technological inventions such as the telescope, the compass, water wheels, windmills, gunpowder, the printing press, and oceangoing ships. In order to acknowledge the full historical record, we reach back even further to such momentous technological and social achievements as the production of paper, the development of writing, the invention of the wheel, the domestication of wild plants and animals, the emergence of language, and, finally, the slow outward migration of our African ancestors at the dawn of human evolution.

Thus, the answer to the question of whether globalization constitutes a new phenomenon depends upon how far we are willing to extend the chain of causation that resulted in those recent technologies and social arrangements that most people have come to associate with this fashionable buzzword.

Some scholars consciously limit the historical scope of globalization to the last four decades of postindustrialism in order to capture its contemporary features. Others are willing to extend this timeframe to include the ground-breaking developments of the 19th century.

Still others argue that globalization really represents the continuation and extension of complex processes that began with the emergence of modernity and the capitalist world system some five centuries ago. And a few remaining researchers refuse to confine globalization to time periods measured in mere decades or centuries. Rather, they suggest that these processes have been unfolding for millennia.

As we will see in subsequent chapters, the advocates of the first approach have marshalled impressive evidence for their view that the dramatic expansion and acceleration of global exchanges since the early s represents a quantum leap in the history of globalization.

The proponents of the second view correctly emphasize the tight connection between contemporary forms of globalization and the explosion of technology known as the Industrial Revolution. The representatives of the third perspective rightly point to the significance of the time- space compression that occurred in the 16th century.

Finally, the advocates of the fourth approach advance a rather sensible argument when they insist that any truly comprehensive account of globalization falls woefully short without the incorporation of ancient developments and enduring dynamics into our planetary history. While the short chronology outlined below is necessarily fragmentary and general, it nonetheless gives us a good sense that globalization is as old as humanity itself.

This brief historical sketch identifies five distinct historical periods that are separated from each other by significant accelerations in the pace of social exchanges as well as a widening of their geographical scope. In this context, it is important to bear in mind that my chronology does not necessarily imply a linear unfolding of history, nor does it advocate a conventional Eurocentric perspective of world history.

Full of unanticipated surprises, violent twists, sudden punctuations, and dramatic reversals, the history of globalization has involved all major regions and cultures of our planet. Thus, it behoves us to refrain from imposing deterministic ideas of 'inevitability' and 'irreversibility' on globalization.

However, it is important to note the occurrence of dramatic technological and social leaps in history that have pushed the intensity and global reach of these processes to new levels. The prehistoric period 10, BCE-3, BCE Let us begin our brief historical sketch of globalization about 12, years ago when small bands of hunters and gatherers reached the southern tip of South America.

This event marked the end of the long process of settling all five continents that was begun by our hominid African ancestors more than one million years ago. Although some major island groups in the Pacific and the Atlantic were not inhabited until relatively recent times, the truly global dispersion of our species was finally achieved. The successful endeavour of the South American nomads rested on the migratory achievements of their Siberian ancestors who had crossed the Bering Strait into North America a thousand years earlier.

In this earliest phase of globalization, contact among thousands of hunter and gatherer bands spread all over the world was geographically limited and mostly coincidental. This fleeting mode of social interaction changed dramatically about 10, years ago when humans took the crucial step of producing their own food. As a result of several factors, including the natural occurrence of plants and animals suitable for domestication as well as continental differences in area and total population size, only certain regions located on or near the vast Eurasian landmass proved to be ideal for these growing agricultural settlements.

Over time, food surpluses achieved by these early farmers and herders led to population increases, the establishment of permanent villages, and the construction of fortified towns. Roving bands of nomads lost out to settled tribes, chiefdoms, and, ultimately, powerful states based on agricultural food production. Early human migrations. Moreover, for the first time in human history, these farming societies were able to support two additional social classes whose members did not participate in food production.

One group consisted of full-time craft specialists who directed their creative energies toward the invention of new technologies, such as powerful iron tools and beautiful ornaments made of precious metals, complex irrigation canals, sophisticated pottery and basketry, and monumental building structures.

The other group was comprised of professional bureaucrats and soldiers who would later play a key role in the monopolization of the means of violence in the hands of the rulers, the precise accounting of food surpluses necessary for the growth and survival of the centralized state, the acquisition of new territory, the establishment of permanent trade routes, and the systematic exploration of distant regions. For the most part, however, globalization in the prehistoric period was severely limited.

Advanced forms of technology capable of overcoming existing geographical and social obstacles were largely absent; thus, enduring long-distance interactions never materialized. It was only towards the end of this epoch that centrally administered forms of agriculture, religion, bureaucracy, and warfare slowly emerged as the key agents of intensifying modes of social exchange that would involve a growing number of societies in many regions of the world. Marking the close of the prehistoric period, these monumental inventions amounted to one of those technological and social boosts that moved globalization to a new level.

The importance of these inventions for the strengthening of globalization processes should be obvious. Among other things, the wheel spurred crucial infrastructural innovations such as animal-drawn carts and permanent roads that allowed for the faster and more efficient transportation of people and goods. In addition to the spread of ideas and inventions, writing greatly facilitated the coordination of complex social activities and thus encouraged large state formations. Of the sizeable territorial units that arose during this period, only the Andes civilizations of South America managed to grow into the mighty Inca Empire without the benefits of either the wheel or the written word.

Assyrian clay tablet with cuneiform writing, c. All of these empires fostered the multiplication and extension of long-distance communication and the exchange of culture, technology, commodities, and diseases.

The most enduring and technologically advanced of these vast premodern conglomerates was undoubtedly the Chinese Empire. A closer look at its history reveals some of the early dynamics of globalization. After centuries of warfare between several independent states, the Ojn Emperor's armies, in BCE, finally unified large portions of northeast China.

For the next 1, years, successive dynasties known as the Han, Sui, T'ang, Yuan, and Ming ruled an empire supported by vast bureaucracies that would extend its influence to such distant regions as tropical Southeast Asia, the Mediterranean, India, and East Africa.

Dazzling artistry and brilliant philosophical achievements stimulated new discoveries in other fields of knowledge such as astronomy, mathematics, and chemistry. The long list of major technological innovations achieved in China during the premodern period include redesigned plowshares, hydraulic engineering, gunpowder, the tapping of natural gas, the compass, mechanical clocks, paper, printing, lavishly embroidered silk fabrics, and sophisticated metalworking techniques.

The construction of vast irrigation systems consisting of hundreds of small canals enhanced the region's agricultural productivity while at the same time providing for one of the best river transport systems in the world. The codification of law and the fixing of weights, measures, and values of coinage fostered the expansion of trade and markets.

The most extensive of these trade routes was the Silk Road. It linked the Chinese and the Roman Empires, with Parthian traders serving as skilled intermediaries. Even 1, years after the Silk Road first reached the Italian peninsula, in 50 BCE, a truly multicultural group of Eurasian and African globetrotters - including the famous Moroccan merchant Ibn Battuta and his Venetian counterparts in the Marco Polo family - relied on this great Eurasian land route to reach the splendid imperial court of the Mongol Khans in Beijing.

By the 15th century CE, enormous Chinese fleets consisting of hundreds of foot-long ocean-going ships were crossing the Indian Ocean and establishing short-lived trade outposts on the east coast of Africa.

However, a few decades later, the rulers of the 4.

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The only human artefact discernible from space. Thus, they cut short their empire's incipient industrial revolution, a development that allowed much smaller European states to emerge as the primary historical agents behind the intensification of globalization.

Towards the end of the premodern period, then, the existing global trade network consisted of several interlocking trade circuits that connected the most populous regions of Eurasia and northeastern Africa.

Although both the Australian and the American continents still remained separate from this expanding web of economic, political, and cultural interdependence, the empires of the Aztecs and Incas had also succeeded in developing major trade networks in their own hemisphere.

The existence of these sprawling networks of economic and cultural exchange triggered massive waves of migration, which, in turn, led to further population increase and the rapid growth of urban centres.

In the resulting cultural clashes, religions with only local significance were transformed into the major 'world religions' we know today as Judaism, Christianity, Islam, Hinduism, and Buddhism.

But higher population density and more intense social interaction over greater distances also facilitated the spread of new infectious diseases like the bubonic plague. The enormous plague epidemic of the midth century, for example, killed up to one-third of the respective populations of China, the Middle East, and Europe.

However, these unwelcome by-products of unfolding globalization processes did not reach their most horrific manifestation until the fateful 16th-century collision of the 'old' and 'new' worlds, when the nasty germs of European invaders killed an estimated 18 million Native Americans. Major world trade networks, 1OOOO. The early modern period The term 'modernity' has become associated with the 18th-century European Enlightenment project of developing objective science, achieving a universal form of morality and law, and liberating rational modes of thought and social organization from the perceived irrationalities of myth, religion, and political tyranny.

The label 'early modern', then, refers to the period between the Enlightenment and the Renaissance. During these two centuries, Europe and its social practices served as the primary catalyst for globalization. Having contributed little to technology and other civilizational achievements before about 1, CE, Europeans northwest of the Alps greatly benefited from the diffusion of technological innovations originating in Islamic and Chinese cultural spheres.

Despite the weakened political influence of China and the noticeable ecological decline of the Fertile Crescent some years later, European powers failed to penetrate into the interior of Africa and Asia.

Instead, they turned their expansionistic desires westward, searching for a new, profitable sea route to India. Their efforts were aided by such innovations as mechanized printing, sophisticated wind and water mills, extensive postal systems, revised maritime technologies, and advanced navigation techniques.

Add the enormous impact of the Reformation and the related liberal political idea of limited government, and we have identified the main forces behind the qualitative leap that greatly intensified demographic, cultural, ecological, and economic flows between Europe, Africa, and the Americas. Of course, the rise of European metropolitan centres and their affiliated merchant classes represented another important factor responsible for strengthening globalization tendencies during the early modern period.

Embodying the new values of individualism and unlimited material accumulation, European economic entrepreneurs laid the foundation of what later scholars would call the 'capitalist world system'. The monarchs of Spain, Portugal, the Netherlands, France, and England all put significant resources into the exploration of new worlds and the construction of new interregional markets that benefited them much more than their exotic 'trading partners'.

By the early s, national joint stock companies like the Dutch and British East India companies were founded for the express purpose of setting up profitable overseas trade posts. As these innovative corporations grew in size and stature, they acquired the power to regulate most intercontinental economic transactions, in the process implementing social institutions and cultural practices that enabled later colonial governments to place these foreign regions under direct political rule. Related developments, such as the Atlantic slave trade and forced population transfers within the Americas, resulted in the suffering and death of millions of non-Europeans while greatly benefiting white immigrants and their home countries.

To be sure, religious warfare within Europe also created its share of dislocation and displacement for Caucasian populations. Moreover, as a result of these protracted armed conflicts, military alliances and political arrangements underwent continuous modification.

Ultimately evolving from the Westphalian states system, the sovereign, territorial nation-state had emerged by as the modern container of social life. As the early modern period drew to a close, interdependencies among nation-states were multiplying as well as increasing in density. The modern period By the late 18th century, Australia and the Pacific islands were slowly incorporated into the European-dominated network of political, economic, and cultural exchange.

The sale of the island of Manhattan in In spite of their persistent claims to civilizational leadership, however, they remained strangely oblivious to their racist practices and the appalling conditions of inequality that existed both within their own societies and between the West and the 'rest'.

Fed by a steady stream of materials and resources that originated mostly in other regions of the world, Western capitalist enterprises gained in stature. Daring to resist powerful governmental controls, economic entrepreneurs and their academic counterparts began to spread a philosophy of individualism and rational self-interest that glorified the virtues of an idealized capitalist system supposedly based upon the providential workings of the free market and its 'invisible hand'.

Written in by the German political radicals Karl Marx and Friedrich Engels, the following passage from their famous Communist Manifesto captures the qualitative shift in social relations that pushed globalization to a new level in the modern period. Indeed, the volume of world trade increased dramatically between and Guided by the activities of multinational banks, The discovery of America prepared the way for mighty indus- try and its creation of a truly global market.

Globalization: A Very Short Introduction

The latter greatly expanded trade, navigation, and communication by land. These developments, in turn, caused the further expan- sion of industry. Chased around the globe by its burning desire for ever-expanding markets for its products, the bourgeoisie has no choice but settle everywhere; cultivate everywhere; establish connections everywhere. Rapidly improving the instruments of production, the bourgeoisie utilizes the incessantly easing modes of communication to pull all nations into civiliza- tion - even the most barbarian ones.

In a nutshell, it creates the world in its own image. Translated by the author capital and goods flowed across the borders relatively freely as the sterling-based gold standard made possible the worldwide circulation of leading national currencies like the British pound and the Dutch gilder.

Eager to acquire their own independent resource bases, most European nation-states subjected large portions of the global South to direct colonial rule. Global pricing systems facilitated trade in important commodities like grains, cotton, and various metals.

Brand name packaged goods like Coca-Cola drinks, Campbell soups, Singer sewing machines, and Remington typewriters made their first appearance. In order to raise the global visibility of these corporations, international advertising agencies launched the first full-blown transborder commercial promotion campaigns.

As Marx and Engels noted, however, the rise of the European bourgeoisie and the related intensification of global interconnections would not have been possible without the 19th- century explosion of science and technology. The largely unregulated use of these energy sources resulted in the annihilation of countless animal and plant species as well as the toxification of entire regions.

On the up side, however, railways, mechanized shipping, and 20th- century intercontinental air transport managed to overcome the last remaining geographical obstacles to the establishment of a genuine global infrastructure, while at the same time lowering transportation costs. These innovations in transportation were complemented by the swift development of communication technologies. The telegraph and its transatlantic reach after provided for instant information exchanges between the two hemispheres.

Finally, the 20th-century arrival of mass circulation newspapers and magazines, film, and television further enhanced a growing consciousness of a rapidly shrinking world. The modern period also witnessed an unprecedented population explosion. Having increased only modestly from about million at the time of the birth of Christ to million in , the world's population reached 3. Enormous waves of migration intensified existing cultural exchanges and transformed traditional social patterns.

Popular immigration countries like the United States of America, Canada, and Australia took advantage of this boost in productivity. By the early 20th century, these countries entered the world stage as forces to be reckoned with.

At the same time, however, they made significant efforts to control these large migratory flows, in the process inventing novel forms of bureaucratic control and developing new surveillance techniques designed to accumulate more information about nationals while keeping 'undesirables' out.

When the accelerating process of industrialization sharpened existing disparities in wealth and well-being beyond bearable limits, many working people in the global North began to organize themselves politically in various labour movements and socialist parties. However, their idealistic calls for international class solidarity went largely unheeded. Instead, nationalist ideologies captured the imagination of millions of people around the world.

There is no question that interstate rivalries intensified at the outset of the 20th century as a result of mass migration, urbanization, colonial competition, and the excessive liberalization of world trade.

The ensuing period of extreme nationalism culminated in two devastating world wars, a long global economic depression, and hostile measures to protect narrowly conceived political communities. The defeat of the axis powers in and the process of decolonization slowly revived global flows and international exchanges. A new political order of nation-states anchored in the charter of the United Nations raised the prospect of global democratic governance.

During the s, however, such cosmopolitan hopes quickly faded as the Cold War divided the world for four long decades into two antagonistic spheres: For the first time in human history, the spectre of a global conflict capable of destroying virtually all life on our planet had been raised.

The contemporary period from As we noted at the beginning of this chapter, the dramatic creation, expansion, and acceleration of worldwide interdependencies and global exchanges that have occurred since the early s represent yet another quantum leap in the history of globalization. But what exactly is happening? Is contemporary globalization a 'good' or a 'bad' thing?

Manfred Steger

Throughout this book we will consider possible answers to these crucial questions. In doing so, we will limit the application of the term 'globalization' to the contemporary period while keeping in mind that the dynamic driving these processes actually started thousands of years ago.

Before we embark on this next stage of our journey, let us pause and recall an important point we made in Chapter 1. Globalization is not a single process but a set of processes that operate simultaneously and unevenly on several levels and in various dimensions. We could compare these interactions and interdependencies to an intricate tapestry of overlapping shapes and colours.

Yet, just as an auto mechanic apprentice must turn off and disassemble the car engine in order to understand its operation, so must the student of globalization apply analytical distinctions in order to make sense of the web of global interdependencies. In ensuing chapters we will identify, explore, and assess patterns of globalization in each domain while keeping in mind its operation as an interacting whole. Although we will study the various dimensions of globalization in isolation, we will resist the temptation to reduce globalization to a single aspect.

Thus will we avoid the blunder that kept the blind men from appreciating the multidimensional nature of the elephant. Indeed, technological progress of the magnitude seen in the last three decades is a good indicator for the occurrence of profound social transformations.

Changes in the way in which people undertake economic production and organize the exchange of commodities represent one obvious aspect of the great transformation of our age. Economic globalization refers to the intensification and stretching of economic interrelations across the globe.

Gigantic flows of capital and technology have stimulated trade in goods and services. Markets have extended their reach around the world, in the process creating new linkages among national economies. Huge transnational corporations, powerful international economic institutions, and large regional trading systems have emerged as the major building blocs of the 21st century's global economic order.

The emergence of the global economic order Contemporary economic globalization can be traced back to the gradual emergence of a new international economic order assembled at an economic conference held towards the end of World War II in the sleepy New England town of Bretton Woods.

In addition to arriving at a firm commitment to expand international trade, the participants of the conference also agreed to establish binding rules on international economic activities. Moreover, they resolved to create a more stable money exchange system in which the value of each country's currency was pegged to a fixed gold value of the US dollar. Within these prescribed limits, individual nations were free to control the permeability of their borders.

This allowed states to set their own political and economic agendas. Bretton Woods also set the institutional foundations for the establishment of three new international economic organizations. The International Monetary Fund was created to administer the international monetary system. The International Bank for Reconstruction and Development, later known as the World Bank, was initially designed to provide loans for Europe's postwar reconstruction.

During the s, however, its purpose was expanded to fund various industrial projects in developing countries around the world. Finally, the General Agreement on Tariffs and Trade was established in as a global trade organization charged with fashioning and enforcing multilateral trade agreements.

As we will see in Chapter 8, the WTO became, in the s, the focal point of intense public controversy over the design and the effects of economic globalization. In operation for almost three decades, the Bretton Woods regime contributed greatly to the establishment of what some observers have called the 'golden age of controlled capitalism'. Existing mechanisms of state control over international capital movements made possible full employment and the expansion of the welfare state.

The Bretton Woods Conference of wealthy countries of the global North a temporary class compromise.

By the early s, however, the Bretton Woods system collapsed. Its demise strengthened those integrationist economic tendencies that later commentators would identify as the birth pangs of the new global economic order. What happened?

In response to profound political changes in the world that were undermining the economic competitiveness of US-based industries, President Richard Nixon abandoned the gold-based fixed rate system in The ensuing decade was characterized by global economic instability in the form of high inflation, low economic growth, high unemployment, public sector deficits, and two unprecedented energy crises due to OPEC's ability to control a large part of the world's oil supply.

Political forces in the global North most closely identified with the model of controlled capitalism suffered a series of spectacular election defeats at the hands of conservative political parties who advocated a 'neoliberal' approach to economic and social policy.

These British philosophers considered that any constraint on free competition would interfere with the natural efficiency of market mechanisms, inevitably leading to social stagnation, political corruption, and the creation of unresponsive state bureaucracies. They also advocated the elimination of tariffs on imports and other barriers to trade and capital flows between nations. British sociologist Herbert Spencer O- 19O3 added to this doctrine a twist of social Darwinism by arguing that free market economies constitute the most civilized form of human competition in which the 'fittest' would naturally rise to the top.

Yet, in the decades following World War II, even the most conservative political parties in Europe and the United States rejected those laissez-faire ideas and instead embraced a rather extensive version of state interventionism propagated by British economist John Maynard Keynes, the architect of the Bretton Woods system.

By the s, however, British Prime Minister Margaret Thatcher and US President Ronald Reagan led the neoliberal revolution against Keynesianism, consciously linking the notion of globalization to the 'liberation' of economies around the world. This new neoliberal economic order received further legitimation with the collapse of communism in the Soviet Union and Eastern Europe. Privatization of public enterprises 2. Deregulation of the economy 3. Liberalization of trade and industry 4.

Massive tax cuts 5. Strict control on organized labour 7. The reduction of public expenditures, particularly social spending 8. The down-sizing of government 9- The expansion of international markets 1O.

The removal of controls on global financial flows developments related to economic globalization have been the internationalization of trade and finance, the increasing power of transnational corporations, and the enhanced role of international economic institutions like the IMF, the World Bank, and the WTO. Let us briefly examine these important features. The internationalization of trade and finance Many people associate economic globalization with the controversial issue of free trade.

In the last few years, the public debate over the alleged benefits and drawbacks of free trade reached a feverish pitch as wealthy Northern countries have increased their efforts to establish a single global market through regional and international trade-liberalization agreements such NAFTA and GATT. To be sure, there is evidence that some national economies have increased their productivity as a result of free trade.

Moreover, there are some benefits that accrue to societies through specialization, competition, and the spread of technology.

But it is less clear whether the profits resulting from free trade have been distributed fairly within and among countries. Most studies show that the gap between rich and poor countries is widening at a fast pace. Hence, free trade proponents have encountered severe criticism from labour unions and environmental groups who claim that the elimination of social control mechanisms has resulted in a lowering of global labour standards, severe forms of ecological degradation, and the growing indebtedness of the global South to the North.

We will return to the issue of global inequality in Chapter 7- The internationalization of trade has gone hand in hand with the liberalization of financial transactions. Its key components include the deregulation of interest rates, the removal of credit controls, and the privatization of government-owned banks and financial institutions. Globalization of financial trading allows for increased mobility among different segments of the financial industry, with fewer restrictions and greater investment opportunities.

This new financial infrastructure emerged in the s with the gradual deregulation of capital and securities markets in Europe, the Americas, East Asia, Australia, and New Zealand. A decade later, Southeast Asian countries, India, and several African nations followed suit. During the s, new satellite systems and fibre-optic cables provided the nervous system of Internet-based technologies that further accelerated the liberalization of financial transactions.

David Roodman, Still Waiting for the Jubilee: WorldWatch Institute, April Jubilee United Kingdom website www. Network website www. Secondary Source: World Watch, Vol.

The advance of deregulation and liberalization, O Millions of individual investors utilized global electronic investment networks not only to place their orders, but also to receive valuable information about relevant economic and political developments.

In , 'e-businesses', 'dot. In , global business-to-business transactions are projected to reach 6 trillion dollars. Ventures that will connect the stock exchanges in New York, London, Frankfurt, and Tokyo are at the advanced planning stage. Such a financial 'supermarket' in cyberspace would span the entire globe, stretching its electronic tentacles into countless decentralized investment networks that relay billions of trades at breathtaking velocities. Yet, a large part of the money involved in these global financial exchanges has little to do with supplying capital for such productive investments as putting together machines or organizing raw materials and employees to produce saleable commodities.

Most of the financial growth has occurred in the form of high-risk 'hedge funds' and other purely money-dealing currency and securities markets that trade claims to draw profits from future production.

In other words, investors are betting on commodities or currency rates that do not yet exist. For example, in , the equivalent of over 2 trillion US dollars was exchanged daily in global currency markets alone.

Dominated by highly sensitive stock markets that drive high-risk innovation, the world's financial systems are characterized by high volatility, rampant competition, and general insecurity. Global speculators often take advantage of weak financial and banking regulations to make astronomical profits in emerging markets of developing countries.

However, since these international capital flows can be reversed swiftly, they are capable of creating artificial boom-and-bust cycles that endanger the social welfare of entire regions. The Southeast Asia Crisis represents but one of these recent economic reversals brought on by the globalization of financial transactions.

The New York Stock Exchange. Billions of shares change hands on an average trading day. The Southeast Asia Crisis In the s, the governments of Thailand, Indonesia, Malaysia, South Korea, and the Philippines gradually aban- doned control over the domestic movement of capital in order to attract foreign direct investment. Intent on creating a stable money environment, they raised domestic interest rates and linked their national currencies to the value of the US dollar.

The ensuing irrational euphoria of international investors translated into soaring stock and real estate mar- kets all over Southeast Asia. However, by , those inves- tors realized that prices had become inflated much beyond their actual value. Unable to halt the ensuing free fall of their currencies, those governments used up their entire foreign exchange reserves.

As a result, eco- nomic output fell, unemployment increased, and wages plummeted. Foreign banks and creditors reacted by declin- ing new credit applications and refusing to extend existing loans. By late , the entire region found itself in the throes of a financial crisis that threatened to push the global economy into recession. This disastrous result was only nar- rowly averted by a combination of international bail-out packages and the immediate sale of Southeast Asian com- mercial assets to foreign corporate investors at rock-bottom prices.

Today, ordinary citizens in Southeast Asia are still suffering from the devastating social and political consequences of that economic meltdown. Powerful firms with subsidiaries in several countries, their numbers skyrocketed from 7, in to about 50, in This geographical concentration reflects existing asymmetrical power relations between the North and the South.

Yet, clear power differentials can also be found within the global North. Rivalling nation-states in their economic power, these corporations control much of the world's investment capital, technology, and access to international markets.

In order to maintain their prominent positions in the global marketplace, TNCs frequently merge with other corporations. A close look at corporate sales and country GDPs reveals that 51 of the world's largest economies are corporations; only 49 are countries. Hence, it is not surprising that some critics have characterized economic globalization as 'corporate globalization' or 'globalization-from-above'.

TNCs have consolidated their global operations in an increasingly deregulated global labour market. The availability of cheap labour, resources, and favourable production conditions in the global South has enhanced corporate mobility and profitability. Denmark , Poland , South Africa , Israel 99, Ireland 84, Malaysia 74, Pakistan 59, New Zealand 53, Hungary 48, Fortune, 31 July ; GDP: Their ability to disperse manufacturing processes into many discrete phases carried out in many different locations around the world reflects the changing nature of global production.

Such transnational production networks allow TNCs like Nike, General Motors, and Volkswagen to produce, distribute, and market their products on a global scale. Transnational production networks augment the power of global capitalism by making it easier for TNCs to bypass nationally based trade unions and other workers' organizations. Anti-sweatshop activists around the world have responded to these tactics by enlisting public participation in several successful consumer boycotts and other forms of nonviolent direct action.

Volkswagen's transnational production network. No doubt, the growing power of TNCs has profoundly altered the structure and functioning of the international economy. These giant firms and their global strategies have become major determinants of trade flows, the location of industries, and other economic activities around the world.

As a consequence, TNCs have become extremely important players that influence the economic, political, and social welfare of many nations.

Here is a final example. Nokia's role in the Finnish economy Named after a small town in southwest Finland, Nokia Cor- poration rose from modest beginnings a little more than a decade ago to become a large TNC that manufactures 37 of every 1OO cellphones sold worldwide.

Today, its products connect one billion people in an invisible web around the globe. However, Nokia's gift to Finland - the distinction of being the most interconnected nation in the world - came at the price of economic dependency.

Nokia is the engine of Finland's economy, representing two-thirds of the stock market's value and one-fifth of the nation's total export. Yet, when Nokia's growth rate slowed in recent years, company executives let it be known that they were dissatisfied with the country's rela- tively steep income tax. Today, many Finnish citizens fear that decisions made by relatively few Nokia managers might pressure the government to lower corporate taxes and aban- don the country's generous and egalitarian welfare system.

These three institutions enjoy the privileged position of making and enforcing the rules of a global economy that is sustained by significant power differentials between the global North and South.

Since we will discuss the WTO in some detail in Chapters 7 and 8, let us focus here on the other two institutions. During the Cold War, their important function of providing loans for developing countries became connected to the West's political objective of containing communism. Starting in the s, and especially after the fall of the Soviet Union, the economic agenda of the IMF and the World Bank has synchronized neoliberal interests to integrate and deregulate markets around the world.

In return for supplying much-needed loans to developing countries, the IMF and the World Bank demand from their creditor nations the implementation of so-called 'structural adjustment programmes'. Unleashed on developing countries in the s, this set of neoliberal policies is often referred to as the Washington Consensus'. The various sections of the programme were mainly directed at countries with large foreign debts remaining from the s and s.In order to maintain their prominent positions in the global marketplace, TNCs frequently merge with other corporations.

Contemporary globalization has weakened some of the conventional boundaries between domestic and foreign policies while fostering the growth of supraterritorial social spaces and institutions that, in turn, unsettle traditional political arrangements.

Be the first. Governments can still take measures to make their economies more or less attractive to global investors. Hence, before delving into necessary matters of definition and analytical clarification, we ought to approach our subject in less abstract fashion. First, is it really true that the power of the nation-state has been curtailed by massive flows of capital, people, and technology across territorial boundaries?

Ventures that will connect the stock exchanges in New York, London, Frankfurt, and Tokyo are at the advanced planning stage. The Southeast Asia Crisis In the s, the governments of Thailand, Indonesia, Malaysia, South Korea, and the Philippines gradually aban- doned control over the domestic movement of capital in order to attract foreign direct investment.

These possible alternatives point to the fundamentally indeterminate character of globality; it is likely that our great-grandchildren will have a better sense of which alternative is likely to win out.

LORNA from Wilmington
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