GLOBALISATION

Aim: To discuss the phenomenon of globalisation and consider some of the schools of thought in the present debate.

GLOBALISATION
Globalisation may be thought of initially as the widening, deepening and speeding up of worldwide interconnectedness in all aspects of contemporary social life, from the cultural to the criminal, the financial to the spiritual. (Held et al)

How are YOU affected by GLOBALISATION?

Many disciplines involved e.g. Philosophy, Politics, Economics, Geography, Sociology, Anthropology, Significant differences in definitions

Widely varying assessment: - Chronology - Scale

DEFINITIONS:
Internationalisation:

large and growing flows of trade and capital investment between countries (Hirst/Thompson)
Liberalisation: the process of international economic integration (Sander)

Definitions (cont.) Universalisation: process of spreading various objects and experiences to people at all corners of the earth (Scholte) a planetary synthesis of cultures (Reiser/Davies, 1940s)

Definitions (cont.) Deterritorialisation a process which embodies a transformation in the spatial organisation of social relations and transactions (Held/McGrew) Westernisation/Modernisation what we in the Third World have for several centuries called colonisation (Khor)

Definitions (cont.) In the business environment:

Globalisation refers to the shift toward a more integrated and interdependent world economy. (Hill) Main components:
- Globalisation of markets - Globalisation of production

THE CURRENT DEBATE

3 schools of thought:

Hyperglobalizers (Radicals) Sceptics Transformationalists

(Held et al)

Hyperglobalisers (Radicals)
Todays global economy is genuinely borderless. Information, capital and innovation flow all over the world at top speed, enabled by technology and fueled by consumers desires for access to the best and least expensive products. (K. Ohmae, 1995)

Hyperglobalisers (Radicals) (cont.) Globalisation

a new era essentially an economic phenomenon global marketplace rules supreme brings denationalisation of economies through transnational networks of production, trade and finance

Hyperglobalisers (Radicals) (cont.) institutions of global governance emerging: sovereignty of nation state eroded new global patterns emerging: North-South/Core-Periphery replaced by more complex constellations of economic power.

Hyperglobalisers (Radicals) (cont.) Neo-Liberals: victory of individual autonomy and market principle over state power. Neo-Marxists: victory of oppressive global capitalism.

Sceptics
We

do not have a fully globalized economy, we do have an international economy and national policy responses to it. (Hirst and Thompson, 1997)

Sceptics (cont.) Globalisation:

a myth, nothing new, only heightened levels of interaction between predominantly national economies national governments remain powerful and continue to regulate international activity
governments not passive victims but architects of internationalisation

Sceptics (cont.)

governments not passive victims but architects of internationalisation Regionalisation NOT Globalisation international economy divided into three major blocs: -Europe -North America -Asia Pacific

Sceptics (cont.)

world economy now less integrated than during the classical Gold Standard era international patterns of inequality have changed only marginally rise of aggressive nationalism/fundamentalism (clash of civilisations)

Transformationalists
Many of us feel in the grip of forces over which we have no control. Can we re-impose our will upon them? I believe we can. The powerlessness we experience is not a sign of personal failings, but reflects the incapacities of our institutions. We need to reconstruct those we have , or create new ones, in ways appropriate to the golden age. (Giddens, 1999)

Transformationalists (cont.) Globalisation:

a central driving force behind the rapid social, political and economic changes is reshaping the world order historically unprecedented no longer distinction between domestic and international affairs (intermestic)

TRANSFORMATIONALISTS (cont.)
future direction uncertain leads to new global stratification sovereignty of the state juxtaposed with institutions of international governance new sovereignty regime displacing traditional notions of statehood and sovereignty governments more outward looking Power of national governments not diminished but restructured and reconstituted

(based on Held et al)

Where do YOU stand in this debate?

Globalisation (cont.)

Accurate assessment difficult Lack of long-term global data

Globalisation (cont.)
Economic integration:

shallow integration: - trade in goods and services - movement of capital deep integration: - from 1960s onward - extends to production of goods and services - increases visible and invisible trade - involves primarily TNCs

Globalisation (cont.)
Internationalisation: Extension of economic activity across national borders; growing quantitatively. Globalisation: as internationalisation + qualitatively different functional integration of internationally dispersed activities.

Globalisation (cont.) Uneven spread of globalisation:

- country/region - urban/rural - social class - age group

The Drivers of (Economic) Globalisation

Improvements in technology: - communication - transport Demand for opportunities created

Impact of public policies

INTERACTION of these factors is important!

The Drivers of (Economic) Globalisation (cont.)

Examples: Passenger transport to USA: During colonial times: indentured servant: (5-7yrs) Early 20th century: 2-3 months wages

21st century: ???

The Drivers of (Economic) Globalisation (cont.)

Increase in migration/passenger traffic Increase in international trade

The Drivers of (Economic) Globalisation (cont.)

Since WWII: dramatic improvements in air cargo

integration of sea/road/rail transport through use of containers

Communication costs have fallen dramatically Reductions in both COST and TIME!

The Drivers of (Economic) Globalisation (cont.)

Since WWII:

real living standards have improved threefold World trade in goods and services has increased by nearly twice the pace of GDP: -1950 just under 1/10 of world GDP - 2000 about 1/3 of world GDP

Artificial barriers to international trade have fallen by between 80 and 90 percent.

THE HISTORICAL PERSPECTIVE

Positions change with definition:

Cyclical/recurring phenomenon
Linear development

Germination phase: post 15th century

Take-off period: mid 19th century (Robertson)

THE HISTORICAL PERSPECTIVE (cont.)

Germination phase: post 15th century Take-off period: mid 19th century (Robertson) Start in late 19th century (Porter) Globalisation a phenomenon of the present (Drucker)

THE HISTORICAL PERSPECTIVE (cont.) 15th/16th century:

Local trade: basic necessities Long-distance trade: luxury goods (spices, fine cloth) European maritime nations at centre of international trade dramatic expansion of international trade Core: Spain, Portugal

THE HISTORICAL PERSPECTIVE (cont.) 17th century:

Core moved north: England, Netherlands, France

Development of world trading system Tripartite structure: core/semi-periphery/periphery

THE HISTORICAL PERSPECTIVE (cont.) 19th century: industrialisation

Accelerated and further changed world trade

Core: - industrial production - exported m/f goods, imported raw materials from colonies

New international division of labour

THE HISTORICAL PERSPECTIVE (cont.) Periphery: - supplied raw materials and foodstuffs - market for machinery and equipment trade between core nations and exports to periphery Core: Britain. 19th/20th century: industrial production moves to the US and Germany

THE HISTORICAL PERSPECTIVE (cont.)

Overall development: rapid growth of production and geographical expansion/shifts followed by stagnation/recession

Kondratiev long waves

World War II: decisive break, The West, Eastern Bloc, Third World.

THE HISTORICAL PERSPECTIVE (cont.)

Shift from British to US dominance

Emergence of Germany and Japan as leading manufacturing nations Manufacturing moving from core to periphery to a more complex pattern of production (Asia - Pacific; Eastern Europe)
The End of Globalisation?

Summary

Definition 3 schools of thought: - Radicals (Hyperglobalisers) - Sceptics - Transformationalists Drivers of globalisation The historical perspective

Additional Reading:
Dicken, P. (1999) Global Shift (3rd edition), London: Chapman Giddens, A. (2000) Runaway World: How Globalization is Reshaping our Lives, Andover: Routledge. Held, D. et al (2000) Global Transformations, Cambridge: Polity Press.

Additional Reading (cont.) Hirst, P. and Thompson, G. (1999) Globalization in Question (2nd edition) Cambridge: Polity Press. Ohmae, K. (1990) The Borderless World: Power and Strategy in the Interlinked Economy, New York: Free Press Ohmae, K. (1995) The End of the Nation State: The Rise of Regional Economies, New York: Free Press Scholte, J A. (2000) Globalization: A Critical Introduction, Basingstoke: MacMillan.

Additional Reading (cont.) www. IMF: www.imf.org/external/np/exr/ib/2000/041200.htm International Forum on Globalisation: www.ifg.org

United Nations Conference on Trade and Development (UNCTAD): www.unctad.org/en/pub/pslwir99.htm International Chamber of Commerce: www.icccwbo.org