GlobalizationGlobalization

Change, Power, and Backlash

What is Economic Globalization?

Increased trade flows between countries and trade dependence: imports+exports/GDPIntra-firm trade means production of one product often occurs in multiple countriesHigher levels of FDIGlobal financial markets: currencies and lendingPrice/wage conversion in globalized market

Sources of GlobalizationSources of Globalization

US Hegemonic Influence (political):IMF, IBRD, GATT/WTO, NATO, UN

Liberalism of major economic powers G7+ (pol/eco):

UK, France, Japan, Germany, Italy, Canada, Australia, etc.

Technology (eco):Communicationstransportationother means of efficiency in production

Benefits of Globalization for Benefits of Globalization for Global System??Global System??

Greater wealth through liberalism: trade, investment, monetary integration to form one global economy

World Peace??If interdependence and globalization create

more wealth and also reduce state autonomy to alter policy away from globalization, then less reason to rock-the-boat.

Political Effects of Political Effects of Globalization on NationsGlobalization on Nations

Interdependence: States are mutually dependent upon each other and either sensitive or vulnerable to changes in each others politics or economies.

Loss of autonomy to global markets in wages, prices, monetary value. Globalization means states lose more through barriers (tariffs, capital controls)

If states have lost autonomy and power, where has it gone?

Some power has been transferred away from states to actors in the richest states, but even their autonomy is weaker. The weakest states were always vulnerable to the rich and the strong.

The market and nonstate actors, such as MNCs. In other words, more of the decisions being made for individuals are being made by those outside their country, although accountability is lower since it is hard to identify the multitude of those with influence.

Because the mechanisms of the market operate with an invisible hand, there is no single entity to blame or fear.

This means that as jobs are eliminated (a concrete reality) the promise of a new and better job is abstract. Hence, economic disruption and vulnerability to outside economic shocks, such as the contagion of financial crises, are feared or do harm people.

This means policies that promote globalization like NAFTA or other free trade areas are inherently political. Does globalization actually make people better off? We do not fully know.

Is it any wonder out-sourcing is a hot topic???

Yes, some people benefit from new high paying jobs, but how many?

Yet, some people are short-term, or permanent losers, and have no reason to support globalization. There is a growing gap between rich and poor in the US and other developed states, mostly based on educational level. Fewer people can maintain a middle-class income on a high school level education compared to past decades.

Social dislocation is also a source of civil war in other countries.

Furthermore, it would appear that not all regions of the world stand to gain equally in regard to globalization, at least over a few

generations.

East and Southeast Asia have developed at a high rate whereas growth has been slower in Latin America, Africa, Eastern Europe, the

Middle East and central Asia.

Exploitation of the Poor??

Many radicals claim that global capitalism achieves the following:

exploits cheap labor and undermines labor in developed nations through lower wages, few benefits, fewer safety regulations, and generally does not respect basic human rights.

Produces pollution in weak poor states that are in little position to negotiate or resist.

Protest and Rioting against Protest and Rioting against Globalization:Globalization:

Key Targets: WTO, IMF, IBRD, G7+, MNCs, etc.

Reasons:Exploitation of workers: Pay, benefits, safetyPollutionBarriers to Development: Debt, Literacy, etc.

Battle for Seattle and WTO, Nov. 1999Battle for Seattle and WTO, Nov. 1999

Many of these concerns have been the topic of anti-globalization protests, with the WTO, IMF, and IBRD key targets besides NAFTA.

http://web.mit.edu/gtmarx/www/seattle.html

http://web.mit.edu/gtmarx/www/seattle.htmlhttp://web.mit.edu/gtmarx/www/seattle.html

http://www.greatdreams.com/prep.htm

http://www.greatdreams.com/prep.htmhttp://www.greatdreams.com/prep.htm

IT IS NOW ILLEGAL TO POSSESS, OWN, SELL, OR CONVEY A GAS MASK IN THE CITY LIMITS OF SEATTLE!!!!

Mike Moore, WTO Director-General at the time

Other effects of Globalization

Greater contact between nationalities and cultures

Environmental degradation and pollution. Ecological disaster and increasing disappearance of species.

Increasing spread of disease: SARS, AIDS, Bird flu, etc.

Cultural GlobalizationCultural Hegemony of the West?Greater Diversity as a benefit?

Backlash:TerrorismDestruction of traditional cultures

GlobalizationWhat is Economic Globalization?Sources of GlobalizationBenefits of Globalization for Global System??Political Effects of Globalization on NationsExploitation of the Poor??Protest and Rioting against Globalization:Battle for Seattle and WTO, Nov. 1999Other effects of GlobalizationCultural Globalization