GlobalizationGlobalizationGlobalizationGlobalization

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Recap - Globalizing Recap - Globalizing technologiestechnologies

► ‘‘Digitalization is probably the most Digitalization is probably the most important technological advance in the important technological advance in the area of communications. The term area of communications. The term refers to the process whereby refers to the process whereby information is produced as a universal information is produced as a universal binary code, and is thus able to circulate binary code, and is thus able to circulate more freely and at greater speed across more freely and at greater speed across communication technologies, and not communication technologies, and not just within them’ (59).just within them’ (59).

RecapRecap

►Digitalization brings together different Digitalization brings together different media (telephone, television, media (telephone, television, computers) and texts (pictures, computers) and texts (pictures, sounds, words).sounds, words).

►Greater flexibility.Greater flexibility.►Greater speed.Greater speed.

►The relationship between the place The relationship between the place of technology in our lives and its of technology in our lives and its supposedly progressive dimension supposedly progressive dimension needs to be discussed in terms of the needs to be discussed in terms of the actual effects of these technologies actual effects of these technologies and and global convergenceglobal convergence..

► Global convergence: ‘the tendency facilitated by Global convergence: ‘the tendency facilitated by communication technologies, to bring together communication technologies, to bring together different communities, institutions, media’ (217).different communities, institutions, media’ (217).

►Castells argues that corporations Castells argues that corporations both participate into and are both participate into and are dependent on information networks.dependent on information networks.

►As virtually all corporations are As virtually all corporations are connected to and reliant on connected to and reliant on information networks, they cannot information networks, they cannot place themselves or think outside place themselves or think outside these networks (partly because of these networks (partly because of the general interdependence on such the general interdependence on such communication systems).communication systems).

►The exclusion of some kind of information The exclusion of some kind of information in analysis is part of a much wider in analysis is part of a much wider tendency which Bourdieu refers to as the tendency which Bourdieu refers to as the ‘editing out of the human’.‘editing out of the human’.

► ‘‘Mathematization’ of human behaviours Mathematization’ of human behaviours (‘scientific’ authority associated with (‘scientific’ authority associated with statistically and mathematically based statistically and mathematically based information. 66-7).information. 66-7).

►According to Virilio, information According to Virilio, information networks contribute to the networks contribute to the development of development of endocolonialism endocolonialism (as (as opposed to exocolonialism).opposed to exocolonialism).

► Endocolonialism: Paul Virilio’s term for the new form of Endocolonialism: Paul Virilio’s term for the new form of colonialism where social and economic inequalities are not colonialism where social and economic inequalities are not exported ‘to the colonies’ but are accentuated within exported ‘to the colonies’ but are accentuated within colonialist states such as the United States and the United colonialist states such as the United States and the United Kingdom (216).Kingdom (216).

►There is now a network of flows across There is now a network of flows across the globe. The old imperial centre / the globe. The old imperial centre / periphery has disappeared into a periphery has disappeared into a confusing system of power relations confusing system of power relations and connections. What appear to be and connections. What appear to be free and interactive trade relations are free and interactive trade relations are in fact an utterly constricting set of in fact an utterly constricting set of obligations, tendencies and obligations, tendencies and imperatives (70).imperatives (70).

Chomsky and globalizationChomsky and globalization

http://www.youtube.com/watch?v=AHJPSLgHemMhttp://www.youtube.com/watch?v=AHJPSLgHemM

Chomsky and globalizationChomsky and globalization

► The accelerating pace of globalisation is having a The accelerating pace of globalisation is having a profound effect on life in rich and poor countries profound effect on life in rich and poor countries alike, transforming regions such as Detroit or alike, transforming regions such as Detroit or Bangalore from boom to bust - or vice versa - in a Bangalore from boom to bust - or vice versa - in a generation. generation.

► Many economists believe globalisation may be the Many economists believe globalisation may be the explanation for key trends in the world economy explanation for key trends in the world economy such as: such as:

- Lower wages for workers, and higher profits, in - Lower wages for workers, and higher profits, in Western economiesWestern economies

- The flood of migrants to cities in poor countries- The flood of migrants to cities in poor countries- Low inflation and low interest rates despite strong - Low inflation and low interest rates despite strong

growth.growth.

► In economic terms, globalisation In economic terms, globalisation refers to the growing economic refers to the growing economic integration of the world, as trade, integration of the world, as trade, investment and money increasingly investment and money increasingly cross international borders (which cross international borders (which may or may not have political or may or may not have political or cultural implications). cultural implications).

►The rapid spread of information The rapid spread of information technology (IT) and the internet is technology (IT) and the internet is changing the way companies changing the way companies organise production, and increasingly organise production, and increasingly allowing services as well as allowing services as well as manufacturing to be globalised. manufacturing to be globalised.

The role of tradeThe role of trade

► Trade has been the engine of globalisation, with Trade has been the engine of globalisation, with world trade in manufactured goods increasing world trade in manufactured goods increasing more than 100 times (from $95bn to $12 trillion) more than 100 times (from $95bn to $12 trillion) in the last 50 years since 1955, much faster in the last 50 years since 1955, much faster than the overall growth of the world economy. than the overall growth of the world economy.

► Since 1960, increased trade has been made Since 1960, increased trade has been made easier by international agreements to lower easier by international agreements to lower tariff and non-tariff barriers on the export of tariff and non-tariff barriers on the export of manufactured goods, especially to rich manufactured goods, especially to rich countries.countries.

►Neo-liberalism is based on the Washington Neo-liberalism is based on the Washington consensus, also called the consensus, also called the neo-liberal neo-liberal doctrinedoctrine (or (or neo-liberalismneo-liberalism). It puts great ). It puts great emphasis on liberalisation of trade and emphasis on liberalisation of trade and finance, privatisations and the supremacy of finance, privatisations and the supremacy of markets. This system praises the markets. This system praises the rationalisation of all activities and services, rationalisation of all activities and services, but it generally leads to the concentration of but it generally leads to the concentration of money within the hands of a small minority.money within the hands of a small minority.

►Neo-liberalism relies on the ideas of Neo-liberalism relies on the ideas of Adam Smith (who was one of the Adam Smith (who was one of the intellectuals who developed the idea of intellectuals who developed the idea of free trade and capitalism). free trade and capitalism).

►PrivatisationsPrivatisations►Liberalisation of trade and financeLiberalisation of trade and finance►Supremacy of marketsSupremacy of markets

Global capitalismGlobal capitalism

►Globalization can be understood as Globalization can be understood as ‘the ‘the relationship between the relationship between the development of new communication development of new communication technologies, on the one hand, and the technologies, on the one hand, and the contexts and politics of the use of that contexts and politics of the use of that technology, on the othertechnology, on the other’ (73).’ (73).

►We can also understand globalization ‘as an We can also understand globalization ‘as an aspect of its effects on and in relation to the aspect of its effects on and in relation to the institutions, practices and strategies of institutions, practices and strategies of capitalismcapitalism’ (73). ’ (73).

► Capitalism is ‘currently the dominant system for Capitalism is ‘currently the dominant system for the organization of economies; characterized by the organization of economies; characterized by the the private ownership of the means of private ownership of the means of production, and reliance on the market to direct production, and reliance on the market to direct economic activity and distribute economic goods economic activity and distribute economic goods and rewardsand rewards. Its founding principle is . Its founding principle is the pursuit the pursuit of self-interest through competitionof self-interest through competition’ (215). ’ (215).

Logic of capitalismLogic of capitalism

►Capitalism operates through the Capitalism operates through the creation of creation of surplussurplus value, but that value, but that surplus value must always find a surplus value must always find a market.market.

►Surplus value is created when the Surplus value is created when the value of production exceeds labour value of production exceeds labour and other associated costs.and other associated costs.

►Surplus value is only realized, however, Surplus value is only realized, however, through the process of consumption.through the process of consumption.

►Surplus value is then (at least parlty) Surplus value is then (at least parlty) returned to the capitalist process as returned to the capitalist process as investment, which in turn creates more investment, which in turn creates more surplus value and more goods for surplus value and more goods for consumption.consumption.

►When home markets are exhausted When home markets are exhausted and unable to cope with what and unable to cope with what eventually becomes capitalist eventually becomes capitalist overproduction, or when overproduction, or when overproduction leads to devaluation, overproduction leads to devaluation, capitalism is faced with a barrier to its capitalism is faced with a barrier to its mode of operation.mode of operation.

►This can be accommodated by the This can be accommodated by the development of new markets, such as development of new markets, such as foreign countries (or colonies in the foreign countries (or colonies in the past).past).

►The long term goal of capitalism is the The long term goal of capitalism is the capitalization of the entire worldcapitalization of the entire world (74). (74).

►Global capitalGlobal capital..

►Capitalism’s basic principle is the ‘Capitalism’s basic principle is the ‘pursuit pursuit of self-interestof self-interest, which is achieved , which is achieved economically through competition economically through competition between producers and producers, between producers and producers, consumers and consumers. This consumers and consumers. This competition, under capitalist logic, competition, under capitalist logic, creates a state in which creates a state in which the right amount the right amount of goods and services at the right price of goods and services at the right price are made available to meet consumer are made available to meet consumer demandsdemands’ (79). ’ (79).

► ‘‘The principle, in the simplest terms, is The principle, in the simplest terms, is that increasing demand will put that increasing demand will put pressure on supply; prices will go up in pressure on supply; prices will go up in response to the pressure, and demand response to the pressure, and demand will drop back, in the face of the raised will drop back, in the face of the raised prices, to reach an equilibrium with prices, to reach an equilibrium with supply’ (79). supply’ (79).

►See the marble example on page 79. See the marble example on page 79.

In other words…In other words…

►Under capitalism, the means of Under capitalism, the means of production are production are privately ownedprivately owned. The . The levels of exchange and the production levels of exchange and the production of goods and services are reliant on of goods and services are reliant on the market and the relation between the market and the relation between supply and demand rather than supply and demand rather than through intervention (79-80).through intervention (79-80).

The two main competitors of The two main competitors of capitalismcapitalism

►FascismFascism

- The means of production are privately The means of production are privately owned;owned;

- The state plans and intervenes in The state plans and intervenes in production.production.

►Communism Communism

- The state both owns the means of - The state both owns the means of production and controls the outputs. production and controls the outputs.