Lecture 11: Globalization

• Globalization


  The shrinking of space and time, communication and travel has become advanced and cheap enough to have "shrunken the world"
• Four Dimensions of Globalization

  • Political globalization
  • Economic globalization
  • Cultural globalization
  • Environmental globalization
• There are pessimistic and optimistic ways of looking at each of these dimensions of globalization
• Globalization is unequal, certain groups of people benefit more than others
• Neoliberalism


  Economic theories of Friedrich von Hayek & Milton Friedman, promoted politically by Ronald Reagan (USA) and Margaret Thatcher (UK)
• The shape of globalization is rooted in history
• Stages of Globalization


  • Colonialism (1500-1945)
  • Independence after the war
  • Inward-looking national development
  • Massive changes in the 1970s and 1980s
• Colonial globalization favoured certain groups and countries, but there was space in which marginalized groups could push back
• By 1914, colonial globalization led to world war
• Inward-looking national development focused on

  • Building an internal and cohesive national identity
  • Inward-looking economic policy (welfare state)
• International Organizations designed to assist inward-looking national development


  • United Nations (political cooperation)
  • World Bank (development assistance)
  • International Monetary Fund (financial stability)
  • World Trade Organization (trade rules)
• Massive changes in the 1970s and 1980s

  • Oil shocks
  • Stagflation
  • Increased government debt
  • Higher interest rates
  • Government debt crises
  • Weakening of Soviet Union
  • Fall of Soviet Union
  • Rise of Neoliberal ideology
• Monetarism


  Asserts that changing the amount of money in the economy will impact inflation
• Neoliberalism


  Asserts that market-oriented reform policies like eliminating price controls, lowering trade barriers, and reducing state influence in the economy will lead to economic growth
• The "plan" (neoliberalism) was financed by many of the world's wealthiest people and corporations who wanted a plan to reduce taxation and government control
• Policies of Economic Globalization

  • Deregulation of market
  • Free trade
  • Privatization
• Inequality within countries was the biggest problem in 1850, but inequality between countries has risen significantly since then
• The wealthiest economies were only about 4X wealthier than the poorest per capita in 1850, but now the GNP per capita (ppp) of Luxembourg (2nd richest) is 153 times larger than Somalia (poorest)
• The world Gini coefficient has risen from 0.55 in 1850 to 0.70 in 2010, indicating increased global inequality
• Cultural globalization is enforced by WTO/WB/IMF or bilateral/multilateral free trade agreements, limiting government control to protect national cultures from international media and business
• Aspects of Political Globalization

  • Shrinking of the power of Nations to govern their own territories (neoliberal policies)
  • Attempts in cooperation through international agencies based on United Nations
  • Information technology increases trans-national communication in decentralized way
  • Increased power of the market and transnational corporations in setting policy agendas
• Power has been taken from national governments and given to global financial speculators, large corporations, and international organizations like the IMF/WTO/WB
• In 2002, 70 of the 100 wealthiest economies in the world were corporations
• The "race to the bottom" in the global south involves cheap labour, low taxes, and weak environmental regulation
• Policies Suggested


  • Localized economies (local production for local consumption, social movements like La Via Campesina)
  • Globalized economies ("business as usual", transnational corporations)
• Globalization may have reduced global poverty, but it has also increased inequality and uneven development
• Socialism


  A political and economic theory that advocates for the collective ownership and democratic control of the means of production, as well as social welfare for all members of society.