Unit 3. Globalization Trends associated with globalization

• Increase in international trade at a faster rate than the growth in the world economy.

• Increase in international flow of capital including foreign direct investment.

• Increase in world production and output and consumption.

• Greater trans-border data flow, using such technologies as the Internet, communication satellites, and telephones.

• The push by many advocates for an international criminal court and international justice movements (see the ICC and ICJ respectively).

• Greater international cultural exchange, for example through the export of Hollywood and Bollywood movies.

• Some argue that terrorism has undergone globalization through its use of global financial markets and global communication infrastructure.

• Spreading of multiculturalism and increased individual access to cultural diversity, with on the other hand, reduction in diversity through assimilation, hybridization, Westernization, Americanization of cultures.

• Erosion of national sovereignty and national borders through international agreements leading to organizations like the WTO, OPEC, and EU.

• Greater international travel and tourism.

• Greater immigration, including illegal immigration.

• Development of global telecommunications infrastructure.

• Development of global financial systems.

• Increase in the share of the world economy controlled by multinational corporations.

• Increased role of international organizations such as WTO, UN, IMF that deal with international transactions.

• Increase in the number of standards applied globally, for example, copyright laws.

• Regional economic integration (regionalism).

• Economic integration is concerned with the removal of trade barriers or impediments between at least two participating nations and the establishment of cooperation and coordination between them. Economic integration helps steer the world toward globalization. Globalization refers to the growing economic interdependencies of countries worldwide through the increasing volume and variety of cross-border transactions in goods and services and of international capital flows, as well as through the rapid and widespread diffusion of technology and information.

• The following forms of economic integration are often implemented.

• Free Trade Area: Involves country combination, where the member nations remove all trade impediments among themselves but retain their freedom concerning their policy making vis-à-vis non-member countries. The Latin American Free Trade Area, or LAFTA, and the North American Free Trade Agreement, or NAFTA are examples of this form.

• Customs Union: Similar to a free trade area except that member nations must conduct and pursue common external commercial relations such as common tariff policies on imports from non-member nations. The Central American Common Market (CACM) and the Caribbean Community and Common Market (CARICOM) are examples of this form.

• Common Market: A particular customs union that allows not only free trade of products and services but also free mobility of production factors (capital, labor, technology) across national member borders. The Southern Common Market Treaty (MERCOSUR) is an example of this form.

• Economic Union: A particular common market involving the unification of monetary and fiscal policies. Participants introduce a central authority to exercise control over these matters so that member nations virtually become an enlarged single “country” in an economic sense.

• Political Union: Requires the participating nations to become literally one nation in both an economic and political sense. This union involves the establishment of a common parliament and other political institutions.

• Along with the above sequence from 1 to 5, the degree of economic integration increases. One form may shift to another over time if all the participating nations agree. For example, the European Union (EU) started as a common market and shifted over the years to an economic union and now to a partially political union.

• The above forms reflect economic integration between or among nations within a region. Global economic integration also occurs through “multilateral cooperation” in which participating nations are bound by rules, principles, or responsibilities stipulated in commonly agreed upon agreements. Unlike the preceding five forms that all lead to regional economic integration, multilateral agreements are largely used to promote worldwide economic exchanges. They may be designed to govern general trade, service, and investments (for example, the World Trade Organization), capital flow and financial stability (for example, the World Bank and the International Monetary Fund), or specific areas of trade, such as dealing with particular commodities (for example, the International Coffee Agreement).

• International economic integration is propelled by three levels of cooperation: Global, regional, and commodity. Global-level cooperation occurs mainly through international economic agreements or organizations (for example, WTO); regional-level cooperation proceeds through common markets or unions (for example, NAFTA); and commodity-level cooperation proceeds through multilateral commodity cartels or agreements (for example, OPEC).

• Barriers to international trade and investment have been considerably lowered since World War II at the multilateral level through international agreements such as the General Agreement on Tariffs and Trade (GATT). Particular initiatives, carried out as a result of GATT and the WTO, for which GATT is the foundation, have included.

Promotion of free trade

• Of goods: Reduction or elimination of tariffs; construction of free trade zones with small or no tariffs.

• Of capital: Reduction or elimination of capital controls.

• Reduction, elimination, or harmonization of subsidies for local businesses

• Intellectual Property Restrictions.

• Harmonization of intellectual property laws across nations (generally speaking, with more restrictions).

• Supranational recognition of intellectual property restrictions (for example, patents granted by China would be recognized in the U.S.).

Anti-globalization

• Various aspects of globalization are seen as harmful by public-interest activists as well as strong state nationalists. This movement has no unified name. "Anti-globalization" is the media's preferred term. Activists themselves, for example Noam Chomsky, have said that this name is as meaningless as saying the aim of the movement is to globalize justice. Indeed, "the global justice movement" is a common name. Many activists also unite under the slogan "another world is possible," which has given rise to names such as altermondisme in French.

• There is a wide variety of different kinds of "anti-globalization." In general, critics claim that the results of globalization have not been what was predicted when the attempt to increase free trade began, and that many institutions involved in the system of globalization have not taken the interests of poorer nations and the working class into account.

• Economic arguments by fair trade theorists claim that unrestricted free trade benefits those with more financial leverage (that is, the rich) at the expense of the poor.

• Many "anti-globalization" activists see globalization as the promotion of a corporatist agenda, which is intent on constricting the freedoms of individuals in the name of profit. They also claim that increasing autonomy and strength of corporate entities increasingly shapes the political policy of nation-states.

• Some "anti-globalization" groups argue that globalization is necessarily imperialistic, that it is one of the driving reasons behind the Iraq War (2003), and that it has forced investment to flow into the United States rather than to developing nations.

• Some argue that globalization imposes credit-based economics, resulting in unsustainable growth of debt and debt crises.

• Another more conservative camp in opposition to globalization are state-centric nationalists that fear globalization is displacing the role of nations in global politics and point to NGOs as impeding the power of individual nations. Some advocates of this warrant for anti-globalization are Pat Buchanan in the U.S. and Jean-Marie Le Pen in France.

• The main opposition is to unfettered globalization (neoliberal; laissez-faire capitalism), guided by governments and what are claimed to be quasi-governments (such as the International Monetary Fund and the World Bank) that are supposedly not held responsible to the populations that they govern and instead respond mostly to the interests of corporations. Many conferences between trade and finance ministers of the core globalizing nations have been met with large, and occasionally violent, protests from opponents of "corporate globalism."

• The anti-global movement is very broad, including church groups, national liberation factions, left-wing parties, environmentalists, peasant unionists, anti-racism groups, libertarian socialists, and others. Most are reformist (arguing for a more humane form of capitalism) and a strong minority is revolutionary (arguing for a more humane system than capitalism). Many have decried the lack of unity and direction in the movement, but some, such as Noam Chomsky, have claimed that this lack of centralization may in fact be a strength.

• Protests by the global justice movement have now forced high-level international meetings away from the major cities where they used to be held, and off into remote locations where protest is impractical.

• Some "anti-globalization" activists object to the fact that the current "globalization" globalizes money and corporations and at the same time refuses to globalize people and unions. This can be seen in the strict immigration controls that exist in nearly all countries and the lack of labor rights in many countries in the developing world.

Pro-globalization (globalism)

• Supporters of democratic globalization can be labeled pro-globalists. They consider that the second phase of globalization, which was market-oriented, should be completed by a phase of building global political institutions representing the will of world citizens. The difference with other globalists is that they do not define in advance any ideology to orientate this will, which should be left to the free choice of those citizens via a democratic process.

• Supporters of free trade point out those economic theories of comparative advantage suggest that free trade leads to a more efficient allocation of resources, with all countries involved in the trade benefiting. In general, they claim that this leads to lower prices, more employment, higher output, and greater consumption opportunities.

• Libertarians and other proponents of laissez-faire capitalism say higher degrees of political and economic freedom in the form of democracy and market economies in the developed world produce higher levels of material wealth. They see globalization as the beneficial spread of democracy and market mechanisms.

• Critics of the anti-globalization movement argue that it is not elected and as such does not necessarily represent or is not held accountable to a broad spectrum of people. Also, anti-globalization movement uses anecdotal evidence to support its view while worldwide statistics strongly support globalization instead. Statistics show that: The percentage of people in developing countries living below $1 (adjusted for inflation and purchasing power) per day has halved in only 20 years; life expectancy has almost doubled in the developing world since WWII and is starting to close the gap with the developed world, where the improvement has been smaller; child mortality has decreased in every developing region of the world; and income inequality for the world as a whole is diminishing.

• Many pro-market (pro-capitalists) are also critical of the World Bank and the IMF, arguing that they are corrupt bureaucracies controlled and financed by states, not corporations. These critics point out that many loans have been given to dictators who never carried out promised reforms, but instead left the common people to pay the debts later. Such corrupted loan partners cause "moral hazard" or hidden detrimental action by the lenders. The pro-capitalists see here an example of too little use of markets, not too much. They also note that some of the resistance to globalization comes from special interest groups with conflicting interests like Western world unions.

Globalization in question

• The principle policy concern of globalization is usually put in terms of issues of economic efficiency. Economists tend to judge globalization largely in terms of the gains or losses that it brings to the productive development of scarce world resources. However, many would argue that economic growth should always be secondary to, and in service of, security, justice, and democracy.

• On these issues the evaluations have been both positive and negative. In some respects, globalization has promoted increased human security, for example, with disincentives to war, improved means of humanitarian relief, new job creation opportunities, and greater cultural pluralism. However, in other ways globalization has perpetuated or even deepened warfare, environmental degradation, poverty, unemployment, exploitation of workers, and social disintegration. Thus, globalization does not automatically increase or decrease human security. The outcomes are positive or negative depending on the policies that are adopted toward the new geography.

• Social justice can be looked at in terms of the distribution of life chances between classes, countries, sexes, races, urban/rural populations, and age groups. The bright side of globalization has in certain cases improved possibilities for young people, poor countries, women, and other subordinate social circles, allowing them to realize their potentials. More negatively, however, globalization has thus far sustained or increased various arbitrary hierarchies in contemporary society. For example, gaps in opportunities have tended to widen during the period of accelerated globalization on class lines as well as between the North (industrialized) and the South (underdeveloped) and the East (current and former communist state socialist countries).

• The resultant increases in social injustice can be attributed at least partly to the spread of relations beyond territorial boundaries. The inequities have flowed largely from the policies that have been applied to globalization rather than from globalization per se.

• In terms of the impact of globalization on democracy, the positives are through new information and communications technologies and an expansion of civil society. The downside is that there is a lack of mechanisms to ensure that post-sovereign governance is adequately participatory, consultative, transparent, and publicly accountable. Bold intellectual and institutional innovations are needed to refashion democracy for a globalized world.

• There is much academic discussion about whether globalization is a real phenomenon or only a myth. Although the term is widespread, many authors argue that the characteristics of the phenomenon have already been seen at other moments in history. Also, many note that those features that make people believe we are in the process of globalization, including the increase in international trade and the greater role of multinational corporations, are not as deeply established as they may appear. The United States’ global interventionist policy is also a stumbling point for those that claim globalization has entered a stage of inevitability. Thus, many authors prefer the use of the term internationalization rather than globalization. To put it simply, the role of the state and the importance of nations are greater in internationalization, while globalization in its complete form eliminates nation states. So these authors see that the frontiers of countries, in a broad sense, are far from being dissolved, and therefore this radical globalization process is not yet happening, and probably won't happen, considering that in world history, internationalization never turned into globalization—the European Union and NAFTA are yet to prove their case.

• The world increasingly shares problems and challenges that do not obey nation-state borders, most notably pollution of the natural environment, poverty, and disease. As such, the movement previously known as the anti-globalization movement has transmogrified into a movement of movements for globalization from below; seeking, through experimentation, forms of social organization that transcend the nation state and representative democracy. So, whereas the original arguments of anti-global critique can be refuted with stories of internationalization, as above, the emergence of a global movement is indisputable and therefore one can speak of a real process towards a global human society of societies.