Thoughts on Globalization, 1/15/02 Pete Bohmer I. Class this week, Wednesday optional to come in, Dan and I will be here at 10:00, turn in paper by 1:00 Friday-not enough time for both movies; Global Assembly Line Sweatshop Warriors is in bookstore II. Outline of Class A. Definition of Globalization, Name given to it B. Brief Writing Exercise C. Perspectives on Globalization 1. Causes and Uniqueness 2. Central Aspects of it 3. Social, Economic and Political Implications a. South b. North 4. What is to be done and resistance? A. Definition No one definition, Globalization refers to the process of reducing barriers between countries and encourages closer economic, social and political interaction ( Tabb, Monthly Review magazine, Feb. 1999) emphasizes cross border flows of goods, money, etc. End of geography, death of distance focus on technologies of transport and communication focus on flows of goods, services, money; fax machines, mobility of capital-global village--castells, Robert Reich More extreme- Today s economy is genuinely borderless. Information, capital and innovation flow all over the world at top speed, enabled by technology and fueled by consumers desire for access to best and least expensive products (Kenichi Ohmae, The End of the Nation State, 1995). *** As experienced from below, the dominant form of globalization means a historical transformation: in the economy, of livelihoods, and modes of existence; in politics, a loss in the degree of control exercised locally for some, however little to begin with such that the locus of power gradually shifts in varying proportions above and below the territorial state; and in culture, a devaluation of a collectivity s achievements or perceptions of them.
The structure may engender resistance or accommodation. (James Mittelman, The Globalization Syndrome) B. Write for five to ten minutes Globalization and Key aspects of it; social and economic implications. C. note: Goods, people, money has certainly moved around the globe on large scale for hundreds of years if not more; capitalism has a much shorter history foreign trade of goods grew quite high in early 20th century, also financial flows. Trade between countries has grown far more rapidly than production since 1960 s; huge growth of direct investment, business services, international finance and debt. So is movement of people within and across borders more rapid; e.g., importance of remittances, tourism, global market place; firms produce and assemble parts of whole in many nations, reorganization of labor process, capitalism more dominant and widespread globally; increasing economic integration. So capitalism but quantitative and qualitative changes: global capitalism, other terms, corporate sponsored globalization; globalization, neoliberalism, free trade. III. Perspectives A. Inevitability; Also a true revolution has occurred, modernization 1. Causes are technological and/or economic efficiency (spread of the market) Focus on computer chip, internet, reduced costs of transportation, communication, also economies of scale meaning large production is cheaper agriculture, steel, etc. Easy to move money around the world; e.g., Robert Reich, Work of Nations, 2. Central Aspects-- Today s Economy is genuinely borderless. Information, capital and innovation flow all over the world at top speed, enabled by technology and fueled by consumers desire for access to best and least expensive products (Kenichi Ohmae, The End of the Nation State, 1995). Increasing global marketplace for goods, capital Looks at globalization, TNC as modernizer, dynamic, can t be stopped. Key sector is export sector, Role of national state to enforce private property rights including intellectual property rights; deregulation, privatization, create environment for private investment let market decide; Prevent inflation, balance of payments; Free Trade including services, repatriation of profits;
Liberalization and free market is mantra. IMF and WTO to enforce rules of game, win-win a. Neoliberal version role of state is to further this model possibly also education, health. Washington Consensus (Treasury Department of the U.S. government together with the executive branch of the government together with the IMF and World Bank who they dominate) b. Liberal or New Labor version worker retraining, environmental and labor agreements, some redistribution of income Robert Reich push high value added industries (Prime Minister Tony Blair of Great Britain, John Sweeney, head of AFL-CIO) 3 Social and Economic Implications-dislocation of people necessary; increased consumer choice lower prices; compared favorably to Import Substitution Industrialization (ISI) protectionist model which collapsed. Flexible labor, anti-union; Short run pain, long run gain as capital and technology inflows lead to higher productivity and wages,, increased GDP which trickles down, environment improves as income goes up. Brings democracy 4. What is to be done reduce trade and financial restrictions, cause of problems, more transparency and liberalization; integrate more into economic circuits and WTO, etc. It is positive, progress and inevitable. Looks at humans as nsumers. B. Global Capitalism sometimes called corporate sponsored globalization, not inevitable, result of power of capital, particularly transnational and financial. 1. Something new and not new response to crisis of capitalism in 1970 s falling profits response by corporations to resolve crisis; increased capitalist power as both cause of globalization and result. Key is role of state in causing this, permitting financial flows., different from A. (Not inevitable, technological change is not the main story; socially determined). Capitalism but a new stage. 2. Keys are: a. transnational corporation production and distribution is global, use of contractors and subcontractors to maximize profit, reorganization of labor super exploitative less tied to workers of nation. Growth of informal sector; Headquarter and owners may or may not be national. b. Growing power of financial capital stock market, currency trading as divorced from production.
c. State as aiding and abetting corporation, possibly with little choice Variants National state may or may not be powerless to stop this Note: unlike in III C; a, b and c are a unity. IMF-WTO to serve needs of capital as a whole or financial capital. 3. Implications of global capitalism Concept of unequal development, certain areas get capital, grow rapidly; other areas left out, most of Africa; poverty, poverty and wealth are part of the same process. Also unequal development within nations. Environmental destruction. Race to the bottom environment, labor, one region played off against another; Wages, taxes, environment fall regions, nations. Women pay a particular price, export processing zones (EPZ s); also for decline in public services, subsidies. 1. South-less autonomy for state then in North; fiscal and monetary policy more restricted-repression to those who resist. Growing imports of food. SAP as destructive culturally and economically (Note: Within global capitalism, major economic problems if you accept these rules; or if you are outside of them, then isolated from technology) 2. North- a little more autonomy in fiscal and monetary policy but limited at least in stronger versions of global capitalist thesis, growing inequality weakening of labor Unstable, overproduction, financial and production panics spread; Growing inequality of income and wealth within and between nations, see United Nations Develop Project reports (UNDP) 4. What is to be done Problem is capitalism; global solidarity, harmonization upwards a. Internationalist-Workers of the world unite, international solidarity, development to meet human needs; socialism, industrialization, fair trade. Socialist variant b. More local, small scale production less trade, agriculture and crafts-less trade Anarchist, indigenous, e.g., Vandana Shiva of India.
C. Globalization as Financial Liberalization Problem is globalization not capitalism 1. Cause of problem is financial deregulation, leads to banker and financial speculators in control; problem is not capitalism but finance capital. 2. Central aspects Focus on high speculative investment, huge flows of money across borders, financial liberalization. Stock market development 3 Implications economic instability caused by huge financial capital flows; also lack of demand for consumer goods caused by growing inequality of income and wealth. Problem is power of financial capital, speculators. 4. Solutions Controls on short term capital flows: Tobin Tax on international financial transaction; too much emphasis on zero inflation by IMF and World Bank, Fed, European Union. Keep up consumer demand; reform IMF, government spending, challenge structural adjustment policies (SAPs); In this version of globalization, capitalism and markets with dose of government regulation, spending are desirable. Reformist solutions.