Post on 03-Apr-2018
European Labour Market and Welfare Systems
Jean Monnet Chair in European Integration Studies
Prof. PASQUALE TRIDICO
Globalization
What are the characteristics of the globalization phenomenon?
What are the components of the globalization process
How does this relate to history
The same trend does not always have the same impact everywhere
What are the pros and cons of Globalization?
Globalization-Something New?
It’s been a long time coming, but now it is happening furiously fast—and that is part of the problem.
So, to “what is it?” and “why is it happening?” we have to add: “is the pace of globalization accelerating—and the answer is a definite “yes”
WHAT IS GLOBALIZATION?
1) Whole world interconnected
- interdependence of all parts of world
2) Intensification of world-wide phenomena
3) Trans-national relations
- erosion of national boundaries
4) “Domino effects”
- events have long-distance ramifications e.g. September 11
WHAT IS GLOBALIZATION? 5) Alteration of space
- distances shortened
- technological changes
6) Alteration of time
- things happen quicker
7) Sense of “globality” /
Global consciousness
- experience all places as interdependent
- “the whole planet”
- “the whole of humankind”
Early Globalization
Key Elements: THEN
Key Elements--NOW
What are the Components? 1.
Broad Category: Technology
Instant, cheap Worldwide Communications—cell phone, www(availability at the individual level)
International (instant)financial and capital transfers
Increased scale and frequency of air transport
Container ships
Definitions of Globalization
Political, economic, social and cultural aspects
“an immense enlargement of
world communication and a
world market” (Fredric Jameson)
- capitalist market spreads everywhere
- the negative consequences of capitalism spread globally
Definitions of Globalization
“the intensification of world-wide social relations” (Anthony Giddens)
- - “stretching” of social relations across the globe
- - communications and media technologies
“the compression of the world and the intensification of consciousness of the world as a whole” (Roland Robertson)
- - world becomes “smaller”
- - world is experienced as “one place”
0
2000000
4000000
6000000
8000000
10000000
12000000
1980 1985 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2006
FDI in Developed countries and in the World
world FDI inward stock (millions US$)
world FDI outward stock (millions US$)
DevC FDI inward stock (millions US$)
DevC FDI outward stock (millions US$)
0
5
10
15
20
25
30
35
Global trade intensification
World Imports of goods and services (% of GDP)
World Exports of goods and services (% of GDP)
0
0,5
1
1,5
2
2,5
3
3,5
4
4,5
Foreign Direct Investments in percent of World GDP
FDI, net inflows (% of GDP)
Definitions of Globalization
Deterritorialization:
“a process (or set of processes) which embodies a transformation in the spatial organization of social relations and transactions - assessed in terms of their extensity, intensity, velocity and impact - generating transcontinental or inter-regional flows and networks of activity” (David Held)
1) Processes across and beyond nation-states
2) Processes across whole regions e.g. European Union
History of Globalization Last 30 years
- Electronic communications technology
- Cheap air travel
- Spread of capitalism after fall of Communism in 1989 and 1991
- Development of a truly “global” capitalism
Component 2
Broad Category: Information
Instant dispersal of news by satellite TV, www, fax (but what news and whose?)
Competition is worldwide, not local or national
Very hard to keep a secret
Components 3
Broad Category: Culture
Increasingly a “global village,” but a Western one watching the same TV, music videos, news, soaps. Reaction to this?
Rise of a “global language.” Why? Whose?
Smaller cultures may feel threatened
Component 4
Broad Category: Environment and Health
Global environmental problems (Ozone, global “warming,” sea-level change
AIDS, Ebola, ??
Global plunder of common pool resources—ocean, forests…..
Component 5
Broad Category: Crime and Terrorism
“International” crime, Russian Mafia
Terrorists in caves in Afghanistan threaten lower Manhattan
International crime does not play by the rules of “states,” and may be better organized than some, and “own” others.
Component 6
A global population?
The rich countries remain rich, and a declining proportion of world population
The poor countries remain poor, and a rapidly expanding part of the worlds population (95% of the growth)
Hence the pressure to move to the rich countries, legally or illegally
The Information Revolution
The Internet
The WWW
Instant Dispersal of News & Information
The Rise of a Global Media Village?
The Personalization of communications: the cell/mobile phone system, and its increasing capacity.
Information: Downside?
But, what information is becoming global? But whose news is becoming global?
What is this doing to cultures and communities?
Does Globalization = Westernization =Americanization? Does it matter?
Are we evolving a global language? What are the consequences of this?
Is This Globalization?
Trans-national mobility of:
1) money & wealth
- through computer technology
2) jobs, goods & services
3) business-people
“Trans-national business class” (Leslie Sklair)
A new global elite
Trans-national Corporations (TNCs)
- e.g. Coca-Cola, Nike, Gap, Nokia, News International
Investment in countries
- cheap labour, low taxes
Mobility of capital:
- pull out of one country and move elsewhere:
Increasing World Trade (Billions of
US$)
20 33 21 53 94 154574
1.972
3.824
7.465
0
1.000
2.000
3.000
4.000
5.000
6.000
7.000
8.000
1913
1928
1933
1948
1958
1963
1973
1983
1993
2001
Year
Wo
rld
Exp
ort
s (
US
$
Bil
lio
ns)
Merchandise Exports as percentage of GDP in 1990 prices, world and major regions, 1870-1998 ______________________________________________ 1870 1913 1950 1773 1998 ______________________________________________ Western Europe 8.8 14.1 8.7 18.7 35.8 Eastern Europe & former USSR 3.3 4.7 3.8 6.3 12.7 Latin America 9.7 9.0 6.0 4.7 9.7 Asia 1.7 3.4 4.2 9.6 12.6 Africa 5.8 20.0 15.1 18.4 14.8 World 4.6 7.9 5.5 10.5 17.2 ______________________________________________
Who Manages Globalization?
There is no world government, so who regulates and controls the process? Mostly UN agencies, but they require the compliance of all member states, and the UN does not make law.
Do states ever put the global priority ahead of their own? Plus, we have rich, strong states, and poor weak ones.
Free trade: no national barriers to trade
Neo-liberal ideology:
free markets = no State interference in economy = wealth for all
World Trade Organisation (WTO)
International Monetary Fund (IMF)
World Bank
Reduction of a government’s control of its country’s economy
The “Real” World and the “Political” World
This
Or
This-----------
The big difference is, of course, that the one on the left will still be going in 2 billion years; the one on the right, well, don’t put money
on it.
Globalization—The Really Scary Part Part 1—the Good Old Days
Plague Famine
Globalization—The Really Scary Part Part 2—Today
AIDS
SARS
EBOLA
?
Melting Ice Sheets, Flooded Coasts, Global Warming?
Terrorism
Globalization—The
…poverty…...
For Lucas (1993), international trade contributes to stimulate economic growth through a process of structural change and capital accumulation Capital accumulation is determined by “learning by doing” and “learning by schooling” in a process of knowledge and innovation spillovers. A country that protects its goods from international competition by raising tariffs on goods made with intensive skilled work will have as an effect a domestic increase in the price of goods that use intensive skilled work. Skilled workers’ wages will increase and R&D will be more expensive. Consecutively, investments in R&D will decrease, and growth will be affected negatively. On the contrary, deleting tariffs on those goods will cause a reduction in the price of goods that use intensive skilled work. R&D will cost less, and investments in R&D will increase, with positive effects on growth (Lucas, 1993). Policies should therefore address such problems and should create conditions for effective and substantial R&D investments.
Pro and cons…. Advantages of globalisation
uneven development is caused mainly by liberalisation and trade intensification via wage differentials. This risk was already raised by Stolper and Samuelson: according to the Stolper-Samuelson theorem, market integration increases economic inequality and vulnerability because increased international trade raises the incomes of the owners of abundant factors and reduces the incomes of the owners of scarce factors. Since advanced industrial countries are more capital-intensive economies and abundant with skilled labour, trade is expected to be beneficial for capital-intensive economies and skilled labour and detrimental for unskilled labour, increasing income inequality, and for labour-intensive economies, increasing regional disparities.
…but inequality increases… Why? in theory
…BUT inequality…..
Compensation financial sector and other sectors
Avg compensation financial sector
Avg Compensation other sectors
Source: Financial Crisis Inquiry Commission (2011)
Ratio between manager and average workers
compensation in USA Fonte: ILO 2010
Scarier Still
We have global crime—financial, drug-related etc., perhaps the largest single element in international trade
A Man in a cave in Afghanistan can kill 3000 people in lower Manhattan
International crime does not play by the rules of states—or anyone else—and may be better-equipped.
To Recap: Globalization
Is Driven by Technology
Is seen as threatening cultures because it is equated with Westernization
Increases the pace at which everything happens: capital transfers, spread of disease, change of culture…
May be changing our global environment, but can states manage the globe?
Who runs the world????
Globalization of Economy
Right-wing view (e.g. Francis Fukuyama):
- free trade benefits all countries
- poorer countries’ economies develop and citizens get richer
- capitalism brings with it the benefits of
consumerism
democracy
human rights
- “Global Village”
Left-wing view
e.g. Noam Chomsky, Zygmunt Bauman
World united in some ways
- especially economically: world-wide capitalist market
- Habermas: world-wide capitalist system; colonizes local life-worlds
World divided in other ways
- increasing wealth in Developed World, increasing poverty in Developing World
- globalization works in Western interests
Immanuel Wallerstein: World-Systems Theory
1) Globalization = new form of imperialism
2) Not direct but indirect
Not political but economic control
3) Globalization based on rich “core”
nations and poor “periphery” nations
4) Developing world debt
5) Job insecurity in core nations:
- Decline of manufacturing
- “off-shoring”