Definitions and Introduction:Definitions and Introduction:

1) The term “globalization”1) The term “globalization”Modernisation in the 1960s – This was an important debate which dominated development studies, economic history and political science for some time.

The debate on globalisation started already in the 1970s, but it was given new strength by the collapse of State Socialism and the advent of global capitalism. Also the information revolution gave the term new pregnancy.

We refer to the advent of globalisation after 1980.

This debate is often confused and confusing. Globalisation may refer to: a) the structural changes that have taken place in the global economy: i.e. how it organized and integrated;b) The neo-liberal, free market “globalization project”.

Definitions

Globalisation describes growing global interconnectedness. It involves the organisation and exercise of power on a global scale.

It is a multidimensional process – it applies to a whole range of social relations, cultural, economic and political. Its effects range from the food we eat, the TV we

watch and the sustainability of our environment.

It can be seen positively as well as negatively

Cultural economic and political processes are stretched across nation-state boundaries. Events and decisions taken in one part of the world have an increasing impact on others.

This stretching is associated with INTENSIFICATION OF FLOWS AND NETWORKS that transcend nation-states. Density of communication and interactions. Example world wide web. ELECTRONIC FLOWS – Communication networks stretching across the world connect people into a single social space, which is quite distinct from a territorial space.

INCREASING INTERPENETRATION of economic social and cultural practices.

GLOBAL INFRASTRUCTURE underpins globalization, both in terms of global systems of communication, and in terms of institutions, both economic and political, that are suppose to regulate the system: see the United Nations or the World Trade Organization.

Globalisation should therefore be understood as implying a dense network or interconnections, also referred to as “deep integration” on a world-wide level. Globalisation implies an intercontinental dimension. For example see environmental issues or climate change which link different regions in different continents together.

It is distinct from:-Regionalisation (which refers to “deep integration” but limited to neighbouring countries of a particular region/continent)-Internationalisation (which refers to “shallow integration”, on more traditional lines.

Globalization poses a fundamental challenge for the Nation-State.

Globalisation as processGlobalisation as process

If we see globalisation as a process, we actually consider a set of different events, in the cultural, economic and political sphere. We classify them along a spectrum that ranges from the local to the regional to the global and we identify a trend. We probably discover that some parts of social and economic life are closer to one side of the spectrum than to the other, but we take an increasing trend, the stretching of connections, relations and networks to mean that globalisation is happening. However the process might not be a linear one. There might be advances in one area and setbacks in another.

2) 2) Interpretations of GlobalizationInterpretations of GlobalizationGlobalist viewGlobalist view – They take the view that globalisation is real and can be measured and seen. The key assumption is that

forces of globalisation are supplanting, or will inevitably supplant traditional nation-states. Despite different

interpretations, globalists would agree that the essential element of globalisation is economic.

Positive globalists The positive globalists are usually neo-liberals who regard market mechanism as superior to states.

Negative globalists.They are neo-Marxists; they believe that globalization is the expression of the power of global capitalism and that it reinforces patters of inequality between regions and countries.

SCEPTICS about Globalization.

INTERNATIONALISTS or TRADITIONALISTS: They are sceptic about globalisation. Much of what is happening is not new, and there are vast continuities between the past and the present.

TRANSFORMATIONALISTS: The globalists may have exaggerated their case, but there is still evidence of stretching and intensification of global flows.

Globalization represents the projection of US -inspired international liberalism (Gilpin).

For other sceptics it represents the new force of western imperialism.

Globalization and national interest

The Cultural imperialism thesis – global cultural flows involve cultural imposition and dominance. Can globalization simply be seen as Westernization?

This view argues for a resistance to globalization, in the form of: • economic measures to stop and control the global flows • civil protest against the negative effects on the environment, labour conditions etc.

No global movements which act as pressure groups, or NGO in the main global arena.

World povertyWorld poverty

• At the end of the 2004s according to UN Statistics less 1 billion people, i.e. 18% of the world population lived under the World poverty line extreme poverty. The figures as decline consistently after 1981. Looking at relative poverty figures the number in 2001 was 1.5 billion i.e. 28.9% of the world population.

• One billion people in 1999 lacked adequate shelter and housing and 1.3 billion were without access to safe drinking water. 2 billion, 22% of the world population were without electricity.

• Clearly economic poverty also leads to political weakness, financial dependence etc. An increasing gap between the rich, the very rich and the poor.

Economic Globalisation:

markets and production are becoming increasingly interdependent due to the dynamics of trade in goods, services and flows of capital and technology and labour.

It is not a new phenomenon.

It has enormously accelerated in the last 30 years.

Trade in the global economy Trade in the global economy

Trade implies the existence of global markets for traded goods and services.

After 1945 trade volumes outpaced the growth of world output.

The growth was more rapid up to 1973 but even between 1973 and 1996 world trade grew at an average rate of over 4 per cent.

Capital flows in the global economy Capital flows in the global economy

The growth of international capital flows started with the Eurodollar market in the 1960s. It has picked up speed since the 1970s.

Liberalization of financial markets + scrapping of capital controls + flexible exchange rates.

Speculators can attack currencies whose exchange rate is deemed to be non-credible. They can also speculate on floating exchange rates.

Multinational corporations• Thr MNC – Multinational Corporation is a company,

which produces goods or markets its services in more than one country

• Foreign direct investment (FDI) is defined as a long-term investment by a foreign direct investor in an enterprise resident in an economy other than that in which the foreign direct investor is based

Nation states in the global economy

Political economy and the needs of a global economy will put fundamental constraints on any government. The choices in front of them will be restricted, to the practice of ‘sound economic management’.

Has Globalisation undermined the Nation-State?

• The globalist view insists on the forces of global capital that are fatally undermining the nation state (Balderston).

• The traditionalist view. Globalisation is well under the control of the main hegemonic power: the US–

• The transformationalist view identifies the shift in power but posits a new kind of nation state able to respond to some of these challenges by redefining its powers and nature.

Issues: is globalization just a repeat of the pre-1914 period?

Trade (in goods) in 1913 was very important.The international movement of capital and labour

was just as free as in the 1990s perhaps more.

However there is a distinct qualitative difference, especially if we consider the nature and degree of interconnections in the world economy and the speed with which interconnections occur. For example: intra-industry and intra-firm trade; MNCs and global production networks

REGIONALISATION is important. Perhaps more than GLOBALIZATION.

What is happening in the world economy is the formation of at least 3 large economic blocs, the EU, the North American bloc and the Japan and S. East Asia bloc. Regionalization shapes and contains globalization?

The 3 areas have a high proportion of intra-trade.

Class Work

Joseph StiglitzMaking Globalization work,

What is the Washington Consensus?

What is SUSTAINABILITY

What is the relationship between economic and political globalization?

Is globalization good or bad? And what are the problems it poses for world development?

How should it be reformed?