GLOBALIZATIONThe Good, the Bad, and the Ugly

GLOBALIZATION DEFINED“By globalization we simply mean the process of increasing

interconnectedness between societies such that events in one part of the world more and more have effects on people and societies far away.”

Globalization is “the inevitable integration of markets, nation-states and technologies to a degree never witnessed before – in a way that is enabling individuals, corporations and nation-states to reach around the world farther, faster, deeper and cheaper than ever before and in a way that is enabling the world to reach into individuals, corporations and nation-states farther, faster, and deeper, cheaper than ever before.”

- Thomas Friedman

Multi-dimensional processes of integration- Economic Social/cultural Political

GLOBALIZATION OF INDIVIDUALS “Ideas spread faster, leaping borders. Poor countries

will have immediate access to information that was once restricted to the industrial world and traveled slowly, if at all, beyond it. Entire electorates will learn things that once only a few bureaucrats knew. Small companies will offer services that previously only giants could provide. In all these ways the communications revolution is profoundly democratic and liberating, leveling the imbalance between large and small, rich and poor. We seem to live in a world that is no longer a collection of isolated “local” nations, effectively separated by high tariff walls, poor communication networks and mutual suspicion. It’s a world that, if you believe the most prominent proponents of globalization, is wired, informed, and well, ‘flat’.”– Pankaj Ghemawat

CONSIDER THESE GLOBALIZING TRENDS

Economic Dimension of Globalization: Exponential increases in international economic transactions; Demand for a product in one part of the world can have significant impact

on a people and society on the other side of the globe. Global Production Lines: Growth of Multi-National Corporations (MNCs) that

spread the production and distribution of a product across the globe

Social and Cultural Dimensions of Globalization Hyper-increase in social interactions across borders Technological development has allowing ideas to flow and spread easily and

quickly from one country to another. The flow of ideas across borders can challenge local identities and beliefs

and affect cultural change.

Political dimension of Globalization Increase in number and relevance of International Organizations Increase in transnational NGOs and social movements seeking to promote

global values and goals. These movements affect political change.Increase in number of IGOs and increase in rules and regulations for inter-state transactions. These organizations affect political development.

A CRITIQUE OF THE GLOBALIZATION OF CAPITALISM

Neo-Marxists highlight the fact that there are winners and losers in the process of economic globalization. The benefits of economic growth through the expansion of global capitalism have concentrated wealth in a few very rich countries, while leaving billions of people in poverty.

Neo- Marxists argue that the economic dimension of globalization has created huge economic disparities between the Global North and Global South.

Consider: Half the world lives on less than $2.50 a day.

MARX’S THEORY OF CAPITALISM Capitalism--Contains the seed of its own destruction—

That ‘seed’ is the exploitation of workers. Exploitation is ‘needed’ to maximize profit and accumulate

capital---but ultimately the system will crash because workers are not paid enough to buy back the very goods that they are producing.

An exploited workforce will eventually rebel and bring about a new ‘mode of production’—communism

Once we enter the communist mode of production our society will be guided by the principle “from each according to his ability and to each according to his need.”.

WHY DID MARX’S VISION OF A COMMUNIST REVOLUTION NEVER MATERIALIZE?

Vladimir Lenin argues it did not happen because rich states pursued Imperialism to ward off workers rebellions at home.

Rich countries sought to exploit foreign lands and foreign workers instead. This diffused workers so they were unable to organize a workers revolution.

DEPENDENCY THEORY Dependency theory emerged in the 1970s, and drew

on Marxists concepts, in order to explain why countries in the “Global South” (Africa, Latin America and parts of Asia) have been locked into a cycle of poverty.

The Dependency School developed as a voice within the Global South challenging the terms on which poor countries were expected to modernize and develop.

Dependency theory is associated with a neo-Marxist view because it focuses on the way in which global capitalism favors some and disadvantages others. It focuses on patterns and structures of exploitation and inequality.

ESSENCE OF THE DEPENDENCY ARGUMENT

Historical patterns of exploitation (and the legacies and institutions left behind) make it impossible for poor countries to follow the same trajectory of development that have made rich countries prosperous.

Hey, free market economists at the IMF—did you forget the whole history of colonialism that made rich countries rich in the first place?

Oh, and by the way—patterns of colonialism have not evaporated. Even though formal colonial rule and shameless colonial exploitation have ended- there, nevertheless, still remain patterns of dependency and exploitation between rich and poor countries.

KEY DEPENDENCY THEORY CONCEPTS: Colonial legacies (neo-colonialism)

Many former colonies in Africa, Latin America, and Asia continue to have economies that are dependent on the export of a few raw material (s) (bananas, coffee, cotton, peanuts).

Many former colonies in Africa, Latin America, and Asia have infrastructure that was developed for the purposes of resource extraction. Transportation and communication infrastructure is built to take resources out of the country- rather than create a vibrant and integrated domestic economy.

Declining terms of trade Trading bananas for computers is not a good long-term growth strategy, but

one that many former colonies are stuck in. Trading raw materials for ‘valued added’ goods puts poor countries at a

structural disadvantage in trade Raw materials are subject to big price fluctuations, making developing

countries highly vulnerable “Development of Underdevelopment” thesis

The same historical process that ‘developed’ the rich countries (Imperialism) underdeveloped the poor countries. We can’t expect poor countries to simply liberalize trade, adopt the Washington consensus policies, and then miraculously move along the same trajectory as the Global North.

THE DEVELOPMENT OF UNDERDEVELOPMENT THESIS We, are politely referred to as "underdeveloped." In

truth, we are colonial, semi-colonial or dependent countries. We are countries whose economies have been distorted by imperialism, which has abnormally developed those branches of industry or agriculture needed to complement its complex economy. "Underdevelopment", or distorted development, brings a dangerous specialization in raw materials, inherent in which is the threat of hunger for all our peoples. We, the "underdeveloped", are also those with the single crop, the single product, the single market. A single product whose uncertain sale depends on a single market imposing and fixing conditions. That is the great formula for imperialist economic domination.

— Ché Guevara, 9 April 1961

CONCLUDING THOUGHTS ON ECONOMIC GLOBALIZATION

In the following slides I highlight some of the good, the bad, and the ugly aspects of economic globalization..

THE GOOD

With economic globalization we have seen overall global per capita income

Percent of the world living in extreme poverty has declined

THE BAD Widening global income inequality The world's 85 richest people own as much as the poorest

50 percent of humanity. http://

www.theguardian.com/business/2014/jan/20/oxfam-85-richest-people-half-of-the-world

Why should we care about inequality? Marginalizes and silences voices—does not support democratic

principles of equality Causes a sense of relative deprivation which can aggravate

conflicts May not be good for sustaining economic growth

Rising questions and concerns about the sustainability and environmental implications of economic growth. Consider, for example that the carbon dioxide emissions from

the U.S. make up 20% of total global emissions (while we only account for 5% of the world’s population) What happens when developing countries develop along this same trajectory?

THE UGLY Despite increased economic transactions and unprecedented

economic growth, many, many people on the planet have yet to see their quality of life improve as a result of this global economic growth.

Over half the world’s population (over 3 billion people) remain locked in conditions of abject poverty.

According to UNICEF, 25,000 children die each day due to poverty

780 million people on the globe do not have access to clean water. (3.4 million people die each year from water related disease)

Tremendous economic growth has so far failed to achieve meeting the basic survival needs of billions of people on the planet.

And the Global North’s commitment to development in the Global South is, shall we say, not overwhelming. The U.S. give a fraction of a percent (0.2%) of its GDP to development aid.