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GlobalisationGlobalisation is the process by which interaction between humans, and the effects of that interaction, occurs across global distances with increasing regularity, intensity and speed. This adds a new dimension to, or even replaces entirely, interaction which previously occurred across continental, national or local distances. Although much of the current debate about globalisation gives the impression that the process is relatively new, most analysts agree that globalisation has in fact been underway for many centuries. However, none believe that globalisation has been a straightforward process. Trends towards greater global interaction have, in fact, ebbed and flowed quite radically as they have developed alongside the rise of local, national and continental interaction and power. In popular debate, the term globalisation is poorly defined, often meaning different things to different people. In particular, it is rarely clear whether individuals are referring to globalisation in all of its forms or whether they are referring to its economic, political or cultural aspects. Thus, for the sake of clarity, this entry will deal with each of these three aspects separately. However, it must be kept in mind that the links between these three aspects are so closely interwoven as to make their separation a matter solely of use for the purposes of explanation. In addition, 'globalisation' can, in some contexts, be used as a pejorative term while in others it is understood as inherently good. Thus, this entry will deal with the claims for and against globalisation in a separate section below. Political Globalisation Political globalisation refers to the increasing number and power of human associations which influence or govern the world as a whole. Thus, it has been noted that in 1909 there were 37 inter-governmental organisations (IGOs) and 176 international non-governmental organisations (INGOs), by 1996 there were 260 IGOs and 5,472 INGOs (Held at al. 1999; p.53). It is also of significance that a series of key IGOs established in the post-war period have become increasingly influential over the affairs of individual nations and the world. Prime amongst these bodies are the United Nations (UN), the World Bank, the International Monetary Fund, the World Trade Organisation (WTO), the Organisation for Economic Co-operation and Development and the Group of Eight (G8). Alongside these genuinely global IGOs, there has been the establishment of continental associations of nations which have considerable political influence not only for their member nations but also as players on the world stage. The most developed bodies in this regard include the European Union and the Association of South-East Asian Nations. Underpinning this rise in IGOs is the growth in number and importance of international treaties and agreements of which there are many thousands. They cover matters ranging from trade in obscure products to global warming and human rights. A notable response to this rise of global political power and influence is the rise of international non-governmental organisations and campaign bodies designed to influence IGOs and international agreements. These range from global associations representing a particular industrial sector to the large aid agencies such as Oxfam. They also include campaign groups such as Greenpeace to looser political networks such as those formed to protest outside the meetings of IGOs. This very spread of IGOs, INGOs and treaties can also be seen as a response to a deeper process of political globalisation whereby the types of problems now confronting humanity can no longer be adequately addressed on a purely local or national scale nor through the historical method of bilateral agreements between two nation states. Such problems may include environmental degradation, refugees and mass migration, organised crime, and the proliferation of weapons of mass destruction. However, perhaps the 'borderless' issue to which global politics is now most regularly responding is the spread of global trade and finance. Economic Globalisation Economic globalisation refers to the increasing occurrence, speed and intensity of production, trading and financial exchange between individuals and bodies across global distances. This is a process which has developed over centuries, even millennia, but is taken by many analysts (although not all – see, for example, Hirst & Thompson, 1996) to have accelerated and intensified significantly in the post-war period and in particular over the last twenty to thirty years. There are numerous indicators of this expansion of the global economy, all of which are subject to dispute. Examples include a rise in world exports as a percentage of world gross domestic product from 7% in 1950 to 17% in 1995 (Krugman, 1995). Others might point to the massive growth in the issues and loans on international capital markets of 14.4% between 1973 and 1982 or 8.2% between 1983 and 1995 (Held et al, 1999). Alternatively there is the fact that international bank loans accounted for only 0.7% of world output in 1964 but stood at 16.3% in 1991 (UNCTAD, 1994). However, in non-statistical terms economic globalisation can be taken to refer to a series of linked phenomena that have emerged over the last thirty years: • Trans-national corporations have grown in size and influence across the world ensuring that production, distribution, marketing, selling and consumption of goods and services is now a truly global process with one product or service requiring the labour and/or expertise of individuals from many nations and being made available for consumption in many nations. • The rise of new technology and new financial techniques has led to a massive growth in the financial sectors of investment, banking and currency exchange alongside the much greater ease and speed with which capital can be moved around the world by electronic means. • Largely because of the above developments, national economies are more reliant now on investment by firms and organisations beyond their borders for jobs and economic well-being than used to be the case. This includes a rise in the importance of foreign direct investment (FDI) where the foreign investor plays a central managerial role in the enterprise. A political agenda has developed in support of these economic transformations known as neo-liberalism over the last decade and a half. Neo-liberals argue that the process of economic globalisation should be pursued with ever greater vigour by encouraging national governments and their associations to abandon practices and policies which discriminate against foreign investors and firms such as tariffs, subsidies to domestic producers and maintenance of public monopolies. Believers argue that such encouragement of world trade will promote economic growth and ultimately bring wealth to the world's poor. However, there is much criticism of neo-liberalism despite its currently pre-eminent position and influence within the institutions of global governance (see below). Cultural Globalisation Cultural globalisation refers to the growth in the exchange of cultural practices between nations and peoples. Although, this is a process that has undoubtedly occurred for thousands of years, economic and political globalisation has enhanced the process enormously in recent decades. In addition, many analysts point to the way new technologies and their exploitation such as commercial air travel, satellite television, mass telecommunications and the internet have created a world where billions now consume identical cultural products – such as pop music, soap opera and sporting events – and employ cultural practices they would never otherwise have encountered – such as foreign food preparations and foreign words and phrases. At the heart of much of the rise of cultural globalisation has been the massive expansion of the entertainment and communications industry fuelled, in particular, by the spread of television. One survey found that while there were only 39 television sets for every 1,000 people on the planet in 1959, this had risen to 160 per 1,000 by 1992 (Held et al., 1999). Television has become key to the development of pop music, news services, advertising, sport and light entertainment with an appeal – and enormous money-making potential – across the whole world. Current developments seem likely only to accelerate this process further. Entertainment, telecommunications and IT sectors have been building ever closer ties, partly through acquisitions and mergers, since the 1990s. This coupled with the widespread liberalisation of the telecommunications industry – once dominated by public monopolies – is already ensuring that speedier, cheaper and more efficient means of delivering entertainment and information throughout the world are spreading rapidly. The internet is central to this new development but the rise of this technology has also allowed a new type of global cultural exchange distinct from that promoted by the communications industry. This is the way in which those who share interests or concerns around the world can now communicate with one another more efficiently and cheaply than ever before. Thus there are now websites and email networks covering almost every conceivable interest which encourage debate and information- sharing amongst people from many nations and cultural backgrounds. Globalisation: For and Against Since the late 1990s, globalisation has become the source of intense political dispute. Hundreds of thousands have protested on the streets against the impact of globalisation throughout the world while the increasing number of NGOs and campaign groups have lobbied for change. As such, the claims made for and against globalisation are numerous, complex and sometimes highly technical. To summarise fully is impossible. The arguments offered below are largely indicative but provide a good sense of the main issues. • Possibly the central argument is about the extent to which globalisation actually promotes economic well-being throughout the world. For its proponents the spread of free trade encourages enterprise and hence sponsors economic growth, jobs and wealth creation. Historical examples are often used to back-up this claim. It is pointed-out that incomes have converged both in the Americas and in Europe following initiatives to remove trade barriers (Ben-David & Winters, 2000). Many statistics can also be quoted – and disputed – to show that freer global trade reduces poverty. For example, it has been claimed that while GDP per person fell by 1.1% per year during the 1990s in countries that have not entered the global market, it has risen by 5.1% per year in those that have (Dollar & Kray, 2000) . As such, globalisation is proposed as the best way to challenge the economic problems besetting both north and south. For its critics however, globalisation is seen as a key cause of recent rises in poverty and inequality. The dismantling of systems designed to defend fledgling industries in the south thus exposing them to the full force of competition from the north has destroyed domestic economies to the benefit of northern-based trans- national corporations (TNCs) and financial institutions. In addition, the liberalisation of northern and southern economies has gone hand-in-hand with pressure from the powerful institutions of global governance to cut public spending and weaken employment regulation thus removing the social safety nets designed to help those who face unemployment or low-paid jobs. These criticisms are sometimes used as an attack on the very notion of globalisation at other times as an objection to its domination by a neo-liberal agenda. There is also criticism of northern countries for employing double standards in their preaching of the benefits of free trade. It is claimed that while northern leaders use all their economic and political muscle to open-up the economies of the south to allow exploitation by TNCs in the name of free trade, they, in fact, use the same muscle to maintain protectionism in the north. This is achieved through tariffs and subsidies designed to prevent competition from southern firms that would be able to undercut northern companies on price. This argument has been particularly pronounced in the area of agriculture. • Globalisation is also criticised for the way it undermines the fundamental political principles of national sovereignty, accountability and democracy. TNCs are more powerful now than ever before. Some have wealth so massive it outstrips many national economies and they now have great freedom to move capital and productive processes around the world. This, some argue, allows them to dictate the employment, taxation and spending policies of national governments in fierce competition with others keen to attract or retain TNC investment. If this is the case then clearly national sovereignty and accountability to the people of a nation is at risk. However, many refute these claims arguing they present a grossly simplified picture of the relationship between business and nation-states. Corporate interests – both domestic and international – have always offered strong resistance to aspects of state policy long before the era of contemporary globalisation. But the state, then as today, still has the massive advantage of setting the rules under which domestic and international business operates backed often by popular support, democratic legitimacy and considerable financial power of their own. This argument can be supported by figures which show that the average tax revenue in countries belonging to the Organisation for Economic Co- operation and Development has risen from 35% to 38% since 1985 and that corporate taxes now constitute a bigger share of that revenue (Legrain, 2001). If TNCs were as powerful as some claim, it is argued, then one would not expect taxes to have risen. However, those who still regard TNC power as a threat offer two main solutions. For some it is simply to reassert the rights of the nation state. For others it is to create political structures at the global level which can match TNCs in terms of worldwide influence and allow states to present a united face to the demands of TNCs. The European Union is probably the clearest example of this where members are expected to maintain shared standards in areas such as employment law and consumer protection thus preventing TNCs playing states off against each other. However, this approach has caused further dispute with some arguing that this form of political globalisation also undermines national sovereignty while creating political structures ever more distant from the people. Alongside acting as a restraint on TNCs, the most enthusiastic proponents of political globalisation feel that global bodies can represent a real step forward for humanity. They not only allow the world to address some of the historically intractable borderless issues mentioned above but may also provide forums within which disputes – which have led to war in the past – can be resolved peacefully. In addition, organisations like the International Criminal Court and the UN could, if given real teeth and the support of member states, be used to restrain governments intent on persecution of their own or other peoples. • The way in which global culture seems to be changing has also raised heated debate. For some, especially on the progressive left, the sharing and cross- fertilisation of different cultures is something to be celebrated. It is regarded as an historical development overcoming the human tendency to suspicion of difference and creating richer and more diverse lifestyles. Right-wing dissenters from this view argue that the traditional heritage of nations, which are so key to a people's sense of their own worth and strength, has been weakened by this intermingling of cultures. However, there has also been opposition by some on the left who argue that authentic indigenous cultures developed over many centuries are being replaced by a bland commercialism represented most clearly by the way Macdonald's restaurants and its imitators have usurped traditional diets and put identical tasteless food into billions of mouths across the world. This is a view which some on the right also sympathise with. However, unlike the right, the left also shows equal concern for the impact on the south as well as the north arguing that traditional southern cultures are not only under assault from TNCs but have also been cynically exploited and misrepresented by commercial ventures selling their art, music, food and even values to northern markets. Globalisation is now one of the defining issues of early twenty-first century. However, its progress and direction has entered a period of deep uncertainty. The aftermath of the collapse of the Seattle meeting of the WTO in 1999, the developing "war on terror" and the current US administration's apparent willingness to act unilaterally on a whole range of issues will ensure that the relatively straightforward path for globalisation over the last twenty years will now be vigorously contested and diverted down new routes at every step. References Ben-David D. & Winters L. (2000), WTO Special Study No.5: Trade, Income Disparity and Poverty, World Trade Organisation Dollar D. & Kray A. (2000), Growth is Good for the Poor, The World Bank Held D. et al. (1999), Global Transformations, Polity Hirst P. & Thompson G. (1996), Globalization in Question, Polity Krugman P. (1995), 'Growing World Trade: Causes and Consequences', Brookings Papers on Economic Activity, pp.327-62 Legraine P. (2001), 'Dump Those Prejudices', The Guardian (UK newspaper), 12 July UNCTAD (1994), World Investment Report 1994, United Nations Suggested Reading: Suggested Websites: Fabian Global Forum The Global Site Global Trade Negotiations The Globalisation Guide Globalization Studies Open Democracy
Placed on Fabian Global Forum, May 2002
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