What is globalization?
Anyone who follows the news with
even cursory interest has witnessed fierce arguments regarding something called
“globalization.” Among the highlights, we see that protesters in Seattle
have rioted against it, that the G8 meets to guide its progress, and that the
WTO is supposed to preside over its execution. But even the perceptive reader
must be forgiven if, upon request, he is unable to provide a concise definition
of “globalization.” For from its beginnings in 1980’s analysis of perestroika
and détente, the term has grown in importance, and now encompasses a system
that has partially supplanted the pre-21st century mode of
international relations.1
Ignacio Ramonet
provides an ideal entry-point for a discussion of globalization with his
insightful remark that globalization “imposes the force of two powerful and
contradictory dynamics on the world: fusion and fission.”2 The side of this dichotomy most often
discussed is the integrative side, which seems to be the prime and explicit
connotation of the term “globalization.” With the collapse of the great
divisions of the Cold War, the relatively staid network of inter-state alliances
has been replaced by a new discourse that emphasizes market values above ]all others. Under this new, economically-driven
political system, barriers to free trade between
different countries are seen as impediments to the ever-increasing efficiency
of the economy, and therefore must be eliminated for the sake of economic
growth. 3 The
world’s developed nations have become gigantic investors in each others’ markets,
allocating and exchanging capital, labor, and
knowledge over great distances with fluid agility. Nor do the less developed
countries (LDCs) miss out on the fruits of free
trade; with their previously-untapped labor forces, these countries can make
huge gains through exports. In fact, the information revolution has allowed
these countries to export services as well as goods, as seen by the
rapidly-proliferating call centers in many of these nations. All the
countries of the world are drawn tightly together in a bewildering web of
economic relationships that benefit everyone.
Beneath this shimmering veneer of
everybody-wins capitalism, however, lie fractured remnants of the casualties of
the inexorably increasing competitiveness in this new global era. This is the
other side of globalization, governed by its divisive aspect. In some cases,
it acts on those unwilling or unable to comply with its mandate of unification.
Ramonet, in the same article as mentioned above,
gives the example of the 3 Warsaw
pact nations of Czechoslovakia,
Yugoslavia,
and the USSR.
In the new era of globalization, these have shattered into 22 nations, many
of them badly rived by ethnic and cultural strife.4 Aside from these overt cases of the
consequences of globalization, however, it is easily observed that even the
developed countries are somewhat disingenuous in declaring their dedication to
untrammeled international commerce. The nation-state is still the supreme
actor in the world, and every state is still quietly willing to implement protectionist
measures as long as its allies do not protest too loudly. The fact that the
European Union and United States grant around $300B per year in agricultural
subsidies is illustrative of this state-centric selfishness; it is also worth
noting, along the lines of selfishness, that this is roughly six times the
amount that these richest countries spend on aid. 5 This last figure suggests that globalization
might not be equally focused on all human wellbeing, and indeed by many
accounts globalization has done nothing to stop the widening of one of the
greatest gaps of all, that between the rich and the poor.6
Given the respective normative
values afforded by these mutually opposed sides of globalization, it is
unsurprising that those who support or oppose globalization tend to emphasize
one side rather than the other. While my analysis of their positions will
unfold along those lines, it is important to note that both the integrative and
divisive aspects of globalization are manifestations of a single entity, and
to analyze either in the absence of its larger context is to miss the point.
Never the less, there are good points to be made by each side.
Arguments for globalization
Given that globalization is the
engine that fuels the intense economic growth of the developed world, it goes
without saying that its supporters should be many and extremely powerful. With
few exceptions, these include not just the governments of the G8 and other
developed nations, but also the governments of the LDCs.
These governments have committed themselves to the pursuit of globalization
by signing the General Agreement on Tariffs and Trade (GATT), empowering the WTO
to enforce free trade, even to the point of sanctioning member nations for
violations.
This clear hegemony of globalization
stems from the fact that globalization itself is a natural consequence of the
modern economical framework.7
The preponderance of current economic thought supports the central proposition
of globalization: that free-trade is essential for the maximization of
economic efficiency and growth. The marriage of globalization to this
extraordinarily powerful social science has proved to be among its most useful
assets, and the most forceful arguments for globalization are those that deal
with economics.
As for this free-trade principle,
there appears to be a good deal of evidence to support it. Most economists
agree that poverty is linked to growth; on average, for every 1 point of real GDP
contraction, poverty increases by 2 points.8 A large study of nearly 200 countries
from 1961 to 1999 revealed that the majority of countries which showed high
growth had governments dedicated to free trade, whereas most of those countries
in which the economies shrank (especially those with severe contractions) had
implemented protectionist policies.9
Other proponents of globalization add that those countries that earliest
entered the global market have had the highest growth. And, according to the World
Bank, the 1990’s saw the first-ever reduction in gross poverty, from 1.2B to
1.1B people.10
Finally, there is the spectacular example of the East Asian countries, which
have exploited knowledge capital via globalization to achieve astonishing
export-driven growth rates. In summary, free trade creates growth, uplifting
those in poverty and uniting them with the developed world in joint prosperity.
It must be said that the vast
majority of the arguments in favor of globalization rely on the causal
relationships from free trade to growth and growth to poverty-reduction.
Perhaps the deep reverence in which this principle is
held, coupled with the already rapid spread of globalization, has caused an
exuberant spirit among its proponents and eliminated many potential seeds of
doubt. And while the general truth of that principle is difficult to dispute,
there are those who question the practice of applying it unconditionally to all
economies worldwide.
Arguments against globalization
Since most economists are
supporters of the spread of globalization, the popular opposition to globalization
is based mainly on social and moral grounds. Some opponents are governments of LDCs that perceive globalization as impinging upon their
sovereignty, and others are NGOs or aid groups that deplore the humanitarian
consequences of globalization. Yet there is a small, but vocal minority of
economists who challenge even the economic basis for globalization.
The primary problem these
economists see in globalization is the serious failure of large investors to
tailor their economic approach to the country at hand. These investors include
the IMF, World Bank and the U.S. Treasury, both of which are unflinchingly
devoted to the free-market concept. The typical (and oft-repeated) scenario is
that an LDC seeks out loans from the IMF or U.S. Treasury to develop the
infrastructure required to join the global market. As
a condition of these loans, these lenders impose stringent conditions on the
borrowing country’s budget. Frequently, the borrowing country is ordered to cut
social programs to service its debt, or to eliminate controls on the market;
both of these conditions can be disastrous, leading to an ongoing dependence of
the borrowing country on foreign aid.11
A country cannot successfully join the global economy if it is hamstrung by
unreasonable external controls.
Another problem with globalization
as implemented by the Northern hegemony is that it is inherently designed to
serve the interests of the North. As an example, a World Bank analysis of the
effects of the 1994 Uruguay
talks showed that the United States
and Europe were extremely well off, but sub-Sarharan Africa actually lost 3%.
Part of the reason for this is that while LDCs are
forced to open their doors to the imports of the developed countries of the
North, the latter countries use unfair “anti-flooding” laws or specious health
or safety standards to block much of the LDCs’
exports from ever reaching markets. 12
A few economists even debate the
veracity of most claims for the success of globalization. Nowhere is the
divisive influence of globalization better seen, they argue, than in this
sobering statistic: in 1980, the median income of the top decile
of wealthy countries was 77 times that of the bottom decile,
but in 1999 this disparity had grown to 122 times. Also, much of the supposed
growth and alleviation of poverty in LDCs can be
accounted for by the inclusion of China’s
per capita GDP, a misleading statistic given the greatly increasing inequality
in that country.13
Conclusion
In presenting the two sides of globalization
I have remained mostly within the realm of economics to explain globalization
and its attendant phenomena. But there are, as I mentioned earlier, serious
moral and social problems with today’s globalization that compel me to view
it with deep skepticism. Part of what repels me is the North’s seemingly
boundless arrogance in suggesting to LDCs that it,
rather than they, should control their economies. This idea is not only
antidemocratic, but inimical to the very core of what free trade ought to
represent.14
More disturbingly, the North’s implementation of globalization smacks of
imperialism.
To illustrate this point, I make
reference to Johan Galtung’s structural theory of
imperialism. In this framework, the more developed country is divided into an
elite center, and the less-empowered periphery. Since the goal of the center is
to increase its dominion over the periphery, and the goal of the periphery to
resist this encroachment, there is some amount of disunity within this
developed country. Then, however, the center of this developed country takes an
interest in an LDC. By transacting with a certain class within that LDC, the
center of the developed nation elevates that class to center status within the
LDC. To cement its newfound domination by pleasing its master, this
center of the LDC (which is proportionally much smaller than the center of the
developed nation, due to the developed nation’s republican government) aids the
center of the developed nation in striping away the resources of the periphery
of the LDC and passing them to the center of the developed nation, which uses
the resources in its own quest for supremacy. One would hope that perhaps the
peripheries of the two nations would realize their similar plight and rise up
to end this unfortunate situation, but since the periphery of the developed
nation is culturally closer to the center of its own nation than to the LDC,
the exploitative relationship continues unabated.15
This theory of globalization
extends effortlessly from the original theory of imperialism, and goes
precisely to the heart of Ramonet’s dichotomy:
productive unification does occur, but only for the elites of the countries
involved. Far more serious are the consequences for the lower classes
everywhere, who, as a result of the increasing power
of the elites, are ever more-distant from parity.
This is not to say that globalization
should be avoided at all costs. On the contrary, a democratization of world
trade can and does have many beneficial effects. What is needed, however, is a
system of globalization that is equitable and benefits LDCs
as much – or even more – than developed nations. Only then will globalization
truly achieve what it professes.
1
“Dueling globalizations: A debate between Thomas L.
Friedman and Ignacio Ramonet” Foreign Policy, Fall
1999 issue 116, p110 This idea is Friedman’s
2 Ibid.
3
Gill, Stephen. “Constitutionalizing Inequality and
the Clash of globalizations”, International Studies Review; Summer 2002, Vol. 4 Issue 2,
p47
4
Friedman and Ramonet, 2002
5 Birdsall, Nancy. “Cheerleaders, cynics,
and worried doubters”. Global Agenda, Jan 2003 Issue 1. p32
6 Hersh, Adam, and Weller, Christian E., “Free Markets and
Poverty,”. The American Prospect, Volume 13 Issue 1. January 1-14 2002.
7
Gill 2002
8 Hersh and Weller, 2002
9
Panagariya, Arvind, as
cited in Bhagwati, Jagdish,
“The Human Face of globalization.” Global Agenda, Jan 2004 Issue 2, p74
10
Birdsall
2003.
11
Stiglitz, Joseph E., “Globalism’s
Discontents.” American Prospect, Volume 13, Issue 1. January 1-14 2002.
12
Ibid.
13
Hersh and
Weller, 2002.
14
Stiglitz,
2002.
15
Galtung, Johan. “A Structural Theory of Imperialism”,
Journal of Peace Research 8: 81-117, 1971. reprinted
in “Approaches to Peace,” 2000, ed. Barash, David P.