WORLD POLITICS Lecture 19

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WORLD POLITICS Lecture 19
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GLOBALIZATION AND ITS DISCONTENTS
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GLOBALIZATION

• Globalization refers to the increasing linkage of
  national economies through trade, financial
  flows, and foreign direct investment (FDI) by
  multinational firms.

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GLOBALIZATION AND ITS DISCONTENTS

• While economic globalization is indeed very
  important, the world is not nearly as integrated.
•  
• Globalization rests on a political foundation
  that could disintegrate if the major powers fail
  to strengthen their economic and political ties.

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Uneven Globalization

• Integration of the world economy has been highly
  uneven, restricted to particular economic sectors
• Although the technology leading to increased
  globalization may be irreversible, the national
  policies responsible for the process of
  globalization have been reversed in the past and
  could be again in the future.
•  
• The economic impact of globalization has been
  largely confined to the United States, Western
  Europe, Japan, and to the emerging markets of
  East Asia.

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Free Market Argument

• Globalization is leading to an era of
  unprecedented prosperity.
• As more and more nations participate in the
  global economy, financial and technology flows
  from developed to less developed countries lead
  to equalization of wealth and development around
  the world.

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International Distribution of Wealth and Power

• Proponents argue that globalization will
  eventually achieve greater equality and
  convergence of performance among national
  economies.
• Globalization will increase worldwide acceptance
  of individualism and political democracy.

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Example of International Distribution of Wealth

• As the productivity of low-wage workers in
  developing countries increases, their wages will
  also rise, and thus their alleged threat to
  high-wage workers in the developed countries will
  be reduced.
• For example, as Korea has industrialized, the
  wages its workers have risen considerably and
  have approached Western levels.

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Populist (Nationalist) Argument

• Populists blame globalization for most of the
  social, economic, and political ills afflicting
  the United States and other industrialized
  societies
• There is growing economic inequality and high
  levels of unemployment within the industrialized
  economies, illegal migration, increasing crime.
• Globalization threatens the security and economic
  well-being of the United States and Europe.

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Example of Weak International Distribution of
Wealth

• The largest segment of the world's population has
  scarcely been touched by economic globalization.
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• Africa and other impoverished regions are more
  threatened by marginalization and neglect than by
  globalization and exploitation.
• However, if they isolate themselves from the
  international economy, they risk falling farther
  behind and dropping in the international
  hierarchy.

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Globalization as a source of political troubles

• German investment in the transitional economies
  of Eastern Europe, American investment in Latin
  America, Japanese investment in Pacific Asia and
  Multinational corporations in Nigeria are
  triggering extremist attacks on foreign firms and
  investors.
•  

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Convergence of Economic Systems

• Proponents of a market-dominated world economy
  foresee all nations converging toward a new world
  order based on liberal values (free markets,
  individualism, and freedom), spreading global
  prosperity, and world peace.
• Globalization is inevitable and cannot be
  reversed.

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The End of National Sovereignty

• Loss of National Autonomy
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• Both critics and proponents of globalization
  argue that the increasing integration of national
  societies has led to a decrease in the economic,
  political, and cultural autonomy of
  nation-states, or the end of their national
  sovereignty.
• Various individuals and groups argue that
  globalization entails the end of economic
  independence, erosion of political democracy, and
  a debilitating process of cultural homogenization
• They even charge that economic integration of
  national societies means that domestic groups,
  and even whole societies, are losing control over
  their own destinies to powerful outside economic
  and technological forces.

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Reservations

• National differences continue to be fundamental
  and of determining importance in the functioning
  of capitalist or market economies.
•  
•  Very little convergence has taken place at the
  level of national institutions. National
  institutions tend to be sticky or, in the
  language of economics, inelastic.
• The domestic effects of globalization are largely
  determined by states themselves.

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Reservations (Cont.)Example Japan

• The fundamental aspects of Japanese societythe
  subordination of the individual to the group, an
  intense, tribal nationalism, and a fierce desire
  to maintain national independence and to "catch
  up" with the West-remain.
•  
• It is certainly true that Japan in recent years
  has experienced a number of noteworthy economic
  and institutional changes as the overwhelming
  role of the state in the economy has moderated.
•  
• Despite this important change, the overall
  political purposes of the Japanese economy remain
  those of preservation of domestic social harmony
  and strengthening of national independence.
• In pursuit of these fundamental social and
  political goals, the central role of the Japanese
  state in the economy is very likely to continue,
  and Japan will strongly resist American-style
  "marketization" of its economy.

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Clear Application of Globalization

• The one important economic area to which the term
  globalization clearly does apply, however, is
  international finance, and the East Asian
  economic crisis and the global economic turmoil
  of the late 1990s gave considerable credence to
  the charge that globalization has significantly
  increased international economic instability.