The nature of globalization


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The nature of globalization

  1. 1. The Nature of Globalization By Rony Duclosel, MA, MS
  2. 2. The objective of this paper is to shed light on neo-liberal globalization’s effect on global markets/labor, democracy, communication/transportation, cultural integration, immigration, ethnic unity, localized rivalries, and xenophobia. This will be done by providing a brief history of and definition for both neo-liberalism and globalization and their potential ideals, and by reviewing other research works previously done. Although, the term globalization has been around since the Post-War period (WWII), it has only become a buzzword for the last two decades. Most of the time, the term globalization is used in reference to economic affairs or political discourses. However, it affects almost every aspect of life and society such as culture, communication—in general global interaction. For different people, globalization can have different meanings, depending on their ideology or political stance, because globalization is a broad concept with supporters and opponents. As for neo-liberalism it is also a fairly new concept that became popular in the 1970’s. Just like globalization neo-liberalism has become a buzzword in the 1980’s and has also changed the way business is done around the world and how the third world countries are run. Neo-liberalism is an economic ideology based on a global free market. This ideology promotes the “laissez faire” policies that minimize government intervention in the market and maximize or reinforce the private sector business. According to Rajesh Makwana, the Executive Director of Share the World's Resources; “The goal of neoliberal economic globalization is the removal of all barriers to commerce, and the privatization of all available resources and services”.1 In this system the State has little or nothing to do with the market. Everybody is in the market for their own interest and the market will regulate itself as needed; in other words, the market is assumed to be rational. Neo-liberalism is very profitable for big corporations and the wealthy businessmen, and its policies are proliferated through the International Monetary Fund (IMF), the World Bank, and the World Trade organization, (WTO).2 1 2 Ibid 2|Page
  3. 3. Globalization is a concept that tends to be very controversial. According to the IMF, “globalization is a historical process, the result of human innovation and technological progress. It refers to the increasing integration of economies around the world, particularly through the movement of goods, services, and capital across borders.”3 This definition is in line with the pro neo-liberalists. The definition gives a frame work through which capitalists can move their capital around the world using technology, for cheap labor and new market opportunities. In other words, “globalization is a process of interaction and integration among the people, companies, and governments of different nations, a process driven by international trade and investment and aided by information technology”.4 In this case, in an economic sense, countries will become borderless and governments will be marginalized in regards to the economic markets. The neo-liberal globalization is the laissez faire of the world economic or the free global market. In this era some companies become global, thus increasing their market, therefore their capital. Countries borders become something of the past and technology reduces the distance considerably. For example, in 2006 the military telecom corporation Viettel, a Vietnamese company, entered in Cambodia to become the first Vietnamese telecom to directly invest overseas. Two months after its licensing, the company had taken over about 20% of the local international telephone market of Cambodia.5 According to a Haitian radio station, “radio metropole”6 on Thursday April 30, 2010, the same company Viettel acquired 60% of the share of the TELECO, the main Haitian phone company which changed its name after the contract to Natcom. This is a good example to show how globalization, using technology can reduce the distance between two countries; Vietnam is situated in Southeast Asia and Haiti is in the Caribbean region, thousands of miles away from each other, yet both countries were able to make a deal. As it is stated in the Stanford Encyclopedia of Philosophy, “physical distance is 3 4 5 US/2/5/2010.viettel 6 3|Page
  4. 4. typically measured in time. As the time necessary to connect distinct geographical locations is reduced, distance or space undergoes compression or “annihilation.”7 Neo-liberal globalization is the new economic ideology, at least for now. Whether locally or across borders, businesses are constantly looking for cheaper labor and new market shares; cheaper labor means fewer expenses and new market shares mean more sales, both will translate into more profits; that is global capitalism. For those who favor globalization, it is a good thing. Labor has been increasingly globalized for the past twenty years, especially with the integration of China, India into the world economy.8 Offshore outsourcing which has been a big problem to the opponent of globalization is down played by the IMF as being very small in relation to the overall economy. “Off shored inputs make up only about 5 percent of gross output in advanced countries.”9 In the advance countries such the United States, United Kingdom, and Canada labor price has been increased for the skill workers where as for the unskilled it has been decreased,10 thus widening the economic gap between skilled and unskilled workers. Whether it is positive or negative, the effects of globalization are more than purely economic. Globalization impacts every aspect of life, cultural, social, religious, etc. Globalization itself does not address these issues; however, globalization goes along with the Westernization or Americanization of the world, which is due to their financial and cultural dominance. While globalization creates new markets and wealth, it also creates poverty and suffering; since there is no regulation in the system, more vulnerable markets, such as developing nations become victims. As James Wolfensohn, the former President of the World Bank said: “You hear talk about a new financial order, about an international bankruptcy law, about transparency, and more… but you don’t hear about people … Two billion people live on less than two dollars a day 7 8 9 Ibid 10 Ibid 4|Page
  5. 5. …We live in a world that gradually is getting worse and worse and worse. It is not hopeless, but we must do something about it now”11. Moreover, Neo-liberal globalization has an effect on democracies, since democracy seems to be defined almost entirely by formed governments via elections; hence, the pro globalization camp may argue that in 2005 forty-six percent of the world’s population lives in countries classified as “free”, compared to 35 percent in 1973; meanwhile sixty-four percent of the world’s governments are considered democratic.12 For those who favor globalization these stats look good and promising. For the opponent of globalization it can be quite different. According to Mikhail Beliaev of the Department of Cultural Studies Saratov State University in Russia, “There are two main arguments supporting the thesis that economic globalization threatens democracy: (1) increasing interconnectedness between nations restricts national sovereignty and democratic control over political agenda; (2) economic globalization tends to eliminate the social correctives to the market economy”13 These two sets of stats can justify how controversial the concept of globalization still is. Globalization has made the world very close and small by “removing” the borders for free trade. The international institutions such IMF and the World Bank become more influential in the policy making of the world, especially the third world. The world economy is already globalized. Now, the real question is: How do we globalize democracy? As Benjamin Barber points it out in Terrorism’s Challenge democracy: “The democratic project is to globalize democracy as we have globalized the economy – to democratize the globalism that has been efficiently marketized; the issue is no longer the utopian longing for global democracy against the siren call of consumerism or the passionate war cries of Jihad; it is the securing of safety.” 14 As human beings, communication is one of the bases of our existence. Throughout history mankind has always found a way to communicate with each other beside the basic tool 11 Terrorism’s Challenge to Democracy 12 13 14 Terrorism’s Challenge to democracy 5|Page
  6. 6. of communication known to all men, language. Whether it is through sign such as semaphore, Morse, or telegraph, mankind has always communicated with each other. With globalization communication becomes more instant. The internet is a good example; in a flash, we can check what is going on around the world; before, you would have to wait for the print paper. At any time we can talk to someone in China, Russia, Greece, almost any country in the world through telephone. The invention of the airplane has considerably decreased travel time and is integral to the idea of globalization. In 1492 Christopher Columbus sailed from Spain. It took him more than two months before he spotted an island on the Caribbean; now a trip from Spain to anywhere in the Caribbean is no more than six or seven hours. It is true that with globalization we communicate better. We do so because we have tools at our disposal that we did not have before, and even those tools that we had before become more efficient because of the progress of science and technology. Through internet we can stay in touch with family and friends almost anywhere in the world via email and/or chat. With the internet we can earn a college degree without stepping on a college campus. Globalization makes it possible for those who can afford it to attend school or university abroad more easily. In other words, globalization has made the world a closer place for better or worse. For the people who live in metropolises of developed countries they can be more cultural integrated because globalization now can be considered as one of the causes of immigration. It is true that people migrate for different causes. Some people leave their country for security reasons; the war in Iraq is a good example. “The war in Iraq has led many Iraqis to leave their country in search of a more secure environment, which has in turn led to increased concerns about immigration in neighborhood countries like Jordan”15 However, most people leave their country in search of better job opportunities. According to a Pew research done in thirty six countries about why people leave their country to live elsewhere, the vast majority of the respondents cited jobs as the main reason.16 Therefore the movement of people across the 15 Assessing Globalization: benefits and Drawbacks of Trade and Integration, June 24, 2008, Andrew Kohut 16 Ibid 6|Page
  7. 7. world to metropolises of the developed countries makes it more cultural integrated for those who live in those metropolises. New York City, Miami city, Montreal, Tokyo, Paris, and etc. are good example of culturally diverse cities. As people leave their country in search of better life, this movement makes the immigrants and the native wherever they go, more integrated. It is also worth noting that the international migration is often accompanied by regional or national migration where people leave the rural areas to urban settlement. Globalization may not lead to greater ethnic unity because we are what we are, shaped individually by our respective culture and socio-economic background. The search for new and better opportunities makes our paths cross each other; nonetheless, we still remain who we are, as individuals. As Tiger Woods said “I ‘m just who I am, whoever you see in front of you” 17; we commute together, we work together, we share the same park, the same neighborhood, but we still have our differences as individuals. If globalization does not lead to greater ethnic unity, at least in certain circumstances, it leads to global empathy. The recent earth quake that destroyed most of the capital of Haiti, Port-au-Prince and its surroundings on January 12, 2010 triggered the empathy of the whole world to the Haitian sufferings. “The response by people all over the world has been immediate. Governments, NGOs, and individuals are mobilizing relief missions, and social websites are lighting up, as the collective human family extends a global empathic embrace to its neighbors in this small Caribbean nation.”18 This was not the first time that the world has come together to help another nation, another people. We witnessed something similar when Hurricane Katrina hit New Orleans in 2005 and the Indian Ocean tsunami of 2004 that killed about two hundred thousand people. “We saw a similar global response in the wake of Hurricane Katrina that devastated New Orleans and the gulf coast of the United States and the giant tsunami that struck Asian and African coastlines earlier in the decade.”19 The feeling of empathy may not be permanent, but when tragedy strikes mankind anywhere, we always rally together to come to the rescue of those in difficulty. The empathy may not be triggered by globalization itself, but the progress of science and technology through 17 Race: I’M just Who I am, Jack E. White …In Partnership with Time CNN May 05, 1997 18 19 Ibid 7|Page
  8. 8. computers, internet, radio and television which are some of the tools of globalization allows us to experience the events as they unfold. Since globalization tends to remove all borders, local rivalries can be very intense in the quest to share a market or in the process of adaptation to a new country, territory, and or culture. With world globalization, comes the rise of certain countries politically and economically. Brazil has ascertained itself more and more as a world power. In fact Brazil has been leading the United Nations Stabilization Mission in Haiti since 2004, a leadership role that the United States has always played in the past. Andrew Kohut, the President of the Pew Research Center, in Washington, DC qualifies globalization as “the rise of the rest”; meaning the climb of many other countries as regional powers. Does globalization lead to xenophobia is a question of true research, but pew research shows that while Europeans have favorable opinions of Jews “anti-Jewish sentiments are almost universal in the three Arab nations surveyed--95% or more in Lebanon, Jordan and Egypt say they have an unfavorable opinion of Jews.”20 The pew’s 2008 survey shows that Spain has the highest increasing negative view of Jews, up forty six percent from twenty one percent five years ago. It is not only Jews that are viewed negatively in Europe. Muslims are no different. Forty six percent of Poles have a negative view of Muslims, up from thirty percent in 2005. Twenty three percent of Britain has an unfavorable view of Muslims compared to fourteen percent in 2005. In Spain, fifty two percent of Spaniards have a negative view of Muslims compared to thirty seven percent in 2005.21 It is worth noting that this trend is stronger among certain demographic groups than others. Age, education, and ideology all play a role in the attitudes. Globalization will remain a hot controversial topic for years to come and it will continue to affect our lives one way or another. Support for ‘key economic features of globalization’ will continue to rise as attitudes towards multinational corporations, free markets, and 20 21 Ibid 8|Page
  9. 9. international trades continue to be positive. Third world countries may welcome the multinational corporations for job opportunities but their immigrants will continue to flow to the developed world in search of better opportunities. As some will profit from the globalization of the world, others will remain in the most abject poverty, and the gap between rich and poor will keep on widening. 9|Page