Chapter 19 Globalizationby Josée Johnson: Chapter 19 Globalization by Josée Johnson


INTRODUCTION: INTRODUCTION Will examine: Globalization’s space-time compression and digital divide Top-down versus bottom-up globalization Effects of casino capitalism Role of international financial institutions in globalization Social and environmental consequences of globalization*


GLOBALIZATION DEFINED: GLOBALIZATION DEFINED Globalization: A social, economic, and political process that makes it easier for people, goods, ideas, and capital to travel around the world at an unprecedented pace Has given rise to space-time compression: Diminished importance of geography and time lags Traced back at least to 1500s with beginning of transoceanic European exploration Current phase not radically different in form but radically different in pace (e.g., Internet usage)*


WORLD INTERNET USAGE AND POPULATION STATISTICS: WORLD INTERNET USAGE AND POPULATION STATISTICS


THE DIGITAL DIVIDE: THE DIGITAL DIVIDE Despite rapid pace of space-time compression, access to means of communication that facilitates globalization is unequal Not all people and ideas have access to channels of globalization like the Internet or even the telephone Inequality of access is known as the digital divide*


SPACE-TIME COMPRESSION AND THE DIGITAL DIVIDE: SPACE-TIME COMPRESSION AND THE DIGITAL DIVIDE


GLOBALIZATION AND ETHICS: GLOBALIZATION AND ETHICS While globalization is neither inherently good nor bad, it does create conditions that affect human lives and the environment Ethical debates about globalization are more pronounced after terrorist attacks of Sep. 11/01 While no agreement over motivation of attacks, critical questions raised about inequities of global capitalism and role of United States in global system*


TOP-DOWN GLOBALIZATION: TOP-DOWN GLOBALIZATION Top-down globalization: Involves actions of groups promoting globalized capitalism and free trade Has been dominated by neoliberal economic policies Is strongly associated with United States because of role in promoting neoliberal policies domestically and internationally*


TOP-DOWN GLOBALIZATION: NEOLIBERAL POLICIES: TOP-DOWN GLOBALIZATION: NEOLIBERAL POLICIES Neoliberal policies support: Privatization of state resources Dismantling of the welfare state Reduction in state regulation Faith in power of the market Profit motive in creating wealth*


BOTTOM-UP GLOBALIZATION: BOTTOM-UP GLOBALIZATION Bottom-up globalization: Describes actions of groups that criticize injustices that result from globalization processes Not wholesale rejection of globalization (e.g., supports global labour standards) Advocates more democracy, environmental protection, and social justice in global system Rejects neoliberal forms of globalization*


BOTTOM-UP GLOBALIZATION: BOTTOM-UP GLOBALIZATION Lack of consensus among supporters of bottom-up globalization makes it more of broad framework that encompasses multiple perspectives, including: Moderate critiques of neoliberalism Radical anti-capitalist positions Various forms of anarchism Armed peasant uprisings Fair trade coffee projects, etc.*


RISE OF FINANCIAL CAPITAL: RISE OF FINANCIAL CAPITAL In globalized economy, financial capital (money used for investment, currency trading, etc.) has grown much faster than production and trade Rise of financial capital dubbed “casino capitalism” since speculators – like casino gamblers – can make or lose millions of dollars in short periods Facilitated since 1980s by financial deregulation Tends to destabilize financial systems*


OVERCAPACITY AND CENTRALIZATION: OVERCAPACITY AND CENTRALIZATION Growth of casino capitalism is linked to declining profits and global corporations producing more than world’s consumers can afford to purchase Concern that excess capacity accompanied by poverty (that constrains consumption) may lead to global recession To survive overcapacity and ruthless competition, corporations have centralized, diversified, and become “leaner and meaner”*


FOREIGN DIRECT INVESTMENT AND CROSS-BORDER MERGERS AND AQUISITIONS: FOREIGN DIRECT INVESTMENT AND CROSS-BORDER MERGERS AND AQUISITIONS


GROWTH OF THE CORPORATE GIANTS: GROWTH OF THE CORPORATE GIANTS Corporations have become bigger and more powerful than many national governments Corporate taxation has declined across all developed countries in response to threats to relocate production to more favourable locations Forces governments to rely on taxes paid by less mobile individuals and small businesses Reductions in corporate taxes between 2000 and 2010 will decrease Canadian government’s revenues by $12.5 billion/year*


CORPORATE TAX RATES WORLDWIDE: CORPORATE TAX RATES WORLDWIDE


CRITICS OF CORPORATE POWER: CRITICS OF CORPORATE POWER Examples of responses by bottom-up globalizers to growth of global corporations: Emergence in 1990s of anti-sweatshop movement in North America Kraft boycott in 1994 to expose practices of parent company, Philip Morris, accused of promoting tobacco use to children Corporate responses to criticism include changing name and joining corporate movement for “corporate social responsibility”*


STATES IN A GLOBAL WORLD: STATES IN A GLOBAL WORLD Critics of neoliberal policies question extent to which states (main instrument of democratic governance) are being replaced by “global governance” Is concern that real power belongs to unelected officials of world’s three biggest international financial institutions: the International Monetary Fund (IMF), the World Bank, and World Trade Organization (WTO) Result is democratic deficit in which ordinary citizens are disenfranchised from process of governance*


1. INTERNATIONAL MONETARY FUND: 1. INTERNATIONAL MONETARY FUND Was established after World War II to maintain stability of international monetary system Since 1980s, has become gatekeeper of the institutional financial system IMF loans are conditional on countries instituting neoliberal policies, or risk being excluded from international lending circles and unable to service nation’s debt*


RESISTANCE TO IMF POLICIES IN POOR COUNTRIES, 1999-2000: RESISTANCE TO IMF POLICIES IN POOR COUNTRIES, 1999-2000


2. WORLD BANK: 2. WORLD BANK Also established after World War II for purpose of making loans to assist with postwar reconstruction Most loans made to poor countries and were tied to large development projects, such as hydroelectric dams Like the IMF, also requires certain structural adjustment criteria be met*


3. WORLD TRADE ORGANIZATION: 3. WORLD TRADE ORGANIZATION Emerged in 1995 out of postwar trade treaty Purpose: Lower trade barriers in order to increase international trade and presumably, prosperity Poor countries claim international trade benefits rich and ignores unfair protection of corporate agribusinesses at expense of farmers Has elicited huge protests at every major meeting since 1999’s “Battle of Seattle” protest*


UNITED STATES AS EMPIRE?: UNITED STATES AS EMPIRE? Critics argue United States benefits the most in global economy Is debate over whether United States is a modern-day empire or a fading superpower Uncontested though is United States high degree of political, economic, and military power that allows it to: Make unilateral foreign policy decisions Adopt unorthodox economic policies, and Maintain substantial military presence globally*


U.S. MILITARY BASES WORLDWIDE: U.S. MILITARY BASES WORLDWIDE


GLOBAL INEQUALITY: GLOBAL INEQUALITY Asymmetries among world’s countries today has given rise to new terminological distinctions: Division between “global north” and “global south,” or between developed and developing countries Division between “majority world,” which is generally poor and lacks basic social goods, and “minority world,” which is generally well-educated and has access to good jobs and public goods Marginalized populations and regions that are not competitive in global economy sometimes referred to as the “fourth world”*


THE GLOBAL CONSUMER: THE GLOBAL CONSUMER Global commodity chain: Worldwide network of labour and production processes, the end result of which is a finished commodity Chains are not readily transparent Consumption plays critical role and drives growth in the global economy Given saturation of North American and European markets, consumerism is being exported to world’s middle and working classes*


CULTURE AS COMMODITY?: CULTURE AS COMMODITY? Globalized consumerism treats culture (e.g., films, magazines, books, music) as a commodity Biggest United States export consists of mass-produced products of popular culture United States used WTO to successfully thwart attempts by countries (including Canada) to protect their cultural products through subsidies and quotas But is a growing movement to resist this commodification of culture*


CULTURAL IMPERIALISM: CULTURAL IMPERIALISM Global spread of consumerism criticized as form of cultural imperialism that exports Western way of life throughout the world Often is associated with liberal values around sexuality, feminism, and secularism Is concern about U.S. cultural dominance and resulting loss of global diversity However, is some cultural competition from Arab television news station, al-Jazeera, and Indian movie industry dubbed Bollywood*


U.S. MARKET SHARE OF FILM INDUSTRY FOR SELECTED COUNTRIES, 2001: U.S. MARKET SHARE OF FILM INDUSTRY FOR SELECTED COUNTRIES, 2001


GLOBAL BRAND BACKLASH: GLOBAL BRAND BACKLASH Visible signs of antagonism toward Western-style consumerism exist through: Backlash against corporate brand names, such as Coke, Barbie, and Nike Street protests worldwide against McDonald’s, the Gap, and Starbuck’s Extent to which anti-consumer activism disrupts global flows is unclear*


CONSUMER ALTERNATIVES: FAIR TRADE: CONSUMER ALTERNATIVES: FAIR TRADE Bottom-up globalizers seek to disrupt global commodity chains by focusing on developing consumer products that are: Environmentally sustainable, and Produced by well-paid workers Is reflected in the fair-trade movement that argues producers should be paid fair price rather than free market price Movement has paid special attention to coffee*


COMPARISONS OF FAIR TRADE AND FREE TRADE COFFEE PRICES, 1989-2006: COMPARISONS OF FAIR TRADE AND FREE TRADE COFFEE PRICES, 1989-2006


ECOLOGICAL CONSEQUENCES OF CONSUMERISM: ECOLOGICAL CONSEQUENCES OF CONSUMERISM Global consumerism criticized for being based on Western high-consumption lifestyle that is ecologically unsustainable: 20% of world’s population living in industrialized developed world consume two-thirds of world’s resources and create 75% of all waste and pollution Challenge of promoting sustainable consumption in midst of: Corporate push to expand global consumption Desire of consumer class to maximize individual consumption possibilities*


WORLD CONSUMPTION CLASS: WORLD CONSUMPTION CLASS


GLOBAL WORKERS: GLOBAL WORKERS Are relatively immobile and politically fragmented Unions struggle to protect these workers but are hindered by own organization; i.e., are organized primarily within rather than across states Also, most unions primarily organized to protect domestic workers and wages against “threat” of foreign workers Many global workers work largely in nonunionized underregulated sectors (e.g., nannies, agricultural workers), leaving them vulnerable to exploitation*


WAGE LABOUR AND WAGE INEQUALITY: WAGE LABOUR AND WAGE INEQUALITY Concept of wage labour is new to sizable segment of world’s population As use of wage labour spreads globally, so does segmentation of labour markets: Women, people of colour, rural workers, and people from developing world in general are overrepresented at bottom of wage hierarchy Is tremendous disparity when comparing ordinary workers’ pay with salaries of Chief Executive Officers (CEOs)*


CEO SALARIES VERSUS PROFITS, STOCKS, AND WORKERS’ PAY, 1990S: CEO SALARIES VERSUS PROFITS, STOCKS, AND WORKERS’ PAY, 1990S


THE SEARCH FOR CHEAP LABOUR: THE SEARCH FOR CHEAP LABOUR In less developed countries, states have set up export processing zones (EPZ) where government provides special incentives for corporations to help promote export-oriented manufacturing Have witnessed low-cost manufacturing leave Mexico’s maquiladora (most famous EPZ in North America) and move to Asia where labour is even cheaper Wage competition pits workers against one another in a “race to the bottom”*


GLOBAL ECOLOGY: GLOBAL FOOD SUPPLY: GLOBAL ECOLOGY: GLOBAL FOOD SUPPLY Larger global ecology connects people, resources, and commodities Global agriculture is accompanied by serious environmental costs, including: Increased carbon emissions (and its attendant climate change) from increased fossil fuel consumption needed for: Industrial methods of food production processes Travel required from production to consumption Packaging of commodities Intensive livestock operations*


SOIL, WATER, AND GENETIC ENGINEERING: SOIL, WATER, AND GENETIC ENGINEERING Industrial methods of food production also associated with following global environmental problems: Deforestation Soil erosion Declining water tables*


GLOBAL SOIL DEGRADATION: GLOBAL SOIL DEGRADATION


GLOBAL HUNGER AMIDST PLENTY: GLOBAL HUNGER AMIDST PLENTY World grows enough grain to provide nearly 3000 calories per person, yet number of undernourished people globally has risen since early 1980s Per capita grain production – a general measure of global food security – has been falling since 1984, while overall grain production was flat between 1996 and 2003 Concerns about world grain production are intensified by projected population growth, environmental degradation, and increased grain prices*


THINK GLOBALLY, EAT LOCALLY: THINK GLOBALLY, EAT LOCALLY Alternative to current system of global agriculture found in growing movement to eat foods locally grown, and produced with organic farming techniques Move to promote organic, locally grown food has spread to India and Africa Paradox between peasant and farmer movements that encourage local food consumption and defend local agricultural ecosystems but use global networks to fight battles**