Transcript lecture 1-introduction - Prof. Ruggero Ranieri

Definitions and Introduction:
1) The term “globalization”
Modernisation in the 1960s – This was an important debate which
dominated development studies, economic history and political
science for some time.
The debate on globalisation started already in the 1970s, but it was
given new strength by the collapse of State Socialism and the
advent of global capitalism. Also the information revolution gave the
term new pregnancy.
We refer to the advent of globalisation after 1980.
This debate is often confused and confusing. Globalisation may refer
to: a) the structural changes that have taken place in the global
economy: i.e. how it organized and integrated;
b) The neo-liberal, free market “globalization project”.
Definitions
Globalisation describes growing global interconnectedness.
It involves the organisation and exercise of power on a global scale.
It is a multidimensional process – it applies to a whole range of social relations,
cultural, economic and political. Its effects range from the food we eat, the TV we
watch and the sustainability of our environment.
It can be seen positively as well as negatively
Cultural economic and political processes are stretched across
nation-state boundaries. Events and decisions taken in one part of the
world have an increasing impact on others.
This stretching is associated with INTENSIFICATION OF FLOWS AND
NETWORKS that transcend nation-states. Density of communication
and interactions. Example world wide web.  ELECTRONIC FLOWS –
Communication networks stretching across the world connect people
into a single social space, which is quite distinct from a territorial space.
INCREASING INTERPENETRATION of economic social and cultural
practices.
GLOBAL INFRASTRUCTURE underpins globalization, both in terms
of global systems of communication, and in terms of institutions, both
economic and political, that are suppose to regulate the system: see
the United Nations or the World Trade Organization.
Globalisation should therefore be understood as implying a dense network or
interconnections, also referred to as “deep integration” on a world-wide level.
Globalisation implies an intercontinental dimension. For example see
environmental issues or climate change which link different regions in different
continents together.
It is distinct from:
-Regionalisation (which refers to “deep integration” but limited to neighbouring
countries of a particular region/continent)
-Internationalisation (which refers to “shallow integration”, on more traditional
lines.
Globalization poses a fundamental challenge for the Nation-State.
Globalisation as process
If we see globalisation as a process, we actually consider a
set of different events, in the cultural, economic and
political sphere. We classify them along a spectrum that
ranges from the local to the regional to the global and we
identify a trend. We probably discover that some parts of
social and economic life are closer to one side of the
spectrum than to the other, but we take an increasing trend,
the stretching of connections, relations and networks to
mean that globalisation is happening. However the process
might not be a linear one. There might be advances in one
area and setbacks in another.
2) Interpretations of Globalization
Globalist view – They take the view that globalisation is real
and can be measured and seen. The key assumption is that
forces of globalisation are supplanting, or will inevitably
supplant traditional nation-states. Despite different
interpretations, globalists would agree that the essential
element of globalisation is economic.
Positive globalists The positive globalists are usually
neo-liberals who regard market mechanism as superior
to states.
Negative globalists.
They are neo-Marxists; they believe that globalization is the
expression of the power of global capitalism and that it
reinforces patters of inequality between regions and
countries.
SCEPTICS about Globalization.
INTERNATIONALISTS or TRADITIONALISTS: They are
sceptic about globalisation. Much of what is happening is
not new, and there are vast continuities between the past
and the present.
TRANSFORMATIONALISTS: The globalists may have
exaggerated their case, but there is still evidence of
stretching and intensification of global flows.
Globalization and national interest
Globalization represents the projection of
US -inspired international liberalism (Gilpin).
For other sceptics it represents the new force of
western imperialism.
The Cultural imperialism thesis – global cultural flows involve
cultural imposition and dominance. Can globalization simply be
seen as Westernization?
This view argues for a resistance to globalization, in the form of:
• economic measures to stop and control the global flows
• civil protest against the negative effects on the environment,
labour conditions etc.
No global movements which act as pressure groups, or NGO in
the main global arena.
World poverty
•
At the end of the 2004s according to UN Statistics
less 1 billion people, i.e. 18% of the world population
lived under the World poverty line extreme poverty.
The figures as decline consistently after 1981.
Looking at relative poverty figures the number in 2001
was 1.5 billion i.e. 28.9% of the world population.
•
One billion people in 1999 lacked adequate shelter
and housing and 1.3 billion were without access to safe
drinking water. 2 billion, 22% of the world population
were without electricity.
•
Clearly economic poverty also leads to political
weakness, financial dependence etc. An increasing gap
between the rich, the very rich and the poor.
Economic Globalisation:
markets and production are becoming increasingly
interdependent due to the dynamics of trade in goods,
services and flows of capital and technology and
labour.
It is not a new phenomenon.
It has enormously accelerated in the last 30 years.
Trade in the global economy
Trade implies the existence of global markets for
traded goods and services.
After 1945 trade volumes outpaced the growth of
world output.
The growth was more rapid up to 1973 but even
between 1973 and 1996 world trade grew at an
average rate of over 4 per cent.
Capital flows in the global economy
The growth of international capital flows started with
the Eurodollar market in the 1960s. It has picked up
speed since the 1970s.
Liberalization of financial markets + scrapping of
capital controls + flexible exchange rates.
Speculators can attack currencies whose exchange
rate is deemed to be non-credible. They can also
speculate on floating exchange rates.
Multinational corporations
• Thr MNC – Multinational Corporation is a company,
which produces goods or markets its services in
more than one country
• Foreign direct investment (FDI) is defined as a longterm investment by a foreign direct investor in an
enterprise resident in an economy other than that in
which the foreign direct investor is based
Nation states in the global economy
Political economy and the needs of a global
economy will put fundamental constraints on
any government. The choices in front of them
will be restricted, to the practice of ‘sound
economic management’.
Has Globalisation undermined the
Nation-State?
• The globalist view insists on the forces of global
capital that are fatally undermining the nation state
(Balderston).
• The traditionalist view. Globalisation is well under the
control of the main hegemonic power: the US–
• The transformationalist view identifies the shift in
power but posits a new kind of nation state able to
respond to some of these challenges by redefining its
powers and nature.
Issues: is globalization just a repeat of the
pre-1914 period?
Trade (in goods) in 1913 was very important.
The international movement of capital and labour
was just as free as in the 1990s perhaps more.
However there is a distinct qualitative difference,
especially if we consider the nature and degree of
interconnections in the world economy and the
speed with which interconnections occur. For
example: intra-industry and intra-firm trade;
MNCs and global production networks
REGIONALISATION is important. Perhaps more than
GLOBALIZATION.
What is happening in the world economy is the
formation of at least 3 large economic blocs, the EU, the
North American bloc and the Japan and S. East Asia
bloc. Regionalization shapes and contains
globalization?
The 3 areas have a high proportion of intra-trade.
Class Work
Joseph Stiglitz
Making Globalization work,
What is the Washington Consensus?
What is SUSTAINABILITY
What is the relationship between economic and
political globalization?
Is globalization good or bad? And what are the problems it
poses for world development?
How should it be reformed?