Globalization
Extent of Globalization
Amount of Transnational connections between people and govts Dramatic increases in the amount of info, goods, people flowing across borders through trade, tourism, migration, and media Ex. Advances in tech from launching of communication satellites in 1970s, invention of internet in 1980s- reduced costs and leap in communication and electronic finance transactions Ex. innovations in transportation US relatively globalized but several Western European democracies are even more to foreign economic, political, cultural flows Scope and extent of international communication and exchange have increased dramatically Political globalization: involves the growth in the number and scope of transnational political and economic isussues, ad the increasingly transnational responses States increasingly cannot solve the problems that affect their territory or citizens on their own
How Globalization Weakens Democracy
Could weaken tenuous relationship between citizens and government officials→ IGOs and INGOs increase influence and authority over policy Can alter possibility that citizens can hold rulers ACCOUNTABLE FOR THEIR ACTIONS Unelected bureaucrats who run IGOs have little incentive to respond to public opinion Public does not vote for leaders of UN, WTO or IMF Europeans can regularly vote for representatives to the European Parliament (EP)- but these campaigns generate little interest and low turnout EP lacks ability to select and hold accountable the EU's exec branch→ thus Europeans believe no point to voting for EP As IGO's power grows, citizens may grow less interested in participating in politics Democratic accountability also weakened b/c INGOs do not answer to the public or government of any state Only accountable to their members or financial backers Operate across borders- lobbying for policy changes Ex. Americans/Europeans might object if influential Brazilian, Chinese, Nigerian citizens pushed for change in US policies as these countries would not want meddling by European or American activists
Globalization
Definition: Increase in the scope and extent of political, economic, and cultural connections between governments, organizations, and individuals across state borders
How Globalization Does Not Weaken Sovereignty
Despite the growing importance of transnational issues, IGOs and INGOs, many do not accept that globalization truly limits state sovereignty - IGOs always represent, at a basic level, the interests of member-states -Ex. Greece: EU distributes about $70 billion a year to its member states, about 40% of its entire budget; benefits from billions of dollars in agricultural subsidies like every other EU member state - Keeps European farmers in business in face of competition from countries that cheaply export food such as US, Russia, Brazil - Provides benefits unable to attain outside of EU -While it is true that EU member-states lack full autonomy over econ policy, membership does bring considerable benefits A second reason IGOs and INGOs may not threaten state sovereignty: possess the resources to solve many difficult transnational issues Ex. although terrorists and criminals pose transnational threats, only sovereign states possess military and police forces to fight them EU lacks army Ex. Iraq War- UK and Spain supported US, France and Germnay did not- European foreign policy didnt exist Third reason IGOS and INGOS may not threaten state sovereignty: many states continue to ignore the advice of IGOs such as the International Monetary Fund (IMF) and WTO which advocate free-market economic policies Countries such as Russia, Venezuela, Saudi Arabia, Brazil. South Africa, India-continue to maintain at least partial govt ownership of key industries (petroleum, mining, telecom) If China continues to grow faster than US, many countries may try to emulate China's policies→ confounds that states lost control over economic policy making in globalized era
Race to the Bottom: Developing Countries
Developing countries tend to have weaker state capacity Less likely than wealthier states to maintain or even increase social welfare spending Globalization only causes race to bottom in developing countries Government spending on social security pensions and education benefits middle or upper classes Poor may benefit most from economic opening b/c free trade tends to lower consumer prices and generate jobs Brazil- conditional cash transfer program: welfare programs that give people a small amount ofmoney based on certain required conditions Bolsa Familia (FamilY Grant)- gives families up to $120 a month, if children stay in school over work Covers over 50 million people and 25% of popuilation Helped reduce economic inequality, and number of people in absolute poverty
How Globalization Weakens Sovereignty
Global government: a system in which states relinquish power and acknowledge their subordination to a single global authority Global governance: a situation in which states, IGOs, and INGOs must increasingly act in concert to address transnational challenges. Limits on state sovereignty might follow from the growing influence of other states Although states set up IGOS in their own interests, usually to help address complicated transnational policy issues- they may later see membership w/ strings attached Ex. EU: all member-states agreed to allow travel within entire union without a passport Recently citizens in many european countries have had second thoughts about this policy w/ drugs and terrorism Several european countries- including Sweden, Denmark, Germany, France have reinstated border controls at least temporarily, which is permitted in special circumstances EU authority has grown in many ways-- today's member-states have largely relinquished autonomous control over economic policy 2011: Greece agreed to make deep budget cuts other EU governments demanded despite Greek civilian protests occurring for "unfair impositions" Greeks believe membership in EU means submitting to forces beyond control
Race to the Bottom and Economic Globalization
Goverments depend on tax revenue from economic production but wealthy investors can shift assets from one country to another Need taxes to pay for social welfare programs but cant raise taxes too high or investors will take money elsewhere Economic globalization puts greater downward pressure on governments to adopt business-friendly policies, particularly lower tax rates- to keep jobs and attract investment Race to the bottom: All countries lower tax rates and eliminate government social welfare programs in order to stay competitive Privilege political and economic interests of holders of capital- financiers, bankers, investors Enhanced power of capital conflicts w/ other political interests such as workers demanding pensions, healthcare, unemployed demanding unemployment insurance
How Globalization Strengthens Democracy
Growing influence of INGOs that focus on human rights and civil conflict, Amnesty International and Human Rights Watch (HRW) → difficult for rulers to hide actions from outsiders and from citizens Ex. governments ratify international treaties, b/c they believe little pressure to comply Since domestic and international NGOs work to hold abusers to account, ratification creates more protection against human rights abuses Several IGOs designed specifically to defend democratic principles International Criminal Court (ICC)- created in 2002 by an act of UN and based in The Hague, Netherlands-- claims legal jurisdiction over sovereign states to prosecute genocide and human rights violations Any member state concedes ICC jurisdiction over its territory; joining the ICC makes it harder for future leaders to violate human rights w/o fear of being held to account for their crimes Several states developed new forms of international law to protect democratic rights around world Ex. Belgium and Spain have advocated for universal jurisdiction- holds that states can prosecute crimes that occurred outside their borders- based on notion that crimes humanity know no boundaries Ex. 2003- a spanish judge indicted a former member of an Argentine military junta who was living in Mexico Opponents say this oversteps national sovereignty
Scope of Globalization
In contemporary world, ever-increasing # of issues are transnational- causes and effects cannot be confined to the borders of any single sovereign state. Issues include terrorism, environmental degradation, human rights violations, international migration, drug and human trafficking, trade disputes Requires transnational solutions and responses to such issues have spawned new forms of cross-border interaction between individuals and groups Transnational networks of citizens and govts: EU and anti-globalization activists
3 Factors why Economic Globalization Expanded
Growth of MNCs favor globalization MNCs have interests in integrating global markets Corporations want to lower costs and increase profits and expanding globally creates advantages over smaller, less nimble firms To expand, MNCs seek political influence Ex. corporations can use threat to offshore jobs when negotiating w/ unions for lower salaries or w/ govts about tax rates or labor/environmental regulations MNC lobby against protectionism and for free trade: elimination of tariffs, quotas, and other measures that make foreign imports more expensive than domestically produced goods b/c they may be based in one country, have factory in another, but want to export to other countries Technological Change Rapid advances in communications and computing have changed way corporations and consumers interact Ex. Internet creates cheap and instantaneous global links, integrates MNCs' global business operations, even gives small businesses in one country the opportunity to market to consumers in any other and allows consumers to interact directly with corporations anywhere in the world Innovations in transportation have also lowered costs, making international trade possible for an ever-wider number of products Ex. americans have grown accustomed to seeing supermarkets stocked w/ apples and blueberries in January IGOs IMF and World Bank created in 1944 to prevent another conflict and to maintain stable international currency markets and promote economic development To promote free trade- UN established General Agreement on Tariffs and Trade → WTO IMF, World Bank, WTO = main IGOS shaping international trade and finance Promoted neoliberal economic policies- seek to limit govt's role in setting economic policy Washington Consensus: agreement between MNCs, main IGOs and US govt about how to promote economic stability and growth in poorer countries Policy recommendations: balanced budgets, promotion of free trade, reduction of foreign investment barriers Embodied free market capitalism w/ few govt restrictions on international trade and finance
Race to the Bottom: Wealthy Countries
In wealthiest countries, both economic globalization and social welfare spending have increased rapidly More trade means MORE government Globalization brings more economic uncertainty, citizens demands more protection and receive in government social welfare increased spending Challenges: aging of population Ex. European democracies like Greece, Denmark, Italy have huge pension system deficits Challenge: technological change Wealthy countries have experienced long-term shift away from manufacturing and agriculture as main source of jobs and expansion of service sector Service sector: jobs outside of manufacturing and agriculture that include medicine, law, transportation, retail sales, tourism, entertainment Improves productivity and reduces price for consumers but destorys jobs in industries that are in efficient
IGOs and INGOs
International governmental organizations (IGOS): political institutions made up of member-states that have a transnational presence and that take on governmental roles Not technically governments and do not have sovereignty UN- committed to world peace WTO- regulates commerce between countries EU-governs finance and other policies across borders in Europe International nongovernmental organizations (INGOs): voluntary organizations that form independently of any state's authority, made up of citizens of several states engaged in political activism within or outside their own states' border Many INGOs are religious in nature such as Caritas, the International Islamic Relief Organization
How Globalization Homogenizes Culture
Nationalism and sovereign state weakend local forms of identity Nationalism broadened horizons of people who lived in isolation from other groups- linking local cultural attachments into larger community Belief that- Globalization exacerbates cultural assimilation, extending process beyond national and state boundaries Source of globalization homogenity: commercial and technologicqal Open markets undermine efforts at cultural and political isolation and erode existing cultural identity Global marketplace- cultural specifics get in way of profit Ex. single, integrated global market requires english, the more people need english to succeed in life, the less they value their own local languages and dialects Large multinational corporations want to market programming at the lowest cost Internet lowered cost, ease, speed of glboal communications Spread of new ideas and info, allows people of shared interests form friendships and networks Non-democratic govts see its impact on politics Ex. China has created Great Firewall to block websites that are subversive such as NYT or Amnesty International and has arrested activists McWorld: idea that globalization homogenizes and Americanizes different cultures McDonalds in every town- uniformity and elimination of local, regional, national political identities American culture influence seen everywhere Negative outlash: French farmer Jose Bove, led a protest against perceived threats to French agriculture and cuisine by ransacking McDonalds restaurant construction site No decline in nationalist sentiment across 14 European countries from 1980-2000 Despite EU political, social, economic ties- europeans w/ global identity don't have a large number
Hoe Globalization Allows Cultures to Flourish
Technology can help people gather info on how to counteract such threats and defend their communities Presence of foreign companies and influence may generate backlash reinforcing local cultures Retribalization: defense of group distinctiveness and autonomy against forces that promote similarity everywhere As China opened up to world to accept western culture, the government and population have become more nationalistic Rise of nationalist and religious movements that seek cultural autonomy and political self-determination Kurds in Iraq, Syria, Turkey Timorese in INdonesia Catalans in Spain
Economic Globalization and Poverty
The more globalized a country, the more it grows and reduces poverty KOF Index of Globalization Open economies have industries better suited to profit where new markets open up b/c openness makes them more efficient and agile Industries in closed economies have been protected from competition making them less innovative and efficient Ex. Indian automotive industry Before 1991,no car was produced in INdia After opening up to foreign investment, Indian auto industry emerged and grew rapidly Domestic and multinational corporations produce 3 million vehicles a year in india, and it employees millions of people Tata Motors has bought large South Korean and SPanish bus manufacturers and building assembly plants in other countries, buying Jaguar and Land Rover as well Absolute poverty level: measured as proportion of a country's population that earns $1.90 a day or less India- declined from 60% to 21% China- declined from 85% to 11% China's economy grown faster than US economy every year Created millions of jobs Since 1980s, absolute poverty has declined most in South Asia and East Asia, b/c of China and India Poorest people live in Africa- change from 30 years in Asia Alternative: Pessimists: Increased FDI strengthens MNCs and puts developing countries at disadvantage- extent that openness makes it easier to move money, jobs, and factories around the world Globalization helps MNCs find the weakest regulations, the cheapest labor, lowest tax rates, hurting workers and weakening govt tax base Enhances corporate power over workers and govts
multinational corporation
firms with headquarters in one country but with operations and employees in many countries Ex. mcdonalds- 33,000 restaurants in 119 countries; AB InBev: Budweiser, Bud Lite, Michelbob MNC resulted from merger of Brazilian, Belgian, American brewers
Foreign Direct Investment
purchase/creation of assets in one country by an individual, firm, or government based in a different country Ex. Japanese car company Toyota spent approx $800 million to build a factory in Blue Springs, Mississippi where it will employ 2000 ppl Total FDI increased from 80 billion to almost 2.2 trillion but declined after 9/11 and global recession in 2008 but global volume of FDI in 2014 still 3 times as great