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| [Storm rising over the city] |
I'll be covering globalization this week in one of my courses after introducing it last week. Globalization is a really complex issue, so there won't be time to look at all of it. Instead we'll briefly sort through a couple of main themes. Here's an overview if you keep hearing about that term and are curious. I refer a few times to a textbook I sometimes use (though not this semester) because I find the presentation or examples used by the author for certain aspects of globalization helpful.
Brief History
While there may have been (semi-)globalized economic systems in the past, our present version begins with the colonization of various societies by Western European powers from the 1600s through the early 1900s, including the colonization and integration of larger parts of North America by the former British colonies that became known as the United States of America. The exploitation or outright seizure of resources by those colonized or displaced helped to fuel the economies of these emerging Western powers while creating conditions of social, economic, and political tension in the colonies themselves which has in turn contributed to economic and political instability in many former colonies over the centuries, especially during the 20th century. While the United States and others attained liberation in the 1700s, many colonies in what is known today as Latin America weren't liberated until the 1800s. Asian and African colonies remained under European control until well into the 1900s (the scramble to colonize Africa was still going on in the first decades of the 20th century).
Those who favor modernization theory claim that the problems of former colonies are either the natural growing pains of economic development or are caused by failure to adopt certain political and economic institutions favored by the Western powers. These developing nations need guidance and funding to modernize and grow like the US and Western Europe, so institutions such as the IMF (International Monetary Fund) and the World Bank, largely funded and controlled by those same Western powers, provide economic advice and loans to help reduce poverty around the globe. Many countries are unable to pay back their loans and are saddled with debt, requiring that the terms of their loans be renegotiated. This renegotiation frequently comes with strings attached concerning efforts to combat what the lenders see as waste and corruption.
However, some of these terms follow neoliberal ideals which see any constraints on doing business and making profit as obstructions to economic growth. Under the modern neoliberal view, markets should exist for practically every area of human life, a world in which everything becomes a commodity. This includes things such as fresh air, clean water, and environmental conservation. Markets and the market value of commodities, as determined by consumer demand and the availability of a particular item, are seen as the best guide for human activity since humans are rational actors who will behave according to enlightened self-interest. Anything truly bad or destructive will be weeded out because it is impractical, unsustainable, or offense to a sufficient number of consumers. By increasing the scope of markets and ramping up commodification (turning things into commodities -- things to be bought and sold in the marketplace), economic growth will lead to increased prosperity for all, which is turn is supposed to inherently promote democratic ideals and greater individual autonomy and choice. The best chance for solutions to human problems comes from unleashing the creativity of inventors as entrepreneurs.
Critics of neoliberal policies, such as those who favor development theory, suggest that institutions such as the IMF and World Bank are misguided or inefficient and not addressing the roots of the problems generating poverty but rather are reinforcing them. The stronger critics suggest that while such institutions and their controlling member states claim to be in favor of reducing poverty, their true agenda is to continue the economic exploitation of other nations by colonizing or re-colonizing many parts of the world by economic means. The political and economic instability of the former colonies in places like Africa are attributed largely to continued interference by Western Powers.
The broad Marxian critique of unrestrained Capitalism is also regularly applied to institutions and laws favoring neoliberal policies. These policies include cutting public welfare or subsidies supporting education, healthcare, and local (as opposed to international) economic activity. Instead, austerity policies are favored to reduce government spending. Economic activity favoring international trade, such as allowing increased foreign investment, lifting environmental protection policies, and producing goods that can be sold on the international market (rather than being used in country) are also promoted. Those opposed to the neoliberal view of economic growth claim that these measures are cruel and frequently counter-productive, making it harder for such poorer nations to get out of debt. Criticisms of such policy call for debt forgiveness, while several governments in South America, for instance, have turned more toward a socialist stance (public or government control or ownership of national resources and spending) by privatizing things such as oil fields and placing heavier restrictions on foreign investment.
The World Systems Theory was developed to try to place such competing views in context. Core nations (also known as first world or developed countries) control most of the economic capital and influence the focus of economic activity, whereas peripheral nations (a.k.a. developing or third world countries) have less influence and tend to provide labor and raw resources at low cost. Semi-peripheral nations occupy the space in between. The issue for this view isn't which policies promote economic growth or the welfare of people, but how the global economy is interconnected.
