Major Themes in Industrialised Societies: Globalisation
We shall discuss the definition and nature of globalisation. Then we shall examine the contradictory nature of economic globalisation.
- Bob Jessop and David Held
Economic globalisation refers to:
i) extension and deepening of internationalisation of national economic spaces through trade, labour and capital flows;
ii) formation of regional economic blocs and links between them (e.g., European Union (EU), Commonwealth of Independent States (CIS) and North American Free Trade Union (NAFTA);
iii) the emergence and acceptance of global norms and standards (e.g., accounting standards, trade agreements, educational standards and international diplomacy).
Globalisation involves:
i) multi-centric – activities from competing centres such as Europe, Eastern Asia and North America;
ii) multi-scalar – actions operating on many spatial scale (such as international, national, regional, urban and local) such that there is no linear causation, rather a web of tangled and complex relations;
iii) multi-temporal – complex time-space horizons (such as immediate and instant or gradual and long term events);
iv) multi-casual – different casual processes operating in economic, political and cultural spheres;
v) multi-form – different types of globalisation requiring different strategies; e.g., neo-liberal version requiring policies initiated by the World Bank, IMF and the US Government, or horizontal global governance requiring grass-root social movements such as ecological, black and women pressure groups.
Globalisation is not a unitary causal mechanism, but a complex emergent product of many different forces operating on many scales. Globalisation has:
i) structural moments – increasing global interdependence of individuals, organisations, institutions in different spheres (e.g., economy, law, politics, education and science); and
ii) strategic moments – conscious attempts to promote global co-ordination by the World Bank, IMF, the US Government, UN, etc or to resist such developments by social movements and anti-globalisers.
-Bob Jessop and Don Slater
Capital accumulation involves the exploitation of wage labour – markets cannot produce surplus value, only mediate it. Market mechanism generates contradictions that cannot be solved by that mechanism; i.e., requires regulation. This means institutions outside the market to ensure re-production and to resolve crises.
Market mechanism mediates (dis-embeds and re-embeds) social relationships in pursuit of higher profits / capital accumulation. Regulation ensures that the process of dis-embedding and re-embedding occurs in orderly and stable manner.
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Formal and abstract nature of markets (i.e., the market mechanism) |
Substantive and concrete problems of markets (i.e., need for regulation) |
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free movement of labour |
regulation needed to stop the process of ‘brain-drain’, a pool of illegal unemployment and cheap workers in host country, a flow of sex workers, and so on |
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free movement of capital |
regulation to stop ‘capital flight’, the devaluation of national currency, the flow of criminal (‘laundry’) money, and so on |
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free movement of commodities |
regulation to stop the collapse of ‘home’ industries, smuggling of illegal goods, destruction of traditional work communities, and so on |
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free movement of cultural ideas |
regulation to protect cultural heritage, social order, and so on |
a) commodity as a use-value and exchange value
e.g., tensions created when goods and services (such as health, education, arts and food) treated as primarily as an exchange value, though possibly sacrificing human needs and quality of goods and services
b) workers as abstract unit of labour power substitutable for other units and concrete individuals with specific skills, knowledge and creativity
e.g., substituting older workers with more experience with younger and cheaper workers, and introducing mechanisation (so replacing workers), though losing tacit skills and workers’ creativity
c) wages as a source of demand for goods and cost of production
e.g., high wages in the UK causes multinational companies to move their plants to cheaper countries in South Asia, though causing unemployment and recession in the UK
d) productive capital as an abstract value in motion (i.e., profit) and concrete stock of assets (e.g., machinery and factories)
e.g., short run decisions to shift capital from one industry to another industry in pursuit of higher profits, though sacrificing the realisation of surplus value in the long run
e) money functions as a national currency and international currency
e.g., the pound sterling leaves the ERM system in 1989, the crash of Russian rouble in 1998 and Argentinean peso in 2002, where international speculation of the currency damages its function domestically
f) information and knowledge acting as private property rights and public access to empower individuals and facilitate public sphere of discussion
e.g., copyrights in pharmaceutical and bio-technology industries (such as DNA, wild-life and plants) to capture capital, though preventing wider circulation and use of information
g) planning for short-tern financial gains and long-term development to create ‘real’ competition based on skills, trust and infrastructure
e.g., cancelling educational programmes during economic crisis, though damaging country’s economic competitiveness in the long term
During 1945-72, countries resolved these contradictions by compromises based on national economy, national state, national citizenship and national society (i.e., ‘Keynesian Welfare State’).
Post-1972, countries adopted hegemonic strategy (i.e., ‘neo-liberalism’) of economic globalisation based on the abstract and formal moments of capitalism and competition.