GLOBALIZATION: WE’RE LIVING IT SO WHAT IS IT AND HOW DOES IT AFFECT MY WORLD, COUNTRY, COMMUNITY, FAMILY & ME?
Globalization Defined
Def: The integration of markets, nation-states and technologies to a degree never witnessed before—in a way that is enabling individuals, corporations and nation-states to reach around the world farther, faster, deeper and cheaper than ever before and vice versa.
The driving idea behind globalization is free-market capitalism—the more you let market forces rule and the more you open your economy to free trade and competition, the more efficient and flourishing your economy will be.
Let’s flip back to our social science terms and concepts handout in order to understand capitalism and its opposite communism before we venture any farther.
Characteristics of Globalization
- Cultural homogenization:
- Defining Technologies:
- Demographic Patterns:
Globalization has replaced the Cold War as the defining international system.
Great! Super! Fantastic! What the heck does that mean?
Cold War Defined
def: The era in modern world history rivalry after World War II and symbolically ending with the fall of the Berlin Wall in 1989, between the Soviet Union and its satellites and the democratic countries of the Western world, under the leadership of the United States. An intense economic, political, military, and ideological rivalry between The Soviet Union and its allies and the United States and its allies commenced, short of outright military conflict, and created hostile political policies and an atmosphere of strain between opposed countries.
COMPARING COLD WAR AND GLOBALIZATION SYSTEMS
Defining Characteristics / Cold War / Globalization1. Defining Measurement /
Size
Whose side are you on?How big is your missile?
/Speed
To what extent are you connected to everyone?How fast is your modem?
2. Defining Document /
The Treaty
/The Deal
3. Defining Economies /Tame Capitalism
Government control and protectionism /Unleash Capitalism
Out with the old, in the with the new
4. Defining Anxiety / Fear of annihilation from a visible enemy / Fear of rapid change from an enemy you can’t see, touch or feel5. If they were sports… /
Sumo Wrestling
Two big fat guys in a ring, with all sorts of posturing and rituals and stomping of feet, but actually very little contact until the end of the match when there is a brief moment of shoving and the loser gets pushed out of the ring, but nobody gets killed / 100-Meter DashOver and over and over again. No matter how many times you win you must race again tomorrow
6. Defining Defense /
Radar
Expose the threats coming from the other side of the wall /X-Ray Machine
Expose the threats coming from within7. Defining Structure of Power / Built Around Nation-States
A drama of states confronting states and balanced at the center were the two superstates of the USA and Soviet Union /
Built Around Three Balances
- Between Nation-States –Traditional
- Between Nation-States and Global Markets
-Supermarkets
Example: Indonesia 1998
- Between Individuals and Nation-States
Examples: Osama bin Laden & Jody Williams –
8. If they were board games… /
Risk or Chess
Strategically positioning your armies and funds /Ouija and Monopoly
Sometimes pieces are moved around by the obvious hand and other times by the hands of the Herd and Supermarkets. And, it’s all about making money.9. The key to wealth is… /
Territory
/Knowledge
10. Big threats /Nation-State Armed Forces
/Super-Empowered Angry Individuals
11.People/Businesses/CountriesEqual /
Friends and enemies
/Competitors
#7 Globalization is very important. Unless you see globalization as a complex interaction between all three of these actors: states bumping up against states, states bumping up against Supermarkets, and Supermarkets and states bumping up against super-empowered individuals, you will never grasp the concept of globalization.
OH THE TIMES THEY ARE A’CHANGIN”!
OK so, how did the Cold War walls tumble down creating this new world system of globalization?
Answer = Democratization
Democratization Defined
Def: The opening up of any societal system to increase any individual’s access to it.
- Democratization of Technology:
- Printing/readersRadio/listenersTV/viewersDigitization & Computerization/broadcasters, artists, investors, etc.
- Democratization of Finance:
- Anyone can invest with a mouse click
- Individuals through investing in pension and mutual funds actually hold the national debt of many countries. Weird but true. Back in the day, a few banks then lots of bankers held the debt of other countries.
- Democratization of Information:
- The Internet – no one owns it and you can’t turn it off.
- Governments can’t (and if they are not for much longer) isolate their people from understanding what life is like beyond their borders.
THIS CREATED A NEW WORLD MODEL THAT THE U.S.A. CHAMPIONED
THE GOLDEN STRAITJAKCET
One size fits all. It’s free-market capitalism and it’s the only model on the rack this season!
It keeps a society under pressure to constantly streamline and upgrade its economic and technological institutions and performance.
The Electronic Herd and Supermarkets love the Golden Straitjacket. Countries that put it on and embrace it are rewarded with investment capital. The Herd and Supermarkets are both friend and foe because it can both help countries grow and crumble.
THE ELECTRONIC HERD IN A BIT MORE DETAIL
Think of the Herd in terms of short-horned and long-horned cattle.
Short-horned cattle are, for our purposes, individuals. They invest mostly in stocks and bonds and engage in e-commerce.
Long-horned cattle are multinational companies that engage in foreign direct investment. This means they not only invest in stocks and bonds but also invest directly in its factories, utilities, energy plants and many other projects that take time to build and develop.
So let’s think of a multinational corporation. OK we got it. Now, how can this company stay competitive and ahead of other companies?
Well, in a global marketplace there is lots of competition. It needs to produce a quality product at a price that will attract consumers and yield the company a profit. So, in order to play the global market game, this company will slice up its production chain and outsource each slice to the country that can do it the cheapest and most efficiently. This will keep manufacturing costs down and keep the company competitive with other companies. Others moves the company will make in order to keep costs low are searching for governments and local businesses that are friendly and open to investment from the multinational company, countries that offer low taxes on businesses, and efficient low-cost labor forces.
As a result, the workday becomes longer when spread out throughout the world and it becomes a global relay race.
A GOVERNMENT’S ROLE IN GLOBALIZATION
SO! It seems that countries want to put the Golden Straitjacket on and attract the Electronic Herd and Supermarkets because they have the power to improve or destroy economies. They have the investment capital; the multinational companies provide foreign direct investment. Developing countries would want this. Right?
OH NO!!! WHAT’S HAPPENING TO NATIONAL IDENTITY AND THE UNIQUENESS OF EACH COUNTRY? HAS IT SUCCUMBED TO THE POWER OF GLOBALIZATION?
DOES GOVERNMENT AND POLITICS EVEN MATTER ANYMORE OR IS IT ONE BIG CORPORATE CONSPIRACY!!!!!AHHHHHHHHHHH!!!!!!!!!!!!!!!!
Calm down
In a globalized world, the quality of a country’s government matters more than ever. The ability of an economy to withstand the inevitable ups and downs of the herd depends in large part on the quality of its legal system, financial system and economic management---all matters under the control of government.
The Golden Straitjacket fits each country in its own unique way depending on the status of that countries economic and political system. It seems that if a country puts on the Golden Straitjacket snuggly and adopts GLOBALUTION (The foundation stones of democracy) for operating its society, then investment capital will flow in and when the Herds and Supermarkets bite, as they occasionally do, the country will be better equipped to weather the storm. The following characteristics define globalution:
- Democratization
- Transparency (uh…corruption’s bad)
- Standards (accounting and labor)
- Free press
- Bond and stock markets
Democratization is a process not an event. Nothing changes overnight. Think about the word ‘revolution’. We still live with the image of revolutions, like the American Revolution or the end of the Cold War, which leaves the impression that people rising up and throwing out a corrupt government can only produce democracy.
Lets modernize our perception of revolution: A businessperson shows up and tells your government that he can’t make enough money to employ that country’s people unless that government institutes better legal safeguards, international standards and transparency.
Take the above example and watch China throughout your lifetime and see the process of democratization unfold. It started in 1977. Currently, China still has an authoritarian government but its free market capitalism, its Golden Straitjacket, has attracted the Herd and is creating a whole new class of wealthy and middle class people who will demand more from their government in terms of freedoms, a cleaner environment, etc.
Despite the appeal of globalization as an operating system that countries should adopt if they want to raise their standard of living and grow economically, people are still very much attached to their cultural and national roots. Globalization is happening so fast that its culturally homogenizing and environment-devouring forces are real dangers to people and nature.
Geopolitics still matter but the game has changed from Cold War to Globalization
THE GOLDEN ARCHES THEORY OF CONFLICT RESOLUTION
No two countries that both had McDonald’s had fought a war against each other since each got its McDonald’s. No joke! The bottom line is today’s globalization significantly raises the costs of countries using war as a means to pursue honor, react to fears or advance their interests. Civil wars don’t count in this theory because within each country there are localizers and globalizers.
USING GLOBALIZATION AGAINST ITSELF TO CREATE HEALTHY CHANGE IN…
The Environment: Activists and conservationists have to be active and schooled in many fields. Also, the public must demonstrate to corporations that their profits and stock prices will increase if they adopt environmentally sound production methods.
Country’s Culture: Countries that encounter the force of stronger cultures, like the USA, must absorb influences that naturally fit into and can enrich that culture, and resist those things that are truly alien and to relegate those things that while different, can nevertheless be enjoyed and celebrated as different. This will illustrate the two extremes of this principle:
Taliban of Afghanistan Makudonarudo of Japan
Societies need economic development and a chance to adjust to globalization, the Golden Straightjacket and the power of the Herd and Supermarkets but it will lose its’ self-confidence, its glue, that holds society together if cultural foundations are destroyed.
THE BACKLASH AGAINST GLOBALIZATION
When the world first experienced the creative destruction of capitalism the backlash produced new ideologiessocialism, communism and fascism. These have been discredited but don’t tell Hugo Chavez of Venezuela, because he’s already been told!
Let’s hear the story of the lion and the gazelle (p. 331 L & O).
Other characters to consider:
Wounded Gazelles: They tried globalization, got burned and are now trying to change the rules or shut it out
The turtles: Those that cannot upgrade and keep pace with globalization.
There are many groups and individuals that agree that globalization is hurtful such as, auto and steel workers and environmentalists to name a small few. BUT THERE IS NO SHARED AGENDA OR STRATEGY. In some countries, the strongest backlash comes not just from poor segments of the population or the turtles, but rather from the “used-to-bes” of the middle classes, who found success and security in a protected, walled society.
Systematic Misunderstanding: This arises when your framework and the other person’s framework are so fundamentally different that it cannot be corrected by providing more information. Example: Many Americans easily identify with modernization, technology, and the Internet because they increase individual choices. But for traditional societies, the collective or the group is much more important than the individual. Therefore, globalization is perceived as an outside threat rather than a means to increasing their freedom.
And I don’t know about you but it doesn’t sound inspirational and motivating to streamline, downsize and get the Internet!
Cultural backlash becomes the most politically destabilizing when it gets married to other backlashes such as, when economically depressed people merge with culturally depressed people. When poor people and anti-US or anti-globalizers join forces you can often times get terrorism.
Super-Empowered Angry People: Just like there are Super-Empowered People like Bill Gates, Oprah, Branjalina, the opposite is also true. Osama bin Laden is the most obvious example.
BACKLASH AGAINST THE BACKLASH
Globalization emerges from below, from street level, from people’s very deepest aspirations for a better life. That is the driving force behind this new world order. Is there something about globalization that can both enhance freedom and contribute to the alleviation of poverty?
Well, it can provide more accountable government and give individuals, activist groups, and companies much greater power to become shapers of the new world without walls. It also gives those brutalized by it a greater ability to tell people about their pain or get organized to fix it. Example: Grameen Bank
THE U.S.A. AND ITS PART IN THE SYSTEM
The U.S.A. is close to the ideal country to compete and win in globalization. Here’s why:
- Competitive geographic position
- Diverse, multicultural population with connections to their countries of origin but bound together by the English language.
- Supports venture capitalism as a noble and daring art
- The rule of law is the foundation on which all of America’s prosperity is built.
- Possesses the most honest legal and regulatory systems: relatively little corruption, high levels of transparency, and patent protection.
- Encourages people who fail in a business venture to declare bankruptcy and try again.
- Hard-wired to accept new immigrants creating ‘brain-drain’ in other countries
- Has a democratic, flexible political system with decentralized political decision-making (state, county, local governments).
- Has a flexible labor market allowing for easy movement of people and the firing and hiring of workers.
- Government-protected companies are not allowed and monopolies are not tolerated.
- It’s tolerant of the oddball.
- Has a corporate culture that has already gone through most of its growing pains in the 1990’s adjusting to globalization and new technologies.
- Still possesses a lot of environmentally attractive wide-open spaces and small towns, to attract knowledge workers.
- It values the free flow of information so much it defends the worst pornographers and racists to do their things.
- Possesses a large standing armed forces and military technology.
Americans are apostles of the Fast World. What bothers so many people about America today is not that we send our troops everywhere but that we send our culture, values, economics, technologies and lifestyles everywhere. Therefore, many feel that America has Global Arrogance.
WHERE DO YOU BELONG?
Let-Them-Eat-Cakers
Separatists Integrationists
Social-Safety Netters
SOME QUESTIONS TO CONSIDER
- Think back to our multinational company. What positive effects does it bring to the country it is investing in? What negative effects does it bring?
- How can globalized industrialization and economic growth occur with less impact on the environment?
- In such a competitive world how does a society measure success? Short-term or long-term or both?
- There exists people and groups around the world that are anti-globalization. Can you think of any? Why would they be?
- What do you think sustainable development is? Should countries think in these terms when doing business? Explain.
- How do we get better global governance in areas such as, environment, human rights, financial interactions and worker conditions, without having a global government or a global cop?
- Is globalization irreversible?