Globalization is a buzz word today. The concept of globalization is one that has become widely used in debates in politics, business and the media over the past few years. A decade ago, the term GLOBALIZATION was relatively unknown but today it seems to be on the tip of everyone’s tongue.
Globalization refers to the fact that we all increasingly live in one world so that individuals, groups and nations become interdependent. The economies of the world are being increasingly integrated. It is often portrayed solely as an economic phenomenon. It is no more a new phenomenon. The world has experienced several waves of globalization over the past few centuries. It is also true that globalization is a process that cannot be taken as granted. Even developed countries and established societies feel compelled to look for ways to enable them to deal effectively with the ‘NEW GLOBALISM’. This NEW GLOBALISM is characterized by the rise in the importance and influence of international financial markets.
With the inventions of mobile phone and internet people over the globe have come closer. The world is becoming a smaller place. Work can now be outsourced to any part of the world that has an internet connection. The transnational corporations play a major part whose massive operations stretch across national borders, influencing global production process and the international distribution of labour.
Although economic forces are an integral part of globalization, it would be wrong to suggest that they alone produce it. Globalization is created by the coming together of political, social, cultural and economic factors. It has been driven forward above all by the development of information and communication technology. They have intensified the speed and scope of interaction between the people all over the world.
Currently, globalization enjoys immense popularity. It is a key word in not only the dominant theoretical and political discourse but also in everyday language. In its most general sense ‘globalization’ refers to the cross-national flows of goods, investment, production and technology. For many advocates of it, the scope and depth of these flows have created a NEW WORLD ORDER with its own institutions and configurations of power that have replaced the previous structures associated with the nation-state.
The economies of the world are now being increasingly integrated. This economic integration takes place through four channels—
(a) Trade in goods and services
(b) Movement of capital
(c) Flow of finance
(d) Movement of people
DEFINITIONS OF GLOBALIZATION:
Since the word globalization appeared in dictionary, its meaning has undergone a massive transformation. Just two dozens of definitions of globalization illustrate the problem in grappling with this phenomenon. Some of the definitions are given below.
JEFFREY L WATSON describes globalization in cultural terms. He defines it as “the process by which the experiences of everyday life, marked by the diffusion of commodities and ideas, can foster a standardization of cultural expressions around the world.”
The official World Bank definition of globalization is — “globalization is stated not surprisingly in purely economic terms, as the freedom and ability of individuals and firms to initiate voluntary economic transactions with residents of other countries.”
” Globalization is a word invented to convey the false hope of an integrated, inclusive world, has in reality meant the opposite: the rejection and exclusion of hundreds of millions who contribute little or nothing to production and consumption and are thereby useless by twenty first century capitalism.” —-, SUSAN GEORGE, KHALEEJ TIMES, 2004
“Globalization is a process that has been going almost throughout recorded history and that has conferred huge benefits. Globalization involves change, so it is often feared, even by those who end up gaining from it.” — ANNE O KRUEGER, 1st Deputy Managing Director of International Monetary Fund, 2002.
The Marxists define globalization in terms of expansion of capitalist enterprises. The liberals, on the other hand, to the emergence and expansion of free market economy. There is an increasing interdependence of world economy and internationalization of production. Globalization is also often used interchangeably with internationalization. It also refers to interdependence, universalism or Americanization. Many define it in terms of deterritorialisation which means that border is no longer a limit today.
Although globalization may be thought of initially as the widening, deepening and speeding up of worldwide interconnectedness in all aspects of contemporary social life, from the cultural to the criminal, the financial to the spiritual, such a definition begs further elaboration. Despite a proliferation of definitions in contemporary debates, there is scant evidence in the existing literature of any attempt to specify precisely what is global about globalization. For instance, all the above definitions are quite compatible with far more spatially confined process such as the spread of national or regional interconnectedness.
THE SHAPING OF GLOBALIZATION:
The term “GLOBALIZATION” emerged because the visibility of our globally connected life calls for a world to sum up the phenomenon of this interconnectedness. But if we look under the hood of our daily existence, one could see a multitude of threads that connect us to faraway places from an ancient time. Without looking into the past, anything cannot be explained. Everything carries in itself the imprints of a long journey. As such, globalization is not an exception to this. Most of what we eat, drink or use originated somewhere else than where we find these objects today. Almost everything we associate with a nation or take pride in as ours is connected with another part of the world, however, remotely. The term ‘globalization’ reflecting awareness of these global connections, grew out the very process it describes — a process that has worked silently for millennia without having been given a name.
NAYAN CHANDA in his book “BOUND TOGETHER: HOW TRADERS, PREACHERS, ADVENTURES AND WARRIORS SHAPED GLOBALISATION” describes vividly the process of globalization and what it had undergone through. The Director of publications for the Yale Centre for the study of globalization here in offers an alternative description of the term.
Also, THOMAS L. FRIEDMAN’S “THE WORLD IS FLAT” have explained how the mobile capital, trade and technology have created today’s instantaneously connected and interdependent world.
NAYAN CHANDA describes how traders, preachers and adventurers spearheaded the reconnection and closer integration of settled communities that had come into existence some twelve thousand years earlier. According to him, traders are those people who produce or carry products and services to consumers in distant parts of the planet and in the process, have created an interconnected world. He further anchors that it is hard to image this veritable rock star of the high tech world as a modern incarnation of those traders in the early years of the Christian-Era who transported merchandise by camel caravans on the Silk Road or the Dutch traders who shipped cloves from Southeast Asia.
ADAM SMITH called the basic human instinct for “TRUCK AND TRADE” for profit, which has grown since the dawn of civilization and connects a widening part of the world through a web of connection.
FROM CAMEL-COMMERCE TO E-COMMERCE:
The traders and financiers being ready to take risk of long journeys and life abroad for profitable transactions, they emerged as the most important connectors. The means of transporting the fruits of trade have progressed from donkey and camel to sail and steamboats, from container ships and airplanes to fiber-optic cables. The modes of payment have evolved from barter, cowries, metal coin, paper money and credit to electronic bank transfers and online payment systems like PAYPAL. These developments enabled the speedy transportation of large quantities of goods and the traders and entrepreneurs also grew. Multi National enterprises replaced individuals and groups of traders, all successors to one of the earliest examples, the East India Company, founded in 1600 BC.
If one counted the shareholders of these businesses, the number of people promoting world- wide trade could be in the hundreds of millions. The difference between the Camel Caravan’s borne ‘C-COMMERCE’ of the past and today’s ‘E-COMMERCE’ is in the scale and speed of such transactions. Thus it is not surprising that in the popular imagination, foreign trade has become synonymous with globalization.
Both necessity and a taste for the exotic have led humans to engage in commerce. As agriculture developed and surplus food was available, a class of people attracted by the prospects of profit and perhaps by a sense of adventure became travelling merchants to look for goods and novelties that could be bought with gold or silver or bartered for whatever they had. Traders frequently worked with the sanction of the ruler and paid tax. However, often the ruler himself took charge of trade to ensure a supply of luxuries and profit to be made from commercial transaction.
The traders trading in Silk Road reached its peak in the thirteenth century. There also was a transportation revolution in the fifteenth century. The transportation revolution that linked the continents created the conditions for the emergence of the first multi-national trading company.
According to N CHANDA, the human beings were initially originated in Africa and he takes into account that it is the place from where the root of global process started its journey. Human beings in search of food and various other needs of life left Africa and became globalised by migrating to various parts of the world. The history of our human ancestor’s journey out of Africa is the best proof of that aspect of human nature. But the human journey did not stop with the beginning of sedentary agriculture. The desire to find new and more hospitable areas to settle spurred the early migration of agrarian population through-out Central Asia and India. Migration has continued through-out history.
The curiosity about what lay beyond the human border had led generations of explorers to undertake dangerous journeys and bring back knowledge that has connected wider and wider areas of the world. In the days, when travel was extremely hazardous, the journey of exploration was often not just for the sake of new information. Within three centuries, their discoveries led to the biggest migration in human history. Even after every corner of the planet was discovered, humans contributed to travel. Yesterday’s curious travellers who set out to find out what lay beyond the next mountain or ocean are today’s tourists. Yesterday’s fortune seekers and bonded immigrant laborers in a foreign land are today’s immigrant, legal and illegal. Since the beginning of modern warfare with its casualties the number of refugees has swelled.
As the means of transportation and conditions of travel have evolved, the movement of people across the globe has grown in volume with more people living in a country other than where they were born. In 2005, there were nearly 200 million migrants in countries around the world.
Even though most of the world’s people have never crossed their home country’s border, dispersal of their compatriots through the world has created a global village where the progenies of ancestors who walked away from Africa are connected as par N CHANDA. The human world has been expanding through exploration and adventurous journeys, and the web of connections has been growing for a long, long time.
The desire to live better, to convert others to one’s belief, and to learn what lies beyond one’s borders have been the prime motives bringing countries and people in contact, peacefully or violently. Warriors make up the fourth group of actors who have hastened the integration of the world.
Also, the imperial power built and secured long distance trade routes and boosted commerce by providing currency and legal structures. In their urge to build empires, kings and sultans devoted state resources to explore beyond their borders. They spent state funds to organize expeditions and to acquire scientific and technical knowledge necessary for long distance travel. Empires worked like gene-mixers, intervening the different genetic strains that marked geographically dispersed humans after their ancestors had left. In the process, they brought about microbial and biological unity.
In his book, N CHANDA argues that rather than a synonym for the late capitalism globalization is an expression to the human desires that date back to the dawn of time when the first humans left in African homeland and set out in search of a better life. Globalization he describes is not a scheme dreamt up by a few Western Finance Ministers, corrupt industrialists and the International Monetary Fund. It is an age-old drive as natural as breathing.
FACTORS INFLUENCING GLOBALIZATION:
Explaining all social changes is complex but it is not difficult to pinpoint some of the factors that are contributing to the rise of globalization in the contemporary society. These factors can be discussed mainly under three headings —- The Rise of Information and Communications Technology, The Economic Factors and The Political Factors.
THE RISE OF INFORMATION AND COMMUNICATIONS TECHNOLOGY: The explosion in global communications has been facilitated by a number of important advances in technology and the world’s telecommunications infrastructure. In the post-second world war era, there has been a profound transformation in the scope and intensity of telecommunication flows. Traditional telephonic communication which depended on analogue signals sent through wires and cables with the help of mechanical crossbar switching has been replaced by integrated systems in which vast amounts of information are compressed and transferred digitally. Cable technology has been more efficient and less expensive. The development of fibre-optic cables has dramatically expanded the number of channels that can be carried.
The impact of these communications systems has been staggering. In countries with highly developed telecommunications infrastructures, homes and offices now have multiple links to the outside world. The Internet has emerged as the fastest growing communication tool ever developed. These forms of communication technology facilitate the compression of time and space. Widespread use of the internet and mobile phones is deepening and accelerating process of globalization. More and more people are becoming interconnected through the use of these technologies and are doing so in places that have previously been isolated or poorly served by traditional communications.
INFORMATION FLOWS: If the spread of information technology has expanded the possibilities for contact among people around the globe, it has also facilitated the flow of information about people and events in distant places. Every-day the global media bring news, images and information into people’s homes, linking them directly and continuously to the outside world. Individuals are now more aware of their interconnectedness with others and more likely to identify with global issues and processes than was the case in the past.
This shift of global outlook has two significant dimensions:
(1) First, as members of a global community, people increasingly perceive that social responsibility does not stop at national borders but instead extends beyond them. There is a growing assumption that the international community has an obligation to act in crisis situations to protect the physical well-being or human rights of people whose lives are under threat. In recent years, earthquake in ARMENIA and TURKEY, floods in BANGLADESH, and MOZAMBIQUE, famine in AFRICA and hurricanes in CENTRAL AMERICA have been rallying points for global assistance.
There have been stronger calls in recent years for interventions in the case of war, ethnic conflict and the violation of human rights.
(2) Second, a global outlook means that people are increasingly looking to sources other than nation-state in formulating their own sense of identity. This is a phenomenon that is both produced by and further accelerates process of globalization. Local culture identities in various parts of the world are experiencing powerful revivals at a time when the traditional hold of the nation state is undergoing profound transformation. For example: in Europe, inhabitants of Scotland and the Basque region of Spain might be more likely to identify themselves as Scottish or Basque or simply as European – rather than as British or Spanish.
The nation state as a source of identity is waning in many areas, as political shift at the regional and global levels loosen people’s orientations towards the states in which they live.
THE ECONOMIC FACTORS:
Globalization is also being driven forward by the integration of the world economy. In contrast to previous eras, the global economy is no longer primarily agricultural or industrial in its basis. Rather it is increasingly dominated by activity that is weightless or intangible.
This WEIGHTLESS ECONOMY is one in which products have their base in information. It is the case with computer software, media and entertainment products and internet-based services. The emergence of the society has been linked to the development of a broad base of consumers who are technologically literate and eagerly integrate new advances in competing, entertainment and telecommunications.
The very operation of the global economy reflects the changes that have occurred in the information age. Many aspects of the economy now work through networks that cross national boundaries. In order to be competitive in globalizing conditions businessmen and corporations have restructured themselves to be more flexible and less hierarchical in nature. Production practices and organizational patterns have become more flexible, partnering arrangements with other firms have become commonplace and participation in worldwide distribution networks has become essential for doing business in .a rapidly changing global market
TRANSNATIONAL CORPORATIONS: Among the many economic factors that are driving globalization, the role of transnational corporation is particularly important
Transnational Corporations are companies that produce goods or market services that produce goods or market services in more than one country. These may be small firms with one or two factories outside the country in which they are based or gigantic international ventures whose operations crisscross the globe.
Transnational Corporations (TNCs) are at the heart of economic globalization. They account for two-thirds of all world trade, they are instrumental in the diffusion of new technology around the globe and they are major actors in international financial markets.
According to DAVID HELD, 1999, “TNCs are the linchpins of the contemporary world economy.” TNCs became a global phenomenon in the years following the second world- war. By the turn of the twenty-first century, there were few economies in the world that stood beyond the reach of TNCs. Over the past decade, the TNCs based in industrialized economies have been particularly active in expanding their operations in Developing Countries and in the societies of the former Soviet Union and Eastern Europe.
The argument that manufacturing is becoming increasingly globalised is often expressed in terms of GLOBAL COMMODITY CHAINS, the worldwide networks of labour and production process yielding a finished product. These networks consist of all pivotal production activities that form a tightly interlocked chain that extends from the raw materials needed to create the product to its final consumer.
THE ELECTRONIC ECONOMY: The Electronic Economy is another factor that underpins economic globalization. Banks corporations, fund managers and individual investors are able to shift funds internationally with the click of a mouse. This new ability to move electronic money instantaneously carries with it greater risks, however.
Transfer of vast amounts of capital can destabilize economies triggering international financial crisis such as the ones that spread from the Asian “tiger economies” to Russia and beyond in 1995. As the global economy becomes increasingly integrated, a financial collapse in one part of the world can have an enormous effect on distant economies.
A third driving force behind contemporary globalization is related to Political Change.
(1) First, the collapse of Soviet-style communism that occurred in a series of dramatic revolutions in Eastern Europe in 1989 and culminated in the dissolution of the Soviet Union itself in 1991. Since the fall of communism, countries in the former Soviet bloc have been moving towards Western style in political and economic systems. This development has meant the end to the system that existed during the Cold War. The collapse of communism has hastened the processes of globalization but should also be seen as a result of globalization itself. The centrally planned communist economies and the ideological and cultural control of communist political authority were ultimately unable to survive in an era of global media and an electronically integrated world economy.
(2) Second important political factor leading to intensifying globalization is the growth of International and Regional mechanisms of government. The UNITED NATIONS and the EUROPEAN UNION are the two most prominent examples of international organizations that bring together nation states into a common political forum.
(3) Finally, globalization is being driven by international governmental organizations (IGOs) and international non-governmental organizations (INGOs). An IGO is a body that is established by participating governments and given responsibilities for regulating or overseeing a particular domain of activity that is transnational in scope. The first such body, the INTERNATIONAL TELEGRAPH UNION, was founded in 1865.
As the name suggests, international non-governmental organizations differ from IGOs in that they are not affiliated with government institutions. Rather, they are independent organizations that work alongside governmental bodies in making policy decisions and addressing international issues.
TYPES OF GLOBALIZATION:
There are many types of globalization which gives us the ability to describe it in many different fashions. The varying processes of globalization can be mainly placed into four areas —-
(a) ECONOMIC GLOBALISATION: Economic and technical globalization regards all the phases of the economic fashions. It includes industrial and financial globalization, encompasses the rise and expansion of Multi National Enterprises and the emergence of world-wide financial markets and better access to external financing for corporate, national and sub-national borrowers.
(b) POLITICAL AND MILITARY GLOBALISATION: It refers to the spread of political interest to the regions and countries outside the neighbor-hood of political actor’s long-distance networks of interdependence in which force, and the threat or promises of force are employed.
(c) SOCIAL AND CULTURAL GLOBALISATION: This involves the movements of ideas, information, images and people around the edge.
(d) ENVIRONMENTAL GLOBALISATION: It refers to the long-distance transport of materials in the atmosphere or oceans, or it can relate to the biological substances such as pathogens or genetic materials. For example – the spread of the HIV virus and the effects of ozone depleting chemicals.
THE GLOBALIZATION DEBATE:
In recent years, globalization has become a hotly debated topic. Most people accept that there are important transformations occurring around us. DAVID HELD and his colleagues (1999) have surveyed the controversy and divided its participants into three schools of thought which are as follows-
(1) THE SCEPTICS
(2) THE HYPERGLOBALIZERS
(3) THE TRANSFORMATIONALISTS
(1)THE SCEPTICS: Some thinkers argued that the idea of globalization is overrated that the debate over globalization is a lot of talk about something that is not new. The sceptics in the globalization controversy believe that the present levels of economic interdependence are not unprecedented. They point out that the modern globalization differs from the past only in the intensification of interaction between nations.
The Sceptics agree that there may now be more contact between countries than in the previous era, but in their eyes the current world economy is not sufficiently integrated to constitute a truly globalised economy. This is because the bulk of trade occurs within three regional groups — Europe, Asia-Pacific and North America.
Many sceptics focus on processes of regionalization within the world economy such as the emergence of major financial and trading blocs. To sceptics, the growth of regionalization is the evidence that the world economy has become less integrated rather than more so. Compared with the patterns of trade that prevailed a century ago, it is argued that the world economy is less global in its geographical scope and more concentrated on intense pockets of activity.
Sceptics reject the view that globalization is fundamentally undermining the role of national government and producing a world order in which they are less central. According to Sceptics, national governments continue to be key players because of their involvement in regulating and co-ordinating economic activity.
(2)THE HYPERGLOBALIZERS: The hyperglobalizers take an opposing position to that of the sceptics. They argue that globalization is a very real phenomenon whose consequences can be felt almost everywhere. Globalization is seen as a process that is indifferent to national borders. It is producing a new global order, swept along by powerful flows of cross-border trade and production.
KENICHI ONMAE sees globalization as leading to a “Borderless World” – a world in which market forces are more powerful than national governments.
The hyperglobalisers focus on the changing role of the nation-state. It is argued that the individual countries are no longer in control of their economies because of the vast growth in the world trade. National governments the politicians within them are increasingly unable to exercise control over the issues that cross their borders. Citizens recognize that politicians are limited in their ability to address these problems and as a result of this, they lose faith in the existing systems of governance. Some hyperglobalisers believe that the power of national governments is also being challenged from above — by new regional and international institutions.
“When these shifts are taken together they signal to the hyperglobalisers the dawning of a global age in which national governments decline in importance and influence.” —-ALBROW, 1997
(3)THE TRANSFORMATIONALISTS: The Transformationalists take more of a middle position. They see globalization as a central force behind a broad spectrum of changes that are currently shaping modern societies. According to them, the global order is being transformed, but many of the old patterns still remain. These transformations are not restricted to economics alone, but are equally prominent within the realms of politics, culture and personal life.
Transformationalists contend that the current level of globalization is breaking down established boundaries between internal and external, international and domestic. In trying to adjust to this new order, societies, institutions and individuals are being forced to navigate contexts where previous structures have been shaken up.
Unlike hyperglobalisers, the transformationalists see globalization as a dynamic and open process that is subject to influence and change. It is developing in a contradictory fashion, encompassing tendencies that frequently operate in opposition to one another. Globalization is not a one-way process but a two-way flow of images, information and influences. Global, migration, media and telecommunications are contributing to the diffusion of cultural influences.
According to Transformationalists, globalization is a decentred and reflexive process characterized by links and cultural flows that work in a multi-directional way. Because globalization is the product of numerous intervened global networks, it cannot be seen as being driven from one particular part of the world.
The hyperglobalisers argue that rather than losing sovereignty, countries are seen by transformationalists as restructuring in response to new forms of economic and social organization that are non-territorial in basis. They argue that we are no longer living in a state centric world. The governments are now being forced to adopt a more active and outward looking stance towards government under the complex conditions of globalization.
GLOBALISM VERSUS GLOBALIZATION:
JOSEPH NYE, the former Dean of the Harvard University in his famous articles on globalization makes a distinction between the terms ‘Globalism’ and ‘Globalization’ which most of us think to be similar.
According to him, Globalism describes the reality of being interconnected while Globalization captures the speed at which these connections increase or decrease. There are important differences between the two as in, globalism seeks to describe and explain nothing more than a world which is characterized by networks of connections that span multi-continental distances. It attempts to understand all the inter-connections of the modern world and to highlight the patterns that underlie them. In contrast, globalization refers to the increase or decline in the degree of globalism. It focuses on the forces, the dynamism or speed of these changes.
In short, globalism can be considered as the underlying basic network, while globalization refers to the dynamic shrinking of distance on a large scale. Globalism is a phenomenon with ancient roots. Thus, the issue is not how old globalism is but rather how thin or thick it is any given time. He describes the Silk Road trade which provided an economic and cultural link between ancient Europe and Asia as thin globalism and today’s world wide interconnected trade system as the thick globalism. Hence, according to him, getting from thin to thick globalism is globalization.
In “THE PARADOX OF AMERICAN POWER” he argues that globalization is not as American a phenomenon as many people assume that it is. American culture does not always flow into other societies unchanged — nor does it always have political effects.
IMPACT OF GLOBALIZATION:
The process of globalization has affected each and every country of the entire world. The industrialized and the developing societies have developed in inter-connection with one another and are today more closely related than ever before.
Those of us living in the industrialized societies depend on many raw materials and manufactured products from developing countries to sustain our lives. Conversely, the economies of most developing states depend on trading networks that bind them to the industrialized countries.
“If we take a close look at the array of products available in the market, we can see that the products in a store have been made in