Islam Wazir

Definitions of Globalization
1.Joseph Nye and John Donahue: “Globalism is a state of
the world involving networks of interdependence at
multicontinental distances.”
2. World Bank: Globalization is the growing integration
of economies and societies around the world.
Components of Globalization?
 Economic globalization
 Political globalization
 Cultural globalization
Q: Is there a global economy?
If so, is this good?
 Globalizers (Integrationists) : Yes!
1. Increased integration has brought a higher volume
of trade. This means more goods and services for
most of the world.
2. Increased GDPs and overall standard of living for
those that participate
 Increasing World Trade (Billions of
US$)

8,000
World Exports (US$

7,465
7,000
6,000
Billions)

5,000
4,000 3,824
3,000
2,000 1,972
1,000
574
0 20 33 21 53 94 154
13

28

33

48

58

63

73

83

93

01
19

19

19

19

19

19

19

19

19

20
Year
Is economic globalization good?
 “All boats rising” (for those who participate) but at
different rates
 Raised incomes, though not equal
 More individual choice and freedom in the
marketplace
 Costs of goods and services go down
World Bank Policy Research Report: Globalization,
Growth and Poverty, 2002. Key Points:
1. Strong correlation between integrating into the
world economy and economic growth.
2. Poor countries with around 3 billion people have
broken into the global market for manufactures and
services.
3. Higher growth rates increase a country’s GDP and
standard of living.
3. Globalization has reduced the number of people living
in poverty by over 120 million.
4. Globalization has not increased income inequality (as
many skeptics claim).
5. Globalization has reduced poverty, but not
everywhere. About 2 billion people have been left
out of the globalization process.
 The success stories or “new globalizers” include:
China
India
Bangladesh
Uganda
Vietnam
 Why successful?
 Good investment climate
 Social policies that aid human capital
UN 2003 Report
 China has lifted 150 million people out of
poverty in the last 10 years—the biggest success
story in international poverty alleviation.
 Why?
1. Rapid economic growth
2. Political will (centralized government)
3. Economic and policy reforms—more open trade,
investment, technology
Skeptics (Separatists): No.
1. Not a “globalized” economy. Trade is overwhelmingly
dominated by the developed countries (U.S. and
Europe). These countries amass 76% of the exports
in goods and services.
2. World economy is dominated by the U.S. and major
western powers.
3. Major U.S. trade partners: Canada, Mexico, Japan,
China, Germany, U.K. South Korea, Taiwan, France,
Italy.
LOCATIONS OF THE WORLD’S 500 LARGEST MULTINATIONAL
ENTERPRISES

Country/bloc
Number of MNEs in 1999
United States 179
European Union 148
Japan 107
Canada 12
South Korea 12
Switzerland 11
China 10
Australia 7
Brazil 3
Other 11

Source: Held and McGrew, 2002, p. 43.

4. Developed countries have overwhelming advantage
with investment and trade.
5. Do little to help poor countries.
6. Globalization does not alleviate inequality and
poverty, it increases it. Gap between rich and poor
countries has increased.
Per Capita GNP, North and South
30000

25000

20000

15000 South
North
10000

5000

0
1970 1980 1990 2000
7. Intentions and statistics of the World Bank and the
International Monetary Fund suspect.
Joseph Stiglitz, Chief Economist for the World Bank.
Book: Globalization and Its Discontents, 2002.
These organizations put the interests of Wall Street
and the financial community ahead of the poorer
nations.
11. Labor is anything but “global.”

12. Developed countries are still protectionist. This

hurts developing countries, limits globalization, and
only helps the already developed.
8. Globalization hurts workers in developing
countries—forced to work for cheap wages and in
poor working conditions e.g. China, India. Rights of
workers ignored.
9. Cheap foreign competition and off-shore production
of manufacturing hurts American workers.
10. Globalization is undermining the white-collar class as
well with the export of jobs, for instance, to India.
Q: Is there a Global Culture?
 Globalists: Yes .
1. Decline of nationalism.
2. Growing universal language: English
3. Universal Market of popular culture:
entertainment, the Internet, food,
etc.
4. Globalization does not destroy local cultures,
though it may influence them.

5. Likely growth of a democratic culture. Over 120

democracies today, including over ½ of the world’s
population.
6. Most of these encompass capitalist economies.
 Skeptics: No.
1. Nationalism and ethnic nationalism are alive
and well in many parts of the world.
2. Globalization = Americanization, a “McWorld”
led by the U.S. Vast majority of products
originate from the U.S.
3. Globalization undermines and destroys local
cultures e.g. Guatemala and Mayan culture.
4. Globalization engenders a backlash and
resistance.
Q: Has globalization reconfigured
Political Power and National Interests?
 Globalists: Yes
1. The power of governments has
declined in the face of the market.
2. Downside: states are more
vulnerable—economic pressures and
non-state actors e.g. terrorists.
3. Societies are free of government control; people are
better able to “link up” for common purposes.
4. War is less likely because of the costs
5. The U.S. is the dominant power but it acts as a
positive force in the globalization process providing
“rules” of the market and “creative destruction.”
6. States are losing their sovereignty to the market and
other multilateral organizations
 Skeptics: No.
1. States are still powerful, some clearly more than
others—US unilateralism.
2. National interest? Each state still defines its own if it
can.
3. States ignore the goals and regulations of
multilateral organizations when it benefits them.
Suggestions for Readings
 Thomas Friedman, The Lexus and the Olive Tree, 1999
 David Held and Anthony McGrew, Globalization/Anti-Globalization,
2002
 Manfred B. Steger, Globalism. The New Market Ideology, 2002
 Jackie Smith & Hank Johnston (eds), Globalization and Resistance,
2002
 Joseph Stiglitz, Globalization and Its Discontents, 2002
 Frank Lechner & John Boli (eds), The Globalization Reader, 2000
 Robert M. Jackson (ed), Global Issues 03/04, Annual Editions, 2003