BEYOND GLOBOPHOBIA

Unit 4. DIPLOMACY IN THE MIRROR OF GLOBALIZATION

READING 1

LEAD-IN

a) Globalization, the 'big idea' of the late twentieth century, is believed to be transforming societies and the world order. However, it lacks a universal definition. How would you define globalization? What does globalization consist in? In what ways is globalization a-territorial and multidimensional?

b) What aspects of human life are likely to be affected by globalization?

c) What globalization forces/agents can you think of?

Scan the text to find what misconceptions about globalization exist and what the author thinks about them.

Comment on the author’s arguments.

BEYOND GLOBOPHOBIA

Doug Henwood

The Nation

"Globalization" has been on so many lips that it's easy to forget how recently it entered daily speech. After flatlining its way through the 1980s and early '90s, "globalization" – as a word, at least – took off in a near-vertical ascent in the late 1990s.

What does it mean exactly? Like many deeply ideological words, it's rarely defined; everyone knows what it means. Elites mean something like the internationalization of economic, political and cultural life, as if these haven't long been internationalized. Non-elites seem to mean everything bad that's happened lately. Thirty Americans were convened by a market researcher and asked what globalization meant to them. Some responses: "Nothing's personal...it's all machines." "No more privacy." "There's no mystery anymore...." Pressed for detail, respondents complained about speedup, the "fight for the dollar," powerlessness, growing gaps between haves and have-nots, the deterioration of healthcare. An impressive array of complaints, but it's not clear how "globalization" is their cause. They sound like venerable complaints about capitalism.

Experts often do little better. The French international relations analyst Dominique Moïsi defined globalization as "complexity, interaction and simultaneity," a phrase that could also describe a crowd chatting in a bar. The British sociologist Bob Jessop avers that the word "is best used to denote a multicentric, multiscalar, multitemporal, multiform, and multicausal process... the complex, emergent product of many different forces operating on many scales." Indeed.

Whatever it is, globalization is usually taken as a recent arrival. But from the first, capitalism has paid little respect to national borders. After the breakup of the Roman Empire, Italian bankers devised complex foreign-exchange instruments to evade church prohibitions on interest. Those cross-border capital flows moved in tandem with trade flows.

International flows of investment capital were particularly robust in the late nineteenth and early twentieth centuries, against a backdrop of free trade and exchange rates fixed under the gold standard. Indeed, flows to developing countries were larger in relation to the world economy during this first "golden age" of financial globalization than they are today.

Globalization is thought to be the source of many economic ills. Is it? We, First Worlders, have to be very careful when complaining about its pressure on living standards, since the initial European rise to wealth depended largely on the colonies, and we still derive benefit from cheap labor and cheap resources.

Are globalized economies more unequal than nonglobalized ones? The consulting firm A.T. Kearney has been computing a yearly globalization index for Foreign Policy magazine. If you chart the relation of the index to country rankings for inequality, the results are not what a typical antiglobalization activist would expect.

The relation is far from perfect, but if anything, more globalized countries are less unequal than less globalized ones. Western European social democracies are more globalized than the United States but less unequal. South Korea is much more globalized than Brazil but less unequal; so is Mexico. The point is not that promoting globalization would promote equality, but that the foregrounding of globalization as the cause of inequality isn't a simple case to make. Income distribution depends more on domestic institutions like unions and welfare states than on internationalization.

Has "globalization" contributed to inequality? While it's an article of faith among activists that it has, it's actually quite difficult to prove the case either way: It all depends on how you define and measure. Most studies by economists focus on recent history--but over the long term, global income gaps have widened considerably. According to economic historian Angus Maddison's estimates, African and American incomes were roughly equal in 1600 (because the Americans measured were the native population), but with industrialization, they started diverging in earnest. American incomes were three times Africa's in 1820, five times in 1870, ten times in 1913, and twenty times in 1998. When was the moment of "globalization"?

Capitalism has always produced poverty alongside wealth, and capitalism has from the first been an international and internationalizing system--so it makes little sense to try to isolate the "global" aspect as the major culprit in the production of inequality.

Another image in need of a rethink is that of a "global assembly line." The share of world output accounted for by US multinationals has changed little over the past two decades: Over the seventeen-year period, old-fashioned exports have actually grown faster than production by US multinationals abroad. Output by foreign branches of US multinationals accounted for less than 2 percent of world product in 1999, a share that has changed little over the past two decades.

That's not to say that production isn't being internationalized in some areas. But it's concentrated mainly in a few industries--autos, electronics, textiles. And the multinationalization that has occurred is much more selective than global. Auto production, for example, is increasingly integrated among the three NAFTA countries, neighbors with long borders and long ties. In this case, "regionalization" is a better description than "globalization."

Among some antiglobo activists, there's a strange nostalgia for the nation-state, as if it's one of the innocent structures that globalization is undermining. In the narrow economic sense, fond memories of the pre-1980 protectionist regimes are often evoked. Like many nostalgias, the historical record doesn't justify the sentiment. Even the most protected developmental state is shaped by external forces; the height of the tariff walls and the vigor of the state intervention themselves are testimony to that. But they seem to flourish in particular historical enclaves, like the Latin American import-substitution model from the 1930s through the debt crisis of the early 1980s, and run into trouble when their moment passes. By the late 1960s, for example, growth slowed in Latin America as import-substitution reached its limits. Domestic firms were inefficient, and average incomes were too low to sustain a home consumer market. Labor agitation was met with repression.

Instead of chasing nationalist chimeras, why not go "globalization" one better? Many activists in the wrongly named "antiglobalization" movement still talk locally, even as they're acting and thinking globally. This might be a good time to junk local self-reliance as an ideal and embrace a deeply global perspective.

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