The State and Globalisation 

Globalisation 

Is Globalisation over? 

The invisible hand of the market.

Neo Liberalism 

Classical Liberalism 

Laissez Faire 

From an economic liberal perspective, the market is the only reliable means of generating wealth, the surest guarantee of prosperity and economic opportunity. This is because the market, competition and the profit motive provide incentives for work and enterprise and also allocate resources to their most profitable use. From this perspective, economic globalization, based on the transborder expansion of market economics, ensures that people in all countries can benefit from the wider prosperity and expanded opportunities that only capitalism can bring. 

Promotes general prosperity

.The great advantage of economic globalization is that it is a game of winners and winners. Although it makes the rich richer, it also makes the poor less poor. This occurs because international trade allows countries to specialize in the production of goods or services in which they have a ‘comparative advantage’, with other benefits accruing from the economies of scale that specialization makes possible. Similarly, transnational production is a force for good. TNCs, for instance, spread wealth, widen employment opportunities, and improve access to modern technology in the developing world, helping to explain why developing world governments are usually so keen to attract inward investment. Economic globalization is thus the most reliable means of reducing poverty. 

Economic freedom promotes other freedoms

Economic peace theory 

The McDonaldization of Society 

.Economic globalization does not just make societies richer. Rather, an open,market-based economy also brings social and political benefits. Social mobility increases as people can take advantage of wider working, career, and educational opportunities, and the ‘despotism ’ of custom and tradition is weakened as individualism and self-expression are given wider rein. Economic globalization is thus linked to democratization, and the two processes coincided very clearly in the 1990s. This occurs because people who enjoy wider economic and social opportunities soon demand greater opportunities for political participation, particularly through the introduction of multi-party elections. 

There are several benefits of globalization, such as increased international trade and cooperation and less international aggression. Social globalization—the sharing of ideas and information between countries—has led to innovation in the medical, technological, and environmental preservation industries 

Deepening poverty and inequality.

Critics of globalization have drawn attention to the emergence of new and deeply entrenched patterns of inequality: globalization is thus a game of winners and losers. Critical theorists argue that the winners are TNCs and industrially advanced states generally, but particularly the USA, while the losers are in the developing world, where wages are low, regulation is weak or non-existent, and where production is increasingly oriented around global markets rather than domestic needs. Economic globalization is therefore a form of neo-colonialism: it forces poor countries to open up their markets and allow their resources to be plundered by rich states.

Loss of manufacturing jobs in developed countries

The deindustrialization of the UK and parts of the USA as a result of manufacturing being moved 'offshore' to Asia and Central America led to unemployment and the destruction of working-class communities. This led to the rise of populist politics and Trump's return to protectionism.   The manufacturing jobs created in developing countries may have substandard working conditions, low wages, and few employment rights. . 

Environmental damage

TNCs and the global exploitation of resources, led to the destruction of fragile ecosystems such as rainforests and marine life. The farther a product travels, the more fuel is consumed, and a greater level of greenhouse gas emissions is produced. According to a report by the International Transport Forum, CO2 emissions from transport will increase 16 percent by 2050. These emissions contribute to pollution, climate change, and ocean acidification around the world and have been shown to significantly impact biodiversity.

Transportation—especially when land-based—requires infrastructure like roads and bridges. The development of such infrastructure can lead to issues including habitat loss and pollution. The more ships that travel by sea, the greater the chances for major oil spills or leaks that damage the delicate marine environment.

Invasive species: Every shipping container and vessel presents an opportunity for a living organism—from plants to animals to fungus—to hitch a ride to a new location where it can become invasive and grow without checks and balances that might be present in its natural environment.

The ‘hollowing out ’ of politics and democracy.

Economic globalization diminishes the influence of national governments and therefore restricts public accountability. State policy is driven instead by the need to attract inward investment and the pressures generated by intensifying international competition. Integration into the global economy, therefore, usually means tax reform, deregulation, and the scaling back of welfare.

For example when the IMF makes a loan to a member country that is in need, it is often conditional. Specifically, the state must undergo economic reforms to overcome the problems that led it to request help in the first place.  This might include: ■ cutting wasteful public spending and raising taxes, to eliminate the budget deficit ■ selling government-owned assets to private ownership, known as privatisation ■ increasing the amount of taxes that the state collects to help it pay for its own public services ■ reducing public sector wages

 The link between global capitalism and democratization is also a myth.

 Many states that have introduced market reforms and sought to integrate into the global economy have remained authoritarian if not dictatorial, conforming to the principles of state capitalism.  China, for example, has become more repressive and authoritarian as its economy has developed and expanded into global markets. 

Consumerist materialism and cultural hegemony

Jihad vs McWorld 

Even when economic globalization has succeeded in making people richer, it is less clear that it has improved, still less enriched, the quality of their lives. This is because it promotes an ethic of consumerism and material self-interest. Cultural and social distinctiveness is lost as people the world over consume the same goods, buy from the same stores and enjoy similar working practices and living conditions. This is particularly evident in the development of a ‘brand culture’, which pollutes public and personal spaces to create a culture of unthinking consumerism, even managing to absorb radical challenges to its dominance by turning them into consumer products. 

Advantages of globalisation

Economic benefits

• Increased trade and lower prices: Globalisation has lowered trade barriers, allowing consumers to access a wider variety of goods and services at more competitive prices. This enhances consumer purchasing power and standards of living.

• Economic growth and job creation: The expansion of international trade and investment has fostered economic growth globally. Multinational corporations (MNCs) have created millions of jobs in developing countries, helping to reduce extreme poverty.

• Economies of scale: Businesses can operate on a larger scale by accessing global markets and supply chains. This specialisation and increased production efficiency lead to lower average costs and higher profits.

• Technology and knowledge transfer: The flow of technology, skills, and ideas across borders has accelerated innovation. This has enabled developing nations to adopt advanced technologies and improve productivity.

• Increased capital flows: Developing countries can attract foreign direct investment (FDI) to fund infrastructure, technology, and economic projects that might otherwise be impossible due to domestic savings gaps. 

Socio-political benefits

• Enhanced international cooperation: Greater interdependence can encourage countries to work together to solve global issues like climate change, poverty, and human rights. International organisations like the UN and WHO facilitate these efforts.

• Increased cultural awareness: Globalisation facilitates the exchange of ideas, art, music, and cuisine, promoting cultural appreciation and breaking down barriers between nations. Social media and modern travel have accelerated this exchange.

• Spread of human rights and democracy: Some argue that globalisation can help spread democratic values, human rights, and environmental awareness by increasing scrutiny of governments and encouraging civil society movements. 

Disadvantages of globalisation

Economic drawbacks

• Increased inequality: Globalisation has disproportionately benefited large corporations and wealthier nations, widening the gap between the rich and the poor within and between countries. It can create a concentration of wealth and power among a small corporate elite.

• Job displacement: In developed countries, manufacturing and low-skilled jobs have been outsourced to countries with lower labour costs, leading to job losses and economic hardship for some workers. This can cause a 'race to the bottom' in labour standards.

• Exploitation of labour: The pursuit of cheaper labour can lead to multinational companies exploiting workers in developing nations, with poor working conditions and low wages. The 2013 Rana Plaza disaster in Bangladesh is a stark example of the dangers of this exploitation.

• Increased economic vulnerability: Interconnected financial markets mean that a recession or crisis in one country can spread rapidly across the globe, as seen during the 2008 financial crisis.

• Tax avoidance: Globalisation allows some multinational corporations to exploit variations in tax systems to avoid paying fair taxes in the countries where they generate profits, putting pressure on public services. 

Socio-political drawbacks

• Cultural homogenisation: The dominance of Western (particularly American) brands, media, and products can threaten local traditions, languages, and cultural diversity.

• Erosion of national sovereignty: The power of international organisations and large MNCs can sometimes challenge the authority of national governments, limiting their ability to set their own economic and social policies.

• Environmental degradation: Increased international trade and production lead to higher carbon emissions from transportation and industrial activity. Some companies move production to countries with weaker environmental protections.

• Heightened social tension: Migration, a consequence of globalisation, can lead to social tensions and a rise in nationalism as some people feel their identity or economic stability is threatened. 

Evaluation: A complex and nuanced view

The view that the advantages of globalisation outweigh the disadvantages is highly contested and depends on the specific context:

• For developing economies: While millions have been lifted out of poverty in countries like China and India, others have struggled with exploitation, poor labour conditions, and a lack of economic diversification.

• For developed economies: Consumers benefit from lower prices and greater choice, but some sectors have experienced job losses and increased inequality, fuelling anti-globalisation sentiments.

• For large corporations: Globalisation has been overwhelmingly positive for corporations, offering expanded markets, access to cheap labour, and higher profits. However, this is often at the expense of local businesses and workers.

• For the environment: The negative environmental consequences are a disadvantage for the entire planet, regardless of who is benefiting economically from the process. 

The balance of advantages and disadvantages is not static and changes depending on the issue being examined and the perspective of those affected. While some argue that globalisation's overall effect has been largely positive in reducing global poverty, others contend that the rising inequality, exploitation, and environmental damage mean the costs are too high. Ultimately, the judgment rests on whether one prioritises aggregate economic gains over issues of equity, sustainability, and cultural preservation.