Is Globalization New?
There are lingering questions as to whether or not globalization is new. Some consider it to be not only new but revolutionary. Others, such as Kenneth Waltz, dispute the claim that global interconnectedness has intensified, noting that the current global system has not even attained the level of integration that existed during the pre–World War I era. Waltz also contends that governments now intervene much more than they did in the pre–World War I era. The points raised in this argument are valid. However, they do not repudiate the fact that capitalism has now resumed a vigorous pace of global integration that was interrupted during the interwar period (1918–1939) and during much of the Cold War era, when the Keynesian welfare state system was predominant in the Western world and the socialist system prevailed in the East. The levels of integration of the global system of production and state disengagement from economic activity may not yet have exceeded the levels of 1910, but they are rapidly intensifying and are likely to soon surpass the levels of 1910 if globalization continues at its present pace.
The welfare state system that predominated since the interwar years of the last century has also declined notably and a new vision of global order, crafted along the lines of the intellectual tradition of Friedrich Hayek and Milton Friedman, has emerged. In Hayek's view, for instance, concerns of social inequality are mere vestiges of the bygone era of primitive communalism that need to be weeded out and replaced by individual freedom and responsibility, irrespective of the problems of inequality and poverty. There has also been a surge in the perception that national economies have converged into a single space of global economy and that there is only one appropriate form of social organization. A single world economy is far from being a reality. However, there has emerged a powerful advocacy for such a perspective.
In any case, as Kevin O'Rourke and Jeffrey Williamson point out, in historical terms the liberal order that globalization represents is not new, as it was the predominant order in the nineteenth century, roughly between 1840 and 1914. However, globalization represents a significant departure from the global order that prevailed between the outbreak of World War I and the end of the Cold War.
There is also controversy over the factors that promote globalization. Some view globalization as largely driven by technology. Needless to say, technological advances have facilitated the intensification of interconnectedness. It is not likely, however, that technological changes, by themselves, would bring about globalization without a corresponding ideological homogenization or the growing disengagement of the state from economic activity that is currently underway. It is not clear, for example, that capital mobility would come about as a result of technological changes alone, although advances in communication technology, along with the deregulation of capital flows, have enhanced capital mobility.
Others contend that globalization is shaped by market forces. However, an economic system cannot be realized without a corresponding political system, and globalization is shaped by the acquiescence (if not active support) of governments, especially the U.S. hegemonic power and other advanced countries, as Thomas Friedman notes. Adherents of the market forces argument claim that globalization is forced upon governments and that these governments cannot stand in the way of globalization without incurring severe costs. Powerful capital interests are certainly in a position to punish governments that adopt fiscal and monetary policies that adversely impact their goals. The government of South Africa, for example, can be punished by capital flight if it insists on implementing its agenda of social reform outlined in its Reconstruction and Development Program. However, the masses of South Africa are likely to sustain heavier costs if the government abandons its mandate for social reforms in order to comply with the demands of globalization. Faced with such a dilemma, governments in developing countries have generally selected the side of capital, largely because of the pressure they face from governments in advanced countries and the multilateral agents of globalization.
Capital has now succeeded in capturing the attention of most governments. It is unlikely that the global economic order projected by globalization would be possible in an environment in which labor is organized enough to counterbalance the influence of capital on governments. Powerful countries such as the United States are not helpless against globalization. They can prevent it if they choose to do so or if the balance of power among social classes within the powerful countries changes. The demise of nineteenth-century globalization, due primarily to political forces, as O'Rourke and Williamson note, also indicates that globalization does not come and go merely as a result of market forces or technological change. The view that the state has facilitated (if not authored) globalization is thus compelling. Yet there is little doubt that changes in economic forces and advances in technology, along with changes in government policies reflecting changes in the balance of power among social classes, have all contributed to making globalization possible.
- General Globalization - Implications Of Globalization
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