Domestic Market Instabalization

History of exchange

Development of the societies, economies

"Society does not consist of individuals, but expresses the sum of interrelations,

the relations within which these individuals stand."

— Karl Marx, Grundrisse, 1858

 History of the Globalization
Conquering/Empire building/Colonizing

c Globalization: 300 BC
Hellenistic age, Roman Empire, the Parthian Empire, and the Han Dynasty, India
and silk road…… Arabic golden age and Mongol empire

Proto Globalization: 16th and 17th centuries

Age of discovery, Portuguese and Spanish Empires, and later the Dutch and British
Empires, British East India Company,

Modern Globalization: 19th and 20th centuries

Industrialization , Opium Wars, consumers of European exports, investment between
the European imperial powers, WW I, WWII and Cold War, Collapse of the Socialist
Countries

Pre-colonial Sri Lankan economy

Weva, Dageba, Gama, Pansala

• Water based governance (Culture based on water reservoirs

and agriculture)
• Development of the reservoir building and irrigation system in
3 rd. Century BC
• Ownership of production factors
§ King had sole ownership of properties
§ Monarch or Aristocrats & Peasants (Social classification system
based on division of labour)
• Distribution of the production and the
surplus •
Social & cultural value system
• Self- sufficient economic model until the western colonization

Sri Lankan Economy in Colonial Era

• International trade during 16th century.
• The collapse of the self sufficient economical model and impose of the trade
crops.
• Introduction of the foreign products.
• Infrastructure development. – roads, railway, ports
• Crops – coffee in 1880, rubber in 1885, tea in 1887
Sri Lankan Economy in Post-colonial Era
• Limited freedom and rise of the comprador class
• Expansion of the stagnated population
• Scarcity of the commodities
• Political parties and their economical and political strategies (5 year plan 1972 -
76)

Rise of the Global brands Modern Colonization and Imperialism

• Sri Lanka economy before 1977 (already discussed in previous slide)
• Market liberalization 1977
Economic conditions and it's impact ( sector wise -  manufacturing, agriculture,
energy, tourism, production)
• Role of multinationals and the power of brands (Unilever, HSBC,
BTC)Consumer behavior and social impact
•
Good Effects of the Globalization
• Much surplus accumulation has come to occur through the sale of global articles
whose markets develop largely irrespective of distance and borders.
• In transborder production process, inputs are sourced pretty well anywhere in
the world.
• The growth of supraterritorial production and markets has been achieved inter
alia through a proliferation of global business organizations: companies,
strategic alliances and corporate lobbies whose networks transcend borders.

Good Effects of the Globalization

• The emergence of global capitalism has prompted many mergers and
acquisitions, a trend that has increased concentration in many industries both
within countries and on a world scale.
• Major delinkage of money and financial instruments from territory .
• Major new spheres of accumulation: telecommunications, information
technology, electronic finance, etc.
• States have developed strong relationships of mutual dependence and support
with other agents of global capitalism.

Bad Effects of the Globalization

 Lost Sovereignty
 Retreated from interstate warfare.
 Frozen or reduced social security provisions.
 Multiplied multilateral governance arrangements.
 Lost considerable democratic potential.
 Leads to free market instability and division.
Free Market Instabilitization and Division
• The push to engineer free markets has contained within it the seeds of its own
destruction.
• Economic globalization does not strengthen the current regime of global
laissez- faire.
• Buffer it against the social strains arising from high uneven economic
development within and between the worlds diverse societies.
• The swift waxing and waning of industries and livelihoods, the sudden shifts of
production and capital, the casino of currency speculation- these conditions
trigger political counter- movements that challenge the very ground rules of the
global free markets. (Gray 1999:7)
Cont………
• It produces wealth for significant numbers of people, many others have
suffered.
• The gap between rich and poor has widened as global capitalism has expanded.
• Erodes democracy, seeds instability, and fails even its own test of maximizing
sustainable economic growth, (Kuttner 2002)
• Globalization as merely western imperlism of ideas and beliefs would be a
serious and costly error. (Sen 2002).

Cont………

• Neither multinationals nor individual national governments have the control

over macro-economic forces that they would like.
• Ecological and technological risks have multiplied.
• Globalization in the sense of connectivity in economic and cultural life across
the world, is of a different order to what has gone before.
• The speed of communication and exchange, the complexity and size of the
networks involved, and the sheer volume of trade, interaction and risk give what
we now label as ‘globalization’ is a peculiar force.

Suggestions for overcoming Free Market Instabilitization and Division

• Strong markets require significant state and transnational intervention

• To be sustained across time they also require stable social relationships and an
environment of trust.
• They can be organized and framed so that people throughout different societies
can benefit.
• Public action that can radically alter the outcome of local and global economic
relations.