You are on page 1of 14



For some


it is myriad forms of connectivity linking global to local, the West to the East, and the North to the South.

Another view


It is a techno-economic juggernaut spreading the logic of capitalism and Western values by eradicating local traditions and cultures.

Globalization is a more contested than an accepted concept.

Globalization is a very uneven process: people in various parts of the world are influenced/affected differently. Different disciplines define differently:

Anthony Giddens: Intensification of social relations worldwide David Held: Exercise of power Economists: expansion of market and economic services

Interpretations of Globalization

Interpretations of Globalization

The Economic Dimension of Globalization

1. Emergence of the global economic order dominated by USA & UK

Created a stable money exchange system: the value of the currency of each country was attached to the fixed gold value of the USD

Establishment of international economic organizations

IMF: to administer international monetary system World Bank: to provide loans for Europe’s post-war reconstructions GATT: Enforcing multi-trade agreements

This era is called as ‘control capitalism’ 1970s faced severe economic crisis Moved towards ‘control capitalism’ to ‘liberation’: USA abandoned gold-based fixed rate system.

2. Internationalization of trade and finance Removal of trade barriers (free trade)

The idea is that free trade would increase global wealth and enhance consumer choice.

Integration of market would promote technological innovations, which would benefit people.

There are evidences that some nations increased their productivity as a result of free trade practices.

A World Bank report shows that first time in the history, during 2005-2008, the proportion of people living below $1.25 per day in every developing region went down.

MDG of reducing poverty by half was achieved before the deadline (2015).

What happened to Global South:

Total debt in developing countries……

In 1970: $70.2 billion In 1980: $569 billion

In 2013: $ 6857 billion

Cost of the war in Iraq and Afghanistan (2001-12): $1.35 trillion

Cost required to provide renewable wind energy to 1 billion HHs: $1.2 trillion

% of Lebanon’s GDP spent on debt servicing: 19

Mozambique’s gross debt in 2012: $6.18 billion

% of Lebanon’s GDP spent on health: 4

Google’s net profit in 2011: $9.74 billion

Gap between poor and rich (income inequality) is widening at a fairly rapid pace.

Top wealthiest 20% of the global population controls 64-80% of the total

global income The poorest 20% population controls 1 – 3 % of the total global income.

3. Global Financial Crisis:

1990s: Countries ran out of gold reserve; lack of FDI

1997-98 (East Asian):

Overestimation of stock and real estate market; Prices inflated more than real value; Market withdrew $105 billion from their economies

2007-08: American real estate

4. The Power of Transnational Corporations (TNCs):

Increased from 7000 in 1970 to 80000 in 2012.

Top 200 TNCs account for half of the world’s industrial output

Most of them are headquartered in US, Europe, Mexico, Japan, South Korea & China.

In 2009, a list of 100 GDPs and Corporations’ revenue was furnished: 44 world’s largest economies were corporations, 56 were countries.

For example: Toyota Motors’ revenue was greater than Egypt GDP; Phillips Oil was greater than Malaysia, BP Oil UK was greater than SA.

5. Enhanced role of international financial institutions:


Theories of Global Capitalism










practices at its core, originate with non-state actors and cross-state borders

Transnational practices are involved at three levels:




Transnational capital


Transnational Corporations


Transnational capitalist classCapitalist Class


Transnational cultural elites

Culture of


Transnational corporations bring together other social groups who seeks their interests in global capitalism.

State has no role to play in this process.

Theories of Global Capitalism…… ..

Global Capitalism involves three different layers (William I. Robinson):

Transnational production

Transnational capitalists

Transnational state

In earlier times, economic relations among nations were operated through the trade of products.

In the world of global capitalism, one country has access to production process of another.

This shapes a global system of production and accumulation: by breaking national circuits of production and integrating into a global circuit.

Transnational capitalist class takes shape around global circuit. [Just like local and national elites]

Transnational institutions [international political and planning agencies- EU, WEF] work with national governments

These institutions work as intermediary actors who facilitate the process of global capitalism

Political dimension of globalization

Two questions to be answered:

1. Has the power of nation-state been curtailed by the massive flow of capital?

Trade liberalization and deregulation have constrained the state’s space in the Global South.

Global market undermined the capacity of governments to impose domestic standards.

However, nation-state has not become a bystander.

States still control sectors like taxation, financial transactions, infrastructure, defense, population movement and ICT.

Post-9/11, strict security measures taken by many states hampered global business drastically.

Global market functions on consent of the state than confrontation Nation-state still remains significant.

2. Are we witnessing the emergence of a new global governance structure?

Sub-state and municipal level cooperation

City-level cooperation [Varanasi & Kyoto]

State level cooperation [vibrant business summits by Gujarat, MP, UP, etc. ]

Regional level cooperation

Geography : SAARC, ASEAN, etc.

Strategic importance: BRICS

Global civil society

World-system theory

It doesn’t deal with ‘globalization’ directly but tries to explain the rise of global capitalist economy.

Proposition: A unit of analysis for macro-social enquiry is neither class nor state/society, or country, but the larger historical system in which these categories are located.

Two key elements:

The capitalist world-system is the division of the world into three regions:


Core (powerful and developed nations)

Periphery (forcibly subordinated regions)

Semi-periphery (moving regions from core to periphery or from periphery to core)

Does not recognize the centrality of the nation-state in the larger global system.

Immanuel Wallerstein predicts that early 21 st century would be a moment of transition: entire capitalist world-system will be transformed into ‘something else’. [Terminal crisis]

Cultural dimension of globalization