Globalisation and the neo-

liberal state – Does

globalisation limit state policy?

SOPY3015 Individual, State and Society

Yee May Chan
What are they?

Nation-state deregulation

Global village

Globalisation
Internationalisation

Multinational corporations (MNCs) or

Transnational corporations (TNCs)
 Nation-state
 A state which possesses external, fixed,
known, demarcated borders, and possesses
an internal uniformity of rule.

Deregulation
 Policies aimed at reducing state constraints
(which were designed to serve the public or
national interest) on the free market.
 Internationalisation
vs globalisation
• Internationalisation describes the process that one
product or business is being taken from one country
across other nations (involve changing the languages
and tools of the product or business to adapt to
different cultures and nations).
• Globalization is a process that is a result of shrinking
(integrating as one) of the world because of faster
and more efficient modes of transportation and
communication.
Contents of this session
 Concept and meanings of Globalisation which is
prevalent nowadays.
 Debates surrounding Globalisation – whether it is a
rhetoric or a reality.
 Discuss the ways in which Globalisation has impacted
on the world, and, particularly on Hong Kong society,
and
 Whether Globalisation limits the state / government in
making decision about social policy
Why and what we need to know about
Globalisation

1. Why we need to know?

 The world is changing rapidly – many of these changes are
believed to be associated with a social phenomenon called
Globalisation.
 The world and the people are more intensively
interconnected, and to some extent, interdependent –
cultures, economies and politics of different countries are
mutually impacting on each other. Very few countries in the
world can now survive and develop without depending on
the others.
Why and what we need to know about
Globalisation
 To a certain extent, local traditions and values have seemingly
been influenced, if not replaced, by a global force.
 The emergence of global values – we are no longer guided purely
by values of our own – impacts of family life, work, retirement…
etc.
 Through the widespread use of information and communication
technology (ICT) such as live broadcasting, internet and mobile
phones, etc. cultures and way of life of people in different societies
are increasingly exchanged.
 Some people believe that there is now nothing called “local”, but
rather “global” or sometimes called “glocal” (combination of
global and local).
Why and what we need to know about
Globalisation

 Hong Kong has very much perceived itself to be

under the impact of Globalisation:
– The economy is subject to global impacts;
– Education is to train labour for global competition;
– Government’s decision has to consider global
responses
– Social welfare / strategies to eradicate poverty have
to take into account global trend
Why and what we need to know about
Globalisation
2. What we need to know?
 What does Globalisation really mean?
 What are the debates and controversies of Globalisation? –
Does it really exist?
 What are the cultural, economic and political implications of
Globalisation – particularly in HK?
 The social consequences and impacts of Globalisation in
Hong Kong.
 Who “wins” and who “loses” in Globalisation (esp. in Hong
Kong society).
Globalisation: concepts and meanings

 Globalisation has been portrayed as “the

widening, deepening and speeding up of
world-wide interconnectedness in all
aspects of contemporary social life, from
the cultural to the criminal, the financial
to the spiritual” (Held et al, 1992, p.2).
Globalisation: concepts and meanings

 According to Robertson (1992) Globalisation

as a concept refers both to the compression
of the world and the intensification of
consciousness of the world as a whole…both
concrete global interdependence and
consciousness of the global whole.

Robertson, R. (1992) Globalization: Social Theory and Global Culture. London: Sage Publications.
Globalisation: concepts and meanings

 Giddens (1990) suggested that globalisation can be defined

as the intensification of world-wide social relations which
link distant localities in such a way that local happenings are
shaped by events occurring many miles away and vice versa.
 This is a dialectical process because such local happenings
may move in an obverse direction from the very distanciated
relations that shape them.
 Local transformation is as much a part of globalisation as the
lateral extension of social connections across time and
space.
 Globalisation: concepts and meanings

Globalisation can be viewed as (Sassen, 2000; Urry, 2000) :

 a process: the international flows of capital,
population or cultures
 a condition: a description of how market economies
work a the turn of the century;
 a political project: the global influence of neo-
liberalism; and
 an attempt to imagine and implement global rights.
Globalisation: concepts and meanings
 Globalisation is conceptualised in 3 dimensions
(Neysmith and Chen, 2002):

1. Globalisation is both a process and a discourse:

globalisation is ‘real’ in a sense that there are real
international capital flows, population and culture,
practices and ideas. As discourse, it is deployed for
New Right governments as an rhetoric to advance
liberalism and restructure welfare states.

Neysmith, S. & Chen, X. B. (2002). “Understanding how globalization and restructuring affect women’s lives: Implications for
comparative policy analysis”, The International Journal of Social Welfare, 11(3), 243–253.
Globalisation: concepts and meanings

2. Globalisation has profound political and social

implications: new inequalities are created by
globalisation, e.g. inequality of access to global
networks of flows, unequal distribution of mobility
and fixedness etc.
3. Effects of globalisation are not simply homogenous:
different countries bear different consequences of
globalisation.
Neysmith, S. & Chen, X. B. (2002). “Understanding how globalization and restructuring affect women’s lives: Implications for
comparative policy analysis”, The International Journal of Social Welfare, 11(3), 243–253.
• Globalisation
• Impacts of globalisation
• Who wins from globalisation
Concept of Globalisation
 Globalisation can be seen “as a political phenomenon
basically means that the shaping of the playing field of
policies is increasingly determined not within insulated
units, i.e. relatively autonomous and hierarchically
organised structures call states: Rather, it derives from
a complex congeries of multi-level games played on
multi-layered institutional playing fields, above and
across, as well as within, state boundaries”.

Cerny P. (1997), ‘Paradoxes of the Competition State: The Dynamics of Political Globalization’, Governance and
Opposition, 32(2), pp.251-274.
Concept of Globalisation

 Dale (1999) suggested that Globalisation

is not a homogeneous concept, and the
response to Globalisation varied between
states – e.g. European’s social policy responses
to Globalisation are different from the Asian
countries.

Dale, R. (1999) “Specifying globalization effects on national policy: a focus on the mechanisms”,
Journal of Education Policy, 14:1, 1-17
The Globalisation debates
1. The Globalists (Hyper globalists)
 Believe that Globalisation is a real and tangible phenomenon.
 The impacts of Globalisation can be felt everywhere, and increasing
global interconnections are making national boundaries less
important.
 Local cultures, economies and politics are subsumed into networks
of global flows.
 These lesson local and national differences, autonomy and
sovereignty , and produce a more homogeneous global culture
and economy.
 Globalisation is an inevitable trajectory of development.
The Globalisation debates
• The Positive Globalists
 Point to the benefits of Globalisation and see the results
of globalizing influences as a change to be welcomed.
 Potential of Globalisation to improve quality of life
 Lifting living standard
 Bringing about closer relationships
 Sharing of cultures
 Promoting better understanding between countries
 Developing / sharing the fruits of new technologies
The Globalisation debates
• The Pessimistic globalists
 Emphasize the dominance of major economic and
political power, e.g. USA, Europe, etc. who imposes their
own agenda on the world
 Point to the uneven / unfair consequences of
Globalisation
 The poor (countries and individuals) become poorer, and
the rich become richer
 Women and unskilled manual workers become the major
victims
The Globalisation debates
2. The Internationalists
 They are sceptical about Globalisation
 They believe that Globalisation(one world) is over exaggerated
 What we are now having is purely a continuous progress of the
past mode (e.g. international trade and communication)
 Nation-states (national governments) still have rooms for
autonomous decision making (the claim that nation states have
lost autonomy e.g. in tax is just an excuse of the international
corporation to increase profits).
 Support local groups to resist global business and challenge the
global inequalities.
The Globalisation debates
3. The Transformationalists
 Globalisation may have been over-exaggerated. Nation states
remain militarily, economically and politically powerful. Yet, the
changes in the world in terms of increased inter-connectedness
have undoubted transformed different societies and somehow
unpredictably:
 The autonomy of local states is constrained by transnational power
 Education is changing to cope with international competition (e.g.
international perspectives in education)
 Way of life (cultures are changing)
 Welfare system is changing
Debates on globalisation
The flow of culture is a
A world of
two-way exchange in
totally
which Western culture
independent
A single fully is also influenced and
and sovereign
integrated transformed.
national
global culture, culture,
economy and politics and
politics economies
Transfomationalists
Globalists Internationalists
Positive Pessimistic
 Discuss
• Do you think globalisation has brought
about positive or negative impact on the
people’s rights in Hong Kong?
Dimensions of Globalisation

 Various aspects of Globalisation:

 Cultural Globalisation: one cultural world;
 Economic Globalisation: one economic system
throughout (neo-liberalism);
 Political Globalisation: borderless society,
governance without government; global citizenship;
 Social Globalisation: emerging social standard;
competition state; fragmented state.
Cultural Globalisation

 There is a great circulation of cultural products,

transmitted beyond national borders.
 According to the United Nations Educational,
Scientific and Cultural Organization (UNESCO), the
value of cultural imports and exports increased six
times between 1970 and 1980, from nearly 7 billion
to 38.5 billion (US dollars).
 Cultural Globalisation
• Examples of Cultural Globalisation:
 Sports (English Premier League, NBA, etc)
 Education (Language, International school, Education
Show, articulation and collaborations in local tertiary
institutions)
 Media (BBC, CNN, National Geographic Channel… )
 Entertainment (Movie, TV programmes…)
 Food (MacDonald, KFC, Starbucks, Pizza Hut…etc)
 Way of life, cultural and social values… etc.
Cultural Globalisation

• Reservations
 Has cultural Globalisation been exaggerated?
 The problem of cultural imperialism?
 Do we have a need to preserve local cultures?
 Economic Globalisation
• Some globalists see economic factors determine the
political and cultural factors, and they see
Globalisation as a predominantly economic
phenomenon characterised by:
 Increased international trade (low trading barriers)
 Increased financial flow
 Advances in technology and communication (Internet,
media…)
 Increased labour mobility (migration, foreign workers…)
Economic Globalisation

• Reservations
 Economic Globalisation (if this exists) gives
priorities to the capitalists
 Poor countries will suffer more from the new
“global economic infrastructure”
 The poor and the marginal labour will suffer more
 Cutting back of welfare will affect the
disadvantaged
The core-periphery division

 Internationalisation in general, and

international trade in particular, has taken
place for the last two centuries, which has, in
effect constructed a particular type of global
political economy where there is a particular
type of core-periphery division.
The core-periphery division

 Population of the core countries = 22.9%, while the

peripheral countries = 77.1%.
 In 1962, the share of the core (excluding the Four
Tigers) in world trade was 63.6%, while the
periphery took up 24.1%.
 In 1990, the share of the core increased to 76.5%
(including the Four Tigers), the periphery (excluded
the Eastern Block) decreased to 16.5%.
The core-periphery division

 According to UNDP, 22.9% of the core

population had taken up 84.2% of global
GDP, while 77.1% in the peripheral countries
had only shared 15.8%.
 The core also takes up 70% of the world’s
energy; 75% of metal; 85% of woods, and
60% of food.
Economic Globalisation and political economy

 The structural adjustment programmes of the

World Bank and IMF have encouraged
privatisation and liberalisation policies in the
peripheral countries, which are in great number
in debt.
 Liberalisation policies then ensure that foreign
investment, primarily from the core countries,
get a large slice of trade activities.
Economic Globalisation and neoliberalism

 Globalisation signifies a global export

of economic liberalism (or
liberalisation of economy).
 The expansive phase of world
capitalism is over, and that phase has
now been superseded by a phase of
deepening but not widening capitalist
integration.
Hoogvelt, A. (2001) Globalization and the Postcolonial World, 2 nd edition. Houndmills, Basingstoke,
Hampshire : Macmillan Press.
 The Washington Consensus: 1989
 Fiscal policy discipline, with avoidance of large fiscal deficits relative to GDP;
 Redirection of public spending from subsidies toward broad-based provision of
key pro-growth services such as education, primary health care and
infrastructure investment;
 Tax reforms, broadening the tax base and adopting moderate marginal tax rates;
 Interest rates that are market determined and positive (but moderate) in real
terms;
 Competitive exchange rates (liberalised)
 Trade liberalisation: liberalisation of imports, with particular emphasis on
elimination of quantitative restrictions (licensing, etc.);
 Liberalisation of inward foreign direct investment;
 Privatisation of state enterprises;
 Deregulation: abolition of regulations that impede market entry or restrict
competition,
 Legal security for property rights
Economic Globalisation
 Globalisation involves the emergence of a complex
system of multinational capitalism, in which
corporations conduct business and locate production
at locations worldwide.
 This includes the development of a system of
international finance capable of rapidly shifting large
amounts of investment capital from one place to
another, as economic or political conditions dictate.
Examples of Transnational Corporations
Economic Globalisation

 Such conditions have produced rapid

growth in some parts of the world, as
well as new forms of economic
dislocation and inequality as businesses
relocate to exploit lower labor or
regulatory costs.
Economic Globalisation
• Economic Globalisation is closely tied to
political developments that are intended to
facilitate and control international trade.
• The emergence of the International Monetary
Fund (IMF) as a regulator of international
economic stability and the creation of a World
Trade Organization with sovereign authority
over trade disputes among its members are
prominent examples.
Political Globalisation
 Possible weakening of the local state in
making social policy decisions –
 Emergence of global agenda (e.g. financial
tsunami and global cooperation,
environmental protection, terrorism, etc.)
 Emergency of transnational NGOs and the
increased role of NGOs in transnational
cooperation
Globalisation and Hong Kong Society
1. Hong Kong Economy
 It has always been believed by the Hong Kong Government that Hong
Kong is very much subject to the impacts of global forces.
 The economy of Hong Kong depends very much on the external trading
environment which is beyond our control – HK has to maintain our own
competitiveness to order to have economic prosperity.
 Low cost / free trade is a key to competitiveness
 Low cost could be achieved through low tax, small government,
minimal labour protection and minimal welfare
 Free trade can be achieved through low and simple tax, free market,
minimal government regulation and intervention.
Globalisation and Hong Kong Society
2. Political Globalisation and Hong Kong
 It is believed by the government that any major decision in
Hong Kong is not purely a domestic decision, but rather a
decision which has to take global impacts into consideration –
how other major trading partners see Hong Kong.
 It is increasingly important for Hong Kong government to
participate in global and regional affairs.
 However, when Hong Kong has become part of China, global
consideration appears to have been subsumed under the
notion of “one country”. Global political values do not appear
to be a significant consideration in making political decisions.
Globalisation and Hong Kong Society
3. Cultural Globalisation
 The import of cultural products has not been a new phenomenon in Hong Kong.
Hong Kong has always been known to be a place where “East meets with the
West”.
 The “hybrid culture” can be witnessed in everyday life (typical Chinese and
English mix, English first names, food, etc).
 Social and political values, e.g. liberal democracy, human rights, gender equality
known as global or universal values, have been gradually accepted (even in the
basic law) among local people.
 Western values have once been taken to mean “modern” values, and they are
more advanced – this reflects to a certain extent the problem of cultural
imperialism.
 How to preserve the life style of Hong Kong people (the so-called Hong Kong
way of life) is an important issue to be considered.
Social Welfare in the Global Context
• Social welfare has adapted to the new social
climate –
 becoming more remedial
 becoming more problem-solving
 becoming more punitive
 becoming less critical to the state
 becoming less concerned with social justice but more
with maintaining social stability
Social Welfare : Rising adoption of neo-liberal
values and discourse

• A set of new (neoliberal) welfare discourse is

created as ideological support
e.g. welfare burden,
dependency culture
Self-reliance
increase efficiency (EPP)
workfare
Social impacts of Globalisation

 The deterioration of poverty and income

disparity
 The widespread appearance of structural
poverty and structured dependency
 The weakening of state autonomy in local social
policy
 The stronger domination of liberalism and
liberal economy
Social impacts of Globalisation

 Control of the volume of the state and

stringent control of public expenditure
 Widespread adoption of manageralism
 Social security and social assistance
becomes more punitive which encourage
exit rather than use
Social impacts of Globalisation

 Introduction of private market (or private

market measures) in providing security.
 Social security gradually becomes private
security which individuals and families have the
major responsibility
 Informalisation of care is developed alongside
the privatisation of responsibilities
Globalisation and the limits of
social welfare
• The extension of neo-liberalism as a new right
discourse;
• The acceleration of privatisation of public goods
and of social welfare;
• Creation of more market-friendly measures (e.g.
reduction of tax, retrenchment of the public
sector, welfare cuts…etc) to attract transnational
capital;
Globalisation and the limits of
social welfare

• Compliance with the ‘global order’ of capitalism

and the growing influence of the transnational
corporation, e.g. IMF, World Bank, etc.
• More constraints (or rhetoric of constraints) on
national social policy decisions and governance.
• The notion of globalisation is always used to
justify the changing social and welfare policy.