This modernisation of interdependence may be called globalisation. But this short definition does not convey the whole idea that lies in it. Dr. Deepak Nayyar, a recent authority of the subject, defines it in the following words: “It (globalisation) refers to the expansion of economic transactions and the organisation of economic activities across the political boundaries of nation-states.
More precisely, it can be defined as a process associated with increasing economic openness, growing economic interdependence and deepening economic integration between countries in the world economy”.
In the definition of Dr. Nayyar the two words economic and openness are vital. The term is really broad and significant. It includes import-export of goods, investment and technical knowhow’s. It also includes inflows and outflows of various services.
Penguin Dictionary of International Relation defines it in a slightly different way. It says that the globalisation is a process in which state-centric agencies are reduced to insignificance and maximum importance is given to other actors such as multinational corporations, transnational bodies and financial agencies.
One author calls globalisation as an unrestricted inflow and outflow of commodities, money, ideas and also unrestricted movement of people in different countries of the globe. This definition highlights the free movement of goods, ideas and people among the states.
In a globalised atmosphere the ideas and commodities along with people will not counter any hindrance. So globalisation, in other words, is the denial of national boundaries which are so keenly maintained by the states. In its economic dimension (globalisation is mainly an economic term though it is associated with politics) globalisation refers to the remarkable expansion of markets where imports and exports of commodities take place. This means that globalisation is another name of integration of world markets under a single umbrella.
According to Andrew Heywood “globalisation is not a single- process but a complex of processes, sometimes overlapping and interlocking processes but also at times contradictory and oppositional ones. It is difficult to reduce globalisation to a single theme.” It is not, strictly speaking, a definition of globalisation but a brief account of characterisation.
Globalisation is a “borderless world”. It gives no recognition to the differences among the nation-states. It also denies the division of men into traditional categories It says that people may adhere to the nationalities, caste, religion and they may be known in all these nomenclatures but in the perspective of globalisation all these have no significance. Hence globalisation is trans-border or trans-world concept. It is also a top-down process and a single global system. Globalisation and homogenisation are closely linked with each other.
Theories of Globalisation:
There are three theories of globalisation which are described below:
1. Economic Theory of Globalisation:
Globalisation is based on a foundation of neo-liberal theory of market economy- theory which strongly advocates liberalisation of economic policies and principles and non-interference of state in the economic field. Economic theory of globalisation is based on certain conceptions (opponents call it misconceptions).
Few arguments of globalists are briefly notes below:
It has been argued that capitalism tends to broaden the scope of prosperity and general welfare of the community. It also widens the opportunities for the people. Global capitalism or globalisation creates more opportunities from which people are expected to get more and more benefits. Non-participation of nation-states in the worldwide process of globalisation and a very strong attachment to national sovereignty will lead the national economy backward. Technological progress will suffer most; economy will be the victim of inefficiency.
This will result in high cost of production. Rise in cost of production will force the industrialists to withdraw from the market because they will not be able to compete with other industrialists. In absence of globalisation the industries will not get any opportunities to implement new technology and techniques in industry. New techniques will remain unknown to them.
This will pose problems. Globalisation means the non-interference of nation- states to the economic activities of the private businessmen. This situation is bound to create negative impact upon the entrepreneurs.
Domination of Economic Forces:
Economic forces practically compelled the nation-states to kowtow to the demands of globalisation. Certain tendencies may briefly be stated here. Rapid industrialisation accompanied with it a high grade of specialisatispecialiseon in production. Specialisation, in turn, enabled the economy of the nation-state to in special fields of production and exchange and this ultimately empowered the economy to produce large amount of commodities. Without globalisation this huge amount cannot find market.
Naturally the nation-state was forced to make way for the entry of foreign goods. Markets of all the countries were opened to all the states and restrictions on import and export were withdrawn. In some cases these restrictions were considerably liberalised in favour of the expansion of international trade. Lack of funds and insufficiency in technological progress forced the developing nations of the Third World to allow the entry of foreign goods in their markets.
There were also pressures from below. That is, people pressurised the state to ensure the smooth supply of goods. Rapid modernisation also helped the process of globalisation. Industrialised nations of the world—for the sake of their own survival—modernised the industrial structure and the economy was flooded with commodities.
Commodities were being exported from the industrialised nations to those countries which suffered from shortage of goods and articles. The developing nations also got the opportunity to export their goods to the developed nations. We thus find that specialisation and modernisation played the most vital role in the field of globalisation. Almost all the nations of the world were forced to liberalise their economic policies.
Market Forces, Nation-State and Globalisation:
A nation-state depends on both internal and external markets. The nations which are economically solvent mainly rely on their own internal markets and less on external markets. Even these nations are sometimes forced to make compromises with the external market forces. Because of this the self-reliant nations are seeking the help of globalisation. There are many commodities which these self-reliant nations cannot manufacture.
This is also a type of compulsion which a self-reliant nation cannot evade. But what about the other nation-states which, to a large extent, depend on the external supply even for the sake of mere survival? In this situation these nation- states must allow a heavy dose of compromises in respect of trade, commerce and investment.
These weak nation-states have not sufficient investment fund for rapid industrialisation. This is the picture of all the Third World states. Here globalisation appears on the scene as a saviour. Because without an uninterrupted flow of foreign investment into the industrial market the developing nations cannot make sufficient inroad into the development sector. A nation-state may try to protect its own internal market from the foreign competition.
This step is hardly competent to generate profitable results. If all states follow the same technique that will create a statement in the economic fields. Hence protection is not the correct device which is to be scrupulously followed but the way out is globalisation.
Globalisation and Ideology:
There is a peculiar thesis about globalisation. It has been observed that globalisation is not a revolutionary way of changing the economic scenario of the world in general and the developing nations in particular. Its supporters, it is claimed, had no such intention.
Then what it is? Globalisation is viewed as an ideology. Like nationalism liberalism neo-liberalism, globalisation is an ideology. It is the product of the post- Second World War period. The revolution in technology, science and, above all the productive system brought about a revolution in the entire economic system.
The limitation in the national market was absolutely unable to cope with this revolution in technology, industry and production. Globalisation is duly regarded as an aftermath. An ideology does not generally grow in vacuum. Behind every ideology there stand certain facts and material situations and globalisation. Since it is an ideology is not to be treated as an exception.
There are several tendencies. Globalisation as an ideology envisages the transfer of technology from one country to another. This is due to the disparity in the field of technological progress.
The developed states of the North are exhorted to transfer new and advanced technologies to the sophisticated technology-starved states of the South. Globalisation and openness travel in tandem. Whenever we talk about globalisation openness inevitably appears in the scene. Globalisation and closeness are contradictory terms unprecedented expansion in the movement of commodities and services results from globalisation. The geographical boundaries of nation-states partially become irrelevant.
North-South Division and Globalisation:
There was a time when the world was roughly divided into East and West Later on, a term came to be popular and it is called North South. The term North South was coined by the Independent Commission on International Development Report headed by the then West German Chancellor Willy Brandt. The report entitled North South: A programme for survival was published in 1980. Since the beginning of the 1980s the term globalisation has come to be popular.
The North consists of the advanced industrial countries of the world and the South includes the less developed countries or developing countries. If the latter countries want to survive- they must utilise the globalisation, that is, take the benefits of advanced technology and improved scientific methods which are found in the advanced nations of the North. Critics may raise question about this division but it is a fact that the division is not quite illogical and unrealistic.
The term globalisation was floated and popularised by the developed nations of the North. Without any help from the North (in term of advanced technology, service and capital) the countries grouped under South cannot make any headway in the development sector because of the paucity’ of funds and sophisticated technical know-how.
This concept was propagated through various clandestine means among the nations of the South. Thus globalisation assumes the relation between the developed and the developing nations. This relation has very often become strained.
It has been alleged by the South that globalisation has been imposed by the North upon the South. The flow of aid in the form of technology, services and capital is far from satisfactory. The main cause that lies behind the strained relationship between the South and the North is unwillingness of the North to provide funds and technology on liberal terms.
2. Marxist Theory of Globalisation:
The Real Meaning:
If globalisation is the product of the 1980s how can we attribute it to Marx? The question is quite pertinent. Marx did not directly refer to globalisation, but he had clear and deep conception about the various aspects of capitalist production, capitalism and, above all, colonialism. We need not forget that all these combinedly constitute the core elements of globalisation.
The relevent comment, in this connection made by a critic is: “K. Marx now reborn as a theorist of globalisation rather than as a proponent of class struggle drew attention to the international character of capitalist organisation”. Marxist theory of capitalist organisation and the spread of capitalism throughout the globe were painstakingly explained with a good deal of statistics by Lenin (1870-1924) and J.A. Hobson (1858-1940). Lenin said that though Marx and Engels elaborated capitalism they could not highlight imperialism. Lenin said that imperialism is the highest stage of capitalism.
In the opinion of Hobson and Lenin when capitalism succeed in spreading its roots in the far-flung areas of the world that gave birth to imperialism. Marxist meaning of globalisation has different connotation. The capitalists, for their own survival, established markets at different parts of the globe.
Their main interest was commercial—to sell commodities in different markets and earn profit. The domestic markets were incapable of consuming the entire product produced by the industry. This concept of Marx can aptly be called the embryonic form of what we call today globalisation.
Cosmopolitisation of Capitalism:
The capitalists were constantly confronted with competition and other problems and to tide over this they adopted the technique of constantly revolutionising the productive system by implementing new techniques.
The revolution in productive system resulted in the production of huge amount of commodities and for their sale they went out in search of markets outside their states. “The need for constantly expanding market for its products chases the bourgeois over the whole surface of the globe. It must nestle everywhere, settle everywhere, and establish connections everywhere. The bourgeois has through its exploitation of the world market given a cosmopolitan character to production and consumption in every country”.
This is called cosmopolitisation of capitalism or the products of capitalism. The cosmopolitisation of capitalism finally destroyed the old industries that were set up before this process commenced. Marx and Engels have said that the capitalists adopted this method for their survival. Another aspect of cosmopolitisation is the different parts of the globe were linked with each other by means of improved system of transport and communication.
The bourgeoisie created more massive and more colossal productive forces than have all the preceding generations together. This is Marx’s account of cosmopolitan character of capitalism. This may rightly be called the prelude to modern globalisation. The multinational corporations, the transnational corporations have brought or about to bring the world under their control. Though Marx did not directly hint at modern form of globalisation, his analysis of capitalism, imperialism and their spread in various parts of the world contains abundant materials of modern globalisation.
Present Marxist Approach:
The Marxist approach to globalisation concentrates its attention on economic globalisation. In recent years intensive studies have been conducted by researchers about Marxist view on economic liberalism. A researcher has said that in recent years a new global economy has emerged. This is different from old capitalist world economy. Both these economies exist side by side. What is the central idea of Marxist approach to economic globalisation?
The new economic globalisation supersedes the old capitalist cosmopolitanism. It means that new economic, social and other forces have changed the character of “globalisation”, that Marx depicted. A recent critic observes: …”in the process of economic globalisation nation-states have lost substantial power over the economy.
However the continued process of economic globalisation requires the political framework provided by the nation-states in particular, it requires the military territorial power of an enforcer”.
The Marxist approach states that in the economic globalisation there are several actors or centres of action:
(1) The USA in America—both north and south,
(3) Asian Tigers consisting of Hong Kong, South Korea, Singapore and Taiwan,
(4) European Union, Japan is included into Asian Tigers.
Nevertheless, as an actor of the economic globalisation Japan has a special position. Japan’s contribution to economic globalisation (as interpreted by Marxists) far supersedes the contribution of Hong Kong, Singapore etc. The fact remains that the Marxist approach highlights the erosion of state’s role and also its continuation.
3. Mercantilist Theory:
Meaning of Mercantilist Theory:
The closing years of eighties and the beginning of nineties of the last century witnessed a new trend in the theory of globalisation. This can summarily be called mercantilist theory of globalisation. Some call it mercantilist debate. The proponents of the mercantilist theory do not admit that there is such thing as globalisation. The position of the mercantilists can be stated in the words of a critic.
This position “is highly critical of the economic liberal analysis, both as regards the content of economic globalisation and as regards the supposed consequences for the nation-state. Mercantilists remain unconvinced that a qualitative shift towards a global economic system has taken place”.
The mercantilists do not believe that there is anything in the name of economic globalisation. They are of opinion that the interdependence among the states has taken place and this is being intensified day after day. This interdependence is mainly economic in nature. This intensified economic interdependence is to some extent similar to the economic globalisation.
But according to the mercantilists economic globalisation and intensified interdependence are not the same concepts. Again, the mercantilists do not accept the view that the multinational corporations of the capitalist states have become all- powerful and their parent countries are practically helpless onlookers. The nation- states are quite able to keep their sovereign independent status. There is a close relationship between state and corporations.
Mercantilist’s concept of globalisation can be stated in the following way. We have already noted that the mercantilists do not agree with the proponents of globalisation on certain basic assumptions. One is the role and importance of the nation-state have not declined. The mercantilists have analysed the whole idea (role of state) from a different standpoint. With the help of advanced and sophisticated technology, the mercantilists say, the nation-states have been able to enhance their various capacities.
They regulate the internal and external relations and activities, determine the functions of institutions and organisations according to their choice. Today’s states are far more stronger than they were one century ago. This can be attributed to improved technology. The nation-states are receiving foreign aid in the form of investment, capital, technology and services. But the terms and conditions are not always decided by the donor states.
The global situation has radically changed during the last three or four decades. The multinational and transnational corporations are not the sole actors of economic relations. The nation-states are trying to finance their projects from internal sources rather than international borrowings.
There is competition among the donor states. There are USA, Japan, Asian Tigers and states of E.U. So no one state can claim hegemony in the field of aid and transfer of technology. This has placed the nation-states in a better position. To sum up, the mercantilists do not accept the concept of globalisation as propagated by the neo-liberals.
Criticisms and Evaluation:
1. Globalisation has Caused Inequality:
Noam Chomsky (b. 1928) is an internationally acclaimed linguist and a great critic of American imperialism and capitalism in general. He has said that globalisation means a global market which denotes a -single price everywhere and single wage system. But the real situation is quite different. The levels of prices and wages differ from one region to another and this has resulted in the differences in wages. In other words, what Chomsky stresses is that globalisation has carried with it great curse of inequality.
This is the most unhealthy and undesirable consequence of globalisation. The main cause of the inequality is that though the globalisation creates opportunities and skill, all the categories of people and workers are not equipped with the intelligence and ability to utilise them; and the inevitable result is inequality. Apart from this, mere’ transfer of sophisticated technology and flow of capital cannot ensure rapid progress. It (progress) largely depends on the utilisation of technology and capital.
This again depends upon a mature and broad infrastructure. In most of the developing nations there is a good deal of shortage of this infrastructure. The indigenous capitalists and self-interest seeking persons grab all the opportunities in their favour. The governments of the developing nations are weak and they are incapable of countering this tendency. The inevitable consequence is: as a result of globalisation the rich has become richer and poor poorer.
2. Undermines Democracy:
Another allegation against globalisation is that it has undermined democracy. Let us again quote from Chomsky’s article : “One can debate the economic consequences of liberalisation of capital, but one consequence is very clear, it undermines democracy”.
He further observes: “The attack on democracy is perhaps the most significant feature of the globalisation period, often called the “Golden Age” in comparison with the “Golden Age” that preceded it just by straight economic measures”, Chomsky has narrated several reasons with illustrations.
He says that the centre of socio-economic political decisions has shifted from the nation-states to other areas, particularly to the headquarters of the multinational corporations and other fund-supplying agencies such as I.M.F., World Bank. The decisions are generally placed before the authority of the nation-state. Chomsky calls it “unacceptable concentrations”.
There is another dilemma. The members of the governments of nation-states are directly elected by the people (there are nevertheless exceptions) and because of this the governments are supposed to be accountable to the electorate (people). In other words, a national government is to serve two masters—one national (electorate) and the foreign fund-supplying and technology-providing agencies.
It is really a very problematic task to make a compromise between the two. But for the sake of economic development the authority of the nation-state is forced to oblige and satisfy the foreign agencies. This tendency invariably undermines democracy because the government’s accountability to electorate receives a back seat.
3. Globalisation has Failed to Remove Global Disparities:
Dr. Amartya Sen in his recent work highlights another dark side of globalisation. He is of opinion that (The Argumentative Indian, Allen Lene. Penguin Books, 2005) the real debate about the globalisation is not about the efficiency of markets or about the importance of modern technology.
The debate is about the “severe asymmetries of power”. There are very few big powers and only one superpower in the world. The rest of the world consists of small or medium powers. Even among the big powers there are wide differences. In fact, the present world is a unipolar world. Some may not agree. But it is a fact that international politics is largely controlled by one superpower (USA) in collaboration with some big powers. People are not prepared at all to accept the massive inequalities of power among the states.
The Bretton Woods agreement set up global financial institutions such as IMF, WB etc. with the aim of reducing economic inequalities and it was assumed that this reduction would be able to reduce political inequality. But even after the progress of globalisation the inequalities in political and power sectors have remained and they have even increased.
It is believed that the structure and proposals of the Breton Woods would never be able to free the world from power inequalities. When the Bretton Woods Agreement was finalised more than half of the world was under colonialism and the present system of globalisation is largely based on the architecture of the Bretton Woods system. The fact is that globalisation has established its inability to remove inequalities in power.
4. People’s Right to Protest and Protect is Usurped:
The new technology, including the information technology, though not a product of globalisation has progressed in an unprecedented speed during the period of globalisation. The progress of I.T. and technology in general is blessed with numerous virtues but it is linked with few vices. The entire technological development is at the complete control of those few persons who are controlling capitalism and these few persons have practically become the real masters of the technology and I.T.
They use it in their own way and for their own benefit. This, however, does not indicate that the technological revolution including the revolution in IT has not come to any benefit of common people. But the ordinary people are victim of vices of technological revolution. The internet system is being misused for pornographic purposes and satisfaction of cheap sexual desires. This is vitiating the mind of the younger people.
The technological revolution originated in capitalist countries and in the globalised world it is at the control of the capitalists and magnates of big business. The technological revolution is blessed by the globalisation. The developed nations of the world devised the technological innovation but they ignored its bad effects or they did not consider the task of devising the techniques that might control the measure.
In fact, the technological revolution has become just like a Frankenstein monster. The people of the developing countries have not yet been able to control it and properly use it for their benefit. Thus both technological revolution and globalisation have appeared as curse to ordinary men. Many people, however, do not agree with this view. They argue that the responsibility of misusing it lies with few persons.
5. Cause of Social and Political Unrest:
Globalisation is not a single concept, it a combination of liberalisation and privatisation. Without liberalisation and privatisation, the globalisation, practically, has no importance. We have already noted that globalisation has not been able to reduce economic inequalities and even in most of the countries it has aggravated the disparities in the field of income distribution.
The rights and privileges are not equally/ properly distributed and the basic norms/principles of justice are flagrantly violated. The combined effects of all these fall upon the normal relationships among the people. The relations come to be strained and there occur frequent conflicts. The leftist forces (where they are powerful) exploit/utilise this situation in their favour by ventilating their anti-globalisation views. The whole political and social structures are heavily surcharged with tension.
The financial benefits are enjoyed by few people and majority is deprived of the basic necessities. The latter uses this situation as a plea for protest and this culminates in criminal violence. The whole society becomes a cauldron and it becomes a tough job for the political authority to tackle the situation. It is argued that this is not the normal consequence of globalisation.
In most of the parts of Africa and in some states of Asia and Latin America the bad effects of globalisation are more prominent than its salutary consequences. To sum up, globalisation has been a prime villain of political and social unrest and it has thrown political authority into great troubles and society into unrest.
6. Has Widened the Gap:
We have already noted Dr. Amartya Sen’s observation that globalisation has considerably broadened the asymmetries among the nations. David Held (Models of Democracy) has drawn our attention to a different type of gap between the developed and developing states, and even among the developing states.
Held holds the view that globalisation during the last decade has not been able to bring about integration. No doubt there has developed interconnectedness among the states but not full scale integration. The differences/separateness among the states still exist as they were before. There is another fallout of globalisation. Let us state it in the language of Held: “By creating new patterns of transformation and change globalisation can weaken old political and economic structures without necessarily leading to the establishment of new system of regulation”.
This is a vital point made by Held. The old order and system have changed but new order has not come out of the ashes of the old system. The conflict between the old and the new is inevitable. In fact, this is happening in the states which have come under the positive and overwhelming influence of globalisation. The states can change the political and economic structures suitable for globalisation.
But they have neither the ability nor the freedom to do this job. Being compelled by circumstances they have been forced to compromise with the elements of globalisation. Globalisation is a global force. Even the powerful nations are forced to come under it. The consequence is that the gap between the old and new remains and it widens with the progress of globalisation.
7. Local Issues are Neglected:
There is still another charge against globalisation. It seeks economic development and industrialisation through technological revolution. It is sure that economic progress can be achieved this way. But a very real problem lies elsewhere. Industrialisation or economic progress do not necessarily mean the development in the functioning of local institutions and organisations, especially the Panchayati Raj Institutions (P.R.I.).
These institutions along with their all-round growth are also very much vital for the balanced growth of society. Another very important issue demands due recognition. Application of technology is very important no doubt but the utilisation of local resources and materials is essential. But in the process of globalisation its sponsors have been found to neglect this aspect. The main concern of the multinational corporations is to export the sophisticated technology to the developing nations.
The excessive emphasis on this matter creates a number of political problems. For example, the un-utilisation of local resources makes the development costly and even the fruits of development do not reach the people of the grass-root levels. This invariably creates resentment in the minds of local people against the authority of the state.
A real development can be achieved only by making local people a part of the development process. That is, the involvement of people is a must. For this purpose arrangements shall be made for making P.R.Is an integral part of comprehensive development process and programmes. It is unfortunate that globalisation neglects this. Local people shall be exhorted to participate in local administration and the approach of globalisation shall be reformulated.
We have made a survey of the major aspects of globalisation and also have shed light on its dark sides. But the fact is that time has not yet arrived to utter something confidently about this burning issue of the twenty first century. We completely agree with Dr. Amartya Sen that there is no way of escaping from the world wide influence of globalisation. The issue before us is not to challenge it or to stop its advance and spread of ramification.
The real issue is how to minimise the ill-effects and disastrous consequences of globalisation. We firmly believe that it is purely a national issue and the extent of success in limiting the ill-effects depends upon the ability of nation- states. Here lies a very big question mark because the sponsors of the globalisation are powerful financially and politically and it is impossible for the developing nations of the Third World to counteract the authority of big powers and neutralise the pernicious consequences of globalisation.
Even a big state like India is very often compelled by invisible forces to kowtow to the decisions and activities of the big power regarding the globalisation. It is claimed by some (Dr. Amartya Sen is one of them) that China has succeeded in utilising globalisation for the furtherance of her economy. It is a debatable issue. However, what China can do, it is not possible for other states to do the same.