Globalization Critiqued: Economic, Cultural, and Political Impacts
Globalization: A Critical Standpoint
Key Considerations
Economic Impacts
The general opening of markets for goods and capital suggests the end of trading blocs, regional treaties, and economic independence of countries. It also facilitates the ability to solve economic needs local players have been unable to satisfy. The increasing privatization of economic sectors, with the rise of multinational corporations and the decline of state and national influence, is evident. Increased competition enhances the quantity and quality of products but threatens working conditions (including wages) and can lead to environmental overexploitation. Unregulated access to international markets enables countries to sell products and acquire goods and technologies, promoting jobs. However, it may also lead to the abandonment of organized attempts to promote social progress and justice.
Cultural Impacts
Cultural exchange presents a loss that threatens the integrity of national cultures or identities of participating countries versus the opportunity to diversify and enrich customs. There is a conflict between conceptions of culture as ‘civilization’ or ‘High Culture’ versus the extension of the “Culture of the Common Man” or popular culture. The possibility of the rebirth of folk and regional cultures and individual values exists, versus the product of mass homogenization and globalization of media. Strengthening awareness of the “human community” is contrasted with the uncritical acquisition of cultural elements from dominant societies. There is a possible overestimation of material over social or moral satisfaction versus the minimum material needs of large sectors.
Political Impacts
The possible decay of nationalism and the emergence of internationalism are significant. The political power of enterprises over countries is growing. The spread of democracy and the rule of law as forms of government is contrasted with a predominant worldwide revival of areas and periods of profound political instability. This is due firstly to the loss of power by governments (producing so-called failed states) and secondly to the rejection of what is seen as Western conceptions of politics. The steady decline in immigration controls can lead to losing the most innovative sectors (brain drain) and the ‘invasion’ of international business elites in poor countries.
Further Considerations
Globalization is a complex phenomenon, causing diverse reactions. For some, like a Canadian Senator, it threatens the “nation-state” and modern democracy. Others, such as supporters of political Islam, seek to impose non-Islamic political structures (i.e., democracy) on countries that do not. Some see it as a threat to national identity, while others, like Mario Vargas Llosa, view identity as a construct that obliterates individual differences and local cultures for artificial unity. Still others see the process as a continuation or exacerbation of neo-capitalist exploitation, while for others, it represents a threat to dominance. For some, it promises riches; for others, like Eduardo Galeano, it is the seduction of morally bankrupt consumerism (compare with the Catholic Church’s position).
Before critiquing, consider the difference between supporters’ proposals and their implementation. Free trade globalization refers to the free movement of capital, goods, and people. Yet, developed countries impose tariff barriers and preferential treatment where it suits them. The same applies to barriers to migration and worker movement. Can resources be managed rationally, or do companies derive maximum benefit from imposed, irrational conditions? Paraphrasing criticism of Marxism, globalization may only work well in theory.
Analyzing accompanying phenomena is equally complicated. Bernard-Henri Lévy, responding to a New York Times article proclaiming French culture’s irrelevance, argued that the article revealed more about the U.S. than France. Accepting that French culture’s dominance has waned, he argued that the article reflects the decline of all dominant cultures. He posited that the article was about the U.S. and the potential waning of Anglo-American dominance with the rise of Castilian, Chinese, and other Asian languages. Lévy saw the article as a “savage reflection of American culture itself,” with marginalized artists and intellectuals needing to “speak up in a society that, like any other, is designed to resist emergency.”
Outline of Criticism
This critique focuses on the implemented process, the so-called Washington Consensus, as expressed by the IMF and World Bank (WB).
A primary criticism comes from globalization theorists themselves. They argue that barriers to the movement of goods and people contradict globalization’s principles. Governments pursue policies that globalization imposes on other countries while using subsidies and protectionist measures themselves. It is argued that Consensus institutions serve their largest shareholders (e.g., the U.S.) rather than their intended beneficiaries.
Another criticism argues that if democracy and capitalism are sources of prosperity in developed countries, the state’s role in that prosperity should be replicated internationally. Even some globalization proponents recognize this (although it is argued that democracy alone does not promote economic growth). Economic development and social welfare become urgent with democracy’s expansion (see “Origins and Evolution” in the welfare state). Perhaps democracy doesn’t produce prosperity directly, but once present, both create a positive feedback system.
A third criticism, from opponents, suggests that proponents appropriate others’ actions and misrepresent facts, distorting data to propagate their ideas:
a) Development specialist Dr. Amsden notes that Latin American countries grew faster before the Washington Consensus (pre-1980) than after.
b) Advances in women’s rights, decreased infant mortality, and increased education rates are due to state and citizen group actions (unions, NGOs), not globalization. Progress is primarily the result of citizen activism or state policies, not consensus policies. For example, the UK’s National Council of Voluntary Agencies reported £9.5 billion (approx. $19 billion) in donations in 2007 for aid programs, many focusing on environmental action and poverty reduction, especially in Africa. Contrast this with official government aid (see Oxfam).
c) The most significant poverty rate decreases occurred in countries like India and China, which did not follow Washington Consensus policies. Despite integrating into the world market, they did not massively privatize or deregulate their economies. In countries that followed IMF and WB prescriptions, like those in Latin America and Africa, poverty reduction was much lower or negative (note that the table above considers international market integration and non-adherence to IMF policies).
Furthermore, relative poverty rate declines in IMF-policy countries may result from income loss among industrialized-country workers and the middle classes, especially in developed and middle-income countries like Latin America, who are deprived of security systems (education, medicine, insurance, pensions). Global ownership concentration increases, as predicted by development policy students like Michael P. Todaro, who warned that multinationals could impoverish developing countries by displacing local businesses, diverting resources, and exporting profits.
Washington Consensus and globalization proponents suggest achieving global economic prosperity similar to Europe or the U.S. This assumption is ecologically questionable (see: The Limits to Growth).
The Washington Consensus
In November 1989, economist John Williamson listed ten policies considered accepted by Washington business groups, titled the Washington Consensus. Over time, it became globalization’s program.
- Fiscal Discipline
- Reorganization of Public Spending Priorities
- Tax Reform
- Liberalization of Interest Rates
- A Competitive Exchange Rate
- Liberalization of International Trade (trade liberalization)
- Liberalization of Foreign Direct Investment Inflows
- Privatization
Creation of the WTO
The 1995 creation of the World Trade Organization (WTO) was a decisive moment for globalization. It includes most countries and addresses intellectual property, company regulation, capital subsidies, free trade, and the economic integration of commercial services (especially education and health).
Economic Crises: Tequila, Dragon, Vodka, Samba, Tango
The speed and freedom of capital flows are associated with eco-local financial crises with global impacts. The first series included Mexico’s 1994/1995 crisis (Tequila effect), followed by the Asian crisis of 1995/1997 (Dragon effect), the Russian crisis of 1998 (Vodka effect), the Brazilian crisis of 1998/1999 (Samba effect), and Argentina’s 2001/2002 crisis (Tango effect). Recurrent crises have generated discussion about the IMF’s role.
Pinochet’s Detention and the International Criminal Court
In October 1998, former Chilean dictator Augusto Pinochet was arrested in London, charged in Spain with torture and terrorism. The UK House of Lords ruled for extradition, but it was not completed due to Pinochet’s alleged insanity. This marked a turning point in the globalization of human rights. Simultaneously, the Rome Statute was signed in 1998, creating the International Criminal Court, which entered into force on July 1, 2002. The court was established in 2003, but its operation is hampered by U.S. objections to its jurisdiction.
China’s Accession to WTO
In 2001 (Doha Round) and after 15 years of tough negotiations, China joined the WTO. Thus the world’s most populous country (22% of humanity), the fifth world economy and the fastest growing in the last 30 years, was fully incorporated into the world market. The massive movements of capital and labor that is causing the Chinese economy and the implications for the global system to be the linking of a gigantic, thriving economy “socialist market “(see also market socialism) with the world capitalist system are discussed passionately by scholars worldwide. There is however a broad consensus that China and its growing economic leadership in Asia is driving a historic process which will be decisive in the course of the century and the orientation of the globalization.
On September 11, 2001
The attacks of September 11, 2001, against the World Trade Center (WTC) in New York and the Pentagon, broadcast live and live on global TV channels from all mankind, acquired a global significance.
From that moment, the fight against international terrorism and defending the national security of the United States, will acquire a hierarchy of priority on the global agenda, propose the need to restrict human rights to ensure security, and reinstall the value the State.
However, it is necessary to underline the international community impact of this phenomenon, which affected global almost immediately, initiating actions like the invasion of Afghanistan and the closure of U.S. borders and the European Union.
The bankruptcy of Enron and the bubble of the new economy
On 2 December 2001 the company insolvent Enron shook the financial world: a few months before Fortune had rewarded the company as the most creative of the last five years, and ensured continued growth would have throughout the decade .
The criminal acts to the detriment of shareholders, employees and the community put into question the whole system of deregulation that characterized the globalization and gave a great impetus to the idea of corporate social responsibility (CSR).
The riots in Paris and migration
In the 2005 French riots in November, thousands of young French children of immigrants from northern Africa for two weeks staged a revolt that had his stamp on the burning of thousands of cars in Paris. In the Paris region, more than half the population under 15 years, is native to Africa, which has turned around the culture of the area in less than a generation.
The event shocked the world and brought to the fore the issue of international migration and social and spatial inequalities in globalization.
The World Economic Forum, also known as Davos Forum is a private foundation created in 1971 with a mission to gather annually at Mount Davos ofSwitzerland to major European business leaders. From 1991 it becomes the summit of political leaders and most powerful businessmen in the world. It is a major strategic centers of globalization. Headquartered in Geneva, and overseen by the Swiss government.
Fukuyama and The End of History
In July-September of 1989 the American political economistFrancis Fukuyama published an article entitled “The End of History, which argues that” what we might be seeing is just the end of the Cold War, or a particular post-war period, but the end of history as such: that is, the end point of the historical evolution of humanity and the universalization of Western liberal democracy as the final form of human government. ” The writer, article and especially the words of its title will be a constant reference point for and against globalization. However, from a historical standpoint, and on the basis that the motor of history is conflict, Fukuyama falls into a mistake by granting the status of “total victory or planet” to a period that just means the deepening, in larger scale than before, the capitalist system. Shortly took the “story” in showing his error Fukuyama: The insurrection ofEZLN in southern Mexico (1994), mass protests worldwide Cora globalization, the rise of the MST in Brazil, among many others, showed that in that sense, the “story” continues to enjoy “good health”.