Economic Globalization Essay

Globalization, an economic, political and cultural phenomenon, has swept through the world in the twentieth century. Globalization supposedly brings the world together economically, politically and culturally. Instead, globalization has brought the world farther apart than it originally was, and more inequalities exist now. There is no static definition of globalization, as it is a concept that can mean multiple things, depending on what a definer believe in. I believe a somewhat accurate definition would be.

Globalization refers to the multiplicity of linkages and interconnections between the states and societies which make up the modern world system. It describes the process by which events, decisions, and activities in one part of the world can come to have significant consequences for individuals and communities in quite distant parts of the glove.”

The question posed “is globalization a form of American economic and cultural imperialism?” is one of many differing opinions. Neoliberalists would argue that globalization is good for the economy, but I choose to argue otherwise. I believe that globalization is Americanization of the world, and global capitalism is taking place, where workers are being exploited at the expense of developed countries in North America and Western Europe. I will structure the essay by showing what six different authors have written in their books about globalization. The authors will be grouped into two groups, one of which shows the benefits of globalization from economic, cultural, and political standpoints, and the other, which shows the negative aspects of globalization of the same three facets. Globalization is a form of cultural imperialism and Americanization, and I will set out to justify why this is so, and what the worldwide implications of globalization are.

. In “The Political Economy of Globalization”, Ngaire Woods describes the international economy by saying “economic openness, such as has been experienced over the past decade or so, should be conducive to an invigoration of multilateralism.” Woods says that multilateralism and openness depend on each other, as “multilateralism will be strengthening and deepening as more countries integrate into the world economy and more markets converge.” As more money is pumped into the global economy, more trade occurs, and thus global relations are taking a healthy stride forward, as relations will keep growing for the better. In the first post World War II decades (1945-1985), global economic expansion took place mostly in OECD countries. OECD stands for Organization of Economic Cooperation and Development, and includes countries such as the United States, Canada, United Kingdom and Germany. In wake of the debt crisis, in the 1980’s with Mexico and other countries, “large numbers of developing countries began to liberalize their economies, dismantling trade barriers as well as domestic production subsidies.” As a result of opening their countries to trade and westernization, the developing countries saw large increases in the number of exports and imports, and more trade with OECD countries occurred. This led to more participants in the international trade market, creating new, important ties between states. Furthermore, “globalization at the end of the twentieth century involves an unprecedented degree of functional integration among otherwise internationally dismembered activities.” This is made possible by a rapid flow of capital, resulting from technological advances and changed policy in the industrialized countries. The rapid flow of capital has been directly linked to increased trade, because of the global economy. Governments have been aware of this increased capital flow, and “have turned their policies towards what they think is necessary to attract foreign capital.” Many state-owned companies became privatized; creating joint ventures in which the government extends directs influence over. In summary of Woods’ ideas, she describes economic globalization as “a transformation in the production, distribution and marketing of goods and services and an expansion of the international trade regime to include virtually all countries of the world economy.” Globalization will create a worldwide economy, in which non-industrialized states will have a say in the global economy, and both import and export numbers will increase significantly, creating more wealth, as well as creating long-term trade, which can be advanced by greater global cooperation.

John Dumbrell looks at the political effects of globalization, and if it as a form of American imperialism in his book The Making of US Policy. Dumbrell writes, “The notion of Americanism includes optimism about human behavior and perfectibility, a pragmatic belief in the solubility of the world’s problems.” There also seems to be an idea of justice and liberty only being achieved if the right choices are made, and America always makes the right choices. This has had a direct effect on American foreign policy, as they have tried to stick to their idea of capitalism. Globalization has further portrayed “United States decision makes as responding to threats to the vital assets of the U.S. or taking advantage of the opportunities that the internal system gives U.S. leaders to increase the security of the nation by expanding its military strength or by making alliances.” America therefore has approached globalization with the continuing desire to be the world’s number one economic and political leader, and to take globalization to a new level with the spreading of capitalism worldwide. America had an alternative to the multilateralist New World Order, and this was to be the “globocop”. The role of the American globocop was to act as the worldwide policing body thus retaining “America’s political ability and will to act unilaterally, rather than through the United Nations or ad hoc international coalitions.” This was justified as America felt they needed to protect the interests of the world and themselves, thus creating a balanced world.

Malcolm Waters, in his book titled Globalization, look how globalization affects the world from a cultural point of view. Cultural globalization has “four elements which establish cultural, social and phenomenal linkages.” These four elements are the individual self, the national society, the international system of society and humanity in general. “The individual self (1) is defined as a citizen of national society (2) by comparison with developments in other societies (3) and as an instance of humanity (4).” As well, the international system, will depend on the giving up of sovereignty by national societies, and then sets standards for individual behavior and “provides reality checks on human aspirations.” The individual self, is seen as a global person instead of a part of a local collectivity. National society is seen as the increase of international dependency; the international system of societies is the formation of a state that can only exist globally, and finally humanization is “the global establishment of the view that humanity cannot be differentiated by race, class, and gender.” The social processes of globalization consist of the four aforementioned elements, and globalization will have direct impact on these internal dynamics. A globalized culture is integrated and connected, so that everything is relative to each other. Resource flow “sweeps rapidly across the planet connecting up the components of this culture.” The connection of globalized culture is given a particular shape, as they link together previously “homogenous cultural niches forcing each to relate itself to others.” Relating to others .is a “self-examination of which principles are asserted in the face of threatening alternatives or the absorption of some elements of other cultures.” Globalization also allows for the development of pure trans-national cultures, which are syncretistic in that the decisions made in such cultures are made from a global instead of a national perspective. Three exchanges are formed, when dealing with global relationships, with the three being material, power and symbolic exchanges. Material exchanges include trade, wage labor and fee for services and they tend to tied social arrangements to localized spaces. This type of trade links distant localities together, and generally takes place local markets, but the tying of localities “it will involve chains of commodity exchanges in which each link typically is localized and interpersonal.” Power exchanges, involving election, exercise of command and leadership, social control and enactment of legislation, tie in with social arrangements, which extend over territories. “Power exchanges serve the purpose of controlling the population to keep their interests in the direction of “territorial integrity or expansion.” Symbolic exchanges include the transportation of information to the people, via advertisements, propaganda, and other mass media devices to spread information, which seeks to “release social arrangements from spatial referents.” Symbolic exchanges are the most difficult to accomplish, because they truly globalize the world, as information is spread to the people of a locality. The proliferation of symbolic exchanges is quick, and because “symbols frequently seek to appeal to human fundamentals, they often claim human significance.” In summary, the ideas that underpin Waters’ theory of globalization are that “material exchanges will localize, political exchanges internationalize and symbolic exchanges globalize.”

Having presented the side of the argument that favors globalization, let us now look at the side, which claims globalization is cultural imperialism by the dominant countries and even possibly a form of Americanization. Robert Gilpin writes in his book titled The Challenge of Global Capitalism, “Globalization rests on a political foundation that could disintegrate if the major powers fail to strengthen their economical and political ties.” “Integration of the world has been highly uneven, as integration has been restricted to certain economic sectors and not nearly as extensive as many believe.” The world’s economy was much like the state of affairs in pre World War I, where European superpowers such as Britain and France, were more open to trade than they are today, thus bringing up the question has globalization actually integrated the world? The economic impact of globalization has been strictly confined by what Gilpin refers to as the Triad countries (Japan, Western Europe and North America) and to the upcoming markets of East Asia such as Hong Kong, Taiwan and South Korea. The American economy “has globalized more rapidly than other industrialized economies, yet trade (imports and exports) in the mid 1990’s were only 24% of GNP.” This statistic reveals that the American economy is still driven by domestic forces, as three quarters of the gross national product was coming from different sources. National borders still limit international capital flows, and thus putting a strain on globalization to developing countries. Globalization has led to a loss of national autonomy, because of the increasing integration of national societies. National sovereignty has been jeopardized, and economic independence has all but vanished. “Economic integration of national societies means that domestic groups and even whole societies are losing control over their own destinies to powerful outside economic and technological forces.” Despite the trends towards increasing globalization, no fully integrated economy has been formed, and the world is more globalized than it was say fifty years ago, but considerably less is also believable.

To look at how globalization influences negatively on a culture point of view, I turned to Robert Went’s book, “Globalization: Neoliberal challenge, Radical Responses.” With the collapse of bureaucratic regimes of Eastern Europe and the Soviet Union in 1989, there began integration of these countries into the main capitalist market of the world. The main part of the world which functioned on non-capitalist logic was now gone, and “together with the restructuring of global capitalism since the early 1980’s, this has decreased the ability of countries, particularly in the third world, to choose any other form of economic development other than liberalism.” Opposition to globalization in the last decade or two has risked “not only being excluded from the discussion but seeming cut off from reality.” The OCED has insisted globalization is inevitable, whether one likes it or not, Furthering globalization will only compound the negative effects further.

There will be a greater and more dominant dictatorship of the markets, particularly over countries that wish to attract capital; greater social inequality as a result of the dual process of polarization, within countries and on a world scale among countries; progressive leveling down of wages, working conditions and social security; ecological destruction and deterioration a greater role for unaccountable international institutions and blocs; and a further undermining of democracy.

Culture deprivation is a by-product of globalization, and I feel that this issue needs to be addressed just as much as the economical and political issues. Kevin Danaher looks at certain cases in countries where globalization has had negative effects. In “Ten Reasons to Abolish the IMF and the World Bank”, Danaher writes, “globalization policies are to keep the workers and natural resources of the third world countries open to exploitation by transnational corporations.” Capital from such agencies come from meetings with local political leaders and “agree to lend huge amounts of money if the local elites are willing to implement policies crafted in Washington and Wall Street.” These policies often call for keeping wages, trade unions and environmental restrictions at a minimum, balancing the budget by cutting social services, and exporting to the north at low rates. Brazil, a country with a myriad of natural resources including: Cocoa, Coffee, Sugar, Wood and much more, should be a country where its peoples should not have to live in poverty and hunger. Nevertheless, “despite Brazil’s economic abundance, millions of Brazilians go hungry on a daily basis and the steady commercialization of agriculture has pushed tens of millions of people off farmland and into crowded urban slums.” Seven to ten million children roam the streets of the urban slums with no adults looking after them, thus making Brazil “one of the most unequal societies in the world and more deeply in debt now than it was twenty years ago.” Mexico provides another similar comparison to Brazil. Rich in natural resources and a climate for tourism, yet “the standard of living of most Mexicans is worse now than it was twenty-five years ago.” Since NAFTA, “the ordinary Mexican’s purchasing power has decreased 39 percent and the number of people living in severe poverty (less than $2 a day) has increased by four million, according to the UN. Environmental destruction has increased, after the implementation of NAFTA, and foreign debt just keeps growing.

The political, economical and cultural implications of globalization dominated by America cannot be ignored, and must be addressed to create awareness that globalization is indeed cultural imperialism led by the United States and other developed countries. The IMF and the World Bank are the main parties involved with economic globalization. The IMF, founded in 1944 at the Bretton Woods conference, promoted free global economies, capital mobility and fixed exchange rates. This led to “the recurrent balance-of payments crises, which then prompted governments to defend their currencies with trade restrictions.” The IMF exerts real, tangible power and is willing to loan money to countries in need, with conditionality, which means the lenders must adopt particular policies in order to receive the loan. “Fiscal balance, low inflation, reduction of trade barriers, openness to foreign investment and privatization of state-owned enterprises are elements of what has been known as the “Washington Consensus” Seeing as the name Washington Consensus, refers to the capital of the United States, one can infer that the IMF and the World Bank are controlled primarily by the USA. The IMF and the World Bank were created to “support an international order that today is virtually unrecognizable.” The bank was supposed to operate in a world where poor countries lacked access to foreign funds, but throughout the 1990’s, the World Bank had only lent out “2 percent of private sector financial flows to developing countries.” The IMF on the other hand, was created in 1944 to be the governing body of global fixed exchange rates backed by the American dollar. That system has disappeared for more than thirty years, but the IMF still exists. The IMF is constantly seeking reasons to lend money, as seen by the oil price wars of the 1987-‘s and in the early 1980’s with the Latin American Crisis, followed by the constantly fluctuated economy of the 1990’s. “Of the 124 countries that borrowed from the Fund between 1949 and 1999, nearly 70% borrowed in at least three-quarters of all the years after the year off their first loan; 44% borrowed every single year after becoming an IMF client.” IMF lending dulls incentives for reform in loaner countries, because they know that they can depend on the IMF for money, therefore they will never try to eradicate the problem themselves. IMF loans also signal to foreign investors, many of whom are Americans that the downfall of a country is covered, and it is safe for the investor to tap into such foreign markets, as the country is protected by the IMF.

Turning away from the IMF and the World Bank and dealing with the question “is globalization a form of American economic and cultural imperialism?” I believe we live in a consumer society largely created in the image of America. This creation did not happen overnight. It began at the end of World War II, when two of the world’s superpowers at the time, Germany and Britain had both been defeated. Germany’s defeat came by military means and Britain, having to finance the war for six years, was financially exhausted. The United States on the other hand, was in the war two years after it started, and emerged as the victor. This began the hegemony regime of the USA, American civil society was projected as the correct society, and American goods were deemed as the best goods. A good definition of Americanization is “the projection of American civil society to create a new general form of modernity based on: moral and intellectual leadership, social change and the perception that America as the land of the future.” America, the greatest creditor nation after the war, and “in a special position to project itself across the spectrum of social relations- political, cultural and economic.” The world was offered American ideas, and told that they were the correct ideas, and since they helped to defeat the axis powers in World War II, America was seen as a nation of righteousness. Economic Americanization is seen by today by companies such as McDonalds, CNN, Disney, extending their influence worldwide.

The politics of globalization are also dominated by cultures of developed countries and led by America. Globalization is global capitalism, and the elites consist of America and other Western Europe countries such as France, Great Britain, and Germany. Hegemony is created, thus leaving the third world countries at the complete mercy of the hegemonic power, led by the United States, as seen by the IMF and the World Bank handing out loans with conditions, which benefit American Globalization is backed by the ideology of neoliberalism. Neoliberalism stresses the importance of the economy operating without government intervention, global free trade, and the importance of modernization. Modernization, leads to multilateralism, which is the cooperation of states to aid each other. The cooperation of states will lessen the desire to go to war to settle disputes. Neoliberals believe “the distinction between domestic and foreign policy agendas should be abandoned.” The United States has used Multi National Corporations (MNC), to extend their sphere of influence globally. These companies, neoliberalist in thought, use large amounts of money as foreign direct investments to supplant their stake in foreign countries. MNCs are an important part of globalization politics, because they have “become major determinants of trade flows and of the location of industries and other activities around the world.” MNC’s have direct influence on the economic, political and cultural implications of globalization. Their existence has left many welfare nations in peril, and their economy and political stability at the mercy of MNCs.

Disagreement with the neoliberal school of thought can be found with the Marxian world systems theory. Devised by Immanuel Wallerstein, world systems theory suggests the core-semi-periphery-periphery model discusses international politics and globalization. The core consists of developed, industrialized nations such as the United States, Japan and much of Western Europe. The semi periphery consists of developing countries, such as South Korea and Taiwan, which are a step under the core, but they are better off than the periphery. The periphery is the states that are still in the developing stage, in poverty and are dependent on the core for survival. The world systems theory, I believe illustrates the political inequalities of globalization. America, a part of the core, is able to dominate the periphery to exploit their economy, and human resources. America is currently involved in this uneven class division, as many MNC’s operate sweatshops and employ low wageworkers from the periphery states. This division of “have and have-nots” will have immense cultural impact on the periphery states, and the dependence situation by the south has left many starving and damaged psychologically.

Having discussed the economic and political effects of globalization, let us now turn to the cultural effects of globalization. Globalization has Americanized the world and is responsible for trying to create a culture in which American society is the model society. “The most widely held belief about globalization and culture is probably that of convergence towards a common set of traits and practices.” While it is all glitz and glamour in the developed countries, the picture is much bleaker in the Southern countries. “For millions of small farmers, fishermen, and indigenous peoples, trade liberalization has deprived them of access to and control over natural resources and denied their basic human right to an adequate standard of living. Many women and children work in the sweatshops of counties like Pakistan, Indonesia, and India for mere pennies a day, producing goods, which are sold on the American market for amounts of money, which could amount to a sweatshop workers yearly wage. Sweatshop conditions are not found in America, where there is a minimum wage system in place, but they can exist in third world countries because the IMF and other organizations, which are led by America, regulate the economy of third world countries. The goods produced by sweatshops are strictly for export to developed countries, proving globalization is definitely a form of American imperialism. Countries rich in natural resources, such as Brazil and Mexico, should be able to thrive, if the markets were actually free, but American involvement has created a division of class, where these countries cannot thrive due to the economic policies imposed by the Americans.

Environment conditions have also caused cultures to erode, at the expense of developed countries free market policies. ”Markets are only capable of valuing things in terms of money. A tree has no value standing, it is only when the tree gets killed and turned into plywood and hot tubs that it generates market value.” Destroying nature is normal for market economies. As long as it is profitable, nature will continue to be destroyed because there is nothing to stop the destruction. “Some 25 million people (more than the world’s refugee population have been driven from their home communities by the spread of environmental destruction.” Rainforest in South America is being continually destroyed, to create cattle ranches to export meat to North America. Biodiversity is being threatened, as the Amazon is home to many unique species, which are only found in that region of the world. The “turn nature into dollars” ideology has left much of the earth in tatters, as environmental crises are prominent throughout the world because of the continued need coming from developed countries.
Cultural imperialism by the America does not just affect third world countries. Americanization occurs even in developed countries, by other global corporations. American cultural imperialism is referred to as McDonaldization. The official definition of McDonaldization is “the process by which the principles of the fast food restaurant are coming to dominate more and more sectors of American society as well as rest of the world.” The principles include efficiency, calculability, predictability and control. Corporations such as McDonalds, Ford, and Nike have products, which are on the markets of all developed countries. Cultural icons such as Microsoft, Motorola and General Electric can be found in homes worldwide. American culture has been spread worldwide, and is still expanding. This creates a homogenous culture, where America is the main creator, and American products can be found globally because of Americanization.

The question of “is globalization actually a form of American economic and cultural imperialism?” has been answered with all the evidence presented. Globalization is indeed American economic and cultural imperialism as seen by the inequalities that exist between America (core) and the developing states (periphery). The IMF, which lends money to countries in need, lends on conditions set forth by American policies. These policies call for keeping economies open and free, unrestricted foreign investment, constraining wages, which all benefit the United States economically. America has also been the recipient of sweatshop goods, and their MNC’s have been responsible for destroying the environment just to further their economy and culture. The implications of globalization are that the world will always be divided between the haves and the have-nots. Class divisions will not be destroyed, as long as globalization is the force that drives international economies. Third world countries will continue to be destitute, if they keep receiving loans from the IMF, which they are more than willing to lend out, since it gives them control over the loaning country. The implication of continued American dominance of the global economy is that the rich will get richer, and the poor will get poorer.

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