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GLOBALIZATION

 

O.T. FORD

 

Globalization is the increasing integration of people and processes across the world, and the increasing location of causes and effects at the global scale, rather than any narrower scale. Though the word ‘globalization’ is often used strictly for economic processes, globalization is not simply an economic phenomenon. Globalization is affecting culture, politics, demographics, natural processes, and human-environment interaction as well.

Globalization is not new. One of the great moves towards globalization began in 1492, with the arrival of Christopher Columbus (Cristoffa Corombo / Χρ̃οFERENS « K‛r’oferens ») in the New World, and the subsequent exchange of populations, cultures, resources, and non-human species between the New and Old Worlds. The pace of globalization increased again with the Industrial Revolution, as new technologies made transportation more effective at the global scale. Transport technology has continued to advance since then. Communication technology began to advance dramatically more than a century ago, as telegraph, telephone, radio, and television transformed the ability of people to communicate over great distances, and in ways approaching in-person interaction. The internet and the cellular phone are only the most recent technologies to facilitate globalization, not a fundamental departure from developments of the past.

Some things are broadly understood to be universal: logic and math, science and technology. They unite the well-educated, as they long have; as education becomes more widespread, along with confidence in specialists, these fields help to unite a more-representative segment of the world’s population. Many of the ways that global culture is supplanting local culture are blamed on Western cultural imperialism or capitalism, but are in fact the result of an emerging common technology.

Some things are not broadly understood to be universal: liberalism. Because liberalism emerged in its current form in the West and has always been practiced imperfectly (liberalism for some, not for all), but especially during the period of European expansion (liberalism at home, often-atrocious illiberalism abroad), there are frequent cultural-relativist rejections of liberalism. Some of these, particularly when coming from Westerners, indicate a genuine belief in cultural relativism. Others, particularly when coming from rulers, are pure opportunism. It is to be expected that illiberal rulers outside of the West would attempt to dismiss liberalism as a foreign concept being foisted on non-Western peoples through cultural imperialism, when the rulers are simply interested in perpetuating their power, and would seize any argument in defense of that power. Standing against these relativist assertions, there are now ample cases of non-Western embrace of liberalism.

Anti-“globalization”

The word ‘globalization’ has been used, especially on the political left, as a target of protest in recent decades. Institutions such as the International Monetary Fund, the World Bank, and the Group of Seven (G-7) have been dogged by a global protest scene in which leftists of various sorts, organized and individual, show up at gatherings and attempt to disrupt the proceedings, call attention to their cause, and sometimes riot. Their real objection, though, is primarily to capitalism and Western power, which is why the protest movement at times has turned its attention to the North Atlantic Treaty Organization (NATO) and various Western war efforts, and flowed seamlessly into the Occupy Wall Street movement after the Great Recession.

But in more recent years, there has been a backlash against globalization on the political right as well. The nomination and election of Donald Trump is an example of this, as is Brexit, the withdrawal of Britain from the European Union following a 2016 referendum. Comparable movements have had considerable electoral success in other parts of Europe, with nationalist opposition to immigration as the common thread. Here the concern is as much cultural as economic. Some people are imagining a time in the past when things were better for people like themselves, with secure jobs and lifestyles and a familiar culture that is now undergoing dramatic change. Much of this change (like gay marriage) is internally driven, but immigrants are a visible symbol of cultural change, and are often thought to be competing for jobs, while economic integration like the North American Free Trade Agreement (NAFTA) is blamed for taking jobs offshore.

What these two opposition movements have in common is that they are driven more by values than by the facts of globalization. The ability of either movement to change what is happening is limited by its incomplete understanding of what is happening. Globalization is not a form of corruption of preexisting pure, isolated societies. Rather, globalization represents normal human behavior facilitated by technology. People did not choose to live in small, isolated communities. They did not choose not to communicate, travel, or trade over long distances; there were merely unable to. Now that they are able, they do.

The European world

Post-Columbian globalization has been interdependent with European expansion through imperialism, colonization, and trade. The modern international state system, known as the Westphalian system and now formalized through the United Nations, is simply the intra-European state system translated to the global scale. The states of Europe already interacted with each other through the Westphalian framework when they conquered most of the world. As European settler societies (especially in the New World) became independent, they were automatically incorporated into the Westphalian system. By the time most African and Asian colonies became independent, the United Nations was in existence, and the Westphalian system was the only framework on offer, including its concepts of ‘sovereignty’ and inviolable borders. Most new governments were all too happy to have these concepts giving them unchallenged claims on specific land areas. Even those politicians and officials from cross-border cultural nations settled into the country model and its “nation-state” ideal.

English has emerged as the dominant lingua franca of the world. It is not the first to have been recognized as such; French was considered to be a global lingua franca before the rise of English. This has led many to speculate that English, too, will eventually be supplanted, with Mandarin as the most popular suggestion. There are several reasons to think this will not happen, though. First, the period of English dominance has lasted for a long time; the two most recent global hegemons (see below), Britain and the United States, have been Anglophone. Second, during that span, significant development in globalization has taken place, meaning that the world is much more interconnected than it was during the period of French dominance, to say nothing of the period of Latin dominance confined mostly to Europe. Third, the investment in English runs deeper in society, less confined to the educational elite, than that in French. Fourth, British imperialism was extensive; many states in Sub-Saharan Africa use English as an official dialect and educational dialect, and the highly-populous states of South Asia have broad familiarity with English among the highly educated. Fifth, English is commonly written in a script that is more widely used and easier to learn than Mandarin is. Sixth, English at present has a more adaptable structure to borrowings than Mandarin at present. English incorporates non-English terms and names with minimal modification; such terms and names may be pronounced by native English speakers with their own limited set of phonemes, but there is no systematic effort to modify terms, whereas Mandarin tends to bring every borrowing into its syllabic and phonemic structure, meaning that borrowings are further from the original, including widespread international terms (many of which are now of English origin anyway).

The global status of English notwithstanding, the world is not united in language, nor in religion. But the European expansion has sigificantly reduced diversity in both cases. Western Christianity is now the religion of nearly all of the New World and Australasia, most of the Pacific, and much of Sub-Saharan Africa. European dialects — Spanish, English, Portuguese, and French — are the main vernaculars in most of the New World and Australasia; English, French, and Portuguese are the official dialects in most of Sub-Saharan Africa. Three of these dialects are Romance dialects, and one of them (English) has heavy borrowings from a Romance dialect, while all four, being European, have significant vocabulary from Latin and Greek; this strengthens the linguistic component of global culture. And of course, most of the areas colonized by the Europeans use the Latin script; this includes again the New World, Sub-Saharan Africa, Australasia, and the Pacific, along with insular Southeast Asia and Vietnam. (The Latin script is also now used in parts of the Turkic world, and in an official supplementary role for Mandarin Chinese.)

The ubiquity of Western formal dress for men, and modern counterparts for women (that is, business suits as opposed to evening gowns), is a result of European cultural expansion. The dominance of the United States has brought its music and film (including television) to the world, though in the same period many non-US films and musicians have succeeded through the same channels, such as Hong Kong cinema and British and Korean pop music. US cuisine has had similar, though less dominant, success, while again global distribution channels have given other cuisines the opportunity to spread. And notably, US music and especially US cuisine are themselves formed from multiple global influences.

Core and periphery

Academics frequently divide the world into a core and a periphery, with a semi-periphery in between. While of course this is conventionally done country by country, the concept would come closer to describing the world if understood as a spectrum from core to periphery, with countries themselves broken down into smaller regions that fall at different points on the spectrum. (It would even be possible to say that a smaller region, like a country, contains its own internal core and a periphery, also along a spectrum.) While the concept could be applied to politics or culture, with much the same result, it is typically defined by economics.

In that sense, the core is the part of the world closest to economic power, and most involved in economic decisionmaking. The core has power and influence and is closely connected to the global economy. It is wealthy, high-tech, and urban; its economy is diversified, traditionally industrial, and now post-industrial. Core states tend to be democratic; diversified economies create large middle classes, and the size and collective wealth of such a middle class has historically made it difficult to concentrate political power in an aristocracy. Perhaps the best way to capture core status in a number is gross domestic product per capita — that is, total economic output divided by the number of persons. China is now the world’s second-largest (country-based) economy measured by GDP, but its large population means that it does not have a high GDP per capita. GDP alone is not helpful. But even GDP per capita is not perfect; Qatar has the world’s highest GDP per capita on a country basis, but the economy is not diversified and bears little resemblance to the core.

The periphery is the opposite of the core: removed from economic power and the global economy, poor, rural, dependent on agriculture and often subsistence agriculture, lacking in much of modern technology.

This core and periphery are otherwise known as ‘developed’ and ‘underdeveloped’ or ‘less developed’; this is often expressed with another shorthand, of the ‘Global North’ and ‘Global South’, and very similar to the Cold War division of the world into a First World and a Third World (with the Second World being the Communist bloc). From a country perspective, the core consists primarily of the US and Canada, Western Europe, and Japan. The periphery is typified by Sub-Saharan Africa and some parts of Latin America. China and most of Latin America would fall in the semi-periphery, while states like South Korea and Taiwan are recently semi-peripheral but now more like the core. But as usual, countries are not the best way to analyze the world. Places fall on a spectrum between the very center of the core — Wall Street — to the very furthest periphery — a small village in Sub-Saharan Africa, or an indigenous rural population in Latin America. Clearly some parts of China, in Shanghai and Hong Kong, are closer to the center than some parts of the United States, such as rural areas of the South.

Why Europe, and not China?

We know that Europe became the world’s dominant region, and created the world economic and political system. If we went back to 1450, we might have expected China, which was large, centralized, and technologically advanced, to become the world’s dominant force instead. Since we know that didn’t happen, we need some explanation. A series of reasons have been proposed. First, China’s centralization may actually have worked against it. China was strong, redistributive, meritocratic, resource-rich, and politically stable. This led to it, and its people, being conservative and complacent. Europe was disorganized and unstable; this led to conflict and competition among the various European states, first within Europe, and then beyond, and created a market exchange economy that encouraged enterprise and initiative. A direct example of this effect lay in exploration. Columbus was a Genoan who pursued sponsorship from various powers, eventually finding it with Ferdinand (Ferrando) and Isabella (Isabel) of Spain. A comparable but earlier Chinese explorer named Zheng He (鄭和 « Çəŋ5135 » / 馬三保 « Ma214 San5 Pau214 »; active around 1400-33) explored well into the Indian Ocean, but because China was centralized, he was largely dependent on the sentiments of a single person, the emperor, and his explorations were cut short. There were other factors as well; China’s main staple was rice, which required well-organized labor and irrigation, and benefitted from China’s central authority, while Europe’s staples, wheat and meat, are land-intensive, which encouraged expansion and the development of a merchant class. Europe also practiced primogeniture, where the oldest son in each powerful family inherited the entire estate. The younger sons in powerful families thus needed either to build their own estates overseas, or to make a living in socially-acceptable professions, which led them to the clergy, the military, and trade, and all three professions had an inherent interest in expansion to and conquest of new lands.

Capitalism

The first stage of capitalism, at the beginning of our modern global economic system, was merchant capitalism, an economic system based on merchants (traders/businesspeople). It began in the northern Italian city-states, such as Venice, Florence, and Genoa. By the end of merchant capitalism, the economic center of Europe had shifted to the northwest — the Netherlands, England, and France — and the late merchant-capitalist practice of Mercantilism had emerged. Mercantilism was based on the accumulation of wealth within the newly-consolidated states of Europe. If there were a single center of the world economy in late merchant capitalism, it would have been Amsterdam.

With the emergence of the world economy out of Europe, we also see the beginnings of the hegemonic system. According to Hegemonic Stability Theory, a single state serves as hegemon, a leading power that sets the rules for the global system. Roughly speaking, each hegemonic period has lasted about a century, approximately as follows:

1500s: Portugal
1600s: the Netherlands
1700s: Britain
1800s: Britain, still
1900s: the United States

Portugal came to the hegemony by way of its primacy in exploration; in fact, all four of the hegemons have been leading seafaring powers.

England (later Britain) was one of the powerful states in late merchant capitalism, and London one of the world’s primary centers of capital. England is where industrial capitalism began. While the Industrial Revolution can be seen as a transformation of the economic system, it was above all a transformation in industrial technology, and has been understood particularly through the technology of power — the source of power behind manufacturing. The first phase of the Industrial Revolution (roughly 1720-1810) used water power: the kinetic energy of water moving downhill in streams was captured by waterwheels (the same basic principle of modern hydroelectric power). In order to use this power, industrialists needed the right terrain. This terrain was present in northern England (and not, notably, in the Netherlands). England thus had both the capital, as the result of London’s status as a chief center of the world economy in Mercantilism, and the natural resources, in the form of hilly terrain to establish water-powered plants.

The second phase of the Industrial Revolution (roughly 1810-1890) was powered by steam. (James Watt’s steam engine was actually developed around 1760, from Thomas Newcomen’s earlier engine of 1712, which gives an idea of the time technological transitions can take.) Steam was used to turn turbines; the steam was generated by heating water, and coal was the fuel used to heat the water, so coal was the chief natural resource in the second phase of industrialization. Coal is a heavy fuel and expensive to transport, so plants were built near coalfields, which means that, as with the first phase, plants had a specific geography based on resource endowments. As it happens, parts of Britain, including some of the same parts in northern England, were rich in coal. Other parts of Europe had rich coal deposits as well, and some of them, especially northern France, southern Belgium, and western Germany, became new industrial centers. But Britain was already the world’s leading industrial power, and with its coal wealth, it only extended its lead over its European rivals, who were, by that point in history, its chief world rivals as well. The shift to steam power was the beginning of the centrality of fossil fuels in the industrial world economy; the Industrial Revolution was thus mostly responsible for the effects of fossil fuels on the environment.

Capitalism can be seen as an ideology, but it is also a stage in historical development. Communism was a competing economic ideology proposed before Karl Marx himself, and thus long before the twentieth-century revolutions by self-described communists. But communism has never been practiced on a large scale as an economic system. Rather, the “communist” revolutionaries instituted a kind of state capitalism, where property was owned by, and managed for the benefit of, the state. The failures of this system are more about political repression, which all the post-revolutionary governments implemented (often to a great degree), and central planning (a failure shared by corporate monopolies in conventional capitalism). One of the advantages of capitalism in theory is that economic decisions are decentralized to many, empowered decisionmakers, thus increasing the chance that some of them will make good decisions, where a central planner can commit an entire state to a massive bad decision. This decentralization is essentially the same principle that guides evolution, where greater genetic diversity increases the chance of a successful adaptation.

Economic integration

Though it is customary to speak of global economics in terms of countries (even among economists), such that each country is referred to as a self-contained “economy”, states (not countries) are only one possible level of understanding for economics. Most states have significant internal economic diversity, and there are many arrangements that bring states together into larger economic units. The simplest and least integrated is a free trade area (or free trade agreement), in which trade barriers between states are lowered on specific goods and services. The most obvious barrier is a tariff (a tax on imports), but there are also quotas (numerical limits on imports) and regulations that make importation more difficult or expensive. FTAs often harmonize state regulations, so that (for example) the safety standards on a product are the same in both states, making it easier for manufacturers to meet the standards. The US participates in an FTA with Canada and Mexico (NAFTA, which was officially renamed to placate Trump), but it has many other bilateral and multilateral FTAs. Nearly all the world’s states participate in a global FTA, the World Trade Organization.

A deeper level of integration is a customs union, in which a group of states set a common external tariff (and by implication, eliminate internal tariffs), so that importing to one state is the same as importing to any of the other states. The entire customs union is one unit for customs purposes. A deeper level of integration still is the single market or common market, which groups states into a larger area in which, in theory, there is only one set of economic rules, and there is free movement of goods, services, capital, and labor. The EU is an example of this, but the creation of a common market was one of the earliest forms of integration in the US as well. (The US is also an illustration of the fact that a common market is seldom absolute; the US states do have different laws that pose some barrier to trade and free movement.)

Standing alongside these forms of integration are currency arrangements in which two or more states have connected currencies. This may be through a currency union, in which multiple states use a common currency that they all manage collectively (such as the EU’s euro, but there are older examples, like the Eastern Caribbean dollar). But states can also use the same currency because one or more states unilaterally adopts the currency of another (typically larger) state; this process is called dollarization, even when the adopted currency is not the dollar. Nonetheless, the US dollar is a primary currency used in this way; others include the euro, the Australian dollar, the New Zealand dollar, the ruble, the rand, the Turkish lira, and the Swiss franc. A different arrangement happens when a state issues its own currency, but ties the value of that currency to another state’s. The value may be fixed exactly, or it may be allowed to fluctuate within a narrow band. Currencies used for these sorts of pegs again include the US dollar and the euro, as well as the rand, the Hong Kong dollar, the Singapore dollar, and the Indian rupee.

 

© O.T. FORD

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