GLOBALIZATION AND WORLD ECONOMY

Globalization and World Economy

Globalization and World Economy

Introduction

Today's dominant account about economic globalization in media and policy circles, as well as in much economic analysis, emphasizes hypermobility, global communications, the neutralization of place and distance, and the growth of a new professional transnational class. But this emphasis on abstract capabilities of systems and on the demand for highly educated workers leaves out many significant aspects of globalization. Globalization—economic, cultural, political—localizes in multiple concrete settings, and it does so through a broad range of venues and actors. Viewed this way, many more components to globalization exist than those that prevail in the dominant account. It is not only the powerful who are actors in these processes of globalization.

Global and Subnational Scalings

Two distinct sets of dynamics constitute globalization. One set involves the formation of explicitly global institutions and processes, such as the World Trade Organization, global financial markets, and the War Crimes Tribunals. These vary greatly in their aims, from narrow self-interest to enhancing the common good. They operate at the scale usually associated with the term globalization. For many, globalization is about these types of conditions and institutions.

But there is a second set of processes that does not necessarily scale at the global level as such, but rather takes place deep inside territories and institutional domains that have largely been constructed in national terms in much, though by no means all, of the world. This largely subnational and translocal form of globalization has received less attention from mainstream scholarship and is far less likely to be conceptualized or recognized as part of globalization; one important exception is the rapidly growing scholarship on world cities and global cities.

On the other hand, there is a long history of strong hostility toward international trade effects, including unequal exchange, secular deterioration of terms of trade, and new protectionism. High volatility is a part of globalization, which is the result of a sharp increase in short-term funds and the increased use of private funds to finance external debt.

Financial globalization creates the possibility of speculation bubbles, and economies become more and more prone to exogenous financial and other disturbances. Economic shocks in any one of the five or six economies are electronically and instantaneously transmitted across the globe, and there may be devastating effects. All countries are facing structural unemployment brought by competitive pressures, new technologies, and market-oriented policies. There have been market failures in the past, and there will be new cases of market failures. The blind race of competition has created concerns regarding ozone depletion, global warming, and lack of biodiversity, which may have disastrous consequences for the world.

Globalizing Poverty

Emerging poverty and increasing unemployment and inequalities have created doubts whether this process has been instrumental in globalizing poverty. The gap between the earnings of the skilled and the unskilled workers has widened. Small-scale industries in many countries are facing closure, thereby intensifying the problem of unemployment. Economic efficiency is hardly a desirable end in itself; it has relevance only in relation to the ...