Globalization as an ingrained culture of capitalism - Essay Example

Globalisation and Capitalism This report tries to decipher the concept of globalisation being endemic to capitalism rather than a recent phenomenon brought about by the telecommunication revolution. It delves into the definitions and understanding the concepts of capitalism, globalisation and the telecommunication revolution, thereby relating the impacts and relation between each one of them. GLOBALISATION – ENDEMIC CAPITALISM Through years globalisation has raised doubts in our minds. There has been a constant debate on the pros and cons of globalisation. Many have debated this phenomenon is a result of the telecommunication boom leading to turning the world into a global village. With a growing sense of unease among many of us, the current trends in global capitalism and global society are being constantly reviewed and reiterated. This paper is an attempt to understand the phenomenon of globalisation as an ingrained culture of capitalism rather than a phase brought about by telecommunication revolution. Globalisation of Capitalism It has been argued by many theorists that the characteristic aspect of the globalized economy is the market economy. However, some have maintained that it is not so much market economy but capitalism that characterizes today’s time. Trying to understand the rules that guided capitalism in earlier days will help to understand the new form of capitalism, “globalisation”, today. Eighteenth century definition of capitalism refers to an economic and social regime in which the benefits and ownership of productive assets were appropriated by the minority to the exclusion of the many1. The driving force was money which was used to make more money by any means available to those who already have a great deal (Smith, Adam, 1776). Capitalism has not been concerned with the efficient allocation of resources to meet the needs of common man thus resulting in inequality and deprivation mostly. The ideal of capitalism is a borderless global economy in which money and goods can be moved freely in search of short-term maximum profits without regard to the consequence for people, communities and nature. It has mostly represented a form of economy which lacks public accountability. Globalisation has become a concept for many theoreticians and economists for its intellectual usefulness and political enablement. It helps to organize empirical information on the restructuring of capitalism in a way so as to provide explanation on the direction and nature of world social change at the dawn of a new millennium, and hence to achieve an improved understanding of the prospects for emancipatory social action. Today globalisation can be described as the near culmination of the centuries-long process of the spread of capitalist production relations around the world and its displacement of all pre-capital relations. Stage for Capitalism – Globalisation Today, globalisation has come to mark the triumph of the capitalist mode of production. The capitalist system since its origin has been expanding in a bi-directional fashion, extensively and intensively. The final phase in capitalism’s extensive enlargement started with the wave of colonization in the late nineteenth and early twentieth century and concluded in the 1990s with the reincorporation of the former Soviet bloc and Third World revolutionary countries. Under globalisation, the capitalist system is undergoing a vivid intensive expansion. Capitalist production relations are replacing the remnants of an all pre-capitalist relation around the globe. The era of the primitive accumulation of capital has ended. The remaining “Chinese walls” all across the globe are being broken down in hothouse manner. In the process, those political and cultural establishments that fettered capitalism are being swept aside, paving the way for the total commodification or marketization of the social life across the world. Capital has achieved a new found global mobility and is reorganizing productions world wide in accordance with the whole gamut of political and cost consideration factors. This has resulted in the world wide decentralization of production along with the centralization of the control and command of the global economy in transnational capital. In the process, the apparatuses of national production have become fragmented and have integrated into the new globalised circuits of accumulation2. The globalisation of the productions process in current times is unifying the globe into one single production mode and into a single global system, thus bringing about the organic integration of different countries into a global economy. The ever-increasing dissolution of barriers of space and the subordination of geographies to that of production is without a historic precedence. It is compelling us to reassess the politics and geographies of the nation-state. Role of Telecommunication in modern-day Capitalism – Globalisation Every exploiting ruling class has held a global aspiration and a global dimension. The development levels of the productive forces and the economic relations within a society determine the form of imperial exploitation and oppression, be it the Romans or the British. Likewise, every phase and stage of development of capitalism has had a corresponding form of global activity – globalisation. At the onset of this century, Lenin had called the stage of development of capitalism at that time as “imperialism”, in today’s world, several reformist, economists, authors, academicians call it “globalisation”. Developing from major technological breakthroughs like telephone, the radio, the internal combustion engine, the nineteenth century system of competitive, industrial capitalism gave way to a global form of monopoly capitalism. Today, this imperialistic system is giving way to globalisation – a new stage of capitalism characterized by electronic based production; the desperate attempt to maintain surplus value and value production by any possible means; the internationalization of capital; and the replacement of productive capital with speculative capital3. Thus, ‘globalisation” can be called the capitalism in the age of electronics. It is a well established truth that telecom infrastructure and services are the linchpins of a growing and healthy economy. Telecommunication has become the backbone of productivity, business activity and trade. And for developing countries, effective provision of telecommunication has become imperative for their growing market economy. Growth and development of telecommunication has led to lubrication of the capitalist expansion by enabling the globalisation of both production and marketing for large corporations. But telecommunication has also enabled the processes which have led to the integration of institutions of capitalism in developing countries into a capitalist world economy. The impetus for telecommunication restructuring originates within dynamic and large firms dominating the industry in industrialized countries. Therefore, restructuring appears more internal to the economies of industrialized countries and are driven extensively by the external forces in the case of developing countries. The broader forces which are related to globalisation of the capitalist mode of production also exert specific influence on the telecommunication industry, but these influences manifests in various forms depending upon the integration of the country in the globalised sectors of the international economy, as well as the sophistication and size of its telecom industry, along with other factors. Thus, policies that govern liberalization in developing countries, making them behave as “demander” in a telecom goods market will not necessarily improve the global telecom resources allocation. As the governments of developing countries liberalize the telecom industry, it is important to understand the complexities of supply that place the corporations comprising of supply in the context of the fast changing logic of global capitalism4.. As we witness the globalisation of industry, much of this is made possible by advanced telecommunications. For example when General Motors is manufacturing auto bumpers in Indiana or Matamoros, Mexico, the plants are integrated into the same highly efficient telecommunications network. If they needed to do so, this integration could be in operation anywhere in the world, simply by linking into the global network. If facilities are not readily available, a satellite earth station can do the job. (Williams, 1991) Williams paints the vision towards the path which capitalists seeking new production sites and markets tread, one in which access to the global network makes local conditions irrelevant. The images of a technologically and financially “seamless” global economy proliferated during the late 1980s. Also during the 1980s, evidence of the rigid “seams” between rich and poor regions of the world emerged (World Bank, 1990). But do all these indicate telecommunication as a precursor to globalisation? It merely reinforces the fact that telecommunication has led to shrinking of borders and boundaries in the world, paving a way for capitalism to show its true nature in the form of globalisation. New face of Capitalism – Globalisation Chase-Dunn1 has presented a model of the processes and structures of the modern world-system and has proposed a project to transform the system into a democratic and collectively rational global commonwealth. The article states that popular transnational social movements are challenging the ideological hegemony of corporate capitalism5. The global women’s movement, indigenous movements, the labor movement, and environmentalist movements are attempting to form strong alliances which are capable of challenging the emerging transnational capitalist class domination (Chase-Dunn, 2003). Chase-Dunn argues that new democratic socialist states in the semi-periphery will be critical sources of support and allies for the anti-systemic movements. Globalisation supporters claim that it increases economic prosperity as well as opportunity, especially among developing nations, leading to a greater efficient allocation of resources and enhancement of civil liberties. Economic theories of comparative advantage suggest that free trade leads to a more efficient allocation of resources, with all countries involved in the trade benefiting. In general, this leads to lower prices, more employment, higher output and a higher standard of living for those in developing countries (Sachs, Jeffery, 2005). Proponents of laissez-faire capitalism say that higher degrees of political and economic freedom in the form of democracy and capitalism in the developed world are ends in themselves and also produce higher levels of material wealth. They see globalisation as the beneficial spread of liberty and capitalism (Wolf, Martin, 2004). Vices of Globalisation Critics of globalisation argue that poorer countries are sometime at disadvantage since the main export of poorer countries is generally agricultural goods and it become difficult for these countries to compete with financially stronger countries that subsidize their own farmers (Hurst, Charles, 1993). It has also been argued that globalisation has led to deterioration of protection for the weaker nations by stronger industrialized powers, resulting in exploitation of the people in those nations to become cheap labours6. With the world in its current state, it is impossible for the exploited workers to escape poverty (Chossudovsky, Michel, 2003). In their article, Mcmohan and Tschetter7, point out that as an effect of globalisation, there is an ever widening economic gap between the skilled and the unskilled workers. The low cost of offshore workers have led to corporations to move production to foreign locations resulting in lying off of unskilled workers. The loss of jobs has also greatly contributed to the slow but steady decline of the middle class which is a major factor in the ever increasing economic inequality. Globalisation is being emphasized as a process that is mediated according to corporate interests, and typically raising the possibility of alternative global institutions and policies, which are believed to the answers to the moral claims of poor and the working classes throughout the globe, as well as environmental concerns in a more equitable way8. According to Naomi Klein, it is a myth that global free market has triumphed democratically9. The concept of free market or globalisation, it has been argued is a mere façade to conceal the money trail and puppet strings behind the world changing crisis and wars, being used constantly by super power nations to engulf developing nations into capitalistic subjugation (Holloway, 1994). Future of Capitalism – Globalisation in the modern era The issue of whether the nation state has a future as a central theme of governance in an increasingly ‘globalised’ social and economic system, has now replaced the age old debate of pros and cons of capitalism and globalisation. To understand the future, it has become imperative to consider the development of the sovereign state and understand that the international agreements between states were important in institutionalizing the power of the state over society10. It is important to consider the changing capacities of the state in the modern world, challenging the extreme version of globalisation since the international economy is far from ungovernable and national level economic processes are central. Major nation states will be playing a pivotal role in creating and sustaining such governance. However, their role will be less than as autonomous national macro economic managers, than as agencies that are representative of their populations and sources of legitimacy for new forms of governance. The central function of the nation state will be that of distributing and rendering accountable powers of governance, upwards towards international agencies and trade blocs and downwards towards regional and other sub-national agencies of economic co-operation and regulation (Hirst & Thompson, 1996). Conclusion Capitalism has always been an unstable and violent system weighted down by contradictions. Most of these contradictions connected to the capitalist system are coming to the surface in the new era of globalisation, especially with over accumulations and worldwide social polarization. In the past, these contradictions have led to episodic crises resulting each time in reorganization of the system. But many of capitalism’s repeated crises have also been mediated by the nation state however, current day capitalism, in the clout of globalisation is less able to address these manifold issues. It will not be surprising to see a new transnational elite consolidate its economic and political hegemony. A major economic crisis or collapse could however stymie this process or push it into an unforeseen direction. Transnational capital currently enjoying unprecedented power over popular classes worldwide is a temporary phenomenon of historic conjuncture rather than a fixed feature of the system. The constant and more recent developments in the world economic order highlights the constant attempts of the transnational capitalist class to achieve some regulatory order to stabilize the system and this is being done in the name of globalisation with assistance from the boom in telecommunication technology. It is still unclear how the era of contradictions of the capitalist system will be played out, but certainly new opportunities for emancipatory projects are on the horizon in the form of globalisation and this can be credited to the telecommunication boom. To talk to globalisation as the zenith of capitalism’s extensive enlargement and its accelerated invasion of pre-capitalist spheres is to hypothesize that there are a series of world historic dynamics and of contradictions that are being modified or supplanted by these new circumstances. The defeat of such a system is impossible by the challenges outside its logic as those of the former Soviet bloc countries or the Third World liberations movements. Instead, it seems possible that the defeat may arise from within the system itself. The constant contradictions between the capitalist and pre-capitalist classes are becoming increasingly irrelevant. Resistance to capitalist colonization in the name of globalisation from without is giving way to resistance to capitalism from within. The universal penetration of capitalism through globalisation with assistance from telecommunication breakthroughs is drawing every individual across the world not only into the webs of market relations but also into the webs of resistance. This means developing the mechanism – alliances, networks, direct actions and organizations with the assistance of the technological developments in the telecommunication sphere, making the world a truly global village. Reference List 1. Smith, Adam (1776) The wealth of nations. London Methuen. 2. Williams (1991) Cited in Urey, Gwen. Telecommunication and Global Capitalism. 3. World Bank (1990). 4. Chase-Dunn (2003). Globalization from below: Toward a Collectively Rational and Democratic Global Commonwealth. Gernot Kohler and Emilio Jose Chaves (eds), Globalization: Critical Perspectives, New York, Nova Science Publishers. 5. Sachs, Jeffery (2005). 6. Wolf, Martin (2004). 7. Hurst, Charles (1993). 8. Chossudovsky, Michel (2003). The Globalization of Poverty and the New World Order. 9. Holloway (1994). Global Capital and the Nation State, Capital and Class. 10. Klein (2007). The Shock Doctrine the Rise of Disaster Capitalism, Victoria, Allen Lane. 11. Hirst & Thompson (1996). Globalisation, Governance and the Nation State. Globalisation in Question. Cambridge, Polity Press. Bibliography 1. Smith, Adam (1776), An Enquiry into the Nature and Causes of the Wealth of Nations. London. Methuen. 2. Murray G (2006). Capitalist Networks and Social Power in Australia and New Zealand, series: Corporate Social Responsibility, Aldershot, Ashgate. 3. Dunning, John (2003), Making Globalisation Good – The Moral Challenges of Global Capitalism. Published to Oxford Scholarship Online: Print ISBN-13: 978-0-19-925701-0. 4. Stiglitz, Joseph E. (2002). Globalisation and its Discontents. New York. W.W. Norton. 5. Chase-Dunn (2003). Globalization from below: Toward a Collectively Rational and Democratic Global Commonwealth. Gernot Kohler and Emilio Jose Chaves (eds), Globalization: Critical Perspectives, New York, Nova Science Publishers. 6. Chossudovsky, Michel (2003). The Globalization of Poverty and the New World Order. Edition 2nd ed. Imprint Shanty Bay, Ont.: Global Outlook. 7. Mcmohan, Patrick J & Tschetter, John H (1986). The Declining Middle Class: A Further Analysis. Monthly Labour Review, Vol. 109. 8. Wade, Robert Hunter (December 2001). The Rising Inequality of World Income Distribution, Finance & Development Journal, Vol. 38, No 4. 9. Klein (2007) The Shock Doctrine the Rise of Disaster Capitalism, Victoria, Allen Lane 10. Hirst & Thompson (1996). Globalisation, Governance and the Nation State. Globalisation in Question. Cambridge, Polity Press. Read More