Globalizing Citizenship and the Financial Market - Essay Example

Globalizing Citizenship and the Financial Market: Conflict/Consensus and Macro/Micro Analysis Globalization has erased the importance of citizenship, but reinforced the value of financial markets. It removes geographical, social, economic, political, and cultural barriers, creating a modern form of world order. Because of globalization, citizenship became fluid; it also becomes increasingly impermanent. Globalization completely transformed the essence of citizenship. Most importantly, globalized citizenship reveals the inherent conflict within society, as well as the consensus required to maintain national stability. Dubai is a perfect case in point. The article of Syed Ali entitled Permanent Impermanence explained how the immigration policy of Dubai led to the dramatic increase in its expatriate population, even to the point of surpassing the size of its native population. Skilled workers and professionals from developing countries migrated to Dubai to work, and some of them want to gain citizenship. However, the government of Dubai does not grant citizenship to migrants. As explained by Ali, “The most commonly stated reasons given by government officials for denying citizenship or permanent residence are the threats of cultural extinction and demographic imbalance posed by the possibility of absorbing so many expatriates into the pool of citizens” (Ali 481). This assumption inevitably leads to both conflict and consensus. Dubai’s immigration policy, particularly how it regulates the expatriates’ political, economic, and social life, highlight the conflict that Karl Marx talks about—a division between the low- middle- and high-income class. Those who belong to the lower rungs of the socioeconomic ladder in Dubai have to give up certain rights, such as freedom of speech, in order to continue working in the country. These low-income workers have no choice but to accept these unjust conditions. Nonnative low-income workers are exposed to poor working conditions: “Many men (especially construction workers) are housed in remote, overcrowded, filthy labor camps, and most of the rest of the working class shares rooms in overcrowded, filthy, and dilapidated villas or apartment buildings” (Ali 480). These dire working conditions were viewed by Marx as the outcome of capitalism. Fittingly, Dubai is “a capitalist, consumerist paradise” (Ali 479). In contrast, middle- and high-income workers experience many benefits that are not granted to the working class, such as “high salaries, fast professional advancement, and luxury living” (Ali 481). This is exactly how Karl Marx envisioned the class division in a capitalist society, the division between the proletariats and the bourgeoisie. On the other hand, Dubai’s immigration policy also demonstrates Durkheim’s functionalist perspective. As previously stated, the rigorous and strict immigration policy, also called ‘kafala’, sustains the country’s cultural, demographic, and political balance: “… the kafala system provides a simple and effective mechanism of social control. As expatriates are in Dubai primarily to work, the mere possibility of deportation is enough to stifle any kind of threat they may pose to the political-economic order” (Ali 481). The ‘kafala’ system basically categorizes the expatriate population as “disposable and temporary” (481). In other words, the ‘kafala’ is used as a way to discourage dissident behaviors and actions, such as strikes and protests. This form of social control becomes particularly necessary in a society where in the population is dominated by non-native immigrants. Following Durkheim’s theory, this somewhat unjust condition does not lead to conflict, but result in stability and consensus. Financial markets have been very ingenious recently. Newly developed products like the collateralized debts obligations (CDOs) shifted from zero contracts to contracts that were estimated to place a massive amount of money at risk (Carruthers 200). In contrast, legal restrictions on specific types of organization and operation, different levels of state administration of financial and economic issues, regulations on capital flows, and flat exchange rates all slowed down financial innovation so as to lessen the risk of financial instability and disorder. However, the failure of this system, as explained by Bruce Carruthers in his article A Sociology of Bubbles, and the ongoing formation of deregulated financial markets transformed this environment. Much of the article focuses on such macro structures. Nevertheless, this wider transformation still entailed operations and processes at the micro level as regards specific organizations, products, and markets if the objective was to be fulfilled. The room for financial innovation should remain and implemented in settings where there are competing players. The way markets operate in the actual world and its outcomes needs consideration of the specific attributes of those markets and not only the reinforcing function which ideological and institutional structures serve. Therefore, the financial collapse provides a valuable opportunity to explore the interaction between the micro-level of private individuals and markets and the macro-level of government control. It exposes the limitations of control; specifically, the extent to which the established structures in specific segments of the financial market can be demonstrated as the result of individual types of politics and power. As explained by Carruthers (200-201): Even at the global level, modern financial communities remain close-knit and geographically concentrated in small areas of New York City, London, and Tokyo…. (Indeed, the most formal and professional of these—the network of director “interlocks” where elites sit on each others’ boards and participate in shared governance—help explain why corporate policies and innovations typically spread so quickly and thoroughly.) High finance is, in short, a very small world. The financial collapse reveals plainly who loses and who gains from a specific structure and afterward discloses how private and public entities try to create a new system in a new setting. Macro thinkers emphasize the inequalities at the national level; strategies that influence wide-ranging economic circumstances where in all entities in the national structure function—mainly economic and fiscal strategies. On the other hand, micro indicates strategies particular to components of the system, such as banking and corporate governance. Just as the dividing line disappeared in the period of globalization, it is under emphasis within financial decision making: macro factors function through components; hence the micro basis of approaches toward macro strategy becomes a very important concern. Did the financial collapse occur due to weak macro strategy, such as excessive flow of capital into highly indebted countries, or did it worsen due to weak control of credit ratings, mortgages, and banking? Works Cited Ali, Syed. “Permanent Impermanence.” In Goodwin, Jeff & James Jasper, The Contexts Reader. New York: W.W. Norton, 2007. Print. Carruthers, Bruce. “A Sociology of Bubbles.” In Goodwin, Jeff & James Jasper, The Contexts Reader. New York: W.W. Norton, 2007. Print. Read More