Home Exam Globalization Refers to the Ease

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Globalization refers to the ease and ability of businesses to acquire sources of raw material, manufacturing facilities, services and markets for their goods and services anywhere in the world. This ease has been brought about by the developments in transportation and communication technologies that have made instantaneous sharing of information and material over large geographical distances possible. Along with these developments, political changes have made markets less defined by national borders and natural boundaries. At the global level, countries have decided to bring down barriers to free movement of labor, goods and capital in the form of reduced taxes, tariffs, quotas and other protectionist measures. Along with this, to encourage unrestricted international trade, countries have to encourage imports that may be cheaper than locally manufactured goods.

Globalization policies are the result of the neo-liberal order that was espoused by Reagan and his supporters. In the United States, the Republicans have supported the neo-liberal policies in opposition to the somewhat social welfare policies of the Democrats. The neo-liberal order strives to create an economic order where the state has almost zero involvement in the economy. It seeks to bring an end to government support programs for the poor, no state level employment or education and health facilities, and no incentives or protection against competition for domestic businesses. In doing so, the neo-liberal order aims to create an environment where individuals and businesses compete for survival solely on the basis of their resources and adaptability. Naturally, this favors large businesses with vast amounts of capital and resources while smaller businesses with less developed technology and means of production are unable to compete on an equal footing.

Under the neo-liberal order, the state is required only to act as the law enforcer so that business contracts and rights can be enforced. In addition, the state has no role to play in social welfare or social justice. The neo-liberal order delegates that role to the individual or community level to make individuals and communities responsible for their own social welfare. The concept of the welfare state emerged to perform social security and social work functions as the business community played a more assertive role in the state after the Second World War. However, in the neo-liberal order the state has to forgo this responsibility as the private sector is expected to perform this function more efficiently. This is disadvantageous as the vulnerable sections of society cannot be expected to assume responsibility for its own social welfare when it has no effective control over the resources necessary for the administering of social welfare programs. As basic services like education and health become commoditized under the neo-liberal order, the deprived sections of society are going to become even more unable to look after their own welfare and to learn new skills to survive in the absence of government employment.

Citizenship entails the entitlement to certain rights and services against the state. In other words, in return for loyalty from its citizens, the state has to provide some services to the citizens. This has been incorporated into the model of the state in the twentieth century and in the social contract between the citizen and the state. Under this social contract, the state is responsible to provide such services to the citizen without which the citizen cannot be protected against scarcity (UNHCHR, 2012). In the modern state, these rights took the form of the right to education, health, political and social freedoms and so on. The state ensured that all citizens would be provided these services as their right against the state. The universality of these services and rights also meant that the citizens viewed themselves as a single community and experienced greater solidarity and collective identity. However, with the neo-liberal order shaping economic and political policies, the role of the state has been redefined as an enabler for market forces. As a result, the rights and entitlements of the citizenship have been nearly abolished. Services like food and fuel subsidies, subsidized education and health services have been privatized with the relationship between the citizen and the state transforming into a commercial one. With each individual responsible for themselves, the collective identity is now replaced by a sense of competition over scarce resources. The concept of intergenerational rights of citizens has also been destroyed because of which efforts at conservation of resources have also suffered.

Prior to the neo-liberal order, the state also assumed responsibility to protect the interests of racial and ethnic minorities against racial discrimination and exploitation in employment, education, health and other aspects of civic life. Such protection is necessary to provide the minority communities opportunities to make social progress. However, the neo-liberal order does not sanction any such protection of minorities. Under the neo-liberal order, the state has no responsibility other than that to enforce the law. Apart from that, each individual is individually responsible for his or her own welfare and social progress. Such a move puts the minorities in a particularly disadvantageous position because they are typically marginalized and do not possess a high level of skills or education to compete with the majority. Their chances for social progress are severely constrained as they lack the economic and social resources to survive in the competitive neo-liberal environment. The result is that such individuals are exploited by businesses for whom they work at low wages and with little employment benefits.

Category 2: Question 1

Global institutions like the WTO, IMF and World Bank are dominated by the developed nations and led by the only superpower on the globe, the United States. These institutions were also created after the Second World War, when the United States through its defeat of Japan had become a major world power. The creation of these institutions was also the result of the United States' efforts towards creating a global organization for regulating the economic stability of the world and to prevent another global conflict. It is natural for these institutions to be motivated by the liberal economic agenda of the neo-liberal class. These institutions have sought to help developing countries of the South by requiring them in return to liberalize their economies. At times, these measures have proven to be helpful. At others, the economies have suffered although inflow of foreign direct investment has increased.

North-South relations have a long history of economic relations, particularly during the colonization period when large swathes of Africa and South America were colonized by European powers. The colonizers were interested in the gold, silver and other mineral wealth of these regions and so the relationship was exploitative. After the end of the colonization period when the countries of Africa and Latin America gained independence, economic relations between the North and the South became comparatively fair. However, the trade relations were then based on the sympathy of the South countries for America-led capitalism or Soviet-led socialism. During the 1960s, such loyalties and dependencies prevented regional integration from taking place, while the economic development of national economies relied exclusively on export of raw materials to the North and import of manufactured goods from them. In subsequent years, the countries of the South decided to pursue a policy of import substitution where they sought to change the unfavorable balance of trade in their favor.

One reason for the balance of trade continuing to flow in favor of the North was that the rivalry between capitalism and socialism caused the leading superpowers to tolerate autocrats and dictators in many of the countries of the South in return for loyalty. In return, the North continued significant levels of financial flows to the countries. Thee inflows, however, were spent less on economic development and human rights and more on increasing the personal store of wealth of the dictators. As a result, during the 1970s, the North may be said to have contributed to the poor economic and human rights development in the countries of the South.

During the 1980s, the world economy had been liberalized and as a result, credit was freely available to all countries. The countries of the South sought this credit to develop their economies after the oil crisis of the 1970s. However, the high levels of credit eventually led to economic crises in many of the countries. This was the point where the Bretton Woods Conference set in to pursue their liberal agenda in restructuring the traditionally socialist economies where resources were protected by the state. The organizations like the World Bank and the IMF prescribed economic policies and remedies for these countries that would suit the ideals of free trade and globalization being pursued by the WTO at the same time. They presented a picture that a liberalization of the economy and reduced public expenditure would attract heavy foreign direct investment from the wealthy North. This investment would result in economic development through an increase in jobs, resource utilization and infrastructure development. As laws would be formed to attract foreign investment and integrate the economy into the global economy, the human rights standards and living conditions for the citizens would also improve. Other measures proposed by these institutions included devaluation of the local currency, which would increase exports of raw material to the North.

One particular example of such troubled relations is the case of Argentina towards the end of the twentieth century. As a result of heavy debt and its currency being pegged to the American dollar, the Argentine economy crashed in the later 1990s as its exports became much more expensive compared to those of its neighbors. The IMF stepped in to suggest economic reforms and liberalization of the economic system. In 2002, the country was able to regain the confidence of foreign investors by negotiating arrangements for paying off its huge amounts of debt. The role of the IMF during this period was criticized by the president of Argentina who accused the institution of acting like a creditor instead of a partner in economic development. During the 1990s, the interest of the North in the countries of the South remained focused on the extraction of raw materials for their manufacturing facilities in the North. An example is the oil-producing Gulf economies. Enriched with the infusion of petrodollars, the autocrats invested in infrastructure but little in the improvement of human rights standards. In most of these countries, political activity is forbidden or monitored very closely. Although democracy is stated to be the regime of choice for globalization (UNDP 25-56), the powers of the North are content to do business with undemocratic powers if the economic policies suit their interests.

After the global economic crisis, China has appeared as an important player of the North. To fuel its economic growth and to maintain steady levels, it needs to secure vast amounts of energy resources. Like its predecessors, the country is investing in the African countries for their energy resources and mineral wealth. Chinese investment in countries such as Nigeria, Algeria and South Africa has grown in recent years. In addition to resource markets, these countries are also potential consumer markets for Chinese companies. However, the nature of the relationship between the North and the South has always remained in favor of the North with little economic development beyond the extraction stage for the South economies.

Category 3: Question 1

Globalization and neo-liberal ideologies have been against human rights and democracy because they assume that economic interests should lead the policies of the state. In the current era, there is no significant threat or challenge posed to the ideal of laissez-faire economics. After the end of the Cold War and the demise of socialism, the liberal policies have re-emerged in the form of neo-liberalism. The march toward globalization that began in the late nineteenth century faced some obstacles in the earlier part of the twentieth century. Following the two world wars, the United States then led the wave of globalization and in the latter part of the twentieth century began promoting its neo-liberal policies emphasizing deregulation, privatization, the rule of the market and reduced public expenditure. According to many experts, this has led to a reduction in human rights for the majority by widening the economic disparity between the classes. According to Gindin (2002), "social justice is made compatible with globalization, not by transforming society, but by shrinking our ideals."

It is also important to discuss what human rights mean. The concept of human rights is marked by controversy. Ishay (359-371) explains how human rights date back to even before the West attempted to prescribe a list of universal human rights. The religious origins of human rights mean that the interpretation and value for human rights differ from society to society and it is difficult to argue a completely secular set of human rights. Dembour (2010) also highlights the differences in opinion on how rights are created and agreed upon in her discussion on the natural, deliberative, protest and discourse schools of thought. Globalization assumes that a Euro-centric universal set of economic and human rights exist, which is inaccurate.

Globalization and neo-liberal policies encourage the abolition of protectionist policies that governments enact to protect local businesses and industries against foreign competition. In its desire to create a level playing field, globalization ignores that all the players are not equally capable of competing. It is the responsibility of national governments to protect the weakest of the weak. On the other hand, the invisible hand of the neo-liberal economic structure forces every individual to look out for himself or face losing out in the race for the survival of the fittest. As a result, the gap between the rich and the poor continues to widen as public support and welfare programs are also reduced to curb state interference in the economy. Gindin (2002) comments on the so-called "golden age" of capitalism after the Second World War in the following words: