The Myth of Globalization

Globalization usually refers to increased connectivity between individual, society, and state which principally encompasses three different characteristics or processes as internationalization, technological revolution, and liberalization. In international affairs reality is entirely different then rhetoric, globalization in the form of abolition of distances and flattening of borders have not actually transpired, factors like differences, distances, geography, and resources affect cross-border flows in numerous ways.

However, globalists firmly assert that ‘nation-states has become an unnatural, even dysfunctional, unit for organizing human activity and managing economic endeavor in a borderless world’. The world requires us to take realism and pursue our interests but without excluding the morality. Humanity and altruism for others are necessary to make the world justly global.

At the turn of 21st century, the narrative of ‘globalization’ has become an intense topic of analysis. The modern world is repeatedly denoted as a flat or borderless world. According to the so-called ‘globalists’ perspective, globalization has fundamentally transformed the nature of international political economy so much so that the traditional prominence and relevance of states in the international arena has vanished. Globalists firmly assert that ‘nation-states has become an unnatural, even dysfunctional, unit for organizing human activity and managing economic endeavor in a borderless world’ (Ohmae 19994, 24).

Nevertheless, has international arena really become borderless as claimed by globalists? In order to evaluate this, it is essential to comprehend what constitutes globalization. Globalization usually refers to increased connectivity between individual, society, and state. It principally encompasses three different characteristics or processes. The first characteristic is ‘internationalization’ as the name proposes it denotes the upsurge in economic activity in the form of trade, capital and investment across the border. The second feature ‘technological revolution’ symbolizes how modern communication has empowered firms and business to operate worldwide with considerable ease. ‘Liberalization’ is the third characteristic of globalization that encapsulates the decline in the role of states to disassembling of trade tariffs and barriers, deregulations and privatization of state institutions (Woods 2001, 290).

Putting it differently, globalization refers to the unification of economies, markets, industries, cultures, and policy-making internationally. It can be termed as a process that has led to the integration of national and regional economies, societies, and cultures through the international network of trade, communication, and transportation. Earlier, the focus of globalization was limited to the field of economics such as trade, foreign direct investment, and capital flows. However, now the term globalization has become more comprehensive that includes areas and activities such as culture, media, technology, socio-cultural, political and climate change.

Globalization has become a wide-ranging phrase that is used to designate much of contemporary eco-political and social developments. According to the economist Pankaj Ghemawat, the actualities of globalization are exceedingly hyperbolic as the world has not become ‘flat’ or ‘borderless’ in the actual sense of the term. Proponents of globalization refer to integration, the end of nation-state or end of history, distance or even flattening of the earth as indicators of globalization.

However, the opponents of globalization also tend to overstate its implications as if globalization is categorically ‘ripping through people’s lives’ and they denounce the ‘international rule’ of multi-national corporations. The exponents of globalization tend to take a utopic version of it whereas the anti-globalists tend to have a dystopic understanding of globalization and link it with environmental degradation, exploitation and destruction of democratic values and local cultures. However, both the perspectives go to extremes and tend to forget many ground realities.

The term globalization was first stated in U.S dictionary during 1951. The term gained momentum in the 1980s and augmented in 1990’s and 2000. As the role of governments in regulating the economies started reducing, it was anticipated that the world would get ‘flatten’ along with it domestic structures as well. Due to globalization, it was reflected that government’s role should be limited to regulating money and protecting private property. Remarkably, the proponents of globalization believe that the integrated and unregulated markets have already integrated the world. Despite the success of capitalism, the world is not as integrated as it is believed.

The international politics is still directed by power politics in which states are the primary actors and other transnational or supranational bodies likes UN, WTO, corporate business are of much less value (Ghemawat 2011, 10-11) States prioritize their sovereignty and national geopolitical and economic interests. They routinely indulge in localization and protectionism to protect their economies. Therefore, it is erroneous to conclude that borders have disappeared and there is unequivocally free and unprecedented flow of goods, services, and capital.

The third viewpoint, as opposed to the above mentioned two perspectives, is that the world is at best ‘semi-global’. Therefore instead of taking globalization/integration and regulation/protectionism as mutually exclusive, it is necessary to understand that both regulation and integration overlap and complement each other. To evaluate how much the world is globalized let’s gauge some data that measures globalization mostly in terms of cross borders flows and activities. The cross-border mails and phone calls amount to only 1 and less than 2 percent respectively. Internet traffic that is well integrated across national borders amounts to 17 or 18 percent of all the internet traffic routed across borders. A cross-border spread of content also illustrates similar percentages.

Internationally acclaimed newsweekly such as Time only has 20 percent of readership outside America. Moreover, 21 percent of the news coverage in America is international. In Europe, international news coverage is about 38 percent. And most other states get 5 percent international news coverage. Technological information in the form of patents filed in rich OECD countries, (that accounts for 95 percent of the patents globally) foreign held patents are up to 15 percent.

As for the cross-border movement of people goes, only 3 percent of first-generation migration has occurred up till now. Also, students studying abroad amount to only 2 percent of all university students. Besides, the cross-border movements of people has also limited as much as 90 percent of the people are unlikely to leave their country of origin. At its all-time peak, the international trade was 29 percent in 2008 and then dropped to 23 percent in the subsequent year. Foreign direct investment also remains 10 percent on average. In other words, 90 percent of all fixed investment remains domestic. Only 15 to 20 percent of the capital is installed outside the investor’s home country. Almost 20 percent of the stock market is owned by foreign investors. Transnational proprietorship of bank deposits is approximately 25 percent and government debt remains up to 35 percent (Ghemawat 2011, 25-29)

Similarly, the narrative of homogenization of world culture is quite exaggerated that tend to fear US’s cultural hegemony. It is often ignored that even the hallmark of US supremacy, McDonald’s observes both international and national/local ‘standardization’. It gives its typical food or menu compatible to local tastes and traditions, for instance, the Kiwiburger with beets in New Zealand, vegetarian McAloo Tikki Burger in India, the pork Bulgogi Burger in South Korea, kosher McShawarma in Israel, and pita-wrapped McArabia in Saudi Arabia. (Ghemawat 2011, 228-232).

DISCLAIMER: The views and opinions expressed in this article are those of the author and do not necessarily reflect the official policy and position of Regional Rapport.