Globalization as a process has occurred
in waves throughout human society, beginning as far back as the “Out of Africa”
migration many millennia ago. While
political and social integration on a national scale have occurred in varying
intensities over human history, economic globalization has only recently begun
to impact the world in a day to day manner.
While many social scientists, namely Jürgen Osterhammel and Niels
Petersson, believe that the height of economic integration came in the period
leading up to the first World War (1880-1910), I will focus on the current wave
of economic globalization which came in the wake of the second World War.
The process of economic globalization
has powerful political ramifications the world over. As vividly highlighted in the current presidential
campaign as similar elections in foreign states, the national economy,
especially with regards to the current stagnation worldwide, is one of the most
contentious issues in politics in any country.
Juxtapositioning this increased domestic importance of the economy is
the decreasing control that individual nations possess over their economy. As it becomes harder and harder to run of
political office in any democratic nation without the economy on one’s side, it
is simultaneously becoming harder and harder to have effective national control
over the domestic economy.
Just as manufacturing jobs once fled
New England for the cheaper labor of the post-Civil War South, Manuel Castells
explains that in the previous decades many manufacturing plants have left
industrial nations, such as the United States, for cheaper localities
abroad. This flight to inexpensive
labor, primarily in underdeveloped countries such as India, China, Bangladesh
and Indonesia, is one part of what Castells labels as a new international
division of labor. An example of this
can be seen in what has become a staple of life today: Apple products. An Apple iPhone contains electronic minerals
mined in the heart of Africa, shipped to China where they are crafted into microchips
and installed into iPhones and then shipped to Apple offices in America before
being distributed to the various retailers.
Because of this international
division of labor, it has become more difficult for a nation to wield control
over its economy. Since few goods are
completely domestic products, the transnational corporations which manufacture
and distribute them possess more effectual power over the economy than at any time
in the past. Quite simply, it is far
cheaper for companies such as Apple, Nike, or Ralph Lauren to have their plants
in foreign nations rather than in the United States. There is very little that politicians from
either pole on the ideological spectrum can do to change this trend, regardless
of their promises to “bring back jobs from overseas.”
This is not to say that the concept
of a “national economy” is obsolete one, but simply that nations have less
economic power than they have in the past.
Governments still dictate trade policy, domestic monetary policy, tax
rates, and the allocation of government investments. The fact of the matter is, however, that
national governments have largely taken a back seat to the international
organizations which have jurisdiction over economic matters. The World Trade Organization, the World Bank,
and the International Monetary Fund all control aspects of the global
economy.
With the ease of international
trade, brought upon by transportation innovations such as the jet aircraft and
high capacity freight ships as well as the invention of high speed communication
systems, namely the internet and satellite communications, the global economy
has planted deep roots in almost every individual nation, regional trading
bloc, such as NAFTA or ASEAN, and the previously mentioned international
organizations. It is this deep-seeded interconnectivity between national economies, trading blocs and international
organizations which undermines the ability of the constituent nations to wield
supreme authority over their own economy.
The web of connections between
economies has had a destabilizing effect which the state has not yet found a
way to counter. The sputtering of a
single nation’s economy threatens to spill over and drag nearly the entire
world down with it. The clearest example
of this is Greece, in the throes of the Euro Crisis. While I do not pretend to have even the
slightest sense of omniscience regarding this issue, my understanding is as
follows: Greece, wracked with a debt
nearly twice its GDP, has been forced to commit to massive austerity measures
to cut governmental spending in order to secure a bailout from the European
Central Bank. Should Greece obtain this
bailout-loan and fail to pay it back, Greece will once again default on its
loans, causing it to be expelled from the European Union, which in turn will cause
a cascade of panic across the financial markets which will cause the floor to
drop out from under the global economy and plunge the world into a full-fledged
depression. Should this situation come
to fruition, it will affect every nation, regardless of their involvement in
the instigating problem. The economy of
Argentina will suffer just as much as that of the member-states of the European
Union.
In economic terms, the nation-state
is still alive and well, although with almost every passing day it finds itself
weaker and weaker when compared to trans- and international processes and
organizations. Political leaders of
states must now rely more on their ability to influence the international
community to accept their desired economic policies than their ability to
mobilize domestic support for said policies.
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