Globalization in historical and contemporary perspective

Transcription

1 Globalization in historical and contemporary perspective

2 Global capitalism has long moved goods around the world

3 It s not a new phenomenon

4 But there has been a change in the international/global divisions of labor Comparative advantage Division of labor Skilled vs. unskilled labor Raw materials vs. technology Flows of capital & goods Minimize costs, maximize returns on investment Old int l div. of labor was production based Find optimal combination of factors of production and country site for maximizing return on investment New int l div of labor is consumption based Find optimal combination of design skills, assembly sites, tax and social costs, capital investment, shipping and consumption for maximizing return on investment

5 The New Int l Division of Labor is a concomitant of globalization Compression of space and time makes it easier to move long distances and to learn about far away events Increase and acceleration of flows leads to Growing & more rapid movement of people, goods, bads, capital, pollution across borders & through societies Changes in social orders and their regulation replaces management of political economy by separate states with a form of statecorporate hybrid system of governance Destruction of old practices and customs through Churn eliminates some forms of production and ways of life and forces adaptation to new ones

6 But it has become more complex: Consider an example of an electronic widget Miltronics designs the widget at its SI Valley campus & s the specs to its Bangalore lab, where a prototype is built and tested Spy Lizard: DARPA puts out an RFP, which is won by Miltronics Bangalore then subcontracts the components to factories in Malaysia, Taiwan, and Hong Kong The Spy Lizards are then flown to Miltronics in the U.S. for final testing & delivery to DOD Components are shipped to a Miltronics facility in China for assembly

7 Questions to consider What are DARPA s cost and function considerations in ordering the Spy Lizard? What is the comparative advantage of each group at each step of production? Who or what generates added value, revenues and profits at each step of product? How are costs, revenues and profits accounted for at each step and in crossing borders? Who calculates the most efficient way of producing the Spy Lizard, given various & variable costs? Who gets the credit when goods are produced & traded within firms yet cross national borders?

8 Origins of the new international division of labor Bretton Woods regimes and U.S. military assistance to allies Cold War containment was both an economic and military project U.S. economy became both an engine of global growth and controller of reserve currency *Regulation as used here comes from French regulation theory It includes rules, laws, customs, but has to do with managing society Systemic regulation * became necessary to stabilize the American political economy It is something like the regulator on a turbine or a boiler keeps it going at a specific speed.

9 Globalization then becomes a consequence of several phenomena End of the Gold Exchange standard Declining profits Inflation Information Revolution High interest rates U.S. Rust Belt Global sourcing Cheap imports

10 Globalization involves Compression of space and time Broadening & deepening of capitalism Hyperindividualism, consumption, the body Self-regulation & self-discipline Disruption of social hierarchies

11

12 Globalization is facilitated by and linked to Industrial Revolutions Under capitalism, those with funds can privately invest in and control the means of production (technology) Goods are manufactured by labor in certain ways and locations under the eye of capital, leading to specific social relations of production Households, families, social relations are organized so as to offer labor for sale and facilitate the survival of the household But capital is always seeking ways to make and sell new goods, organize production more efficiently, lower costs of materials and labor, increase profit margins

13 There have been three industrial revolutions since 1700s ~1800: Development of water and steam power led to rise of industrial cities and semi-skilled working class ~1900: Development of electrical power led to rise of mass production, mass consumption, Fordism, and skilled labor class ~2000: Development of bio-info-nano technologies is leading to rise of knowledge-based commodification, production, consumption and educated working class

14 Contemporary globalization has been facilitated by a shift in industrial organization, from Fordism, based on metal-smashing, to post-fordism, based on information commodification (more on this next week).

15 Neo-liberal globalization is one form of globalization among many: it is the discursive frame through which globalization is made material Neoliberalism is a philosophy in which the existence and operation of a market are valued in themselves, separately from any previous relationship with the production of goods and services, and without any attempt to justify them in terms of their effect on the production of goods and services; and where the operation of a market or market-like structure is seen as an ethic in itself, capable of acting as a guide for all human action, and substituting for all previously existing ethical beliefs. Paul Treanor at:

16 "The bourgeoisie, by the rapid improvement of all instruments of production, by the immensely facilitated means of communication, draws all, even the most backward, nations into civilization. It compels all nations, on the pain of extinction, to adopt the bourgeois mode of production; it compels them to introduce what it calls civilization into their midst, i.e., to become bourgeois themselves. In one word, it creates a world in its own image." "The bourgeoisie cannot exist without constantly revolutionizing the instruments of production, and thereby the relations of production, and with them the whole relations of society. Conservation of the old modes of production in unaltered form was, on the contrary, the first condition of existence for all earlier industrial classes. Constant revolutionizing of production, uninterrupted disturbances of all social conditions, everlasting uncertainty and agitation distinguish the bourgeois era from all earlier ones. All fixed, fast-frozen relations... are swept away, all new-formed ones become antiquated before they can ossify. All that is solid melts into air, all that is holy is profaned..." --Karl Marx & Friedrich Engels, The Communist Manifesto--

17 This brings us back to the issue of world order: globalization upsets social systems and can trigger disorder & violence

18 It also raises some serious questions about the consequences of the current economic crisis