Globalisation

Concept of globalisation

Globalisation means the growing flows across the world. The flows are of four kinds:

• Ideas: news, knowledge, films and values moving from one part of the world to another.
• Capital: money invested or lent across countries.
• Commodities: goods traded across borders.
• People: people moving in search of work, education or a better life.

The key feature is worldwide interconnectedness: these flows are lasting, and events in one place affect people far away. Globalisation is multi-dimensional: it has political, economic and cultural sides, and its effects differ from place to place. It is not only about the economy.

Causes of globalisation

• Technology is the most important cause: the telegraph, telephone and microchip, and now the internet, have made communication and travel fast and cheap. Printing earlier had spread ideas widely.
• Awareness of interconnectedness: people know that events elsewhere (a bird-flu outbreak, a financial crisis) affect them.
• End of the Cold War and the spread of market-based policies.
• International organisations like the IMF and WTO promoted open trade.

Globalisation is not new: trade and migration are ancient. What is new is its speed and scale.

Political consequences

• Erosion of state capacity: the welfare state gives way to a 'minimalist' state that does core jobs like law and order; the market decides economic priorities; multinational companies gain influence.
• The state remains strong: it still controls law, order, security and borders, and chooses which rules to accept.
• The state may become stronger: new technology helps it collect information and govern better, or watch its citizens more.

Economic consequences

• More trade, more foreign investment and fewer restrictions on imports; economic globalisation is guided by the IMF, the WTO and big countries.
• Capital moves more freely than people: rich countries still limit visas, so workers cannot move as easily as money.
• Critics say it widens gaps between rich and poor and between countries; it reduces the safety net for the poor, so a 'social safety net' is needed; some call it re-colonisation.
• Supporters say it brings growth, jobs and well-being; it creates interdependence that can reduce wars.

Cultural consequences

• Fear of sameness: a dominant (often Western, American) culture may replace local cultures. This is called McDonaldisation of the world.
• Cultural heterogenisation: outside influences can also enlarge choices and mix with local culture, like blue jeans worn with a handloom kurta, creating new combinations.
• Every culture has always taken from others; the question is whether the mixing is equal.

India and globalisation

• Flows are old in India: the Silk Route and sea trade linked it to Asia, Africa and Europe; ideas and religions spread both ways.
• During colonial rule, India became a supplier of raw material and a market for British goods.
• After independence India chose protectionism: build its own industry, limit imports and foreign firms.
• In 1991, facing a financial crisis, India began economic reforms (liberalisation, privatisation, globalisation): lower tariffs, open doors to foreign investment, and a bigger role for the private sector.
• Results: faster growth, growth of IT and services, and more consumer choice; but worries about farmers, small industries, jobs and inequality.

Resistance to globalisation

• Left critics: globalisation is a phase of global capitalism that makes the rich richer and weakens the state's ability to protect the poor.
• Right critics: fear the political weakening of the state and the loss of traditional culture and values.
• Almost no one wants a totally closed world; many ask for fair globalisation that protects the weak.
• Global protests: the Battle of Seattle during the WTO meeting in 1999.
• The World Social Forum (WSF) is an open meeting of human rights activists, environmentalists, labour and youth groups against neo-liberal globalisation. The first was in Porto Alegre, Brazil, in 2001; the fourth was in Mumbai in 2004. Its slogan: 'Another world is possible'.
• Resistance in India: trade unions and farmers' groups (for example against patents on neem and other plants by foreign firms); Left parties; and some cultural groups opposing foreign TV channels or celebrations like Valentine's Day.

Try it yourself

Check five things in your home: a phone, a toy, a food packet, a film you watched, a song you like. For each, write which of the four flows (goods, money, ideas, people) brought it to you. Then switch the flows off one by one in the 3D and list what you would lose.

Key formulas and definitions

• Globalisation = worldwide flows of ideas, capital, commodities and people
• Main cause: technology (telegraph, telephone, microchip, internet)
• Effects: political, economic, cultural
• McDonaldisation = cultural sameness; heterogenisation = cultural mixing
• India: protectionism after 1947; reforms in 1991
• Resistance: Seattle 1999; World Social Forum 2001, Mumbai 2004

Worked examples

Common mistakes

• Saying globalisation is only economic. It also has political and cultural sides.
• Saying globalisation began in 1991. It is old; India's economic reforms began in 1991.
• Claiming globalisation always makes cultures the same. Cultures also mix and create new forms.
• Saying all critics want no globalisation at all. Many ask for fair globalisation.