The term globalization describes the contradictory economic, political, and cultural processes of world capitalist integration. Although capitalism has been of a global character since the 1400s, the current phase of globalization is manifest by emergent transnational institutions, changing relations between multinational corporations and sovereign nation-states, and the development of a global monoculture of consumption. In order to articulate the contradictory processes of globalization, we propose a critical framework that explains globalization as a dialectical relationship between and within the suprastatal, statal, and intrastatal sectors of the global system. We argue that dominant global processes are not an immutable feature of capitalism, but are contested by social actors across these three dimensions.
The term globalization is increasingly used to describe the ongoing integration of the world within a capitalist political economy. Advocates of globalization point to the emergence of the “middle-class” in developing countries, economic growth within peripheral economies, the continued expansion of global stock markets, democratization and the emergence of a “global culture” as indicators of the benefits of this process. Critics of globalization point to the rising gaps of inequality between nations and within all nations of the global economy, increased environmental degradation, especially in the developing world, the loss of sovereignty, cultural imperialism and the rise in extreme nationalism as indicators of the downside of this process. This paper will systematically outline a framework for understanding some of the seemingly contradictory processes in our globalizing world.
Globalization is a not a new phenomenon. Capitalism has been of a global character since the time Europeans began setting up colonies in the 1400s. Colonial economies were organized to suit the needs of the core countries of the capitalist world system (Best, 1975; Chase-Dunn, 1989; Frank, 1978; Wallerstein, 1974). Although the principles of globalization have been around for the “long durée,” there are nonetheless several elements of globalization that are widely accepted as representing the current phase of global capitalist development. The increasing interconnectedness of markets, finances, goods and services, and the growing stature of transnational corporate networks heavily influence the economic, political, and cultural processes of globalization today (Chase-Dunn, 1999). Cvetkovich, et. al. (1997) notes that this influence involves creating a new world market, new transnational political organizations and a new global culture. This process of globalization is not linear, but rather involves a dialectical relationship between its economic, political, and cultural dimensions that often appears contradictory and chaotic.
Economics The economics of globalization represents the contemporary process of capitalist accumulation. This process is manifest through global commodity chains and a global division of labor, the global mobility of capital, the increasing concentration of industries into a small number of transnational corporations, the development of global regulatory institutions, and a shift in world trade from goods and services to financial instruments. At the center of this process are international elites who have been able to bring the world economy under the domain of multinational corporations without losing the national economic priorities of the leading core states (Arrighi, 1994). Although the relationship between governments in the core states and elements of the international elite (the majority of the latter are citizens of core states) has been mainly harmonious, at times it is prone to tension and overt disagreement.
Economic globalization can be demonstrated empirically by looking at the increasing percentage of world trade as a percentage of world production (Chase-Dunn,1999 ). The Human Development Report (HDR) notes this increase in international trade: “world exports, now $7 trillion, average 21 percent of GDP in the 1990s compared to 17 percent of a much smaller GDP in the 1970s” (UNDP, 2000:25). This growth in international trade is necessarily accompanied by increasing transnational linkages in production, which is further facilitated by technological improvements undertaken by transnational corporations in core capitalist states. Economic globalization has accelerated because of the post 1960s “electronics revolution,” which “transformed the quantitative possibilities of transferring cash and money capital into qualitatively new forms of corporate and personal financing, entrepreneurship, and, crucially, the system of credit on which the global culture and ideology of consumerism largely rests” (Sklair, 1999: 150). In 1980 average daily foreign exchange trading totaled $80 billion, “today it is estimated that more than $1,500 billion changes hands daily on the global currency markets” (Ellwood, 2002:72).
Politics The politics of globalization is represented by the emergence of global governance and the increasing contradictions between and within nation states. The central political tension of globalization rests between increasingly powerful transnational institutions (like the World Trade Organization, United Nations, World Bank, International Monetary Fund, as well as multinational corporations) and sovereign nation-states over the regulatory landscape of global capitalism. Globalization involves a shift in organization from a nation-state level to intra-regional and transcontinental levels of political organization. This means that the relationships between nation-states are increasingly mediated through institutions of global governance. Areas of national sovereignty are being redefined, in part because global financial markets require global governance to insure reliability and security. Even so, the control over global finance remains firmly embedded within the core financial capitals of Tokyo, London, New York, Frankfurt, and Paris (Mittelman, 1996). Core countries have a disproportionate amount of control over the institutions of global governance and thus are expanding their control over the global capitalist process despite the threats to their own sovereignty. Consequently, this tension affects political processes within nation-states as groups jockey to favorably influence state action within the context of global governance. This process is evident in bioagriculture, for example, where European and African nation-states are attempting to keep out genetically engineered grains produced by American agro-multinationals on the one hand, while the agro-multinationals based in the US are influencing their government’s action to take their case to the WTO on the other.
Culture The culture of globalization is about the increasingly interconnected social world, which both weakens the uniqueness of national ways of living, local cultures and non-capitalist values, but also encourages a convergence of communication and style among diverse people throughout the world. The process of cultural globalization preferred by the international elite is one that incorporates the world community as consumers of goods and services produced, developed, and distributed by transnational corporations – that is, consumerism of the western model is the dominant process of cultural globalization. Since the late 1970’s, multinational corporations have been targeting distinct social groupings via ethnicity, gender, class, race, and sexual orientation (Turow, 1997) in order to satisfy consumer needs and wants through the production, promotion, and delivery of goods and services (Oropesa, 1995). This strategy of constantly dividing and sub-dividing the world is enhanced by “split-second” technology, that not only allows for the accumulation of detailed patterns of purchases by consumers, but also provides for the transmission of that knowledge in compact forms (like CD-ROMs) to any marketer with the money and the desire to buy such information. In this sense, global corporations have embraced multiculturalism in so far as it provides a vehicle to reduce active citizenship to patterns of consumption. That is, cultural differences are used to equate happiness and the realization of dreams to that of purchasing commodities. At the core of this ideology of consumerism is individualism; however, the internalization of this force for cultural homogenization is experienced in culturally specific ways. Although powerful, the cultural process of globalization can be interpreted using local cultural lenses and thus provide opportunities for resistance.
In our view, the processes of globalization discussed above are manifest through the interrelationships of three sectors of the global political economy: the suprastatal, statal, and intrastatal spheres. In order to enhance the transformative potential embedded in the processes of globalization, it is necessary to expose the latent tendencies of globalization, which reflect the hierarchies of power within the global political economy (Cox, 1996). Consequently, we propose to identify the central features of this process and thus inform empirical analyses of the effects of globalization on societies as a whole and on groups within societies. This framework follows Sklair’s (1995) “global capitalism model” for understanding globalization, which is based on the concept of transnational practices that occur across economic, political, and cultural/ideological spheres.
Figure 1: A Critical Framework for Globalization
The suprastatal sector encompasses global institutional forces such as the International Monetary Fund, the World Bank, the World Trade Organization, and the United Nations. These institutions are directly or indirectly controlled by, and represent the interests of, an international elite who promote liberalization, comparative advantage and market-oriented economics. The majority of the international elites and the institutions of global governance promote an ideology of neoliberalism and increased consumerism and individualism.
The statal sector encompasses the power and role of governments to negotiate treaties and to coordinate political and economic activity between nations. The states within the global system are not equally represented; rather, they hold different positions among a hierarchy of nations. Since a fundamental role of the state is to legitimize particular social relations, this sector manifests the competing interests of national elites for privileged positions within the local and global class structure. Within this sector citizenship defines the rights of individuals and the leaders within the nation state.
The intrastatal sector encompasses the varied struggles between different groups and institutions within nations over state activities and the distribution of economic resources. It manifests itself through unequal relationships between race, class and gender groups. This sector also represents the primary sphere where non-governmental organizations (NGOs) and grassroots social movements are acting as counter-hegemonic forces by constructing an alternative vision of globalization. Equal opportunity, meritocracy and social justice are values around which these struggles are organized. The struggles within the intrastatal sphere can have a fundamental impact on the statal and suprastatal spheres of globalization.
Our critical framework exposes the process of globalization as a dialectical relationship between and within the suprastatal, statal, and intrastatal sectors of the global political economy. These sectors represent the hegemonic structure through which struggles of globalization occur. In other words, globalization is not an immutable feature of capitalism; rather, different social groups are contesting the ways in which the global political economy should be organized. These struggles cut across economic, political, cultural, and ideological spheres.
The economics of globalization is evident in global markets for labor and production. The global marketplace is indicated by the expansion of international trade, which is controlled by large multinational corporations and fueled by global financial transactions. International trade in commercial services, which includes such areas as transportation, financial services, communication, construction and information professional services grew by 8 percent annually between 1980 and 1993, while trade in goods increased by only 5 percent (Bhalla, 1998: 2). Yet a growing and significant portion of international trade consists of intra-firm trade: a 1992 World Bank study acknowledged that 40 percent of global trade consists of trade within the 350 largest transnational corporations. In addition, more than one-third of all US trade is between foreign affiliates and their US-based parent companies (Chomsky, 1993). Similarly approximately one quarter of Japan’s imports is from intra-industry transactions (OECD, 2002). Put simply, the growth of international trade has developed suis generis as multinational corporations expand their operations worldwide.
The global manufacturing system implies that the production of goods operate across several countries, with each nation performing tasks in which it has a cost advantage (Gereffi, 1996; Hopkins and Wallerstein, 1986). These commodity chain networks allow for subcontracting to low income countries with limited labor codes, and thus contribute to the fragmentation of production of particular products across international borders. (Nike and Reebok are prime examples).
An additional economic feature of globalization is the increase in Direct Foreign Investment (DFI) and Direct Portfolio Investment (DPI), which represents private capital investments that do not flow through the IMF or World Bank. Although there has been a 236 percent increase in DFI from US $25b to US $84b between 1990 and 1994, forty-seven (47) of the least developed countries received less than 1 percent of all DFI. Moreover, investment in Third World countries are overwhelmingly directed towards the Pacific Rim: East, South and Southeast Asia accounted for 70 percent of the DFI flows to the Third World, a threefold increase in their share of total Direct Foreign Investment since the 1980s (Levitts, 1996). These international investments by both institutional and individual actors has reinforced the dependency of Third World countries on foreign capital, which is manifest in export-oriented economies that serve external markets, and undermine the ability of people to meet their basic human needs (Khor, 1996). DFI tends to have some short-term stability; in contrast, DPI, which is where foreigners are allowed to by shares on the local stock market, makes local financial markets very unstable. DPI accounted for about 1/3 all foreign investments in countries between 1990 and 1997 (Elwood, 2001). The Asian financial crisis that began in Thailand in 1996 is indicative of the negative impact on countries that can result from this emergent power of global finance capital to make seamless transfers throughout the global political economy.
The driving force behind this expansion of global manufacturing and international trade is the international elite. The leaders and operatives of Fortune 500 companies represent the international elite, whose primary goal is to realize maximum profit. In 1998, the three wealthiest members of the international elite held total assets of US $110 billion, which is more than the combined gross domestic product of all Leased Developed Countries. In addition, the assets of the 200 richest persons in 1998 were more than the total income of 41 percent of the world’s people, and the combined assets of the wealthiest 400 individuals increased 36 percent from the previous year to US $1.04 trillion (UNDP, 2000). This tremendous increase in wealth among the international elite is facilitated by the removal of all barriers to the flow of capital. The lack of market regulation for global capital flows illustrates the triumph of financial capital over all other forms of capital, and is a hallmark of economic globalization.
International political institutions, like the World Bank, International Monetary Fund, and most recently, the World Trade Organization are intended to institutionalize the freedom of capital from the regulatory framework of independent nations. The former of these suprastatal institutions were established through the Bretton-Woods Agreement. The IMF provides short-term loans to countries that have temporary shortfalls in exports, and the WB lends capital for long-term development projects. For example, the IMF provides “structural-adjustment” packages that are primarily aimed at taking the nation-state out of the development process and allowing economic actors to allocate resources. Similarly, the WB is clear about its intent to reorient developing economies to ensure there is an enabling environment for private capital to operate. These policies require Third World countries to shift scarce resources away from the basic human needs of their citizens, and towards the neoliberal model of “free-trade”. Consequently, both investment and trade rules complicate the ability of states to monitor and control both events and non-state actors that affect working people (Stubbs and Underhill, 1994).
In 1996, the Uruguay Round of the General Agreement on Tariffs and Trade (GATT) implemented the World Trade Organization, and several regional trading blocs were developed in North America, Europe and Asia. These global institutions enforce regulatory frameworks that allow transnational corporations access to national resources and further the monopolization of new technologies, global investment and production (Chomsky, 1993). The pursuant cross-border flows of information and the global integration of financial markets undermine the policy autonomy of states outside the core of the global political economy (Bhalla, 1998). The net effect of these developments is that the structural power of capital is strengthened relative to the power of labor and to representative democracy. The World Trade Organization is designed to safeguard the accumulation of capital, and to regulate the flow of goods and services, intellectual property rights, food safety, animal and plant health, financial services, food, agriculture policy, investment, technology and telecommunications across all signatory nations. The outcome of these policies perpetuates the interest of the international elite and reinforces class domination within the global capitalist economy.
The cutting-edge of the globalization process is at the intersection of the international financial elite and the suprastatal institutions that promote their interests. This convergence gains meaning through the ideology of neoliberalism, which is a doctrine that promotes the correctness of de-regulation, “free-market” strategies, flexible labor markets, individualism, and the dismantling of social welfare. It demands that people have an individualist orientation rather than a collective one. This model of globalization is alarming, because it seeks legitimation for the transnational movement of capital, investments, and wealth as the necessary path to global integration, while ignoring the consequences of such unfettered capital flows to the established social rights of the world’s citizens. The ideology of consumerism serves two purposes in terms of globalization. On the one hand, in core capitalist countries the media promotes consumerism to create dissatisfaction among select status groups through “niche marketing”, thus stimulating demand for newer goods. On the other hand, the promotion of consumerism in emerging markets is intended to convert the most remote parts of the globe into part of the transnational middle class.
This ideology of consumerism is promoted through a global communication network that provides both content and conduit for international flows of information, news and entertainment. This mass media is primarily controlled through multinational corporations based within the core capitalist economies (Sklair, 1999). These corporations seek to “fully control messages and images, from the conceptual stage to their ultimate delivery to user and audiences” (Schiller, 1996: 95). Since the culture of consumerism emerged out of the experiences of Western capitalist societies, it reflects the views, values and priorities of the organizations that control it (Norberg-Hodge, 1999; Thomas, 1989). Within the context of neoliberalism, consumerism promotes the impression that capitalism and Western values result uniformly in glamour and wealth. The promotion of consumerism is intended to increase demand for services and goods that are produced by the international elite, such as fashion, music, and film. In general, consumerism glorifies the lifestyle of the “middle-class,” which is fundamental for the reproduction of global capitalism as it is currently structured. Consequently, the values of consumerism imply that “conspicuous consumption” is more important than using local products to satisfy human needs (Norberg-Hodge, 1999).
The changing dynamics of global capitalism since the 1970s illustrate that the most powerful actors of the suprastatal sector are multinational corporations. These firms reflect the interests of the international elite, and the global institutions of the suprastatal sector are intended to legitimate these interests. The dominant value of globalization, which is consumerism, is propagated through the global media culture, itself a product of several multinational corporations. Accordingly, the interests of media and cultural product corporations converge with the general multinational corporate objectives and policies (Schiller, 1996). Yet the dynamics of the suprastatal sector presuppose the global world-system of nation-states.
The emergence of the suprastatal sphere presupposes a willing nation-state. The global world system is organized around a hierarchy of nations described as core, peripheral, and semi-peripheral. The conflicts between nation-states can be understood as representing the intra-class struggle of national elites because national elites are in dominant political and economic positions within their respective countries. The cultural framework of the statal sector is that of civil society, which reflects the ideology of state sovereignty and of citizenship. The nation-state during this phase of globalization has actively privileged the global and domestic rights of capital through regional and global treaties, and via domestic legislation (Panitch, 1996). Although the suprastatal sector requires coordination between core nation-states and other states within the global capitalist economy, all state-level actors do not have the same influence. For example, within the United Nations, which is the suprastatal institution for inter-statal politics, the most powerful economic states enjoy a de jure veto over the democratic decisions made by the United Nations by virtue of lifetime seats on the security council. This inequality of power between nation-states is also reflected in growing economic inequality between and within nations. The GNP ratio between the countries with the richest 20 percent of the world’s population and with the poorest 20 percent was 60:1 in 1989, while the ratio of the incomes of the richest 20 percent of people to the poorest 20 percent was 140:1 (Chomsky, 1993b). According to Ellwood (2002: 100) in 1960 the richest fifth of the world’s population received 70.2 percents of global income by 1997 that figure had increased to 90 percent of global income, whereas for the same period the amount of global income going to the poorest 20 percent of the world’s population went from 2.3 percent to 1 percent.
Although all members of the international elite are also members of national elites within their countries, not all national elites benefit from the neoliberal agenda of the transnational ruling class because national elites have their bases of power in many different areas. The power of many traditional elites in developing nations is based on the control of agricultural production and land ownership. The power of other national elites is trade-based because they control the import and export trade within their respective economic sectors. A third form of power for national elites stems from control over manufacturing and services. In many instances protected markets ensure profits by local elites. The main goal of national elites is to retain their position of power and privilege within their respective societies. Consequently, the benefits of globalization as defined by multinational corporations and the international ruling class are not necessarily consistent with the interests of national elites. For example, the reduction of trade barriers and the free flow of goods and services advocated by suprastatal institutions can threaten the power of national elites in developing countries who have enriched themselves by controlling access to both natural resources and inexpensive labor. Indeed, the struggle to weaken peripheral states that control these resources is a fundamental reality of statal dynamics (Bunker, 1994).
The fragmentation of interests among various national elites indicates a second dynamic of inequality between nation-states within the global world system. The extent to which national elites can implement policies consistent with neoliberalism and “structural adjustment” influences their position within the global capitalist economy, because the most powerful multinational economic actors are based within the most powerful core political actors. National elites, especially from non-core nations, who have challenged the neoliberal approach to globalization, have been threatened with global capital investment strikes and with the loss of international aid. Indeed, global capital is not dependent on the business climate in one country and can move large amounts of money quickly between competing investment locations (Gill and Law, 1988).
The new pressures of globalization that stem from the suprastatal sector undermine the ability of national elites to choose such policies as economic nationalism. According to Mittelman (1996), the power of global production and international finance, especially debt structures, constrains the options of national elites to choose different forms of capitalist development. Indeed, the possibility of suprastatal intervention in domestic policy decisions is especially likely when those decisions undermine transborder flows of capital, information, technologies, and consumer goods. The World Trade Organization has been used to challenge laws, policies and programs of nation-states that are deemed to restrict “free-trade. Un-elected bureaucrats have unprecedented authority to penalize nation-states that choose to ignore its rulings.
The relative power of nation-states represents a fundamental contradiction for globalization at the statal level. On the one hand, some national elites are critical for the survival of suprastatal institutions like the WTO, because multinational corporations seek legitimacy from all corners of the globe for the consumer-driven process of global capitalism. The ability to construct rules of trade and investment that favor global capital and the international elite requires national elites from less powerful countries to implement domestic policies favorable to these processes. On the other hand, the WTO can be seen by national elites in some countries as representing the interests of elites within the core of the capitalist political economy. For example, the controversy over the so-called “Green Room Papers” at the November 1999 WTO meetings in the United States illustrates the class struggle between elite representatives of different nations. The position papers generated from these private meetings in Seattle, that primarily included representatives from core capitalist countries, were intended for approval by the full WTO membership; however, national elites from developing countries in Africa, Latin America, and the Caribbean denounced these meetings as privileging “the biggest companies in the major economies” (Khor, 1999).
The relationships between nation-states are not only dictated by their relative access to economic resources, but are also dependent on military power. Despite the end of the Cold War, military might remains a pivotal element in the power relationships between nation-states. The most technically advanced and well-trained militaries are in the core countries. These militaries are often used to ensure that the strategic and economic interests of core nation-states (read national elites), and of multinational economic actors, are protected. Despite the demise of the former Soviet Union, whose presumed belief in communism facilitated the ideological justification for military spending during the Cold War, core countries continue to spend significant sums of money on their military developing new weapons systems. Within the United States, the FY 2004 military budget is projected to exceed $399b US, which represents 51 percent of all discretionary domestic spending and more than 45 percent of global military expenditures (Center for Defense Information 2003). This military capability of core countries can be used to protect the interest of the international elite. During the 1991 Gulf War, for example, the coalition of nations that fought under the guise of liberating Kuwait and restoring democracy was also aimed at protecting oil supplies that are critical to the interest of elites in core countries. The threat of force is not the only factor that enhances the power position of core states; the threat of withdrawing military protection for peripheral and semi-peripheral nations also coerces weaker nation-states to comply with the demands of the dominant global political and economic actors.
The cultural struggle within the statal level of globalization is informed by the ideology of civil society. This ideology underscores the legitimacy of regional and global treaties, because state power is predicated on the sovereignty of nation-states to engage in international policies that protect national interests. Indeed, the implementation of global trade regulations presupposes the democratic nature of nation-state political representatives. In other words, the sovereign rights of the nation-state are bound up in the ideology of citizenship, which defines the duties and rights of individuals within society, including the duties of political leaders (Urry, 1999). Yet the processes of globalization at the statal level are squeezing the nation-state between the accountability to market forces represented by suprastatal institutions, and the accountability to “the governed” represented by domestic political parties and interest groups. This contradiction is intense, because national elites need the state to facilitate entry into the international ruling class, but are constrained by widespread attachment to the ideology of democracy and state sovereignty. This tension suggests that the power of the nation-state, which is based on a territorial embodiment, is undermined by the requirements of globalization that seek legitimacy for territorially unbounded institutions (Kirby, 1993).
Development policies since the 2 nd World War have an impact on the position of respective national elites. Overproduction following the reconstruction of Europe and Japan saw new low cost producers entering the world market (Brenner, 1998) resulting in the demand for more international trade. As more countries modeled after the Asian Tigers, competition between national elites for part of the global market increased. The US policy of deficit spending in the 1970s and 1980s and the coordinated monetary policy of the US and Britain in the form of tax cuts, privatization, and deregulation also affected the position of national elites. Indeed core states continue to push for deregulation to the benefit of their large corporations and national elites.
This process has resulted in the alteration of the scope of national sovereignty. The changing role of the nation-state has been referred to as the “declining significance” of the state. However, the pressures of globalization do not equally undermine all nation-states. Generally, core states are closely embedded to the dominant process of finance capital and multinational corporations and thus have greater control over the determination of national policies than states in the periphery. Although statal dynamics of globalization are contested, the dominant trend within nation-states suggests that the presumed connection between the rights of democratic participation (i.e. civil society) and expanded social rights is no longer, if it ever was, guaranteed. Within the core capitalist states, global civil society is being defined as requiring the priority of the market over all other human institutions (Markhoff, 1999). That is, the sovereignty of nation-states within the global political economy presupposes the embrace of global competitiveness in order to enhance corporate profits, which, it is argued, will alleviate the poverty and inequality that results from nation-state regulation of market activity. The intrastatal manifestation of these suprastatal and statal dynamics is dependent upon the unique organization of groups within nations, on how national civil society is organized, and on the unique cultural and ideological positions of the respective societies.
The doctrine of neoliberal economics is based on the premise of letting market forces determine the allocation of resources. The role of the state in this process is to be a facilitator in the removal of trade barriers, the increase of capital flows and the development of information networking. Although competitive markets may be the best guarantee of efficiency, they are not producers of equity. The convergence of political, economic, and cultural forces of globalization has resulted in more inequality between nation-states and within nation states. According to United Nations Development Project (UNDP) “ the income gap between the fifth of the world’s people living in the richest countries and the fifth in the poorest was 74 to 1 in 1997, up from 60 to 1 in 1990, and 30 to 1 in 1960” (2000: 3). UNDP (2000) continues to note that the one-fifth of the world’s population that live in core countries control 86 percent of world GDP, 82 percent of world export markets, and 68 percent of direct foreign investment. In terms of nation-states, OECD countries who make up 19 percent of the world population control 71 percent of the trade in goods and services and 58 percent of direct foreign investment, while 84 percent of expenditures in research and development are made by only ten countries.
The economics of globalization is manifest at the intrastatal level through the dynamics of race, class and gender inequality. The uneven development within nation-states have resulted in new high-paying jobs in the so-called “boom sectors,” while the vast majority of job growth is in the lowly paid service sector and exploitative manufacturing sector. For example, 85 percent of the new jobs in Latin America are in the informal sector (UNDP, 2000); the US Census Bureau reports that the total number of positions in the high-technology sector of the US labor market will be fewer than those of janitors, nursing aides, or restaurant servers (Hodson and Sullivan, 1995). This bifurcation of the labor market is widening class divisions, which are especially large in countries where there is an explosion of export-oriented sectors, such as Russia, Chile, and Brazil. For example, the Gini coefficient index, which is a measure of the distribution of income within countries ranged from 48.7 in Russia to 56.5 in Chile, and 60.0 in Brazil (100 is the most unequal and 0 is the most equal).
According to the IMF, the transition to market-based capitalism in the former “communist” countries has also increased “Gini” inequality within nations from 3 to 27 index points between 1987-88 and 1998-99 (Kolodko, 1999). Increases in class inequality have also been recorded in core countries like the United Kingdom and the United States since the 1980s (UNDP 2000). For example, the Economic Policy Institute reports that the average median income adjusted for inflation in 1997 was 3.1 percent less than it was in 1989 in the United States. In this same year, the World Development Indicators show that the highest quintile of households in the US controlled 46 percent of income, while the bottom three quintiles combined controlled only 31 percent of total income. In Britain, the top 20 percent of households in 1991 controlled 43% of total income compared with the 34% controlled by the bottom 60 percent of households.
The mobility of financial capital and the speed with which it can enter and leave a particular country contributes to this increasing class inequality. The turmoil in the financial markets of East Asia was the consequence of a reversal in capital flows, which led to an increase in bankruptcies, unemployment, job and income insecurity, as well as to the reduction of state spending on social services such as education and health (Elwood, 2001). The 1994 global bond crisis, for example, cost the central bank of Malaysia US $4 billion (Greider, 1997). Such economic turmoil means that improvements in human development issues, like education, literacy, and life expectancy, are slower than economic gains that accrue to the elites within these nations and to multinational corporations and their international elite investors.
Further exacerbating intrastate inequality is the frequency of national elites introducing “flexible labor policies” in order to attract direct foreign investment. Flexible labor laws weaken worker protections, worsen the conditions of work, and reduce job security. Many governments in Latin America have either changed their labor laws or have turned a blind eye to existing labor laws, according the UNDP (2000). These flexible contracts with multinational corporations have increased the proportion of informal sector employment to formal sector employment from 52 percent to 58 percent. According to the European Children’s Trust, reductions in government spending on social programs encouraged by IMF loans to Eastern European countries increased poverty tenfold over the last decade, and resulted in at least 50 million children being exposed to levels of tuberculosis usually associated with Third World countries. In other words, the “structural adjustment” policies of the suprastatal political institutions, the patterns of direct foreign investment by suprastatal economic actors, and the policies of governments within the statal sector, operate together to sustain economic growth without concern for the inequitable impact of those policies on the world’s people.
The economics of globalization also has a differential impact on men and women within nation states. Historically, women have been burdened not only with various forms of household labor, but also with the reproduction of children for the nation-state (Yuvall-Davis, 1993). The acceleration of direct foreign investment and of international financial capital flows has exacerbated the sexual division of labor within the global capitalist system. Multinational corporations actively recruit women into the labor process by establishing production plants in developing countries as part of their global commodity chains, but women were already over-represented in the agricultural sectors and other low-paying sectors of these labor markets. In 1980, 73 percent of women workers in Africa and the Middle East, and 70 percent of women workers in Asia, were located in the agricultural sector (Beneria, 1989). Women workers are also prominent in service sectors such as garment trades and private domestic services, which are uniformly defined by their “sweatshop” conditions (Mitter, 1986). Over 70 percent of the workers in the maquiladora export-processing zone along the US-Mexico border are women, because of the widely held belief that women “ are more responsible than men,” are “gentle and obedient,” and will provide fewer problems for the corporate managers (Fernandez-Kelly, 1994). Put simply, the gendered distribution of income, power, education, and healthcare within nation-states are reproduced within the global division of labor.
The incorporation of women into the labor force has exacerbated gender inequality because women already provide the bulk of “caring labor” in most countries, especially in the developing societies. Caring labor involves providing for children and the elderly, and in reproducing future generations. This “double” burden for women is reinforced by neoliberal economic policies that demand fewer resources for health care services. Developing countries are particularly hard hit in this area, because they have to deal with structural adjustment programs and the dismantling of state services. According to the UNDP, “global economic competition has put pressure on the wages for caring labor, as the wage gap increases between tradable and non tradable sectors, and between the skilled and unskilled” (2000:7). Among the “least developed countries,” the gender-related development index of the 1999 HDR is significantly lower (.415) than the world index (.700) and the industrialized countries index (.915). Importantly, insufficient care for children increases the probability that they will not realize their full potential. This problem is also present in the core nations, like the United States, where 1 in 5 children live in poverty.
Race and ethnic inequality are powerful elements of the social stratification system within societies. In the core “colonial” societies, Whites and people of European descent have greater access to wealth and formal education, which establishes the foundation of a racialized dimension of inequality within the globalization process. Within the suprastatal economic and political sectors, the CEOs of the Fortune 500 multinational corporations are European-White, the majority of political elites are also European-White, and the economic benefits of globalization appear to disproportionately accrue to one racial group. For example, in the United States in 1998, 26.1 percent of African Americans, 25.6 percent of Latinos, and 12.5 percent of Asians and Pacific Islanders lived in poverty. Further it has been shown that the poverty gap between Whites and minorities has moved very little since 1975 (Maconis, 2000). This racial impact of unequal access to financial resources can have potentially explosive social consequences.
Within the former colonized societies this dynamic of racial inequality takes on a nationalist appearance, because European Whites are not in the numerical majority in these countries. Historically, European colonizers refused to integrate with indigenous populations, and justified their presumed superiority through nationalist ideologies and cultural racism. That is, the dominant settler groups defined their culture as the culture, and did not recognize or respect the social and cultural contributions of indigenous populations (Bowser, 1995). Since the European colonizers controlled both economic and political power, the cultural discourse in these settler societies used race and ethnicity as tools of subordination and exploitation, which reinforced the economic and political privileges of European-Whites (Stasiulis and Yuval-Davis, 1995). In Brazil and South Africa, for example, research continues to illustrate how ruling elites use racial differences to obscure their class interests by creating competition and conflict between racial and ethnic groups (Guimares, 1995; Nkomo, Twala, and Carrim,1995).
After World War II, the independence of former colonized nations resulted in the transfer of political power to local peoples, but economic power remained concentrated in the hands of Europeans. In the Caribbean, for example, political elites do not control the resources necessary to plan and execute long-term economic development. As a result, they have channeled investments from the international elite within core nations to enclave sector development, which has exacerbated poverty in rural areas, and increased emigration to core nations like the United States and Britain for low-end service jobs. Through inheritance, the children of Europeans have inherited the wealth of their forefathers, and continue to comprise the most influential class of elites in the developing world.
An important dimension of race, class, and gender stratification within globalization is the distribution of skills, which are signified by education credentials. The preferred labor market positions within the global political economy require distinct analytic, computer, and communication skills, and education represents the institutional gatekeeper to these skills. Yet race and ethnic, gender, and class inequalities also impact access to education. In terms of primary and secondary education throughout the world, women have less access than men to these basic institutions. For example in Trinidad and Tobago, women on the whole have a smaller probability of attending a school in the upper tier of the education system and for rural Indo-Trinidadian women the probability is even less (Ramsaran, 2001). Within the United States, educational opportunities continue to privilege upper class students, who are more likely to attend college, enter graduate and professional programs, and receive elite educational credentials (Price, 2003; Davies and Guppy, 1997; Hearn,1990; Bowles and Gintis, 1976). Consequently, the individual beneficiaries of the process of globalization primarily reflect the hierarchies of race, class, and gender that already exist both within particular societies, and between nation-states.
The political processes at the intrastatal level reflect the cleavages of race, gender, and class inequalities. The challenges to these inequalities that are reinforced through globalization occur primarily in the political arena within nation-states. While national elites use racism and sexism to reinforce their political and economic domination, the new social movements and non-governmental organizations that challenge this domination also reflect these inequalities. Importantly, this contestation takes place within culturally specific situations. Groups within the nation-state use their own history and experiences to interpret the cultural messages of globalization. In other words, the struggle for and against globalization within the intrastatal level can be understood through the universal categories of class, race, and gender, but the particular manifestations of this struggle take on culturally specific forms within respective nation states.
The politics of globalization in the first instance takes place between competing groups of national elites who do and do not benefit from the globalization process. This statal level process informs the intrastatal struggles over globalization. In many developing countries, some members of the economic elite derive their position of power from their control of the distribution of goods and services within their society. Other elites occupy oligopoly positions within their society, which they have attained by using the state to set up tariffs and other barriers to foreign investments. For this group of national elites, the “free trade” mantra of globalization threatens their privileged position. This group of national elites often align themselves with national labor organizations to argue for nationalist policies that protect local jobs, which is also in their economic interests. On the other hand, some elements of the national elite may benefit from the process of globalization, and advocate for liberalization policies that would weaken their elite competitors and thus strengthen their positions within the national political economic structure. These elites tend to own land and infrastructure that is desirable to foreign investment (e.g., export zones for manufacturing facilities), or they control the financial institutions within the national economy that could benefit from an influx of foreign capital.
Conflict between neoliberal and nationalist elites involve both “identity politics” and nationalist ideologies. Within racial and ethnic homogenous societies, the struggle over globalization becomes an issue of national sovereignty stressing the idea of a “common interest” among all citizens. In this scenario, ethnic and national identities converge into a potentially reactionary social movement that may benefit some workers and nationalist elites in the short-term, but undermines the possibility of a global alliance between non-elites of several nations. Within racial and ethnic heterogeneous societies, the struggle over globalization becomes a fragmented series of seemingly disassociated identity-groups stressing their particular form of oppression. Thus, ethnic and interest group identities flourish due to the process of globalization, but their particular struggles against their own exploitation becomes what Castells (1997) calls an “identity of retrenchment.” In other words, interest groups, whether organized along gender, class, ethnic, or single- issue politics tend to focus on their particular struggle, which may result in a temporary ease of oppressive conditions, but also weakens the possibility of a global social movement against the dominant economic and political actors that benefit from an unorganized majority of people across and within nations.
The politics at the intrastatal level, however, need not follow the contours outlined above, which reflect the interests of the international elite. On the contrary, trade unions, employee associations, non-governmental organizations (NGOs) and grassroots organizations, as well as emergent political parties, represent political actors within the nation state that hold the possibility of a counter-hegemonic block. This potential of a global social movement requires that locally based community, labor, and political organizations see the contemporary manifestation of globalization as the ultimate cause of their particular oppression. Seidman (1993) provides examples from Brazil, South Korea, and South Africa during the 1970s and 1980s where workers organized militantly to not only improve the conditions of skilled workers, but also to challenge state control over workers’ communities beyond the factory gates. For national labor-based and other new social movements to be successful in the twenty-first century, these organizations must be able to communicate with other counter-hegemonic organizations that emerge throughout the global capitalist economy. The organization and limited success of labor, grassroots and other civic organizations from around the world in their opposition to the annual WTO meetings gives a glimpse into the potential of modern communication and counter hegemonic action.
The cultural and ideological dimension at the intrastatal sector can be understood as the interplay between the human rights narrative of social justice, which reflects the counter-hegemonic social movements, and the equal opportunity narrative of meritocracy that benefits national elites but also reflects a key struggle of globalization: namely, the tensions between nationalist and internationalist elite interests. The struggles of globalization are increasingly the result of “fragmentation and indigeneity.” That is, the conflicts within nation-states are about particular rights and of the rights of particular people, are between individual vs. collective rights, and have both national and ethnic components (Friedman, 1999). These struggles seek to transform differences into claims on the public sphere, for recognition, for funds, or for land. When indigenous struggles self-define the relationship between local and global, the possibility of a counter-hegemonic social movement emerges. For example, the ongoing Zapatista uprising in Chiapas, Mexico represents an organized struggle against state policy that is informed by a global perspective on the causes of the particular forms of oppression experienced by this indigenous population. The ability of the Zapatista movement to withstand the military power of the state is in part due to their use of new communication technologies that facilitates the transformation of isolated counter-hegemonic struggles into globally interconnected movements for an alternative vision of globalization.
The ideological outlooks of these types of counter-hegemonic struggles require a critique of the dominant processes of globalization. Throughout the world, claims for “unhindered representation, recognition without marginalization, and acceptance and integration without distortion,” represent a different vision of a global citizen: that of membership in an inclusive cultural democracy (Pakulski, 1997: 80). These social movements are creating an alternative cultural narrative for social justice. For example, the Organization of African Unity advocates “popular participation, empowerment of the people, accountability, social and economic justice, respect for human rights, and peoples’ self-determination” (Sunmonu, 1993: 192). The People’s Plan 21 advocates for a declaration of a new human right: “the right of people to intervene in, to modify, to regulate, and ultimately to control any decisions that affect them” (Ichiyo, 1993: 156). These narratives connect abstract ideas of human rights and social justice with concrete practices. In other words, a counter-hegemonic narrative defines global citizenship as one of participatory democracy where different social sectors organize themselves to articulate different interests, but acknowledge the right to be different and the idea that difference shall no longer constitute the basis for inequality (Dagnino, 1993). Such visions, however, are constrained by the economic and political realities of intrastatal dynamics.
Intrastatal social movements can take on a nationalist character when the interests of the ruling elites converge with those of trade unions, NGOs and other grass roots and community bases organizations. When the processes of globalization are negatively affecting the livelihood of the people and also are weakening the power of the national elites in the world economy, then the nation may unite in its struggle against the negative effects of globalization. The power of the state is thus strengthened to resist the dictates of global governance, because internal struggles between social groups appear low. The ruling elite can use this to rally the people within its domain to challenge the processes of globalization. For example, after the WTO ruling that removed protection for Eastern Caribbean bananas into the EU market, the St Lucian government took steps to have its case heard against the US in the World Court. This hearing may have focused on unfair trading practices that favored the multinational corporations in the United States, but it did not address the exploitative and repressive conditions of the banana workers in the Caribbean. That is, the discourse of this struggle was for “equal opportunity” of Caribbean producers to compete with other producers in the global economy (Ramsaran 2003).
Intrastatal social movements can also become more intense when national elites seek to implement neoliberal policies in order to strengthen their position with the international elite. The implementation of flexible labor practices, the introduction of free trade, and capital mobility become contested areas in the political sphere. In this scenario, the discourse of intrastatal struggles juxtaposes the “equal opportunity” promise of integration within the global political economy with the “equal opportunity” claim for emphasizing production for the domestic market. The latter claim represents a threat to national elites insofar as trade unions, NGOS, and indigenous organizations are well organized with a strategy for gaining control over state institutions. The consequence of the former claim is often increased state repression, because the export economies favored by the national elites require continually increasing controls over the labor force and the reduction of labor costs (Vilas, 1989). For example, until 2000, the elites in Mexico that controlled the state through the Institutional Revolutionary Party (PRI) reduced public expenditures, eliminated subsidies, restricted credit, privatized most state industries, liberalized trade, devalued the peso, and introduced “competitive” wages (Heredia and Purcell 1996). The authors quote a study by researchers at the Faculty of Economics of the National Autonomous University of Mexico (UNAM) that compares a 136 percent increase in the minimum wage between December 1987 and May 1994 with a 371 percent increase in the cost of the Basic Basket of Goods.
The dominant strain of intrastatal struggles are articulated through the competing narratives of nationalist and internationalist variations of equal opportunity and meritocracy. These struggles are most likely because of the statal and suprastatal dynamics of the global political economy that provide differential institutional power to national elites. The elites who benefit from increasing their statal presence in the global economy face more volatile struggles within the intrastatal sphere; however, they are able to suppress these struggles with limited interference from other state and global actors. The elites who are not benefiting from the processes of globalization are able to invoke nationalist/cultural values to unify intrastatal struggles against the state and global actors that are blamed for the current conditions of the nation. In both cases, intrastatal struggles either focus on national elites or on global actors as the cause of the social inequalities of race, class, and gender. A third possibility of intrastatal struggle is to recognize the interconnected interests of national and international elites, of statal and suprastatal institutions, and of global and local causes of social inequality. This recognition holds the promise of a counter-hegemonic narrative of social justice, which posits a different trajectory of globalization from that being driven by national and international elites through statal and suprastatal institutions.
The processes of globalization can be seen within and across economic, political and cultural dimensions, and between and within state and global institutions. An emergent international elite drives these processes, but is constrained by conflicts with national elites, and by struggles with non-elite actors throughout the global political economy. Consequently, globalization is not an inevitable process; rather, it is negotiated and contested. As with all social conflict, however, these struggles are not between equals. The power of state and global institutions to set the parameters of the negotiations for and against globalization tends to favor the interests of an emergent international elite that is primarily located in OECD countries of the G-7. The struggles against these global processes are often led by national elites whose domestic positions of power are threatened by global capitalism, but can also be influenced by grassroots organizations that seek a new vision for social justice. This alternative vision for globalization requires counter-hegemonic struggles to connect across national boundaries in order to transcend the struggles of globalization between competing factions of national elites.
Our view of globalization is intended as a critical framework for analyzing and understanding the contradictory processes of the global political economy. The economic, political and cultural (or ideological) dynamics of globalization reflect a dialectical relationship between and within suprastatal, statal, and intrastatal sectors. The suprastatal sector is the emergent “superstructure” of the global capitalist system, and is manifest by the power of capital over the nation-state and by the increasing power of global regulatory institutions like the World Trade Organization. This sector is contested among members of the international elite who are struggling for hegemony. The statal sector represents the current hegemonic order, which reflects a hierarchy of nation-states and thus a hierarchy of national elites. The suprastatal institutions need the nation-state to confer legitimacy, but not all national elites benefit from the suprastatal framework of globalization. Consequently, national elites from weaker nation-states are using state power to shore up domestic support for their regime, but also to negotiate more favorable positions within the international elite.
The intrastatal sector is the most volatile location for the struggle over globalization. National inequalities that are based on race, gender, and class characteristics are increasingly the focal points of struggles for state power; however, these struggles are not necessarily counter-hegemonic. On the contrary, statal and suprastatal processes of globalization often shape the social movements of the intrastatal sector. That is, the demands for equality by subaltern groups within nations can be appropriated by divisions within national elites who either benefit or suffer from the emergence of the suprastatal sector. The counter-hegemonic potential of intrastatal struggles requires an alternative vision of social justice that does not differentiate between non-elites of different nations or between non-elites within nations. The struggles over globalization within nations are increasing, but we believe they need to be understood within the larger framework of globalization presented above. In this way, the contradictory processes of globalization can be consistently articulated throughout the global capitalist system.
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