Week 2
Is Globalization Likely to Create a Better World?
I – A transformation of our image of the world
A – Th. Friedman’s The World is Flat
Thomas Friedman: “What is globalization? The short answer is that globalization is the
integration of everything with everything else. A more complete definition is that
globalization is the integration of markets, finance, and technology in a way that shrinks the
world from a size medium to a size small.”
Globalization refers to the increasingly global relationships of culture, people, and economic
activity. It is generally used to refer to economic globalization: the global distribution of the
production of goods and services, through reduction of barriers to international trade such as
tariffs, export fees, and import quotas and the reduction of restrictions on the movement of
capital and on investment.
"Free market" and "flat world" advocates say this is a great opportunity to cut benefits for the
old folks (and for the young folks in the future), thus bringing the countries budgets back into
balance, and this story is the main corporate media storyline.
B – An illustration of globalization: language dynamics
Colonial empires in 1900
Major languages in the world:
- All worldly spread languages are of European descent (colonial legacy) Globalization is
more often the result of power relations than of freely taken decisions
- Only eight languages are enough to cover most of the globe’s surface
Spanish proverb: “a man with two languages has two souls”
II – A pilotless machine? World space without world regulation
A – Financial deregulation
Whereas globalization is centered around the diminution of international trade regulations as
well as tariffs, taxes, and other impediments that suppresses global trade, economic
globalization is the process of increasing economic integration between countries, leading to
the emergence of a global marketplace or a single world market.
Observation 1: The volume of financial transactions in the global economy is 73.5 times
higher than nominal world GDP, in 1990 this ratio amounted to “only” 15.3. Spot
transactions of stocks, bonds and foreign exchange have expanded roughly in tandem with
nominal world GDP. Hence, the overall increase in financial trading is exclusively due to the
spectacular boom of the derivatives markets …
Observation 2: Futures and options trading on exchanges has expanded much stronger since
2000 than OTC transactions (the latter are the exclusive domain of professionals). In 2007,
transaction volume of exchange-traded derivatives was 42.1 times higher than world GDP,
the respective ratio of OTC transactions was 23.5% …
In other words, most of the financial flows comprise wealth-shuffling speculation
transactions which have nothing to do with the facilitation of trade in real goods and services
across national boundaries.
B- Terrorism and globalization
Christopher Cocker, LSE seminar:
“The globalization of terror has also changed in character as the world moves away from the
state sponsored phenomenon of the 1980s. The statistics tell their own story. Between 1968
and 89 the incident rate of terrorism was 1,673 per year. Between 1990 and 1996 there was
an increase of 162% on the Cold War years (4,389 a year). The percentage increase would
now be closer to 200% given the escalating number of conflicts since 1996. (…)
1) Globalization is encouraging religious fundamentalism. Thirty years ago there was
not a single religious cult or religious terrorist movement in the world. As recently as
1980 only two of the world’s 64 known terrorist groups were animated by religious
belief. (…)
Violent reactions to globalization, dangerously increasing gap between urban westernized
minorities and the majority of the population, attached to its customs and religion.
2) It is also producing new network centered terrorist organizations. Thus Al-Qaeda is
largely a franchising agency which functions through religious internationalism and
stateless networks rather than through the Cold War mechanism of sponsoring states.
(…)
Paradoxically, while denouncing globalization it relies on it to reconstruct a Moslem
community beyond national boundaries. Its use of English, the internet and satellite
phones is an authentic product of a modern globalized world, even if they serve a
movement that is fundamentally in conflict with it.”
Globalization provides continuously renewed opportunities for terrorist groups.