Globalization: a theoretical reflection
| Pages | 95-112 |
| DOI | https://doi.org/10.1108/20425961211247725 |
| Published date | 01 February 2012 |
| Date | 01 February 2012 |
| Author | Tidings P. Ndhlovu |
| Subject Matter | Public policy & environmental management |
Globalization: a theoretical
reflection
Tidings P. Ndhlovu
Department of Accounting, Finance and Economics,
Manchester Metropolitan University Business School,
Manchester, UK
Abstract
Purpose – The purpose of this paper is to evaluate and situate globalization within the context of
different theoretical perspectives, with a view to developing a theo retical framework for understanding
and interpreting this phenomenon.
Design/methodology/approach – In the light of historical and empirical evidence, this paper uses
the idea of parallax to explore, synthesize and interpret globalization. Evidence is marshalled in order
to enable comparative assessments on the merits of the globalized system to take place.
Findings – A materialist approach is identified as appropriate for aiding and deepening our
understanding of the processes at work. It best captures the complexities and contradictions in the
global economy.
Originality/value – This paper develops a critique that locates globalization within the process of
accumulation and teases out its attendant crises and efforts to restore profitability. The materialist
approach developed here may be successfully applied in a holistic manner.
Keywords Capital, Globalization, Internationalization, Materialist approach,
Accumulation of capital, Restructuring and renewal of capital, Crises
Paper type Research p aper
1. Introduction
Globalisation has often conjured up an image of gleaming sp orts cars, iPhones and
iPads, a digital revolution, “interconnectedness” of economies and opportunities for
trade and investment. Proponents of suc h a viewpoint often claim that free markets
inculcate a “go-get-it” enterprise culture, ensuring liberty and economic prosperity. To
be sure, technological advances in information and modern communications and the
dramatic expansion of global financial flows, consequent upon deregulation of
financial markets in the 1980s, are credited with driving prices down and giving rise to
the notion of a borderless world. In other words, time and space has arguably been
compressed in such a way that we can be forgiven for believing that we live in a global
village (Bunting, 2011; Fine, 2002, p. 5; Giddens, 1999; Markillie, 2012; Ndhlovu,
2011; Robertson, 1995, p. 8; UNCTAD, 2011a, p. 10). It is argued further that the quick
adjustment to changes has the potential to lead to rapid economic growth, greater
consumer choice and an increase in living standards (The Economist, 2001). To use the
late US President Ronald Reagan’s colourful language at the World TradeOrganisation
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World Journal of Entrepreneurship,
Management and Sustainable
Development
Vol. 8 No.2/3, 2012
pp. 95-112
rEmeraldGroup Publishing Limited
2042-5961
DOI 10.1108/20425961211247725
The author wishes to thank Ms Pat Ayers, Burjor Avari, Dr Stephen Dearden, TakisTriantafillou
(Manchester Metropolitan University), John Kemp, Dr Michelle Commosioung and Dr Stephen
Mago (University of Fort Hare, South Africa) for their detailed comments on an earlier draft.
Many thanks also go to Keith Gibbard and Professor Andrew Kliman (Pace University, New
York) for their challenging and insightful comments that forced the author’s re-reading of some
of Marx’s writings and subsequent revision of parts of the paper. Finally, the author must thank
two anonymous referees and the editor for patiently coaxing him towards a tighter argument.
Any remaining errors are the author’s.
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Globalization:
a theoretical
reflection
(WTO) meeting in Cancun (Mexico) in 1981, “this is the magic of the market place”.
It thus goes without saying that globalisation is “a fact of life” (Krueger, 2003, p. 1;
Markillie, 2012; Stiglitz, 2003, p. 258) and is unstopp able. Analysts of this sort argue
that multilateral institutions such as the International Monetary Fund (IMF), World
Bank and WTO, as well as a more effective US leadership can play an important role in
ensuring rapid and sustained global growth, thus improving living standards and
enabling people to make better choices (Krueger, 2003, pp. 6-7, 11-12; Gilpin, 2000).
Safeguards are then required to protect those people who are affected by the worst
effects of, for example, structural adjustment policies (also see The Economist, 2001;
Stiglitz, 2003). Arguably, governments and, indeed, intra-regional blocs such as the
European Union (EU) can be expected to provide the necessary safe guards.
However, with the advent of slower global economic growth and financial crises,
globalisation has increasingly come to symbolise “low-paid sweatshop workers, GM
seed pressed on developing world farmers, selling off state-owned industry to qualify
for IMF and World Bank loans and the increasing dominance of US and European
corporate culture across the globe” ( Jeffery, 2002, p. 2; also see Moore, 2012;
Stiglitz, 2006, 2010). There has also been a differential impact, “These crises have
been particularly prevalent in the developing world (fig. 2), but they have been
growing steadily larger in the advanced economies, culminating in the deepest
economic collapse since the Great Depression” (UNCTAD, 2011a, p. 10; also see Bell
and Blanchflower, 2011). Indeed, “For many years, however, concerns have been raised
regarding certain effects of globalization on jobs, wages and job security. [y]
A German Marshall Fund (2007) survey shows that about half of Americans
and Europeans think that ‘freer trade’ results in more job loss than job creation.
Globalization [in particular outsourcing overseas] has also been blamed fo r the recent
financial crisis and its effect on employment” (Bacchetta and Jansen, 2011, p. 1). Some
analysts contend that globalisation has condemned a large propor tion of the world to
poverty, exacerbated inequalities, led to casualisation of labour and worsened working
conditions, including the lengthening of the working day and redundancies.
In response, Anne Krueger, the former World Bank Chief Economist and IMF
Managing Director, urges us to focus on the “important role” that globalisation has
played in reducing poverty and points out that there is no conclusive evidence to
suggest that globalisation has contributed to widening inequalities (Kr ueger, 2003,
pp. 6-7, 11-12). For his part, Wolf (2004) argues that globa lisation will lead to greater
economic integration and prosperity, reduced inequality, good governance, enhanced
personal freedoms and a much improved life for people in developing countries.
Bernstein (2010) also suggests that there are “phenomenal benefits of competitive
capitalism” (also see Centre For Development Enterprise (CDE), 2006). In addition,
Krueger argues that all these developments must be put in context:
It is important not to be distractedby confusing relative and absolute progress. It makessense
to reflect carefully before condemning conditions in the sweatshop factories in developing
countries in absolute terms. The choices confronting someone on the brink of starvation are
rather different to those facing someone with money in the bank. [y] What matters is that,
however modest in absolute terms, those higher wages have radically improved the lives of
those workers and their families. [y] Child labour is sometimes prevalent in developing
countries. [y] But that is usually because the alternatives are even worse: starvation or
malnutrition, begging, forced early marriages for girls, or prostitution. [y] Insisting that
workers be given a decent wage by industrial country standards would erode the competitive
advantages for business using unskilled labour in developing countries (Krueger, 2003, p. 6).
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