by Reza Ghorashi
Globalization is a complex, multifaceted, and correlated phenomenon that affects social, cultural, political, economic, and technological dimensions of human life. Since the dawn of modernity1 we have had several rounds of globalization. The process typically goes as follows: Major scientific breakthroughs give rise to technological inventions that enable humans to control and manipulate their physical environment. This opens opportunities for production and exchange of goods and services that did not exist before. The society will evolve and adjust to enable entrepreneurs to take advantage of new economic opportunities. Increased trade and communications with faraway people and communities necessitates opening up to more tolerance of others and secularism.
Earlier Rounds of Globalization
The earliest round of modern era globalization came after The Age of Discovery2 in the 16th and 17th centuries. New technologies, most notably gunpowder and the compass, imported from the “East” (the Islamic world, and via them India and China) enabled a handful of European sailors to travel on high seas to faraway lands and face strangers that far outnumbered them. This opened up opportunities for trade of high value items such as gold and spices in demand at home, primarily by the aristocracy. Influx of gold and silver increased the money supply tremendously and facilitated exchange and market activities. The era of “merchant capitalism” in Europe had begun. Large entities, such as East India company3 were formed. Monarchs and princesses increased their support of newly emerging class of merchants and explorers. Increased contact with “other” people resulted in an emphasis on Eurocentric and Christian identities. Spread of Christianity became a noble cause. This was used to justify mistreating “others” as sub-human and savages who could be cheated of their belongings, and even enslaved. The era of colonialism had begun.
The second major round came after the Industrial Revolution in the mid-18th century. Scientific and technological breakthroughs enabled replacing and enhancing of human and animal physical power with that of machines. Suddenly human beings could literally move mountains. Steam boats, and later railroads, enabled much faster traveling and carrying of bulk items. Long distance trade now included raw materials and food items. Securing resources and trade routes enhanced rivalry between European colonial powers. Newly emerged nation-states of Europe made sure that “their” companies benefited from a monopolistic presence in the colonies, and most of the time, at home. The triangular colonial pattern of trade became the norm.4 The bourgeoisie had risen to become the dominant class, and “no taxation without representation” had paved the way for liberal democracy.5
The next round came about a century later via the Second Industrial Revolution,6 the distinct characteristic of which was the introduction of electricity. Suddenly darkness of the night was conquered. Now factories could work 24 hours a day. More relevant here, instant communication, at first via telegraph and later telephone, radio, and eventually television became possible. Politically, a hierarchical global system was established with the British on top, as a superpower, under the principles of the Congress of Vienna.7
The distinctive economic characteristic of the first round of globalization was the long-distance trade of raw materials. The second round’s distinctive characteristic was the addition of exports of manufactures and industrial products. That of the third was the dominance of the export of capital. The colonial powers had run out of new lands and people to colonize and to expand production to avoid economic crises in the Marxian sense. The new comers, notably the US, Japan, and Germany were, according to the “law of uneven development of capitalism,” growing faster and challenging the status quo.8 The era of “monopoly capital” and “imperialism” had arrived. The result was the most catastrophic man-made disaster in the history of the world up to then: The First World War. A world order was not re-established after the war ended due to several factors such as the Bolshevik Revolution, the re-emergence of “isolationism” in the US, and a “winner takes all” attitude of the victors (particularly the French) in the Versailles Peace Treaty. It took another major disaster, even bigger than the previous one, the Second World War, to re-establish another world order with the US as the hegemonic power. The interwar era was one of the worst periods in social history of humankind that witnessed the rise of Nazism in Germany, Fascism in Italy, and the Great Depression, among other things.
This world order, despite becoming a bi-polar system, dominated by the US and Soviet Union, survived until the collapse of the latter. After which, the neoconservatives9 in the US attempted to create a “unipolar moment” in accord with their vision of a “New American Century” which led to more problems.
The Current Round of Globalization
The main technological advancement that triggered the latest round of globalization happened in the field of artificial intelligence (AI). The “Third Industrial Revolution” used electronics and AI to automate production. The First Industrial Revolution, relying primarily on steam power drastically enhanced our muscular and physical ability. We could move heavy materials to faraway distances at high speed. The second one, based on electricity, enhanced our senses. We could hear and see and communicate from far distances. The third one has enhanced our brain power and decision making. It began by letting machines (computers) do the routine decisions and is advancing to more complex decision-making situations. A fourth one is underway: “Now a Fourth Industrial Revolution is building on the Third, the digital revolution that has been occurring since the middle of the last century. It is characterized by a fusion of technologies that is blurring the lines between the physical, digital, and biological spheres.”10
Technological innovations usually end up raising the productivity of labor. In the short run this could mean unemployment and redundancy of the existing labor. This, and the fact that gains from increased productivity of labor have mostly gone to the owners of capital and drastically increased the gap between the “haves” and “have nots,”11 necessitated an economic role for the state. Under capitalism, a fundamental economic role of the state is to enforce contracts in the market, that is to enable owners of capital to exploit the workers. In unusual circumstances, such as during major wars or severe recessions the state may take additional steps to save the system.12 That necessitates some degree of control over a country’s corporations. On the global level, each state promotes and protects the interests of its own national corporations. This may cause chaos. The “world system” is more stable when there is a hierarchy. The hegemonic power is responsible for stability, including economically, of the world system. England did it for almost a century, from 1815 (final defeat of Napoleon in Waterloo) until 1914 (start of WWI) when the “status quo” was no longer sustainable. The US had done it after WWII until the start of the last round of globalization in the late 1970s.
The most important economic characteristic of this round of globalization is that production itself has become global. “Economic globalization keeps taking new forms — firms are becoming more and more agile: some only provide the intellectual property, like software, blue prints and design, while production is carried out by contracted producers. Firms may undertake R&D, while components and raw materials may arrive from various other countries to be assembled in yet another country. Finally, products may be sold to customers all over the world. Even more complex arrangements are emerging in the area of services. The complexity is amplified by the search for tax optimization and complicated ownership arrangements which are key features in globalization.”13 A product like Apple iPhone is produced all over the world.14
This makes the nationality of the major corporations meaningless. These are genuinely global entities that have no loyalty to any one nation-state. The ability of the latter to control these global entities is very limited at best. Indeed, usually it is these global corporations who manipulate nation-states against each other to get a better deal. In some cases, there is no supervision at all. Every single day, several trillion dollars go around the world, hopping from one stock market to the next. They are in New York 9:30 AM to 4 PM local time and move westward with the sun to Australia, Japan, Hong Kong, and Singapore. A few hours later, they are in Western Europe (Zurich, Frankfort, and Paris). By 5 AM NY time they are in London, and at 9:30 AM back to NYC, with practically no national or international control or supervision.
The response to this inability of nation-states to rein in global corporations came first from the left, then from the right. The left, the progressives and the unions, tried to save the welfare-state under assault from Reaganomics and Thatcherism in the 1980s.15 These attempts failed. Symbolically, candidate Bill Clinton opposed NAFTA while president Bill Clinton signed it, albeit with minor cosmetic changes. The failed Trans-Pacific Trade Partnership (TPP), proposed by President Obama, would have recognized “sovereignty” of these global corporations in relation to the nation states: “Investment rules. Markets were opened to foreign investment among members, and rules added to protect investors from unfair treatment. The controversial investor-state dispute settlement (ISDS) provision, which allows investors to sue host governments using international arbitration panels, was included.”16
The rightwing reaction to globalization in the US came with the Tea Party and a populist nationalism tainted with racism. The phenomenon was not unique to the US. All around the world, from Philippines to Turkey to eastern Europe, and more recently, Italy and Austria, these populists have come to power. In many other countries they have gained a lot more strength. In addition to the economic and political aspects, this nationalism also reacts to socio-cultural dimensions of globalization.
This round of globalization has drastically increased communication and interaction between peoples and communities that so far had known about each other only from books and documentaries. Increased awareness about economic opportunities has made labor a much more mobile factor of production. This century has seen a drastic increase in migrations globally with waves of migrants in search of a better life from Africa to Europe and the “south” to the US. To this one should add the emergence of “failed states,” as a source of mass migration.17 On the positive side, the virtual space of social media has rendered physical distance irrelevant. Two persons from the opposite sides of the planet could be friends on Facebook and share the same tastes and values as if they belonged to the same community and culture. While this creates a global community, it also creates resentment by some segments of society, and by the nation-state apparatus that loses control over its citizens.
In sum, the current round of globalization has made the entirety of life global. It is not only production, capital, or more and more labor (not to ignore outsourcing), or even consumption, but also cultural and social aspects of life that have become global. Lagging are proper global institutions, mostly political, to deal with this new reality. The existing international organizations such as the United Nations and its affiliates, although do a lot of good things, are limited by the fact that they are nation-state-centric. That is, each member represents the interests of its state. Nationalism is not the proper response to this round of globalization. Nor is it desirable. The Trump era has proven this.
We need new global institutions concerned with the welfare of humanity. These should place the universal human, regardless of race, gender, religion, ethnicity, and nationality, at the center of their attention. This does not mean that we must start from scratch. In some areas a universal approach and relevant institutions already exist. The Universal Declaration of Human Rights and organizations such as Amnesty International are examples. Passed in 1948, the UDHR was not taken seriously for a while as the “sovereignty” of a nation-state overruled its violation of citizens’ human rights. Since the 1970s, however, this concept of sovereignty has been questioned more and more and by the time of the Tiananmen Square massacre in 1989 many rejected the Chinese government’s “it’s our internal affairs” argument.18
One can make a case for establishing a global agency to regulate and supervise movements of finance capital and close loopholes, such as “off shore” accounts that global corporations use to avoid paying taxes. Labor unions can go global too: workers everywhere share work-related concerns and have increasingly confronted global corporations in their struggles to improve the conditions of labor. Environmental issues, such as global warming, are another challenge that humankind, regardless of their nationality, is facing. Here too, numerous NGOs and movement activists have raised awareness to the extent that even nation-states have had to respond by signing documents such as the Paris Agreement.19 Not surprisingly, populist nationalists like Donald Trump oppose them. They rely instead on nativist nationalist ideologies.
A necessary first step towards building a global framework suitable for new realities is to put national identity and nationalism in their proper place. National identity is based on a sense of belonging to an “us.” The early form of this is tribal identity which is based on “blood.” With the advancement of civilization and the emergence of the city this identity becomes more a social construct based on location and profession. Religious identity, although theoretically universal, is limited to those who practice it. Some older religions do not even accept converts; only those born into it are accepted as “us.” National identity is superior to all of the above. An “American” is, in theory, part of “us” regardless of gender, race, religion, ethnicity, and other such categories. Its main limitation, however, is that the “them” it constructs acts as the “other” to the “us” and is often enough to mobilize people and to justify organized violence such as wars that kill scores of innocent people.
For the appropriate global institutions to be created and succeed there is a need for a proper mindset: that is, the “us” should be defined as “universal humanity.” All human beings, regardless of their other attributes, including national identity, should be considered as us. Technological advancements of the past enable us to improve the lots of all human beings. We need social institutions with the same goal. A prerequisite for such institution building is the acceptance of the universal identity of human beings everywhere. This is not as difficult as it may seem. For one thing, most of us show it when there is a natural disaster such as a major earthquake or hurricane. If activists act and think in accord with this understanding then others will join as well. Those whose lives are significantly affected in negative ways by this latest round of globalization are prime candidates for supporting a new global institutional framework on the basis of the universal identity of human beings. The working class, for example, has been hurt by the global nature of production; it is not hard to imagine that it should and would support an alternative consciousness of what constitutes an “us.” Those who spend time on “virtual communities” on social media, mostly the younger generations, are another potential source of support. The social media can be used to advocate this new “universal” identity. Arguments for a new global architecture or authority to deal with issues of environmental degradation, violations of human rights, and even the deregulated movement of speculative capital around the world, would be more easily accepted once our consciousness makes the shift from the national to the universal understanding of human identity.
G. Reza Ghorashi is professor of Economics and Coordinator of Global Studies at Stockton University of New Jersey. He has published articles on various aspects of globalization.
- There is a large body of literature debating the definition, origin, and characteristics of modernity. Here we simply define four major characteristics of it: 1- Scientific: “triumph of reason over faith” that, among other things, resulted in major scientific and technological breakthroughs (by asking “Why?”). 2- Economic: the dominance of market mechanism (production for purpose of exchange and profits, rather than self-consumption). 3- Political: the emergence of the “nation-state” and the elevation of “subjects” to “citizens.” The source of power came down from the heavens to the people and governance became a matter of a “social contract.” 4- The tolerance of “otherness”: it started with the “religious other” (Catholic vs. Protestant) and subsequently led to the separation of church and state, and to secularism in general.
- Henry Freeman, The East India Company: From Beginning to End, CreateSpace Independent Publishing Platform, 2016.
- Geoff Woodland, Triangular Trade, Pen and Sword publishers, 2013.
- No doubt these are very complex and complicated phenomena and many books have been written about them. Here we do not intend, nor are we able to, provide an exact assessment of these phenomena. However, we would like to point out that they all have numerous positive and negative aspects. Furthermore, there are many unintended consequences, such as the replacement of liberal democracy for absolute monarchy.
- The Congress of Vienna and its Legacy: War and Great Power Diplomacy After Napoleon, Mark Jarrett © I. B. Tauris publishers, 2014.
- See for example: https://www.ernestmandel.org/en/works/txt/1969/laws_of_uneven_development.htm
- See for example https://www.globalresearch.ca/the-neocons-project-for-the-new-american-century-american-world-leadership
- For a comprehensive analysis of this gap please see Thomas Piketty, Capital in the 21st century, Harvard University Press, 2014.
- Such as the New Deal.
- Because there are hundreds of individual components in every iPhone, it’s not possible to list every manufacturer whose products are found on the phone. It’s also difficult to discern exactly where those components are made because sometimes one company builds the same component at multiple factories. Some of the suppliers of the key parts for the iPhone 5S, 6, and 6S. as well as where they operate, included:
- Accelerometer: Bosch Sensortech, based in Germany with locations in the US, China, South Korea, Japan, and Taiwan
- Audio chips: Cirrus Logic, based in the US with locations in the UK, China, South Korea, Taiwan, Japan, and Singapore
- Battery: Samsung, based in South Korea with locations in 80 countries
- Camera: Qualcomm, based in the US with locations in Australia, Brazil, China, India, Indonesia, Japan, South Korea, and more than a dozen locations throughout Europe and Latin America
- Chips for 3G/4G/LTE networking: Qualcomm
- Compass: AKM Semiconductor, based in Japan with locations in the US, France, England, China, South Korea, and Taiwan
- Glass screen: Corning, based in the US, with locations in Australia, Belgium, Brazil, China, Denmark, France, Germany, Hong Kong, India, Israel, Italy, Japan, South Korea, Malaysia, Mexico, Philippines, Poland, Russia, Singapore, South Africa, Spain, Taiwan, The Netherlands, Turkey, the UK, and the United Arab Emirates
- Gyroscope: STMicroelectronics. Based in Switzerland, with locations in 35 countries
- Flash memory: Toshiba, based in Japan with locations in over 50 countries
- Flash memory: Samsung
- LCD screen: Sharp, based in Japan with locations in 13 countries
- A-series processor: TSMC, based in Taiwan with locations in China, Singapore,
- Touch-screen controller: Broadcom, based in the US with locations in Israel, Greece, the UK, the Netherlands, Belgium, France, India, China, Taiwan, Singapore, and South Korea
- Wi-Fi chip: Murata, based in the US with locations in Japan, Mexico, Brazil, Canada, China, Taiwan, South Korea, Thailand, Malaysia, Philippines, India, Vietnam, The Netherlands, Spain, the UK, Germany, Hungary, France, Italy, and Finland. Source: https://www.lifewire.com/where-is-the-iphone-made-1999503.
- The cause and effect relation between these and globalization and the “deregulation” movement that had started in the late 1970s requires a separate treatment. Here, suffice it to say that a correlation exists.
- “Failed states” themselves are consequences of the new reality of globalization: the US as the hegemon is challenged by “newcomers,” most notably China. Neither the neoconservative’s militarism nor Obama’s “diplomacy first” were able to reverse this trend. And Trump has offered nothing but confusion.
- Still there are some governments who oppose certain aspects of the Declaration as “Western” values. The divide is not geographical between “East and West.” It is, rather, historical between modern and pre-modern values. The fact that modernity started from western Europe should not be the reason to deny it from other regions just like the fact that writing began in Sumer, or alphabet was invented by the Phoenicians, should not prevent others from using them.