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Globalisation as Current Capitalist Transformation

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Contents

  1. Introduction
  2. Globalisation as Neo capitalism
  3. Conclusion: Capitalism and Globalisation

Introduction 

In his well-known book, The World Is Flat, Thomas Friedman (2005) outlined the three waves of globalization: Globalization 1.0, which lasted from 1492 when Christopher Columbus set sail to 1800 and shrank the world from a size large to a size medium, with countries and governments tearing down barriers and knitting the world together; Globalization 2.0, which lasted from 1800 to 2000 and shrank the world from a size medium to a size small, and the key agent of change was multi.

We now realize that globalization is not a recent phenomenon and has occurred in waves throughout history. New lands were discovered by European and Chinese explorers for the purposes of trade and adventure during the first phase of globalization. The need for raw materials for use in industries established in Europe more overtly drove the second phase of globalization. Alongside this, efforts were made to find new markets for the excess production. This ultimately ushered in the age of colonialism. Seemingly as a result of the desire for market dominance, there has been a third wave of globalization. Global businessmen from every region have entered the arena thanks to the use of information and communication technology.

Karl Marx attempted to show in his writings that the capitalist system is a specific period in the development of European society. According to Marx, economic institutions should be prioritized when attempting to understand the past. The relations of production serve as the foundation for every social structure. Only when there is economic equality in society is social equality possible. Every time in history, according to Marx, there have been two classes in society. In every society, there are two classes: those who own the means of production and those who do not. The capitalist society is also an unequal society where the bourgeoisie (owners of factories, etc. , , ,,,,,,,,,,,,,,

Marxists contend that capitalism is an unjust economic system in which the owner class has complete control over all of society's major institutions. The systems of production, distribution, and consumption were all developed to serve the interests of the capitalist class. In this system, workers are taken advantage of. They can't receive payment for the labor they put in. Capitalists siphon off the profits produced by their laborious efforts. They cannot receive equal treatment in society. The polarization of classes is ultimately caused by the increased competition among capitalists. None of the members of the non-owner class have access to basic necessities. Marx held that this required the end of the capitalist system. Only the proletariat class' revolution made this possible. The only way to eradicate capitalism is through a communist revolution.

The second stage of globalization was targeted by the Marxist critique of capitalism. The neo-Marxist worldview, however, is very critical of the neo-capitalist world. The unrestricted expansion of capitalism around the world has always been opposed by the two groups. Thus, these groups have studied globalization as a particular form of capitalist transformation.

Globalisation as Neo capitalism

Four different types of changes can be used to describe globalization in the modern world. In the beginning, it entails a stretching of social, political, and economic activities across borders, regions, and continents. It is distinguished by the intensification, or expanding scope, of interconnectedness and flows of commerce, investment, finance, migration, culture, etc. Third, it can be connected to a quickening of global interactions and processes as the expansion of global transportation and communication networks quickens the spread of concepts, products, information, capital, and people. And, fourth, the expanding extent, intensity, and velocity of global interactions can be linked to their deepening impact, such that the effects of distant events can be highly significant elsewhere and particular local developments can become to have significant global consequences (Held et al. , 1999).

In this way, the lines separating national and international affairs become more porous. In a nutshell, globalization can be defined as the widening, intensifying, accelerating, and growing impact of global interconnectedness.

The primary driver of market expansion may be the industrialist surplus in many nations, particularly in developed nations. The communists thought that the current wave of globalization was a result of various nations around the world looking for new markets. Overproduction, i.e., the reason the search began. e. , global overcapacity in a number of economic sectors. A surplus of manufactured goods, according to some thinkers, is harming the global economy. So it would seem that the systemic crisis facing global capitalism requires drastic structural changes.

From the communist nations, the capitalist economies of the world continued to be restrained. China, some countries in Eastern Europe, and the USSR all experienced revolutions in the form of the Bolshevik and peasant movements. For several years, these nations operated as a single bloc. The other half of the world, however, kept using the capitalist system of economics. Thus, the world remained bipolar through the 1990s.

Many people believed that the American liberal values of democracy, individualism, and free markets had triumphed and that the world would soon be moving quickly toward capitalism as a result of the collapse of the USSR, which left the world with only one superpower. Since the World Trade Organization, General Agreements on Trade and Tariffs, and General Agreements on Services were established, economic issues have assumed a more prominent role in international discussions. After that, the global economy underwent a number of changes. The markets for developed countries have expanded as a result of these changes, which on the surface appear to be aimed at promoting global trade. As a result, this period of globalization is also referred to as a capitalist transformation.

From a state-dominated to a market-dominated world, there has been a significant shift. In terms of markets, national borders are becoming less important. A market must be established for the excess goods and services produced. The businesses are unable to afford to stay within their national borders. The opening of global economic borders inspires new hopes and ambitions among the businesses. Political leaders have also begun to promote international trade. To entice foreign businesses to invest in their countries, they travel to other countries. It appears that nation states' economic interests have surpassed their political interests in importance. As a result, political, economic, and social activities are becoming more global in scope, and interactions between states and societies have grown on many fronts.

Unrestricted trade, investment flows, and the international operations of multinational corporations are characteristics of a global capitalist economy. Just a few significant changes in trade, finance, and foreign direct investment by multinational corporations can be attributed to economic globalization. Increased international flows of goods, capital, and services are evidence of the market's growing importance; these flows have been facilitated by falling transportation and communication costs, the collapse of command-type economies, and the growing sway of a conservative economic ideology based on the theories of economics. The expanding globalization of markets, production, and finance during the years prior to World War I is really what is driving the current market revival.

International trade has significantly increased in size and significance since the end of World War II, having a significant impact on both national and global economic affairs. In the past 30 years, global trade in goods and services has grown by an average of 7% annually, surpassing a peak of US$ 18 trillion in 2011. This is in contrast to the period between 1913 and 1948, when the volume of international trade only increased by 0% annually. When trade is calculated in terms of value added, services are more important.

Between 1980 and 2011, developing economies increased their share of global exports from 34% to 47% and their share of global imports from 29% to 42%. In terms of global trade, Asia is becoming more important. Today's global trading system has been propelled by sharp drops in transportation and communication costs. These structural trends have been advanced and strengthened in a significant way by geopolitics. In contrast, the total value of exports (goods and services) worldwide in 1997 was $6.6 trillion, or $25 billion per day! In the late 1990s, the volume of foreign exchange trading (buying and selling national currencies) averaged about $1.5 trillion per day, an eightfold increase since 1986.

Since the middle of the 1970s, a much more tightly integrated global financial system has emerged as a result of the lifting of capital controls, the development of new financial instruments, and communications technology advancements. The global economy's structure and operation have been significantly changed by the growing significance of multinational corporations (MNCs). The location of businesses, industries, and other economic activities around the world are now largely determined by these massive firms and their global business strategies. The sectors that require a lot of capital and technology receive the most investment. These businesses have grown to play a crucial role in the expansion of technology flows to both industrialized and developing economies. Multinational corporations have consequently taken on a crucial role in determining the economic, political, and social welfare of many countries. Such firms have emerged as major players not only in international economic affairs but also in political ones, controlling a large portion of the world's investment capital, technology, and access to global markets. This has led to a backlash in many nations.

The different economic sectors have seen an increase in Foreign Direct Investment (FDI) thanks to globalization. However, the trends indicate that FDI does not enter the infrastructure sector. The consumer sector receives the majority of foreign direct investment. Companies' primary concern is making quick money, not seeing their investment countries develop. Furthermore, FDI is actually very unevenly distributed throughout the world and is highly concentrated. A large or potentially large market attracts businesses, which is why the majority of FDI occurs in the United States, China, and Western Europe. With a few notable exceptions, FDI has been minimal in less developed nations.

Marxists and Neo Marxists still hold the view that the current stage of globalization does not represent a typical laissez-faire state of the global economy. It was purposefully designed to serve the interests of the world's capitalist nations, especially the USA and other European nations. They contend that current globalization is hegemonic and serves only a small number of powerful countries.

Despite these developments, the majority of trade still occurs between the three advanced industrialized economies of the United States, Western Europe, and Japan, as well as a few other emerging markets in East Asia, Latin America, and other regions. Except as exporters of food and raw materials, the majority of the less developed world is left out. For instance, it is estimated that only 1% of global trade in the 1990s came from Africa south of the Sahara.

The resources of post-colonial peoples are still exploited, according to neocolonialism's detractors, and this economic dominance is similar to the traditional European colonialism that existed from the 16th to the 20th centuries. Neocolonialism can simply refer to the interference of powerful nations in the internal affairs of weaker nations in broader usage, which is particularly common in Latin America. This implies that "neo" colonialism is a contemporary, economic form of imperialism. In a post-colonial world, the dominant nations act like colonial powers, and this behavior is compared to colonialism. The liberalization of markets and the gradual removal of all forms of "restrictions" on the free flow of capital and commodities around the world, particularly over the last two decades, when neo-liberalism and monetarism have been widely adopted, have greatly accelerated the process of globalization. The dominance of financial speculation in the advanced capitalist nations, particularly in Europe, the USA, and Japan, is crucial to the global mobility of capital today.

The world is becoming more and more divided into a small number of countries that appropriate capital and other means of production, and the rest of the world that appropriates only labor as capital accumulates on an ever-increasing scale in the system's center. The immediate hiring of peripheral labor by metropolitan capital invested in the periphery is how surplus value is transferred from the periphery to the center in an increasing number of cases. The separation of the producer from the means of production, or the division between capital and labor, is the fundamental contradiction of the capitalist mode of production, which has now been extended to the entire world.

Neo-Marxists see today's globalization as simply an expansion of capitalism in its modern form. The capitalists arrived in search of new markets for their goods, which ultimately resulted in the colonization of various nations around the world. The multinational corporations of today's world perceive a market shortage. To gain access to the consumers living in the third world, they pressure national governments to open their markets to international trade.

Today's critics of globalization also contend that rising income inequality both within and between countries is a direct result of the current stage of globalization. The country's cottage and small-scale industries are being destroyed by it. Multinational corporations, whose budgets exceed those of the governments of the various nations, are gaining power. Crony capitalism is a result of their alliance with the political elite and the government. These critics assert that national societies are unavoidably being assimilated into a global economic system. As a result, capitalism's modernized form of globalization is nothing new.

Conclusion: Capitalism and Globalisation

The free-enterprise or free-market system, also referred to as capitalism, is an economic system that gives people the freedom to use their private property however they see fit while minimizing the interference of the government. Let the market remain unregulated, according to critics of capitalism, is reckless. However, there are many supporters of capitalism, including Robert Murphy (2007), who defends it vehemently by claiming that "politically correct" misconceptions about capitalism have been spread throughout the world by propagandists posing as educators and members of the liberal media. He believes that these myths about the bad aspects of capitalism hide the fact that it has improved the lives of people from all social classes, and that working classes in capitalist countries have fared better under capitalism than under communist regimes. On the other hand, the Marxist charge that capitalism exploits the poor in order to advance the interests of the wealthy is the most common criticism leveled at it.

Increased technological, economic, and cultural interconnection of nations is what is meant by the term "globalization" in this context. Global capitalism, as opposed to national capitalism, is essentially what it is. Economic activity is not constrained by time zones or national boundaries in a globalized economy. Labor forces, ideas, knowledge, goods, and services are all traded internationally. Since the 1980s, when technological advancement made it easier for people to travel, communicate, and conduct business internationally, this phenomenon has accelerated significantly.

Critics of globalization characterize this phenomenon as a form of Western expansionism and cultural imperialism, contending that it increases the chances for wealthier countries and their multinational corporations to profit at the expense of the poorer societies by utilizing the cheap labor and lax regulations. Proponents of globalization have noted that every country that has jumped on the globalization bandwagon since the 1980s has seen an increase in its manufacturing output and per capita income, and that countries with open economies typically have much stronger economies than those with closed economies. The best example of this is seen in the East Asian nations, where the increased wages brought about by globalization reduce poverty and improve living conditions for all.

However, critics of globalization like Petras and Veltmeyer (2001) like to point out that it is simply imperialism dressed up in a new disguise that aims to create the ideal environment for the "free play of greed, class interest, and profit-making.". Petras and Veltmeyer are clear on this point: it is the transnational corporations (TNCs) who are the controllers and the beneficiaries of globalization. However, since globalization depends on decisions made by humans, the question is who those humans are and in whose interests are they acting? A new global division of labor is emerging, one that is characterized by cheap labor and oppressive governments. There is a huge unemployment problem as a result of new, advanced technology that reduces the need for labor. The fact that profits do not stay in the countries where they are made but instead move north and west ensures that the imbalance of power between the center and the periphery will continue, despite the fact that globalization may be more internationalized than it was previously. This is what prevents globalization from being what Adam Smith had envisioned (namely, the situation where each country could be in a position to concentrate on what it was good at).

This claim is expanded upon by Berch (2003), who claims that globalization is the final and most developed stage of capitalist imperialism, helped along by transnational capital. It is an "accelerated and most pervasive phase" of globalized advanced monopoly capitalism. In this sense, it is a continuation of transnational capitalism's global expansion, which is now characterized by new characteristics such as speed, intensity, privatization, and the waning role of the state, which are unique to this most recent stage of capitalism's development. Globalization represents a qualitatively new stage in the growth of global capitalism when taken as a whole (Ross and Trechte, 1990).

The fact that globalization is fundamentally a capitalist endeavor and nothing can change that fact remains an undeniable fact despite all these quantitative and qualitative variations. The logic of profit for private capital accumulation based on the exploitation of labor around the world drives globalization, just like its earlier avatar (capitalism).

According to Berch, new anti-imperialist, anti-capitalist struggles will inevitably arise, particularly in Third World countries, along with a radicalization of labor movements in developed countries because the globalization process has had a direct impact on working classes everywhere. He is adamant that the global political economy's contradictions will lead to more class conflict in the future. It is unclear how much his opinions will turn out to be true.

References

  1. Berberoglu, Berch (2003) Globalization of Capital and the Nation State: Imperialism, Class Struggle and the State in the Age of Global Capitalism (Revised ed. Edition), Lanham, Maryland: Rowman and Littlefield Publishers 
  2. Friedman, Thomas L. (2005) The World Is Flat: A Brief History of the Twenty-First Century, New York: Farrar, Straus and Giroux 
  3. Held, D. and McGrew, A., Goldblatt, D. and Perraton, J. (1999) Global Transformations: Politics, Economics and Culture, Cambridge: Polity Press. 
  4. Hirst, P. and Thompson, G. (1999) Globalisation in Question, second edition, Cambridge: Polity Press. 
  5. Murphy, Robert P. (2007) The Politically Incorrect Guide to Capitalism, Washington, DC 
  6. Ohmae, K. (1990) The Borderless World, London: Collins. 
  7. O'Neill, O. (1991), 'Transnational justice' in D. Held (ed.) Political Theory Today, Cambridge: Polity Press.
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