[Editor’s note: this lecture was delivered to the Leavey Institute of Santa Clara University in 2003. You can find it reproduced in whole here.]
The word “globalization” is often used as shorthand to suggest that the world as recently shrunk for many purposes (Friedman, 1999). At first blush, this would seem to be good news, facilitating the spread of literacy, the diffusion of useful technologies, and socioeconomic progress, in general. However, a large segment of public opinion, in this country and, apparently, a larger segment in Europe and certain other countries (such as India), takes a jaundiced view of this shrinkage. This view is propagated by numerous websites as well as by professional intellectuals such as Noam Chomsky (who is often heard on National Public Radio). It contains a large anti-American component (Menand, 2002). It is widespread – at various levels of sophistication – in American universities. (1) In recent years, it has been dramatically acted out by rioters in Seattle, Quebec and Genoa, among other places. For left-wing opinion, “globalization” seems to imply that there is something radically new under the sun that is also economically nefarious for the poor and for the weak. For the same left-wing opinion, the word often suggests a sinister plot implicating in turn, “big corporations”, the World Trade Organization, the International Monetary Fund, and other organizations little understood by the general public. (For a broad, business-oriented and mildly liberal classification of the many sins the word “globalization” covers, see Eden and Lenway, 2001.) That new something entails a clandestine hegemony, or hegemonies, of some sort, dedicated to the further “exploitation” of the already poor and weak by the already rich and powerful. In this presentation, I develop the idea that there is little that is both radically new and nefarious,
and that what is new is likely to have largely beneficial effects. I rest my argumentation on readily available, public evidence.
Note: If you don’t think such a perspective on globalization exists, or you believe it’s inconsequential, you may want to stop reading. It is very difficult to find anywhere assertions about globalization displaying at once the following features:
Well-supported by systematically gathered facts;
Clearly bearing negative consequences for the welfare of any category of population anywhere (2).
Scanning the media and the public statements of scholars and activists for evidence that satisfy these criteria, I find only two noteworthy consequences of globalization. One that is undoubtedly noxious but not all that new: the frequent betrayal of small economic actors by powerful democratic governments. The second and the most striking is the nearly undisputed global hegemony of the American motion pictures industry. It’s relatively new and the cultural influence of American movies (and of television) is frequently decried by many different kinds of commentators, almost everywhere in the world. In fact, I am almost sure that given ten perfect strangers, in any part of the globe, I can elicit anti-American cinema sentiments in five minutes flat from at least one of them.
I argue at the end of this paper that the social consequences of exposure to American movies must be mostly positive for the poor and the powerless of this world. But first, I will take a detour to show that many seemingly self-evident truths about globalization are simply inventions or gross misreadings of the facts.
Globalization in International Trade and Investment?
“Globalization” means, among other things, an increased, or somehow more consequential presence of large multinational corporations. For critics, this implies undesirable consequences.
It’s difficult to evaluate the effect that the presence of given multinational company has on a given segment of population of a given country where it operates. There is some ambiguous isolated evidence that some multinationals engage offshore in behavior that would not be ethically acceptable in their home countries (3). Yet, there exists a broad claim to the effect that multinational companies in general are more noxious than they used to be, and international trade, as well as its companion, foreign direct investment, correspondingly destructive of human happiness. If this broad claim were factual, we would expect trade flows or international capital flows to be somehow different from what they used to be. Or, alternatively, we would observe that the cause and effect relationship between such (unchanged) flows and their consequences has become qualitatively different, in a negative way. If any such new developments were truly calamitous we should be able to detect their effects in aggregate income figures. This second possibility needs to be established explicitly; it cannot just be affirmed to exist. At a minimum, the claim that economic globalization is a bad thing requires that some parts of the world be demonstrably worse off than before – or some segment of some population – in a way systematically related to attributes of these flows. The first idea, that trade and investment flows are different from what they used to be, can be examined directly.
In fact, neither trade nor investment flows have changed much in the past 25 years. They are not even radically different from what they were a hundred years ago. The international trade of today was largely prefigured by the international trade of three hundred years ago and even earlier. There already was a great deal of long-distance trade a thousand years ago.
The strongest evidence I have found about any recent change in international trade flows is that it appears that the proportion of world commodity production that is traded has increased 2.2 times between 1959 and 1996 (Sangmoon and Shin, 2002). Yet, the importance of all international trade in the aggregate world economy has just recently returned to what it was before WWI (Pollock, 2001). Although, on the average, countries had more trade ties with one another in 1996 than in 1959, according to a recent rigorous study, most of the increase took place before 1975. (Sangmoon and Shin, 2002). The relative importance of any one single country in global trade ties has decreased, between 1959 and 1996; that is, world trade networks are becoming decentralized. (Sangmoon and Shin, 2002).
A spoof issue of the Wall Street Journal (1/11/99, fictitiously dated “01/01/1000”) published to celebrate the millenium reminds us of the large size and diversity of international trade between China, the economic superpower of the day on the one hand, and other parts of Asia, and Europe and Africa, on the other, in the year 1000 (The article also describes a second network of far-flung trade in gold within Africa.) This WSJ special issue mentions customs duties comparable to today’s (around 10%).
A 1974 book that received the most prestigious Sociology award (the Sorokin Award), entitled The Modern World System, paints in minute scholarly detail the development of the “European world economy”. The gist of the book’s argument is that there has been no autonomous regional (or even less, national) economic change since the early sixteenth century, except in the most backward parts of the world. (The fact that its author, Immanuel Wallerstein, may be judged, on a personal level, as one of the ideological grandfathers of today’s anti-WTO rioters does not change the tenor of his book.)
Dependence on other parts of the world for essential goods is not a new fact of life. Indonesian mace and turmeric growers of the year 1500, surely did not count on surviving by consuming their own production; they had to sell it far away, as far as Norway, for example, to buy staples (De Raynal,1778). Those who, today, view with alarm the displacement of locally produced good by foreign products tend to forget that Marco Polo never tasted spaghetti a la Bolognesa because tomatoes had not yet been brought to Europe from the New World. Nor did Marco know the taste of coffee, or of chocolate, nor did he smoke, because the last two common stimulants came from the Western Hemisphere, and the first, though originating in Ethiopia, spread to the world through European plantations in the West Indies. Only about four hundred years after Marco’s death had people in most of the world incorporated these items into their lifestyles, but then, it was for good (Braudel, 1981:249-263). Europeans adopted the potato, and Africans, corn, at about the same time (Braudel,1981:165-171).Those were major changes for the toiling masses of the time, un-paralleled, it seems to me, by anything taking place recently on a global scale.
Production for distant markets, the long distance trade relations it implies, and the transformation of some cultural patterns it carries, are not new phenomena.
Capital flows relative to the economic sizes of the countries whence they came were larger before WWI than today (Bordo et al.:27). In other words, capitalists then were more invested abroad than they are now. Bordo et al. speculate nevertheless that today’s foreign investment in, say, Latin America, may have more negative consequences for the recipient countries than yesterday’s British investment in say, Australia. (Yes, reader, you got that right: Some critics of globalization actually believe that bringing money into a country harms that country.) They argue that this must be so because whereas British 19th century investment was mostly in infrastructures, contemporary foreign investment is mostly in production. Although it is plausible that investments in different economic sectors have different social and economic consequences, the validity of this idea has to be established with data, not just peremptorily stated. In point of fact, over twenty-five years of reviewing sociology of development submissions for the top Sociology journals (American Journal of Sociology, Social Forces, American Sociological Review), I have seen a fair number of empirically based papers making this kind of claim and I used to contributed to this brand of research myself (Delacroix and Ragin 1981). A few of these papers were methodologically and otherwise good enough to be published in those top journals. Those are only a handful, in spite of my impression that such papers tend to receive abnormally favorable reviews because nearly all capable reviewers belong to the same ideological school as the submitters. (Nevertheless, if I were an intellectually serious militant against economic globalization, this is where I would direct my attention.)
(1) In my resolutely middle-class, but non-elite university (it’s not Harvard), this perspective appears under two guises: a) at rallies and in a local newspaper put together by a small number of student activists; b) in assignments turned in by undergraduates in various Liberal Arts classes. Based on my occasional reading of the latter, I suspect this view of globalization is widespread.
(2) Except for the undeniable fact that whenever production moves from one area to another, some temporary social and economic dislocation occurs in the area that is left behind. I think this dislocation is not trivial but that it must be measured against: a) The overall low rate of unemployment in developed countries and a consideration of its structural causes other than job flight overseas; b) The generous measures most of these countries have taken to soften the blow to individuals displaced by the removal of production to other countries. The US historical unemployment rate was around 6%, much before there was any job flight on any significant scale. European Union countries, most of which have chronically higher unemployment, seem to encourage joblessness by extending benefits for months, sometimes years, to alleged job seekers without demanding much by way of proof of an active job search. Japanese companies just don’t seem to lay off people no matter how much they move operations abroad. Both the EU countries and Japan also inadvertently promote unemployment by making it administratively difficult to lay off workers. A French restaurant owner told me that hiring in France was much more serious than getting married because the former was “pour la vie”. In addition to the export of jobs, it may be possible to find socially deleterious consequences to some unwise lending policies of the International Monetary Fund, an organization that is often the object of left-wing ire. It’s not obvious how this is an aspect of “globalization” except if we imagine that the IMF is engaged in a mysterious conspiracy to impoverish whole countries to serve the sinister purposes of multinational corporations. Anything is credible for those who don’t care about evidence!
(3) On September 26/02, six American clothing companies (including The Gap) and 23 Saipan manufacturers joined 19 predecessors and assented to settle a lawsuit brought about by Chinese contract workers. They agreed to create a $20 million fund to address alleged past and future wrongs, including $6.4 million for back pay; this without admitting any fault. Levi Strauss, a multinational known for its progressive social policies, refused to join the settlement, arguing that it had done nothing wrong and already possessed an adequate system to monitor its offshore suppliers. The total cost of the settlement to be shared with 49 others, including such giants as J.C. Penney, Sears Roebuck and Nordstrom would be equivalent to five per thousand of Levi Strauss, annual sales. The amount is small enough in relation to the sizes of the companies involved to sustain the possibility that Levi Strauss was standing on principle and that the other manufacturers settled a mere nuisance suit for the sake of convenience. It’s not clear that any of these companies did anything wrong, by any standard.