The rest of the world is pretty much left (and maybe even kept) behind. That means that some very important countries, notably Russia and China, do not enjoy fully the fruits of economic globalization. They also feel frustrated and respond with aggressive geopolitical actions to geo-economic challenges. It is exactly where the world stands today. If the 20th Century witnessed a switch from geopolitical conflict to economic cooperation, the 21st Century could take us back from economic frustration to geopolitical conflicts.
By Nicholas Dima l January 2, 2017
During the 19th and most of the 20th Centuries, political leadership took a central stage in national affairs, geo-politics dominated international relations, and economic activities followed the political lead. Consequently, the nation-states and their spheres of influence were the power-centers of the world. The late 20th Century brought about a radical change: Economic activities took over the initiative and big Trans-National Corporations (TNCs) began to dislodge the authority of the government. This new trend led to new international economic blocs, it eroded the power of national governments, and it forced average people to adjust to new realities.
This article explains briefly the process of globalization and what is happening on a global scale. A few clarifications are needed. Economy means the production, exchange, and consumption of goods and services. But, there is no economic development without political backing. Politics mean the rules by which a society is governed. Yet, there is a strong link between political and economic institutions. Together, they can make a nation flourish; separate, they can strangle a country. Thus, politics and economics must evolve together to achieve stability and prosperity. This is what happened traditionally in the United States. However, America has come to a crossroad. Should Washington opt for the interests of the big corporations or for the benefits of the average American?
The process of globalization refers to new and strong economic, political, and cultural links that bypass international boundaries. It means new production arrangements and new trade relations, services and marketing activities. All these require renewed international relations and new personal attitudes. Yet, globalization is an elusive concept and is apparently irreversible. The process is caused primarily by modern technology, but it is driven by politics and by economic forces. At the same time, globalization results in a contradiction between big Trans-National Corporations and national governments. And last but not least, it is viewed as a potential conflict between nationalism and internationalism.
In the new economically-dominated world, some pertinent questions should be kept in mind when studying the process of globalization and the role of government. What are the goals of national governments and what are the interests of the big corporations? Who is running the show and who is winning or losing? And what alternatives are there for the world given the globally unifying role of the new technologies? These are difficult questions and the answers are neither simple, nor are they very clear.
Take, for example, the role of national governments and the goals of TNCs. Traditionally, nations are created historically in a natural way from the ground up. They are located geographically on a given territory and have governments that at least in principle are elected by the people. In addition, governments have an inner balance of power between the executive, legislative and judiciary. By contrast, TNCs are created from above without any popular consent, as a rule do not have a local or a national loyalty, and do not have an inner balance of power. While national governments must serve their citizens, corporations serve their interests. Do corporations also serve the interests of the countries where they operate? Yes, but only as long as they first serve themselves. Do national governments always serve the interests of their nations? Not necessarily. Corrupt or inept governments put the interests of their members and their backers before the interests of the nation, thus causing ruinous consequences for the people. Where does America stand these very days between two different administrations with two opposing philosophies?
Is the process of Globalization good or bad? So far we only know some consequences. They are economic domination by some big TNCs, growing gaps between countries, and polarization of incomes between rich and poor everywhere. As attitudes, globalization advocates claim that in the future everybody will benefit, but opponents are skeptical. Until America’s 2016 presidential election, it embraced globalism without reservation. Other Western countries are more nuanced, but remain strongly ethno-centric. International organizations generally support the process and implicitly help the powerful countries. Many national leaders are caught between a rock and a hard place. As a result, leaders of some developing countries insist on ‘Fair’ rather than ‘Free’ trade. Poor countries have little or nothing to say. And average people bear the consequences.
The process of globalization has deeply polarized the world. A number of corporations and a handful of individuals have become incredibly rich. The rest of the world is not necessarily poorer than before in absolute terms, but it is being left behind in relative terms. Admitted, however, globalization entails some benefits for many people: more international trade, more goods available everywhere, reduced production cost, spreading of new technologies, intensified international relations, and, hopefully, spreading of democracy. On the other hand, globalization also entails also negative consequences. It generally creates low-paying jobs, polarizes the society causing social problems, and erodes national sovereignty.
From a geopolitical and geo-economic point of view, today’s world is increasingly ‘global,’ but with three dominant centers: Anglo-Saxon North America, Western Europe, and South-East Asia. The rest of the world is pretty much left (and maybe even kept) behind. That means that some very important countries, notably Russia and China, do not enjoy fully the fruits of economic globalization. They also feel frustrated and respond with aggressive geopolitical actions to geo-economic challenges. It is exactly where the world stands today. If the 20th Century witnessed a switch from geopolitical conflict to economic cooperation, the 21st Century could take us back from economic frustration to geopolitical conflicts.
(This article is a succinct summary of Professor Dima’s book, A Brief Study of Globalization, Exlibris: U.S., 2013).
Nicholas Dima, Ph.D, is a former professor and author of numerous books and articles including the autobiographical memoir, Journey to Freedom, a description of the effects of communist dictatorship on a nation, a family and an individual. He currently lectures and is a contributor to SFPPR News & Analysis of the online-conservative-journalism center at the Washington-based Selous Foundation for Public Policy Research.