1) Globalization FROM ABOVE:
(Defining, and explain important features of globalization.)
Globalization from above
Globalization from above has had a more negative than positive impact on the 3 world rd
because globalization from above enorrdusly exploits the people of the 3 world as well
as the natural resources of the 3 world without replenishing the countries that they rob.
Yes the process of globalizations creates millions of jobs but at the 3 world’s expense.
Multinational companies and corporations only come to the 3 because of the cheap
labour and the low wages that the people receivrd These companies also extract any
wealth and or natural resources that the 3 retains. The process of globalization also
harms the environment in many ways which in the end results in little or no prospects for
sustainable development in the 3 world. Also globalization from above does not help
the 3 world develop in any shape or form. If anything globalization from above
continues to paralyze the 3 world and keep them in their current destructive state,
globalization from above only widens and expand the gap between the rich and the poor
Globalization from above is the functional integration of globally dispersed economic
activities into highly integrated world economic system under the hegemony of
international capital, also Global integration at production level; ‘global factory’ at the
level of consumption.
Globalization: A process (or set of processes) which embodies a transformation in the
spatial organization of social relations and transactions-assessed in terms of their
extensity, intensity, velocity and impact-generating transcontinental or interregional flows
and networks of activity, interaction and the exercise of power.
• For these reasons globalization has to be understood as a process which both
unites and divides peoples and communities; it does not automatically follow that
humanity is becoming a single global community of fate.
• It refers to the ways in which development in one region can rapidly come to
have significant consequences for the security and well-being of communities.
• In this sense globalization express the widening scope, deepening impact and
speeding up of interregional flows and networks of interaction within all realms of
social activity from the cultural to the criminal.
- There are four dimensions of globalization
- Deepening of global independence (economic, political, cultural)
- Increased flow of commodities and cultural products (such as trade in an
- Emergence of global institutions and bureaucracy to mandate exporting
- Increased power of TNC’s (trans-national corp.)
- Emergence pf global cities (certain cities are noble points in the emerging global
city. They play a key role in promoting globalization
- Global spread of Western-style consumerism
- Time and space compression. Winners and Loser (North/South Divide)
North- Enjoys a greater share of global economic activity
• Represents 20% of world population, shares 80% of global economic activity,
and receives 65% of all foreign investment.
South- Growing differentiation with TW
• Only 10 countries account for most economic activity.
• The global system is very exclusive. It excludes citizens across the world from
having access to the global market.
• It excludes people as producers but also as consumers. In the so-called global
shopping mall most people are only window shoppers.
• The gap between the halves and the halve-not is widening, leading to greater
• So globalization has not delivers in sharing economic qualities. In this respect
globalization is reordering developing counties into clear winners and loser such
that it operates to the advantage of the ‘more dynamic and powerful countries in
the north and south
Impact on Third World- Globalization has impacted the third world in variety of different
• Bringing down barriers to allow for trade
• Interaction with foreign countries to build the economic structure
• However there have also been negative implications such as exploitation, and
increased prices of certain goods.
• It has change the configuration of wealth and power in parts of the world.
• A new form of western Imperialism, which dominates and exploits through
multinational capital such as the IMF & WB.
• Social Exclusion
2) New global division of labour (main features)
1. Geographical expansion of manufacturing production
- many other countries are now producers, which are exported to developed
- emergence of global assembly factories )global assembly line, means there are a
number of components from a variety of countries that come together to be
produced in a central location
- there are ten countries: Mex, Arg, Bra, China, Singapore, SK, Taiwan, HK,
- Free- export zone ( small countries allowing foreign industries producing for
2. Highly centralized management of global production
- Efficient managers of global factories are TNC’s
- market offshore production
3. Growing concentration/monopolization/ economic resources and power by
TNC’s - If you look at the top 100 eager producers 51 are producers 50 are countries.
Thus proving that corporations are becoming increasingly powerful.
4. Global economic activity is not evenly distributed
- Illustrated in the North/South Divide.
- North enjoy greater share of global economic activity ( 20%world population,
80% global economic activity, 65% global foreign investments)
- G-8 forum (most powerful countries in the world)
South – South divided: growing differentiation within TW
- NICs account for most economic activity ( 80% of total TW exports, 75% private
BRICS – Brazil, Russia, India, China and South Africa newly emerging (growing)
economies, which are becoming more integrated into world economy
3. Core, Peripherystnd Semi-Periphery rd
- Core= 1 world, Periphery= 3 world. By comparison many radical accounts
conclude that the core and periphery (1 world and 3 World) remain very much
fundamental reality of the contemporary world order. This is especially so today
as most of the world’s population and the majority of developing economies are
becoming increasingly excluded from global affluence.
- The old North-South hierarchy is arguably giving way to a new global division of
labour in which the “familiar pyramid of the core-periphery hierarchy is no longer
a geographic but a social division of the world economy.
- To talk of North and South, or 1 world and 3 world, is to overlook the ways in
which globalization is transforming old hierarchies by forgiving new patterns of
inclusion and exclusion, which cut into and reach across all the countries and
regions of the world.
- Semi-periphery are countries that have developing/ industrialized markets like
china and India.
4) Liberalism & Neoliberalism:
Liberalism is an economic theory in favour of laissez-faire, the free market, and the gold
standard. Liberalism is a European political and social philosophy that came about from
the rule of the monarch but eventually changed into a parliamentary democracy which
supports the notion of welfare state. Stressed individual freedoms and minimal roles of
the state. The role of the state is simply to protect individual rights and freedoms. Also
supports the notion of individual freedom to own property, freedom to engage in market
transaction and individual freedom from government interference. Laissez-faire
capitalism equals free market capitalism and the market equals key institutions to
allocate resources in society. Neoliberalism principles apply to transnational capitalism,
which supports the notion of stress-free markets and free trade to promote free flow of
capital and goods. Neoliberalism stresses the market, it also stresses the concept in
which the market has to regulate society. Neoliberalists want the market to decided
what has to be done on all levels; they basically want the market to rule every part of
Basically liberalism is human oriented whereas Neoliberalism is market oriented.
Liberalism is all for individual rights, freedoms and democracy whereas Neoliberalism is
all about the market, meaning that it’s all for the market governing every aspect of
Neoliberalism= reduced role of the state
Policies: 1. THE RULE OF THE MARKET. Liberating "free" enterprise or private
enterprise from any bonds imposed by the government (the state) no matter how
much social damage this causes. Greater openness to international trade and
investment, as in NAFTA. Reduce wages by de-unionizing workers and
eliminating workers' rights that had been won over many years of struggle. No
more price controls. All in all, total freedom of movement for capital, goods and
2. CUTTING PUBLIC EXPENDITURE FOR SOCIAL SERVICES like
education and health care. REDUCING THE SAFETY-NET FOR THE POOR,
and even maintenance of roads, bridges, water supply -- again in the name of
reducing government's role. Of course, they don't oppose government subsidies
and tax benefits for business.
3. DEREGULATION. Reduce government regulation of everything that could
diminish profits, including protecting the environment and safety on the job.
4. PRIVATIZATION. Sell state-owned enterprises, goods and services to private
investors. This includes banks, key industries, railroads, toll highways, electricity,
schools, hospitals and even fresh water. Although usually done in the name of
greater efficiency, which is often needed, privatization has mainly had the effect
of concentrating wealth even more in a few hands and making the public pay even
more for its needs.
5. ELIMINATING THE CONCEPT OF "THE PUBLIC GOOD" or
"COMMUNITY" and replacing it with "individual responsibility." Pressuring
the poorest people in a society to find solutions to their lack of health care,
education and social security all by themselves -- then blaming them, if they fail,
5) Multinational Corporations: By definition are producers in more than one country,
including its home. Such firms therefore have mulit0country production operations. Its
defining characteristic is to have their headquarters at the country of origin (home base).
Trans-national Corporations: There is less agreement over the definition of a TNC.
One characteristic that is frequently referred to is the integration of its economic
activities-research, design, purchasing, marketing, sale and production at a global scale.
On this view, TNC’s will locate their activities, including headquarters or research and
design functions, wherever is the most favourable economically. To have a market
presence in each of the major economic regions of the world requires a different form of
organization, one that has shed any association it may have had with a particular
country. It is in this sense that TNC may be characterized as ‘footloose’, willing to locate
and relocate their activities anywhere on the globe, rather than have main headquarters
the way that MC’s do.
6) State-led Development (market-led development is globalization from above, so
compare state-led to those forms of development):
East Asia`s outward-oriented strategy:
-EOI (export oriented industrialization) -fosters industrial growth by export oriented economy, feeds international markets with
-industrial development is based on giving export subsidies to companies that build and
manufacture products within the country.
-State uses tax incentives for export companies, foreign investors (for those interested in
setting up companies that want to manufacture), and also selective incentives for
manufacturing imports (such as companies that could bring new technologies for
-State promotes international competitiveness through wage policies (low wages). This
is used through non-democratic means, to ensure that wages stay low (such as
repressing trade unions).
-Thus the environment created was friendly to foreign capital but unfriendly to labour
Role of the State:
-Secure foreign-capital investment; economic planning by strong authoritarian state;
control lending institutions (provide cheap credit, discriminating lending policies)
-Set-up state-owned companies –use revenue to invest in education and programming.
Results- countries become more attractive to foreign countries because of better trained
labour force & reduced the costs of training to private industry
-Asian Miracle; unprecedented economic growth and diversification
-integrated economies of the Asian NICs
-import dependent on Japan for technology
-export dependent on US markets, following with foreign markets more broadly
-neoliberal policies ignore the central role of the state to development; market obsessed
view disarms existing states and disadvantages the state to direct economies in the best
interests of their countries
7) Structural Adjustment Programs (SAP’s)
- Neo-liberalism in practice lets the market drive the allocation of resources. It
promotes the reduction of the role of the government and less welfare state, as it
discourages motivation for people.
- Neo-liberalism believes that the ‘state’ should take a back seat in socio-economic
matters, and that natural resources should be privatized for more capital.
- ne-lib market is seen as bet institution to allocate resources, allowing for minimal
state intervention. Believes market is suitable institution to distribute resources in
- SAPs were a process of restricting the economies, moving them away from state
led models of development, and restructuring them so that they were opened to
‘market led’ forms of economic development.
- Strip down state control and opens/empowers markets (fewer social services)
Remove trade barriers, allow market to be ‘free; open economy, no tax.
- SAP’s gave rise to neoliberal agenda, because they were forced to open up
boundaries. Trade/Foreign investment. Therefore SAP’s was a major vehicle
- SAPs were implemented after the oil crisis, when countries were in debt and
needed loans, they were put in place as loan conditionalities
* These have been greatly influenced by the World Bank and the IMF. 8) Washington Consensus (WC)
- The term Washington Consensus most commonly refers to an orientation
towards neoliberal policies that from about 1980 - 2008 was influential among
mainstream economists, politicians, journalists and global institutions like the IMF
and WB. The term can refer to `market-friendly` policies that were generally advised and
implemented both for advanced and emerging economies.
-It refers to economic reforms that were prescribed for developing countries which
included advice to reduce government deficits, to deregulate international trade and
cross-border investment, and to pursue export-led growth. The term Washington
Consensus is also sometimes used by economic historians tstlabel an era.
- WC embodies neoliberal views from the US in the 21 century, and constructs policies
that are then imposed on developing countries of the South and transition countries
(Soviet Union), through the mechanism of debt.
-The IMF, WTO and World Bank enforce WC policies through structural adjustment
Principles of WC: (147-8 in RK)
1. Encourage competition in all endeavours, at all levels.
2. Keep inflation low
3. Concentrate on exports and increase trade volume (trade liberalization).
4. Allow capital to flow freely across borders (deregulation).
5. Reduce taxes on corporations and rich individuals. (Relates to trickle-down
6. Do NOT, however close down tax havens
7. PRIVATIZE, privatize, privatize. Argues that markets, rather than governments,
when left to themselves, will ensure the best economic and (therefore) social
outcomes both nationally and internationally.
8. Make labour markets flexible, increase competition between workers. Involves
removing protection for workers (such as restrictions on hiring and firing
practices), eliminating social advantages (paid holidays), health insurance,
maternity or paternity leaves, unemployment compensation or minimum wages.
9. Practice ``cost recovery`` -fees for access to previously free services such as
schools and clinics.
9) Bretton Woods Conference:
The Bretton Woods conference was held on July 1944. The conference resulted in the
creation of the International Monetary Fund, to promote international monetary
cooperation, and of the World Bank. The two organizations were set up essentially to
regulate the global economy under the sponsorship and direction of the US, initially with
the acute needs of war damaged Europe in mind.
- Post WWII international institutions established (IMF WB) to rebuild Europe and
ensure financial stability to prevent future wars.
- Established after WW2 to help European countries rebuild after the war. 44
countries - not representative.
The World Bank and the IMF were formed at the Breton Woods Conference in 1944,
called to establish a new global economic order at the end of World War Two. They were
designed to smooth out the wrinkles of currency and capital shortages. 10. World Bank:
WB = long term development projects, IMF = balance of payment crisis. Policy
conditionality = specific terms attached to loans i.e. SAPs, undermines sovereignty and
reinforces dependent relationships and used to open markets
Purpose: The World Bank was set up in 1944 as an institution for development
assistance. It got started mostly by giving loans for rebuilding Western Europe after
World War II, and began giving development loans to poor countries in the1960s. The
World Bank is now the world's largest source of development assistance, and most of
the money that it lends (75%) is raised in financial markets. Influence in decision-making
depends on the contributions of member countries, with industrialized economies
accounting for the largest share. It faced a lot of criticism as a result of the structural
adjustment programs it imposed as a condition for assistance in the 1980s, as well as for
managing big development projects that were completely inappropriate to local
Current roles: It has since tried to improve its performance by working more closely with
developing countries and somewhat distancing itself from the positions of the
International Monetary Fund. However because of interests rates, and the cycle of
dependency that is created from accepting world bank loans many of these developing
countries continue to struggle with high debt rates, and an unstable economy.
IMF is short term loans on SAP conditions, which encourage cutting back social
spending. The World Bank is long term, opens up Markets. They both impose the neo-
liberal agenda through various programs
Purpose: It was established to promote international monetary cooperation, exchange
stability, and orderly exchange arrangements; to foster economic growth and high levels
of employment; and to provide temporary financial assistance to countries to help ease
balance of payments adjustment.
11) Principle of Policy Conditionality:
Was initially used by the IMF but then became a form of structural adjustment in which
rules and regulations were imposed in order for countries to get loans.
i) Describe the Third World Foreign Debt situation (causes, impact of development)
The third world foreign debt situation was created with the intervention of the IMF and
World Bank. In an effort to create more social programs, decrease poverty and
underdevelopment, these institutions began to loan out funds to the third world. In
theory, this may seem beneficial to the development of the country; however, with the
implementation of conditionalities that were imposed on these countries this idea
became a very negative aspect of foreign aid. These short-term loans also had high
interest rates, making it very difficult to re-pay these loans.
Neoliberal Model of Development:
• The neo-liberal economic model consists of free market, free trade, privatization
of natural resources and property less state regulation etc. • Enforce the neoliberal “holy trinity’ of privatization, deregulation, and trade
liberalization used to open markets.
• Neo-liberalism is the ideology on which structural adjustment policies were
based. The policies at the macro-level believed that opening up countries to free
trade would lead to greater economic development.
e) Connection Global Capitalism, neoliberalism and SAP’s
Neoliberalism and Global Capitalism seem almost to go hand in hand when you consider
the requirements of both structures.
• Is a market lead orientation for its people?
• Liberal principles are applied to trans-national capital
• Stress free market and free trade (emphasized by many advocates for this
• To promote free flow of capital and goods (across national boundaries)
• Free flow of capital and goods
• Freedom to invest capital anywhere
• Freedom to re-locate profit
• Freedom to move goods across nation borders.
• These are attempts to destroy existing models of development. intentional
12) Water: commodity or public good
3 major problems with the growing corporate control of water. (Water as a commodity)
1. There is no incentive to stop pollution
- WTO promotes and protects the trade in enviro services encouraging cross
border trade and investment in private water cleanup companies
- Govts are encouraged to relinquish public control of water treatment to the
private sector and have to ensure any rules that are in place for the least
trade restrictive possible
Only the rich will have clean water
- Corp control of water and its infrastructure from drinking water and sanitation
utilities services to bottled water, clean up technologies, and nuclear powered
desalination plants, money goes to the rich still
- Water starved countries not affording the technology
2. Nature will have to fend for itself
- With no regulatory or govt control, theres no protection for nature and need to
safeguard integrated ecosystems from water plundering
- Impact on wildlife and health with nanotechnology Water is necessary to survive, should be a public good, if it turns into a
commodity, it is in the control of corporations who are more concerned with profit
than people. Poor people can not afford to pay for water, prices will rise with
13) Privatization of water (impact on human development)-MISSING
• Barlow’s reading chapters 3&4
• The shift from public to private model of water services can be traced to the rise
of neoliberal, market- based ideology first manifested in Margaret Thatcher’s
Britain, then adopted by Renaldo Reagan in the US as a major component of his
war against communism.
• In 1989 Thatcher privatized Great Britain’s publicly owned water. This includes
large properties with significant cultural and natural assets. The private
companies became owners of the entire infrastructure, including the buildings.
(given license to run the water systems without competition for 25 yrs. As well as
free rein to charge what they want, lay off employees made as much profit as
• WB undergoes SAPs that require them to sell off public enterprises and utilities
and privatize essentials public services such as healthcare, education, electricity
• WB & IMF made water and sanitation services targeted for privatization. includes
the Asian Development Bank, African Development Bank and Inter-America
Development Bank, were encouraging poor countries to let the big European
water corporations run their water systems for profit. The vast majority of loans
for water were conditional on privatization.
Impact on human development
• Water is a basic need, if it is a commodity it becomes hard to get; more
expensive, land gets taken away for private companies to build dams, offices,
• Water is used for everything and without it people will suffer, the poorer
people being the most affected
How do SAPs impact human development with particular focus on:
Privatization of ‘public goods’
Lowering Trade Barriers
• Natural resources are comodified
The emphasis of SAPs was not on human development but on economic growth, and
the logic that pure competition would lead to economic growth which would lead to
increased standards of living (TOP DOWN) The privatization of public goods and
resources was based on the notion that private competition motivated businesses could
do things more efficiently and cheaper, which would lower prices. This did not take into
consideration the link that peoples livelihoods have to the local economy, and that
exposing that to the international competition, may in fact be harmful at the local level
14) Globalization From Below: Below refers to the underdogs, the powerless, the unheard and unrecognized. With
globalization from below there has been a shift from national to global problems. It
involves the development of transnational links through new technology but also a
decentralized pluralistic network of grass-root movements and civil society
organizations. In turn this allows for face-to-face interactions, more participation of
members, who seek to protect physical essential of life including;
• Subsistence rights (food security, freshwater, food safety)
• Economic rights (contingent work, sweatshop labour, debt bondage)
• Environmental rights (climate change, rivers/damns, fish/forest)
• Social rights (public education, universal health care, housing, social assistance)
• Cultural rights (opposition to ‘global monoculture’ monopoly od media, attacks on
• Human Rights (military repression, flesh-trade, labour standards)
* They assert that government have the right and obligation to intervene in markets
15) Social Movements
Social movements bring people together around an issue, and utilize the opportunities of
globalization for positive change. This does not mean that they are identical. There can
be many approaches to the same issue within one social movement.
- Provide voice for traditionally disempowered citizen push new agendas, create
conflict, propose alternatives to neo-liberal globalization
- Advocate for social welfare, redistribute. Advocate for change, provide
alternatives to system
- Proactive: to keep from happening (prevent), identify what’s wrong with system
(inequalities) Reactive: reform – via capesina, protesters; bringing issues outside
of political context. Offering alternative solutions.
- Social movements tend to fight for issues and rights that are close to, if not
directly connected to the livelihood and wellbeing of the people affected by
underdevelopment and the negative impacts of globalization.
16) Third Sector
-Third sector (TS) is civil society (first sector-market; second=state)
-Represented by NGOs, voluntary, non-profit, non-gov`t agencies
-TS reflects` diversity (social movements, advocacy groups, community organizations
Mainstream and alternative views of civil society****
Civil society, triadic model of development (Post-Washington Consensus)****
19) Fair Trade
What is it?
• Fair trade represents ethical considerations in economic transactions
• Equitable partnerships (northern consumers-southern producers)
• Make trade work for small producers
• Social control over market mechanism • Consumer responsibility
• Fair trade recognizes the unfair extraction of surplus value from developing world
producers and seeks to remedy this.
Benefits and goals:
• Promoted by NGO’s and concerned citizens. It was an alternative to free trade.
Its main benefit was to direct producers in the Third World. It is also described as
a transparent process
Origins of Fair Trade:
• Solidarity movement (60-80’s)
• Alternative retail outlets (crafts)
• Marketing of Nicaraguan coffee
• Informal networks
• Conventional retail- mainstreaming fair trade
Impact and principles:
• Fair Trade has created co-operative and democratic workplaces
• Recognized trade union, and no child labour
• Healthy and safe working conditions
• Environmental sustainability (‘organic’)
• Price should cover cost of production. Price Guarantees
• Social Premiums to improve living conditions
• Long-term relationships between producers and buyers.
20) Free Trade & Fair Trade:
• Free trade is about perfect competition. Lowering any barriers that may ‘artificially’
increase the price of a commodity in a market. The idea is that those that can
produce something the most efficiently (read – most cheaply) should be the ones to
provide it to the world. It does not take into account the social/human development
relationship that exists between the producers and their ability to sell their product in
their country, as opposed to the world market price.
• Free trade is purchasing raw materials at a less value then farmers deserve.
Meaning the work put into the raw materials is no recognized.
• Free trade: market/profit led, profits for capitalist nation. Promotes interest of rich
countries. Makes commodities cheaper but exploits workers
Free trade = cheapest = best. No matter what reinforces imperative of competition
Free trade is promoted by the World Trade organization. Basically free trade benefits the
rich and powerful. Free trade and international trade without the interference of tariffs,
subsidies, price controls and pork-barrel p