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March 22, 2013

Globalization's Bed of Nails, Part 3: The Transformationalists and Traditionalists

In the first two segments of this series, I looked at the optimistic and pessimistic sides of globalization. In both of those posts, as in this one, I used a post by an anonymous British blogger as the basis of each sides' various arguments. ["Theories of Globalisation," realsociology, 9 February 2013] In this post, I'll first look at what he (or she) calls the "the Transformationalist View of Globalisation." By that, I believe he means the views of those who believe that globalization has transformative qualities (both good and bad). I assume that transformationalists want to encourage good qualities and discourage bad ones.

The first argument that the blogger says is made by transformationalists is that "'Trade' has many complex formations. So it is difficult to say that it is either good or bad. Besides Free Trade, Fair Trade is expanding, and there is also illegal trade – in drugs for example." He goes on to note, "The Fairtrade Foundation has many examples of how trade can benefit people the world over in all sorts of different ways." On the other hand, he notes that all of the technologies that have fostered international trade can also be used by criminal and terrorist organizations to pursue their nefarious activities.

The second argument addresses the topic of transnational companies. The optimists saw TNCs as a force primarily for good and the pessimists saw them as primarily a force for exploitation. The blogger writes, "TNCs operate in dozens of countries. Clearly there are going to be winners and losers in different cases. Also governments the world over regulate international companies in different ways." I'm not exactly sure what transformationalist argument he is trying to make. I'm assuming the point is that global corporations are transformative because they operate somewhere on the globe 24 hours a day, 365 days of the year. They have their own cultures, policies, agendas, and so forth. They are also the source of many of the challenges associated with globalization, such as, pollution, working conditions, infrastructure stress, and so forth.

Transformationalists also point out that globalization has forever changed consumerism. Like trade, however, in and of itself "consumerism isn't just good or bad." The blogger claims that increased consumerism has affected global culture, which he says "is characterised by hybridity – new brands come into contact with local cultures and they are modified by those cultures, creating new products." He notes that some people refer to this as "glocalism" or "glocalization." As I noted Part 2 of this series, this is particularly true in the food and drink sector. Successful international companies learn to adapt to local cultures.

One of the strongest arguments that transformationalists make about the transformative powers of globalization is in the area of politics. "Globalisation is characterised by new political formations, not just the spread of democracy or the spread of American dominance." U.S. politicians have learned that you can encourage democracy, but you can't control the direction it will take. Elections in Egypt, for example, certainly didn't achieve the results that U.S. politicians had hoped for. Economics is another area in which globalization has a significant transformative affect. The blogger points to China and the fact that it has transformed from a closed, highly-centralized economy to a hybrid economy that now embraces capitalism.

The next transformative aspect of globalization involves technology. Africa surprised the world by leapfrogging over telephone landline infrastructures and embracing mobile phone technology. There are now more mobile devices in the world than there are people. Technology has also fostered activities like crowdsourcing, microfinance, mobile banking, and a myriad of social media outlets that have empowered many previously disenfranchised segments of society. With advances in alternative energy sources, like wind and solar, bringing down costs, it is not inconceivable that some developing countries will also be able to leapfrog large electrical grids and rely on smaller, more affordable, local or regional distribution systems.

The final transformative aspect of globalization that the author discusses involves the shattering of traditional ideas and behaviors. He writes, "Anthony Giddens argues that 'detraditionalisation' is part of Globalisation – People increasingly challenge traditions as they come into contact with new ideas." As with most other aspects of transformationalism, challenging traditions is not inherently good or bad. Some traditions need challenging and some deserve to be protected. The blogger concludes, "Read KT’s blog post on 'detraditionalisation' and summarise Gidden's view of what effect globalisation has on culture – Is this closer to the optimist or transformationalist view of globalisation?"

The final view of globalization that the blogger examines is the Traditionalist view. According to the author, adherents of this viewpoint believe that the effects of globalisation are exaggerated. In fact, some people refer to all the hype as "globaloney." ["The case against globaloney," The Economist, 20 April 2011] The Economist article notes that much of what journalists write involves simplification and/or exaggeration. It claims that assertion is certainly true when it comes to what has been written about globalization. It states:

"There is a lively discussion about whether it is good or bad. But everybody seems to agree that globalisation is a fait accompli: that the world is flat, if you are a (Tom) Friedmanite, or that the world is run by a handful of global corporations, if you are a (Naomi) Kleinian."

The staff at The Economist claims that at least one academic has managed to "keep his head" on the subject of globalization. He is Professor Pankaj Ghemawat of IESE Business School in Spain. It explains:

"For more than a decade he has subjected the simplifiers and exaggerators to a barrage of statistics. He has now set out his case—that we live in an era of semi-globalisation at most—in a single volume, 'World 3.0', that should be read by anyone who wants to understand the most important economic development of our time. Mr Ghemawat points out that many indicators of global integration are surprisingly low. Only 2% of students are at universities outside their home countries; and only 3% of people live outside their country of birth. Only 7% of rice is traded across borders. Only 7% of directors of S&P 500 companies are foreigners—and, according to a study a few years ago, less than 1% of all American companies have any foreign operations. Exports are equivalent to only 20% of global GDP. Some of the most vital arteries of globalisation are badly clogged: air travel is restricted by bilateral treaties and ocean shipping is dominated by cartels. Far from 'ripping through people's lives', as Arundhati Roy, an Indian writer, claims, globalisation is shaped by familiar things, such as distance and cultural ties. Mr Ghemawat argues that two otherwise identical countries will engage in 42% more trade if they share a common language than if they do not, 47% more if both belong to a trading block, 114% more if they have a common currency and 188% more if they have a common colonial past. ... Mr Ghemawat also explodes the myth that the world is being taken over by a handful of giant companies. The level of concentration in many vital industries has fallen dramatically since 1950 and remained roughly constant since 1980: 60 years ago two car companies accounted for half of the world's car production, compared with six companies today. He also refutes the idea that globalisation means homogenisation. The increasing uniformity of cities' skylines worldwide masks growing choice within them, to which even the most global of companies must adjust. McDonald's serves vegetarian burgers in India and spicy ones in Mexico, where Coca-Cola uses cane sugar rather than the corn syrup it uses in America."

The article concludes, "People seem to have a natural tendency to overestimate the distance-destroying quality of technology." If you are optimistic about globalization, there is a lot more that can be accomplished. If you're a pessimist, apparently there isn't too much you have try and undo. Considering those facts, it's remarkable that globalization has accomplished as much as it has over the past few decades.

Regardless of your point of view, there is a set of arguments that supports your position; and, there probably isn't a competing set of arguments that is going to convince you that another point of view is more correct. Pessimists only focus on the dark side of the subject (and, unfortunately, there is a lot to write about). Nevertheless, globalization's proponents have a good tale to tell (and the good that has been accomplished has far outweighed the bad). Can we do better? Of course we can. But we should face the future armed with a broad perspective of the benefits and pitfalls associated with globalization (or with whatever scheme eventually replaces it).

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