3. From Embedded Liberalism to Neoliberal Globalization

Neoliberalism Globalization

• 1970s - 2010s

• Recommitment to “free market” – with government role in supporting/protecting markets

• Critique of welfare state and taxes, calls for “small” government

• Certain ideas about “freedom”

• Dominance of ‘G’lobalization discourse

• “Free market” trade and financial policies

  • Offshoring and complex global production networks

  • Uneven development and the international spatial division of labor

  • Structural adjustment programs

New International Economic Order (NIEO)

• High point: mid-1960s through 1970s

• Post-colonial attempt to achieve modified international economic rules that would recognize postcolonial differences and help repair them, e.g.:

  • Right to national resources, including right to nationalize property or resources under own compensation laws

  • Negotiating better (non-market) prices for raw commodities

  • Greater power in international institutions

  • Promoting transfer of technology, knowledge and skills to developing countries

  • Debt relief

• 1970s Global South movement demanding fairer trade terms, more control over resources, and reform of global institutions.

  • Rejected by U.S. and faded with neoliberal rise.

New International Division of Labor (NIDL)

• Global reorganization of production

  • Substantial movement (offshoring) of manufacturing from Global North to Global South (i.e. from wealthy to lower- income countries)

• Begins late 1960s, takes off 1970s

→ Increasingly complex and fragmented transnational

production networks and supply chains

→ Postcolonial countries become more involved in low-wage

manufacturing

→ Export-oriented industrialization strategies in many

postcolonial states

→ Increasing differentiation among postcolonial states

Shift of manufacturing from Global North to Global South via offshoring and outsourcing.

• Driven by multinational corporations seeking cheap labor.

• Cook’s “Follow the Thing: Papaya” shows the human side of this process in commodity chains.

Tariffs/Non-tariff barriers

Tariffs: Taxes or fees on imports or exports

Non-tariff barriers (NTBs): any other policies that might affect trade, including

• Labeling and origin requirements

• Consumer protection laws

• Environmental regulations

• Health regulations

• Subsidies for particular industries

Tariffs = taxes on imports; non-tariff = quotas, subsidies, regulations.

• Neoliberal globalization tries to eliminate these, but (as Hopewell shows) they’re coming back in the age of “state-capitalist geopolitics.”

globalization (little g)

• process of increasing, but uneven, interconnection and interdependence

• the empirical process of global interconnection (flows of goods, people, ideas)

‘G’lobalization (big G)

• influential political discourse

  • 2013 - the most dominant way of talking about globalization in the West and among the elite and Global South

  • Intended to describe and produce a particular form of global interdependence

  • Characterized by “neoliberal” economic and political views (and policies.

  • Certain spatial and social beliefs about globalization

    • Beliefs about geography of globalization

• The ideological project that celebrates globalization as inevitable and beneficial — often masking inequalities.

Washington Consensus (‘G’lobalization policies)

Set of neoliberal policies (1980s-90s) promoted by IMF/World Bank: fiscal discipline, privatization, liberalization, deregulation

1. Liberalize trade

2. Privatize public services

3. Deregulate business and finance

4. Cut public spending

5. Reduce and flatten taxes

6. Encourage foreign investment

7. De-unionize

8. Export led development

9. Reduce inflation

10. Enforce property rights

“The World is Flat”

• Thomas Friedman’s phrase suggesting globalization levels the playing field — Sparke critiques this as mythic, ignoring “uneven development.”

  • argues that globalization has entered a new phase (“Globalization 3.0”) in which technology and digital connectivity have “leveled the playing field” between countries and individuals around the world.

Drivers of globalization

• Economic forces

• Competition

• Technology

• Individuals/companies

Geography of globalization

• Flattening

• Shrinking

• Homogenizing

• Networked

Social effects

• Greater prosperity

• Greater equality

• Increasing diversity/multiculturalism

“Myth of the Free Market” (Chang)

Chang: All markets depend on rules and governments

• To restrict certain economic activities

  • E.g. pollution, child labor

• And to enable others, e.g.:

  • To enforce contracts

  • To create and enforce (intellectual) property rights

  • To set certification/safety/environmental standards

  • To build infrastructure

  • (etc., etc.)

→ No such thing as free markets

→ Only decisions about which rules

• Neoliberal globalization adopts (very complicated) rules that promote

  • Cross-border flows of goods

  • Cross-border financial flows

  • Privatization of national industries

  • Limits on subsidies and other NTBs

• ‘G’lobalization discourse: these rules create “free” markets

• Chang’s critique: these rules create certain kinds of regulated markets

“Uneven Development”

(Global) capitalism/markets/economic policies

• Use differences between people and places

• (Re)produce these differences

→ Globalization makes some differences (and borders) less important

→ And others more important

For Sparke/Chang and many others:

• ‘G’lobalization does not erase differences

• It uses/(re)produces certain kinds of differences

→ Creates a certain type of globalization (little ‘g’)

• for Sparke and Chang, globalization doesn’t flatten the world — it relies on and perpetuates inequality, producing a specific, neoliberal form of globalization (“little g”) that benefits some regions, classes, and corporations while marginalizing others.