Economic Globalisation

Christopherson et al., 2008 - What is globalisation?

Globalisation is the growing interconnectedness and interdependence between the world’s nations, markets, social and political systems. Driven through cross-border flows of goods and resources. It is viewed as a force for spreading opportunity and wealth across nations, with the intensification of competition that it engenders stimulating innovation and productivity. To others, it is seen as a process dominated by global corporations extending their power over nation states. Globalisation increases inequality within advanced economies, which undermines the ability for the world’s most marginalised populations to improve their social welfare or protect their natural environment.

Christopherson et al., 2008 - uneven scope of globalisation

Critiques Friedman’s (2006) flat world thesis, which makes limited comment towards the intensified socio-economic inequalities between groups in light of globalisation. They instead argue that information and communications technologies and lower trade costs drive spatial agglomeration of economic activity and ‘spiky growth’ in certain dominating regions, rather than global dispersion. Using network and flow mapping and supply chain tracing, they demonstrate that economic activity remains concentrated in specialised mega-regions. Place-dependent advantages, such as face-to-face contact and localised social networks, ensure that cognitive and spatial distance continue to dictate international trade and widen the gap between frontier and laggard regions.

Porter, 1998 - supports Christopherson et al., 2008

The enduring competitive advantages in a global economy are often heavily localised, arising from concentrations of highly specialised skills and knowledge, institutions, agglomeration economies and sophisticated customers.

Harvey, 1989 - time-space compression

Time-space compression recognises the distinction between spatial and cognitive distance. As a result of increased flows of capital, goods and people, as well as the advancements of technology and transport, the world has metaphorically contracted. Physical distance has been made a less significant barrier.

Massey, 1994 - the power geometry of space influences how demographics influence individual experiences of time-space compression

Feelings of dislocation experienced by Western populations at the homogenisation/blurring of global cultures in architecture and ethnic retailers etc., affecting people’s sense of place, mirrors the influences of European colonisation in the Global South over the last 300 years.

Trouillot, 1996 - fragmented globality

Global and local histories and geographies are simultaneously becoming more intertwined and more contradictory. This is due to uneven integration, which means that some parts of the world are hyper-connected to global financial networks and cultural flows, whilst others are marginalised, violently displaced or omitted entirely. Because globalisation elicits feelings of control, it simultaneously drives massive cultural openness and intense local nationalism.

Vallely, 2026 - link between fragmented globality and contemporary UK politics

The rise of Reform UK and the Green Party offer polarised reactions to globalisation. In a post-industrial society, mass redundancies and economic inequality are responded to by votes for Reform UK, which aim to ‘Make Britain Great Again’ by reducing migration and increasing domestic production, in the hope that this will undo decades of structural unemployment, depressed wages and strained public services.

Katz, 2001 - no compression but stretching of space and time; Howa, Sudan

Capitalism creates time-space compression for the powerful, yet it produces time-space expansion for marginalised communities due to their struggles for survival and alienation from the rest of the world.

The Suki Agriculture Project, introduced in Howa, central-eastern Sudan, in 1970, aimed to bolster the country on the global export market, incorporate rural dwellers into the informal economy as producers, and modernise the rural sector. However, by converting wooded area and limiting grazing land by 2500 acres, this led to the commodification of once free/commonly-held goods such as wood, meat and milk. Furthermore, subsistence farmers formally reliant on their own food production were prevented from growing their personal crops. This was exacerbated by the rising price of staple crops such as sorghum (cereal grain) by 2000%, which detrimentally affected the most marginalised in the population with widespread food insecurity.

Suki Agriculture Project recognises a clear loser from globalisation - in the rush of introducing methods of increasing Sudan’s global export position, land use conflicts were ignored and subjugation ensued which led to production difficulties, greater socioeconomic differentiation, and serious environmental degradation that further encouraged the commodification of free/commonly held goods such as woods, fruit, milk and meat. Furthermore, globalisation has entrenched Sudan in neo-colonial international extraction from wealthy Arab countries.

Buckley, 2009 - global factory model of economic development

The global factory is a network structure where lead multinational enterprises (MNEs) utilise a Coase theorem framework, which dictates that resources should be allocated where localised comparative advantages can be leveraged, to fine-slice the global value chain. This often means concentrating high-value R&D internally whilst outsourcing labour-intensive assembly to developing nations (China, India etc). This orchestration creates a low-level equilibrium trap (Nelson, 1956) characterised by persistent underdevelopment for emerging countries. This is because the ownership-control nexus makes transition from process upgrading to high-value functional upgrading (branding/design) difficult. Results in a hierarchal world economy.

Buckley, 2023 - COVID-19 pandemic has reshaped globalisation

Pandemic-related disruptions and supply-chain vulnerabilities have encouraged shifts from extreme globalisation and outsourcing toward regionalisation and the localisation of production. This could offer some of the benefits of globalisation (sustained growth, poverty reduction) without some of its core drawbacks such as hypergrowth, rising inequality, neo-colonial environmental degradation and extreme vulnerability to supply shocks).

Would bring costs, especially when establishing regional supply chains in locations that lack supporting services, specialist suppliers, or efficient transport systems. These higher costs would reduce the comparative advantage which some regions currently possess, potentially driving up prices higher to what buyers are willing to pay.

Levinson, 2020 - Containerisation winners and losers

Containerisation is the primary driver of globalisation since the 1960s. The standardisation of the shipping container has reduced shipping costs from $5.83 to $0.15 per tonne, and has enabled global trade volume to grow 2x as fast as global GDP. Containerisation has enabled JIT (Just-in-Time) production and the rise of East Asian economies in the Pacific Rim (the “world’s workshop”), who directly benefitted from cheaper production costs and infrastructure investment exceeding $14bn across 72 seaports between 1990-2014. JIT shipping is estimated to save US businesses $100bn per year, and it offers environmental benefits with a potential CO₂ emission reduction of 5% due to increased fuel efficiency.

Containerisation has exacerbated geographical disadvantage, in turn increasing uneven global development. Landlocked countries or inland cities in countries with poor transport infrastructure have been the worst impacted by containerisation, with shipping costs raised by over 50% if efficient transportation isn’t available. Linkages to the ‘physical internet’ (The Economist, 2020); connectivity brings access to vast new markets, and exclusion prohibits export-led economic growth which may be detrimental to developing countries.

What is neoliberalism associated with?

Free-market and laissez-fair economic system, with minimal/no government interventions such as price controls and trade barriers. Governments should limit their role to enforcing property rights, defending the nation and maintaining the rule of law rather than directly interfering with social/economic welfare. Prioritises materialistic individual responsibility and self-reliance, representing a paradigmatic shift away from post-war collectivism.

Criticised because unrestricted market competition and the reduction of social safety nets widens pre-existing wealth divides, disproportionately benefitting higher-income classes. Furthermore, hyper-individualism and relentless profit seeking can lead to the neglect of public infrastructure, the environment, and collective wellbeing.

Harvey, 2005 - neoliberalism

Neoliberalism is a political project designed to restore class power to economic elites following the 1970s crisis of accumulation (characterised by declining profit rates and stagflation - stagnated economic growth, high unemployment and high inflation). Through the process of accumulation by dispossession, modern capitalist systems transfer wealth and power from public to private institutions. This is done through the privatisation of state-owned assets e.g. utilities, public housing; financialisaton (predatory lending and engineered debt crises extract wealth from the working class and transfers it to financial institutions); crisis management (using debt or environmental crises to justify asset sell-offs, e.g. bank bailouts); and state redistribution (cutting public pensions, seizing land for corporate development, dismantling labour protections).

Global growth rates fell from 3.5% in embedded liberalism of 1960s to 1.1% in neoliberal 1990s. In US, CEO-to-worker pay ratios jumped from 30x to 50x.

In 1973, Chile’s socialist president Allende was ousted in a CIA-backed coup, following social unrest and political tension against the opposition-controlled National Congress of Chile. Allende’s democratic socialist reforms, such as nationalising major industries including the US-owned copper mining sector, and implementing agrarian reforms against the wealthy classes (appropriating 6mha of agricultural land and redistributing it to peasant families), concerned Chilean elites and the US government. Pinochet’s dictatorship succeeded Allende’s coup, during which period he introduced the first neoliberal agenda - privatisation, deregulation, opening up of the market to foreign competition. Resulted in the reprimatisation (Toussaint, 2023) of Chile’s manufacturing industry.

In 1979, the USA’s Volcker Shock (aggressive interest rate hikes by limiting the monetary reserves available to banks, intentionally triggering a major recession to reduce crippling inflation rates); Margaret Thatcher’s election and subsequent policy implementations; and Xiaoping’s special economic zone (SEZ) deregulations in China all reflect pivotal turning points in the rise of neoliberalism.

Levy, 2019 - impacts of the Vockler Shock of 1980 on deindustrialisation

High interest rates supported the value of the US dollar and encouraged foreign investments in the US stock market - which supported high-wage service jobs yet accelerated the loss of jobs in manufacturing facilities. Resulted in rising economic inequality in the USA, with high-paid service jobs creating derived demand for low-wage jobs that catered to their needs, yet gutted the manufacturing employment in the middle ground, which encouraged the growth of a polarised hourglass economy (still evident today in the wake of globalisation and technological automation).

High interest rates also decreased the costs of imports, making foreign manufacturing relatively more competitive than domestically-produced goods. This structural economic shift led to increased reliance on global supply chains and the decline in heavy industry in the USA.

Peck and Tickell, 2002 - evolution of neoliberalism from deregulations to interventions

Neoliberalism is an evolutionary process, shifting from 1980s rollback deregulation through Reagan and Thatcher to 1990s roll-out interventions like Workfare and Business Improvement Districts (BIDs; private management of public spaces) to manage the fallout of market-induced social crises such as structural unemployment and economic downturn.

Workfare is a government social welfare system in countries e.g. the UK, USA which requires able-bodied adults to participate in job training or perform community/public service work in order to receive state benefits. Proponents of the scheme argue that it reduces welfare dependency and provides experience to help individuals transition back into the job market, whilst critics view it is a form of exploitative unpaid labour.

Singapore’s ‘neoliberal-developmental’ state (Liow, 2011) has its own Workfare Income Supplement (WIS) programme, which operates as a financial incentive for those who get involved by increasing the wages and retirement savings of low-income workers. Therefore, it acts as an income stabiliser as well as an encouragement for individuals to remain employed and upskill (in turn increasing human capital).

Bruff, 2014 - the rise of authoritarian neoliberalism in Greece

Post-2008 financial crisis era is characterised by authoritarian neoliberalism, where the state is reconfigured to insulate market policies from democratic conflict through constitutionalisation and legal administrative shielding.

The Troika’s forced austerity in Greece as part of an “economic adjustment programme” since 2010 was a condition for the $110bn in bailout loans provided to the Greek government as part of the EU-IMF rescue deal. Resulted in economic collapse by 25%, a 27% rise in unemployment, and 1/5 of the population living in severe poverty. Greece’s overall debt to Eurozone governments, the ECB and the IMF has increased since then due to economic stagnation following austerity measures. Non-Eurozone countries condemned the IMF/ECB/EU for not cancelling Greece’s debt rather than offering bank bailouts, yet this was done to ensure that private speculators would get repaid and the public would pay the costs of having to carry debts into the future. Eurozone governments have since lent more money (primarily used for debt payments), even though austerity and privatisation conditions are still forced on Greece. This means that solely 8% of the money lent was allocated to the Greek government, with 92% given to multinational banks. This has major effects on the Greek healthcare system, which is now chronically underfunded due to budget cuts; a quarter of the population do not have state healthcare coverage, ranking last in the EU.

Christophers, 2019 - The renterisation of the United Kingdom

The share of the real estate sector in the UK increased in its share of gross national value (GVA) by more than the share of the finance sector between 2005 and 2014. The UK has transitioned into a post-industrial rentier capitalist society, were wealth is generated via assertion; controlling scarce assets like land, intellectual property, and infrastructure, rather than by manufacturing and productive innovation. Neoliberalism has helped to facilitate rent-seeking practices by reducing pressures on big agents to engage in competitive struggles in the real economy.

UK land value rose by 544% between 1995-2017 (ONS, 2017), which accounts for over 50% of national net worth.

Exacerbated through Thatcher’s government reforms - privatisation, regulation and the weakening of labour unions opened up key sectors including housing, utilities and finance to competition and private ownership. Policies such as Right to Buy have resulted in major tenure restructuring in the real estate market, with 41% of the homes purchased through the scheme now private rentals. Water privatisation (1989 Water Act) has enabled shareholders to generate a combined estimate of over £50bn, despite chronic under-investment in water and sanitation infrastructure causing major sewage spills and leaks.

Castree, 2008 - neoliberalising nature

Neoliberal relations with the nonhuman world are understood as rational ‘environmental fixes’ to private investors and the state. Often results in dynamic contradictions, with the changes set in motion by neoliberalising nature catalysing events which may modify or hinder the policies that brought about these changes.

Heynen and Perkins, 2005: decline in urban tree planting in Milwaukee, Wisconsin (coincident with local state fiscal austerity and public land sales) had social and environmental consequences. Led to a reduced capacity to temper extreme precipitation and temperatures, which impacts local flood management and increases energy usage for air-conditioned buildings. The urban poor suffered a disproportionate loss of access to forested recreation space; qualified as environmental racism. On a spatial scale, the decline of tree planting is linked to the wider failure of the state to maintain global forests for ecological life-support benefits.

Prudham, 2004: water poisoning in Walkerton, Ontario in May 2000 highlighted the failure of neoliberal reforms to appropriately redistribute the responsibility for water testing and safety. Links closely with the Flint water crisis in Flint, Michigan, in April 2014; both are examples of “normal accidents” of neoliberalism arising from systemic irresponsibility of environmental governance. In both cases budget cuts resulted in water utility mismanagement, with dire consequences for the affected communities.

Collier, 2011 - the post-Soviet social

Neoliberal reforms in post-Soviet Russia worked to maintain essential social services and public utilities such as heating, water, housing and public budgets. Neoliberalism was a reorganisation of social provisions, involving means-tested housing subsides, budget reforms and cost accounting for utilities.

Case study of Belaya Kalitva:

• Soviet planning model from 1964 provided nearly universal access to apartment housing, central heating, water and sewer networks, schools and hospitals, and sports and cultural amenities. By 1980, the city had a population of over 70,000 residents.

• Even by the late 1990s, when the aluminium plant providing most of the city’s employment lost its guaranteed state orders and municipal finances deteriorated, core infrastructures and bureaucratic systems were preserved.

Lightsley, 2017 - neoliberalism as biopolitical governance

Neoliberalism is a form of biopolitical governance (Foucault, 1990); the regulatory control over the mechanisms of life, influenced by hygiene, public health, and welfare support. Neoliberal biopolitics acts as a factor of segregation and social hierarchisation; “make live and let die” reflects how those who are socially vulnerable and who cannot be self-reliant are collateral damage. Geopolitical state powers are the primary administrators of biopower (security, welfare). In Global South countries this can be complicated by flows of labour, subjugation to war, receiving humanitarian aid or conditional economic reforms. Here, biopolitics creates a paradigm which structurally widens the inequality gap between social groups due to the emphasis placed on individual responsibility.

Owens, 2020 - neoliberal globalisation in Haiti

Neoliberal globalisation has entrenched the poorest countries in exploitative neo-colonial practices. Following economic collapse in 1986, Haiti took loans from the IMF, which had conditions of neoliberal structural adjustment measures. This included a reduction of tariffs on imports that had previously protected local agriculture, including the production of rice (from 50% to 3%). As such, Haiti’s domestically-produced rice became far less competitive compared to imports from the USA, and the market became flooded with subsidised foreign imports. This meant that Haitian farmers were forced out of the market. As a result, many rural workers were forced to migrate to urban slums, and Haiti’s domestic agriculture sector was severely contracted.

Today, 58% of Haiti’s population suffer from food insecurity. Compounded by environmental and epidemiological disasters (2010 mag. 7.0 earthquake, cholera epidemic, 2016 Hurricane Matthew, 2015-16 El Nino effect bringing a 50% decline in local food production due to drought).

Amin, 1994 - post-Fordism

Transition from Fordism. a post WWII system of intensive accumulation and monopolistic regulation, to apost-Fordist