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Globalisation is a complex concept that has created much controversy. There is little agreement in the available literature on what globalisation is and whether it is a new or an old idea. Narrowly, globalisation signifies a process of intensification of political, economic, and cultural interconnectedness among different actors within the global system. It is pursued more systematically in the economic arena where it represents a process of integration of national economies with the aim of making the global economy develop the capacity to work as a unit.
This process of intensification of interconnectedness is, however, made possible by certain underlying socioeconomic conditions and policy mechanisms.
Therefore, in understanding globalisation it is of importance to take into account the underlying context that has made it viable, as well as the institutional set up and policy frameworks that promote it. Over the last two decades, some significant changes in the global system precipitated globalization. One is the reconfiguration of the power distribution at the global level with the United States emerging as the sole superpower.
This reconfiguration has eliminated the competition among rival powers for global leadership and dominance; it would be difficult to form a single economic space when there are competing superpowers.
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Thus, the notion that globalization is a United States dominated global system is compelling; this signifies that globalization emerges from a single unchallenged setting of power and that the process would be reversible if another centre of power emerged to counteract the United States (Scholte, 2001).
Another factor which precipitated globalisation is the restoration of the global hegemony of the free market economic system and capitalism.
Conflicting economic frameworks and visions would not be compatible with the processes of making a single economic space. Hence, the lack of competition between various economic visions has created a favourable environment for globalization. With the establishment of the underlying conditions, several policy instruments have been created to act as mechanisms of globalization.
In addition, fresh multilateral institutions have been created to manage and promote the mechanisms of globalization; the older ones being restructured. Among the key multilateral institution include the International Monetary Fund (IMF), The World Trade Organisation (WTO), and the World Bank. Policy mechanisms have also been developed to foster globalization; these mechanisms include disengagement of state in economic activity as well as institutional changes like trade barriers restriction, privatization, and capital mobility liberalization.
In the developing nations, the World Bank and IMF through their sponsored programs have been the force behind the adoption of these mechanisms. (Scholte, 2001) There are two major reasons that explain why globalization involves homogenization of economic policy with neoliberal ideologies. First, it would be close to impossible to think of integration of national economies into a single space controlled by hegemonic power where countries are not restrained from exercising their powers such that they single handedly design economic policies in line with their specific needs.
Second, the identified underlying shift stands for a change in power balance amid the social classes in support of capital at the global level. This change coupled with the United States hegemony has resulted into a condition suitable for the integration of capital's vision of the world economic system. The vision involves liberalization of trade and the flow of capital as well as deregulation of labour markets to correspond to the interest of capital. Consequently, liberalization of capital flow across borders coupled with technological development has reinforced the surge in the capital’s power by giving it the power of mobility.
In contrast, labour’s ability to organize and maintain united bargaining has been shaken by deregulation of the capital mobility, labour market, and technological development. (Tehranian, 2001) In light of the globalizing mechanism and the underlying changes, globalization can be defined as a process of intensification of interconnectedness among national economies with the aims of establishing a single economic space, largely aligning with the interest of capital, and led by a hegemonic power and promoted through several policy instruments and institutional frameworks.
Globalization: a new or old phenomenon. (2020, Jun 02). Retrieved from https://studymoose.com/globalization-new-old-phenomenon-929-new-essay
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