Global Shift: Mapping the Changing Contours of the World Economy / Edition 7 available in Paperback, eBook
Global Shift: Mapping the Changing Contours of the World Economy / Edition 7
- ISBN-10:
- 1462519555
- ISBN-13:
- 9781462519552
- Pub. Date:
- 02/10/2015
- Publisher:
- Guilford Publications, Inc.
- ISBN-10:
- 1462519555
- ISBN-13:
- 9781462519552
- Pub. Date:
- 02/10/2015
- Publisher:
- Guilford Publications, Inc.
Global Shift: Mapping the Changing Contours of the World Economy / Edition 7
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Product Details
| ISBN-13: | 9781462519552 |
|---|---|
| Publisher: | Guilford Publications, Inc. |
| Publication date: | 02/10/2015 |
| Edition description: | Seventh Edition |
| Pages: | 619 |
| Product dimensions: | 6.70(w) x 9.40(h) x 1.00(d) |
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Read an Excerpt
CHAPTER 1
WHAT IN THE WORLD IS GOING ON?
CHAPTER OUTLINE
The end of the world as we knew it? 1
Conflicting perspectives on 'globalization' 4
'Hyper-globalists' to the right and to the left 4
'Sceptical internationalists' 5
Grounding 'globalization': geography really does matter 6
THE END OF THE WORLD AS WE KNEW IT?
During the past 50 years the world economy has been punctuated by a series of crises. Many of these turned out to be quite limited and short-lived in their impact, despite fears expressed at the time. Some, however, notably the oil-related recessions of 1973–9 and the East Asian financial collapse of 1997–8, were very large indeed, although neither of them came close to matching the deep world depression of the 1930s. And recovery eventually occurred. Meanwhile, during the last three decades of the twentieth century the globalization of the world economy developed and intensified in ways that were qualitatively very different from those of earlier periods. In the process, many of the things we used in our daily lives became derived from an increasingly complex geography of production, distribution and consumption, whose geographical scale became vastly more extensive and whose choreography became increasingly intricate. Most products, indeed, developed such a complex geography – with parts being made in different countries and then assembled somewhere else – that labels of origin began to lose their meaning. Overall, such globalization increasingly came to be seen by many as the 'natural order': an inevitable and inexorable process of increasing geographical spread and increasing functional integration between economic activities (Figure 1.1).
And then ...
On 15 September 2008, the fourth largest US investment bank, Lehman Brothers, collapsed. It was an unprecedented event, heralding the biggest global economic crisis since the 1930s. And this crisis is still ongoing. The repercussions of the financial collapse that began with the disaster of the US 'sub-prime' mortgage market continue to be felt throughout the world, although to widely different degrees, as we will see throughout this book. Since 2008, for example, economic growth rates (production, trade, investment) have plummeted in most of the developed world, notably in parts of Europe but also in North America. In all these cases, job losses have been huge, and the fall in incomes of the majority of the population has been so serious as to place many more people and households on the margins of survival. At the same time, the incomes and wealth of the top 1 per cent have continued to increase even more astronomically, creating enormous social tensions and an upsurge of popular resistance in many countries. The most obvious recent example is the Occupy movement, which first emerged in late 2011 as 'Occupy Wall Street', using 'We are the 99%' as its rallying cry. In comparison, some developing countries – the so-called 'emerging markets' – have experienced relatively high growth rates, leading some observers to talk of the emergence of a 'two-speed world economy'. But that broad-brush picture, though valid in some respects, masks continuing and deep-seated issues of poverty and deprivation throughout the world. The notion that developing countries can somehow 'decouple' from the effects of financial crisis in developed countries is demonstrably far from the truth.
To individual citizens, wherever they live, the most obvious foci of concern are those directly affecting their daily activities: making a living, acquiring the necessities of life, providing the means for their children to sustain their future. In the industrialized countries, there is fear – very much intensified by the current financial crisis – that the dual (and connected forces) of technological change and global shifts in the location of economic activities are adversely transforming employment prospects. The continuing waves of concern about the outsourcing and offshoring of jobs, for example in the IT service industries (notably, though not exclusively, to India), or the more general fear that manufacturing jobs are being sucked into a newly emergent China or into other emerging economies, suddenly growing at breakneck speed, are only the most obvious examples of such fears. Such fears are often exacerbated by concerns about immigration, especially among lower-skilled workers who perceive, correctly or incorrectly, a double squeeze of jobs moving abroad and those at home being taken by immigrants on low wages. But the problems of the industrialized countries pale into insignificance when set against those of the very poorest countries. The development gap persists and, indeed, continues to widen alarmingly.
Hence, the world continues to struggle to cope with the economic, social and political fallout of the unravelling of the global financial system which occurred with such sudden, and largely unanticipated, force in 2007–8. The spectacular demise of Lehman was only one of many casualties. But its collapse was highly symbolic. Lehman was one of those institutions that epitomized the neo-liberal, free market ideology (sometimes known as the 'Washington Consensus') that had dominated the global economy for the previous half century. This was the ideology of so-called free and efficient markets: that the market knew best and that all hindrances to its efficient operation – especially by the state – were undesirable. But in 2008, all this was suddenly thrown into question. As one financial institution after another foundered, as governments took on the role of fire-fighters, and as several banks became, in effect, nationalized, the entire market-driven capitalist system seemed to be falling apart.
Question: does the economic turmoil that broke out in 2008 herald 'the end of the world as we knew it', 'the end of globalization'? Well, it all depends on what we mean by 'globalization': it is important to distinguish between two broad meanings of the term:1
• One is empirical. It refers to the actual structural changes that are occurring in the way the global economy is organized and integrated.
• The other is ideological. It refers to the neo-liberal, free market ideology of The 'globalization project'.
These two meanings are often confused. Of course, they are not separate but it is important to be aware of which meaning is being discussed.
It is too early to say whether the free market ideology has been irrevocably changed by the global financial crisis. Some think it has. Many more think it should be. Others believe that, once the dust finally settles, it will be business as usual. That may, or may not, be the case. But globalization, as we will see throughout this book, has never been the simple all-embracing phenomenon promulgated by the free market ideologists. We need to take a much more critical and analytical view of what is actually going on over the longer term; to move beyond the rhetoric, to seek the reality. That is one of the primary purposes of this book.
CONFLICTING PERSPECTIVES ON 'GLOBALIZATION'
Globalization is a concept (though not a term) whose roots go back at least to the nineteenth century, most notably in the ideas of Karl Marx. Indeed, in the light of the post-2008 crisis, many observers – even some who could by no stretch of the imagination be regarded as ideologically on the left – recognize that Marx's analysis of the development of global capitalism was extremely acute and highly relevant to today's world. 'Globalization' as a term entered the popular imagination in a really big way only in the last four decades or so. Now it is everywhere. A perusal of Web-based search engines reveals millions of entries. Hardly a day goes by without its being invoked by politicians, by academics, by business or trade union leaders, by journalists, by commentators on radio and TV, by consumer and environmental groups, as well as by 'ordinary' individuals. Unfortunately, it has become not only one of the most used, but also one of the most misused and one of the most confused terms around today. As Susan Strange argued, it is, too often,
a term ... used by a lot of woolly thinkers who lump together all sorts of superficially converging trends ... and call it globalization without trying to distinguish what is important from what is trivial, either in causes or in consequences.
'Hyper-globalists' to the right and to the left
Probably the largest body of opinion – and one that spans the entire politicoideological spectrum – consists of what might be called the hyper-globalists, who argue that we live in a borderless world in which the 'national' is no longer relevant. In such a world, globalization is the new economic (as well as political and cultural) order. It is a world where nation-states are no longer significant actors or meaningful economic units and in which consumer tastes and cultures are homogenized and satisfied through the provision of standardized global products created by global corporations with no allegiance to place or community. Thus, the 'global' is claimed to be the natural order, an inevitable state of affairs, in which time–space has been compressed, the 'end of geography' has arrived and everywhere is becoming the same. In Friedman's terms, 'the world is flat'.
This hyper-globalist view is the one shown in Figure 1.1. It is a myth. It does not – and is unlikely ever to – exist. Nevertheless, its rhetoric retains an extremely powerful influence on politicians, business leaders and many other interest groups. It is a world-view shared by many on both the political right and the political left. Where they differ is in their evaluation of the situation and in their policy positions:
• To the neo-liberals on the right – the pro-globalizers – globalization is an ideological project, one that, it is asserted, will bring the greatest benefit for the greatest number. Simply let free markets (whether in trade or finance) rule and all will be well. The 'rising tide' of globalization will 'lift all boats'; human material well-being will be enhanced. Although the neo-liberal pro-globalizers recognize that such a state of perfection has not yet been achieved, the major problem, in their view, it that there is too little, rather than too much, globalization. Globalization is the solution to the world's economic problems and inequalities. This, then, is the global manifestation of the 'Washington Consensus' referred to earlier: the ideology of free and efficient markets regardless of national boundaries.
• To the hyper-globalizers of the left – the anti-globalizers – globalization is the problem, not the solution. The very operation of those market forces claimed to be beneficent by the right are regarded as the crux of the problem: they are a malign and destructive force. Free markets, it is argued, inevitably create inequalities. By extension, the globalization of markets increases the scale and extent of such inequalities. Unregulated markets inevitably lead to a reduction in well-being for all but a small minority in the world, as well as creating massive environmental problems. Markets, therefore, must be regulated in the wider interest. To some anti-globalists, in fact, the only logical solution is a complete rejection of globalization processes and a return to the 'local'.
'Sceptical internationalists'
Although the notion of a globalized economic world has become widely accepted, some adopt a more sceptical position, arguing that the world economy was actually more open and more integrated in the half century prior to the First World War (1870–1913) than it is today. The empirical evidence used to justify this position is quantitative and aggregative, based on national states as statistical units. Such data reveal a world in which trade, investment and, especially, population migration, flowed in increasingly large volumes between countries. Indeed, such levels of international trade and investment were not reached again (after the world depression of the 1930s and the Second World War) until the later decades of the twentieth century. In fact, international population migration has not returned to those earlier levels, at least in terms of the proportion of the world population involved in cross-border movement. On the basis of such quantitative evidence Hirst and Thompson argue that 'we do not have a fully globalized economy, we do have an international economy'.
GROUNDING 'GLOBALIZATION': GEOGRAPHY REALLY DOES MATTER
Such national-level quantitative data need to be taken seriously. But they are only a part of the story. They do not tell us what kinds of qualitative changes have been occurring in the global economy. Most important have been the transformations in the where and the how of the material production, distribution and consumption of goods and services (including, in particular, finance). Old geographies of production, distribution and consumption are continuously being disrupted; new geographies of production, distribution and consumption are continuously being created. There has been a huge transformation in the nature and the degree of interconnection in the world economy and, especially, in the speed with which such connectivity occurs, involving both a stretching and an intensification of economic relationships. Without doubt, the world economy is a qualitatively different place from that of only 60 or 70 years ago, although it is not so much more open as increasingly interconnected in significantly different ways.
International economic integration before 1914 – and even until only a few decades ago – was essentially shallow integration, manifested largely through arm's-length trade in goods and services between independent firms and through international movements of portfolio capital and relatively simple direct investment. Today, we live in a world in which deep integration, organized primarily within and between geographically extensive and complex global production networks (GPNs), and through a variety of mechanisms, is increasingly the norm.
Such qualitative changes are simply not captured in aggregative production, trade and investment data. For example, in the case of international trade, what matters are not so much changes in volume – although these are certainly important – as changes in its composition. There has been a huge increase in both intraindustry and intra-firm trade, both of which are clear indicators of more functionally fragmented and geographically dispersed production processes. Above all, there have been dramatic changes in the operation of financial markets, with money moving electronically round the world at unprecedented speeds, generating enormous repercussions for national and local economies. We certainly do not need to be reminded of what that means.
The crucial diagnostic characteristic of a 'global economy', therefore, is the qualitative transformation of economic relationships across geographical space, not their mere quantitative geographical spread. This involves 'not a single, unified phenomenon, but a syndrome of processes and activities'. There is not one 'driver' of such transformative processes – certainly not the technological determinism so central in much of the popular globalization literature. In other words,
globalization is a ... supercomplex series of multicentric, multiscalar, multitemporal, multiform and multicausal processes.
It is because of such complexity that it is totally naive, for example, to try to explain uneven development in terms of a single causal mechanism called 'globalization':
Establishing a link between globalization and inequality is fraught with difficulty, not only because of how globalization is defined and how inequality is measured, but also because the entanglements between globalization forces and 'domestic' trends are not that easy to separate out.
Globalizing processes, therefore, are reflected in, and influenced by, multiple geographies, rather than a single global geography: the local and the global are, in effect, inseparable. Although there are undoubtedly globalizing forces at work, we do not have a fully globalized world. In fact, as Figure 1.2 shows, several tendencies can be identified, reflecting different combinations of geographical spread and functional integration or interconnection rather than the unidirectional trajectory shown in Figure 1.1:
• localizing processes: geographically concentrated economic activities with varying degrees of functional integration;
• internationalizing processes: simple geographical spread of economic activities
• globalizing processes: both extensive geographical spread and a high degree of functional integration;
• regionalizing processes: the operation of 'globalizing' processes at a more geographically limited (but supra-national) scale, ranging from the highly integrated and expanding EU to much smaller regional economic agreements.
(Continues…)
Excerpted from "Global Shift"
by .
Copyright © 2015 Peter Dicken.
Excerpted by permission of The Guilford Press.
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Excerpts are provided by Dial-A-Book Inc. solely for the personal use of visitors to this web site.
Table of Contents
1. What in the World Is Going On? The end of the world as we knew it? Conflicting perspectives on ‘globalization’ Grounding ‘globalization’: geography really does matter I. The Changing Contours of the Global Economy 2. The Centre of Gravity Shifts: Transforming the Geographies of the Global Economy The importance of taking a long view: the imprint of past geographies Roller-coasters and interconnections Global shifts: the changing contours of the global economic map The centre of gravity has shifted II. Processes of Global Shift 3. Tangled Webs: Unravelling Complexity in the Global Economy Connections, connections Institutional macro-structures of the global economy Global production network PNs Even in a globalizing world, economic activities are geographically localized Networks of networks 4. Technological Change: ‘Gales of Creative Destruction’ Technology and economic transformation Processes of technological change: an evolutionary perspective Time–space shrinking technologies Technological innovations in products, production systems and organizational forms Geographies of innovation 5. Transnational Corporations: The Primary ‘Movers and Shapers’ of the Global Economy The myth of the global corporation Why firms transnationalize How firms transnationalize TNCs as ‘networks within networks’ Configuring the TNCs’ internal networks TNCs within networks of externalized relationships Perpetual change: reshaping TNCs’ internal and external networks 6. The State Really Does Matter ‘The state is dead’ – oh no it isn’t! States as containers States as regulators States as collaborators III. Winning and Losing in the Global Economy 7. The Uneasy Relationship Between Transnational Corporations and States: Dynamics of Conflict and Collaboration The ties that bind Bargaining processes between TNCs and states 8. ‘Capturing Value’ Within Global Production Networks Placing places in GPNs Creating, enhancing and capturing value in GPNs Upgrading (or downgrading) of local economies within GPNs 9. ‘Destroying Value’? Environmental Impacts of Global Production Networks Production–distribution–consumption as a system of materials flows and balances Disturbing the delicate balance of life on earth: damaging the earth’s atmosphere Fouling the nest: creating, disposing and recycling waste Used clothing 10. Winning and Losing: Where You Live Really Matters Location matters Incomes and poverty Where will the jobs come from? Over-dependence on a narrow economic base Populations on the move 11. Making the World a Better Place ‘The best of all possible worlds’? TNCs and corporate social responsibility States and issues of global governance A better world? IV. The Picture in Different Sectors 12. ‘Making Holes in the Ground’: The Extractive Industries Beginning at the beginning Production circuits in the extractive industries Global shifts in the extractive industries Volatile demand Technologies of exploring, extracting, refining, distributing The centrality of state involvement in the extractive industries Corporate strategies in the extractive industries Resources, reserves and futures 13. ‘We Are What We Eat’: The Agro-food Industries Transformation of the food economy: the ‘local’ becomes ‘global’ Agro-food production circuits Global shifts in the high-value agro-food industries Consumer choices – and consumer resistances Transforming technologies in agro-food production The role of the state Corporate strategies in the agro-food industries 14. ‘Fabric-ating Fashion’: The Clothing Industries A highly contentious industry The clothing production circuit Global shifts in the clothing industries Changing patterns of consumption Technology and production costs The role of the state Corporate strategies in the clothing industries Regionalizing production networks in the clothing industries 15. ‘Wheels of Change’: The Automobile Industry All change? The automobile production circuit Global shifts in automobile production and trade Changing patterns of consumption Where will the jobs come from? Over-dependence on a narrow economic base Populations on the move 16. ‘Making the World Go Round’: Advanced Business Services The centrality of advanced business services The structure of ABS Dynamics of the markets for ABS Technological innovation and ABS The role of the state: regulation, deregulation, reregulation Corporate strategies in ABS Geographies of ABS 17. ‘Making the Connections, Moving the Goods’: Logistics and Distribution Services Taking logistics and distribution for granted The structure of logistics and distribution services The dynamics of the market for logistics services Technological innovation and logistics and distribution services The role of the state: regulation and deregulation of logistics and distribution services Corporate strategies in logistics and distribution services Logistics ‘places’: key geographical nodes on the global logistics mapInterviews
Students and instructors in geography, economics, sociology, management, international business studies, political science, and international relations; researchers, policymakers, and professionals interested in the global economy. Serves as a core text in advanced undergraduate- and graduate-level courses, including Economic Geography, Economic Sociology, Human Ecology, Globalization, Environmental Sociology, Multinational Business, Merchandising and Distribution, Marketing and International Business, Public Policy, Political Economics, Political Geography, Globalization, Economics of International Trade and Finance, Economics of Wealth and Poverty, and Global Economics.