POLS 374 Foundations of Global Politics Lectures 9-10: Globalization and Production October 24 and 31, 2006

Globalization and Production Chapter: Main Points The relationship between capitalism and globalization is reciprocal. That is, capitalist development drives globalization, but globalization also drives capitalism This reciprocal relationship, in general, has created the basis for the development of a new form of capitalism, which the author refers to as hypercapitalism

Globalization and Production Hypercapitalism Hypercapitalism, to repeat, is an extreme form of capitalism. Extreme in terms of reach and embeddedness in society

Globalization and Production Hypercapitalism: Commodification In terms of reach, hypercapitalism stretches to virtually every corner of the world today, including to such supposedly isolated spots as North Korea

Globalization and Production Hypercapitalism: Commodification Capitalism in North Korea? To see a video on the Kaesong Industrial Complex: Click on either picture

Globalization and Production Hypercapitalism--Embeddedness The expansion of capitalism has also entailed greater and greater embeddedness, not only in economic matters, but also in our consciousness Today, people throughout the world increasingly associate capitalism with democracy, freedom, progress, and with the fulfillment of human potential

Globalization and Production Expanded Commodification Author breaks down the process of commodification into several areas: primary and industrial capital consumer capital finance capital information and communications capital genetic and atomic capital care capital

Globalization and Production Expanded Commodification Primary and industrial capital—e.g., agricultural products, mining, heavy manufacturing (steel, chemicals, shipbuilding), construction, oil and gas These used to be the core of any major economy, but they have been steadily declining in relative importance

Globalization and Production Expanded Commodification: Consumer Capital Consumer capital: Refers to surplus accumulation that is realized in the context of hedonistic consumption

Globalization and Production Expanded Commodification: Consumer Capital An Example of Consumer Capital: The Diet Industry

Globalization and Production Expanded Commodification: Consumer Capital Key Point: Consumer capital and globalization are intimately related For instance, once a new desire is created in one part of the globe it quickly spreads to other parts of the globe: Commodities become largely de-nationalized in a globalized world, which spurs even greater accumulation

Globalization and Production Expanded Commodification: Consumer Capital Denationalized Products: Athletic Shoes

Globalization and Production Expanded Commodification: Finance capital Key point: In the past, “finance” was primarily a medium of exchange It still is today, but it is also a commodity in that people use the trading and selling of money itself to accumulate a surplus

Globalization and Production Expanded Commodification: Finance capital Another Example: Real Estate In real estate, an increasing number of people buy houses not to live in them, but to profit from “flipping them” This is made even easier by the fact that banks have come out with new types of loans “products” (stated-income, ARMs, “principal only” loans) that make it possible for even relatively poor people to buy multiple properties For an interesting case, click here

Globalization and Production Expanded Commodification: Other forms Information and communications capital (ICC) Genetic and atomic capital (e.g., biotechnology and nanotechnology) Care capital

Globalization and Production Expanded Commodification Summary: globalization has played an important role in widening the range of capitalism and reorienting the relative weights of accumulation away from “merchandise” (commercial and industrial capital) toward “intangibles” (finance, information, communications, genetic and nano capital). To this extent the “real” economy has acquired a different reality.

Globalization and Production Altered Organization Globalization and hypercapitalism are characterized by significant shifts in organization; these shifts are most clearly emphasized in the following areas: Proliferation of offshore centers Emergence of global companies Dramatic increase in mergers and acquisitions Rise in concentration

Globalization and Production Altered Organization Offshore Gambling Sites: Recently offshore gambling has become a major enterprise. Consider the following site: http://www.gambling-internet.org/

Globalization and Production Altered Organization Global Companies List of Largest Global Companies: http://money.cnn.com/magazines/fortune/global500/2006/ Compare to economic size of countri es http://www.answers.com/topic/list-of-countries-by-gdp-nominal