POLS 374 Foundations of Global Politics Lecture 2: Globalization Debates (pt. 2) September 28, 2006 Lecture 2: Globalization Debates (pt. 2) September 28, 2006 Professor Timothy Lim California State University, Los Angeles

2 Globalization Debates What to do?  What specific policies or policy courses should be adopted toward globalization? What to do?  What specific policies or policy courses should be adopted toward globalization?

3 Globalization Debates What to do?  The author tells us that there are at least four broad lines of policy response: What to do?  The author tells us that there are at least four broad lines of policy response: 1.Neoliberal 2.Rejectionist 3.Reformist 4.Transformist

4 Globalization Debates Neoliberalism  What is neoliberalism? Neoliberalism  What is neoliberalism?

5 Globalization Debates What is Neoliberalism?  Premised on the idea that markets are the most efficient and effective means of organizing an economy and society  Liberals believe that free markets, while not perfect, are the best means possible to increase prosperity, liberty, democracy, and peace for the greatest number of people What is Neoliberalism?  Premised on the idea that markets are the most efficient and effective means of organizing an economy and society  Liberals believe that free markets, while not perfect, are the best means possible to increase prosperity, liberty, democracy, and peace for the greatest number of people

6 Globalization Debates What is Neoliberalism?  The emphasis is on free markets  “ Free ” means limited or no interference in any market operations by government through regulations or laws, or through non-market activities that limit or otherwise constrain competition.  Practically speaking, this means that liberals are against any form of protectionism or any type of state subsidy. What is Neoliberalism?  The emphasis is on free markets  “ Free ” means limited or no interference in any market operations by government through regulations or laws, or through non-market activities that limit or otherwise constrain competition.  Practically speaking, this means that liberals are against any form of protectionism or any type of state subsidy.

7 Globalization Debates What is Neoliberalism?  Liberalism closely associated with famous economists such as Friedrich von Hayek and Milton Friedman What is Neoliberalism?  Liberalism closely associated with famous economists such as Friedrich von Hayek and Milton Friedman

8 Globalization Debates What is Neoliberalism?  The logic of liberalism tells us that all factors of production and consumption should be allowed to move within and across border with complete freedom. This includes capital, goods, service, money and labor.  As the author notes, however, few neoliberals are willing to argue strongly that labor be able to move within and across borders with complete freedom. What is Neoliberalism?  The logic of liberalism tells us that all factors of production and consumption should be allowed to move within and across border with complete freedom. This includes capital, goods, service, money and labor.  As the author notes, however, few neoliberals are willing to argue strongly that labor be able to move within and across borders with complete freedom.

9 Globalization Debates What is Neoliberalism?  Neoliberals are not anarchists What is Neoliberalism?  Neoliberals are not anarchists What does this mean?

10 Globalization Debates What is Neoliberalism?  It means that neoliberals do not advocate no government, only very limited government.  Practically speaking, this means that the government role should be limited to making sure that there is sufficiently strong legal and institutional framework to allow markets to emerge and develop; governments must also guarantee property rights and contracts What is Neoliberalism?  It means that neoliberals do not advocate no government, only very limited government.  Practically speaking, this means that the government role should be limited to making sure that there is sufficiently strong legal and institutional framework to allow markets to emerge and develop; governments must also guarantee property rights and contracts

11 Globalization Debates What is Neoliberalism?  One more important point …  Many neoliberals argue that when some societies or countries are reluctant to “ liberalize ” that they should be forced to What is Neoliberalism?  One more important point …  Many neoliberals argue that when some societies or countries are reluctant to “ liberalize ” that they should be forced to This pictures depicts Indonesia’s former dictator, Suharto, signing an agreement with the IMF. In order to receive IMF funds, however, Suharto had to agree to far-reaching economic and political reforms designed to “liberalize” Indonesia. For more info, click here.click here

12 Globalization Debates What is Neoliberalism?  One last point …  Neoliberalism is the dominant policy line: it is the policy advocated by the United States government and most of its allies; it is the policy advocated by major international financial organizations, such as the IMF and World Bank, and it is the main principle of the WTO What is Neoliberalism?  One last point …  Neoliberalism is the dominant policy line: it is the policy advocated by the United States government and most of its allies; it is the policy advocated by major international financial organizations, such as the IMF and World Bank, and it is the main principle of the WTO

13 Globalization Debates Rejectionism  Rejectionists span the ideological spectrum: some are radical environmentalists, while others are right wing nationalists.  Their common perception is that globalization is inherently harmful and dangerous: whatever good it does is limited to small groups of elites. Rejectionism  Rejectionists span the ideological spectrum: some are radical environmentalists, while others are right wing nationalists.  Their common perception is that globalization is inherently harmful and dangerous: whatever good it does is limited to small groups of elites.

14 Globalization Debates Rejectionism  Rejectionists call for de-globalization, which can mean several things: Rejectionism  Rejectionists call for de-globalization, which can mean several things:  Economic nationalists, for example, advocate a delinking from global economic activity  Religious fundamentalists prescribe going “ local ” to retrieve original beliefs and practices of faith  Radical environmentalists advocate a return to the “ simple life ” of premodern society

15 Globalization Debates Rejectionism  Rejectionists, as a group, are the most strongly opposed to globalization, and, as the author explains it, they are the only group that might be appropriately classified as “ anti-globalization ” Rejectionism  Rejectionists, as a group, are the most strongly opposed to globalization, and, as the author explains it, they are the only group that might be appropriately classified as “ anti-globalization ”

16 Globalization Debates Reformism  Reformists are not anti-globalization; instead, they are “ alter-globalization ” Reformism  Reformists are not anti-globalization; instead, they are “ alter-globalization ”

17 Globalization Debates Reformism  They do share with rejectionists a deep suspicion of neoliberalism: they agree that neoliberalism has the potential to inflict major cultural, ecological, economic, political and psychological harms Reformism  They do share with rejectionists a deep suspicion of neoliberalism: they agree that neoliberalism has the potential to inflict major cultural, ecological, economic, political and psychological harms

18 Globalization Debates Reformism  They do not reject capitalism per se, for they see neoliberalism as an extreme form of capitalism.  Instead, they believe there is a middle ground: a form of capitalism that can both encourage economic efficiency, but also promote stability and equity, while also limiting damage to the environment, minimizing violence, and enhancing democracy. Reformism  They do not reject capitalism per se, for they see neoliberalism as an extreme form of capitalism.  Instead, they believe there is a middle ground: a form of capitalism that can both encourage economic efficiency, but also promote stability and equity, while also limiting damage to the environment, minimizing violence, and enhancing democracy.

19 Globalization Debates Reformism  The intellectual father of reformism is John Maynard Keynes Reformism  The intellectual father of reformism is John Maynard Keynes

20 Globalization Debates Reformism  Practically speaking, reformists advocate a type of “ managed capitalism ” : for example, they believe in controls on the cross-border movement of resources when such constraints would reduce market volatilities, social inequalities, and environmental costs.  They also believe that governments need to exercise control over corporate power: to keep corporations from becoming too big (e.g., anti- trust measures) Reformism  Practically speaking, reformists advocate a type of “ managed capitalism ” : for example, they believe in controls on the cross-border movement of resources when such constraints would reduce market volatilities, social inequalities, and environmental costs.  They also believe that governments need to exercise control over corporate power: to keep corporations from becoming too big (e.g., anti- trust measures)

21 Globalization Debates Reformism  They believe in guaranteeing minimum standards: living wages, no child labor, health and safety regulations, etc. Reformism  They believe in guaranteeing minimum standards: living wages, no child labor, health and safety regulations, etc.

22 Globalization Debates Reformism  Because most of these things can only be achieved through the state, reformists argue that states continue to be very, very important: at the same time, reformists understand that many states are too weak to be effective on their own, which means that the creation of a global authority is also necessary Reformism  Because most of these things can only be achieved through the state, reformists argue that states continue to be very, very important: at the same time, reformists understand that many states are too weak to be effective on their own, which means that the creation of a global authority is also necessary

23 Globalization Debates Reformism  A “ global authority ” doesn ’ t mean a world government, but the use of already established international organizations  These organizations, too, must be reformed: they must be made more democratic so that they represent the voices of ordinary citizens across the world, and not just the voices of the elite in the most powerful countries Reformism  A “ global authority ” doesn ’ t mean a world government, but the use of already established international organizations  These organizations, too, must be reformed: they must be made more democratic so that they represent the voices of ordinary citizens across the world, and not just the voices of the elite in the most powerful countries

24 Globalization Debates Transformism  Transformism and reformism appear similar on the surface, but transformists do not believe that reformists go far enough: it isn ’ t enough to tinker with capitalism and with international organizations; instead, there needs to be a fundamental transformation that transcends prevailing social structures with radically new arrangements. Transformism  Transformism and reformism appear similar on the surface, but transformists do not believe that reformists go far enough: it isn ’ t enough to tinker with capitalism and with international organizations; instead, there needs to be a fundamental transformation that transcends prevailing social structures with radically new arrangements.