Globalization and welfare Differing perspectives Fly-In Session # 2: Part 1

What is Globalization ? A group exercise

3 Thinking about Globalization Write down the THREE things that first come into your mind when the term ‘globalization’ is used Write down the THREE things that first come into your mind when the term ‘globalization’ is used Share these THREE things with your group partners – are they the same or different? Share these THREE things with your group partners – are they the same or different? Make a list (say SIX topics) of what globalization means to the group and be prepared to share this with the whole class Make a list (say SIX topics) of what globalization means to the group and be prepared to share this with the whole class

4 What does Globalization DO? Looking back at your list of things that Globalization means to you and your group, now think as a group what are the EFFECTS that Globalization has on our lives? Looking back at your list of things that Globalization means to you and your group, now think as a group what are the EFFECTS that Globalization has on our lives? Try to distinguish between ECONOMIC, SOCIAL and POLITICAL effects Try to distinguish between ECONOMIC, SOCIAL and POLITICAL effects Make a list of these effects, but this time put them in order of their importance in terms of their impact on our lives Make a list of these effects, but this time put them in order of their importance in terms of their impact on our lives

5 Globalization – good or bad? Reflect on your thoughts about globalization, its forms and its effects – overall is globalization a force for ‘good’ or ‘bad’ in the modern world Reflect on your thoughts about globalization, its forms and its effects – overall is globalization a force for ‘good’ or ‘bad’ in the modern world Remember – think not only about effects on YOUR life and that of people like you, but also effects on OTHERS around the world Remember – think not only about effects on YOUR life and that of people like you, but also effects on OTHERS around the world

6 Globalization: phenomenon or process? Two interconnected dimensions: Two interconnected dimensions: a) what globalization is & b) the processe(s) of globalization Economic, political, and social dimensions to both a) and b)

7 Perspectives on Globalization: Economic ‘Global’ trade both quantitatively and qualitatively (cf. past - international trade) ‘Global’ trade both quantitatively and qualitatively (cf. past - international trade) Globalized labour markets: NIDL Globalized labour markets: NIDL Dominant role of MNCs and TNCs Dominant role of MNCs and TNCs Flexible organisation - ‘Toyotism’ Flexible organisation - ‘Toyotism’ Finance as ‘free-floating’ Finance as ‘free-floating’

8 Perspectives on Globalization: Political Increased economic and cultural connections make nation-state govt. ineffective re territorial power (cf. Weber) Increased economic and cultural connections make nation-state govt. ineffective re territorial power (cf. Weber) State power usurped/superseded by TNCs State power usurped/superseded by TNCs Shift of ‘national’ political decisions to international/intergovernmental basis Shift of ‘national’ political decisions to international/intergovernmental basis Sovereignty shifts to international units (EU, ASEAN), treaties (NATO, OPEC), organisations (UN, WTO, WHO) Sovereignty shifts to international units (EU, ASEAN), treaties (NATO, OPEC), organisations (UN, WTO, WHO)

9 Perspectives on Globalization: Social/Cultural Overall theme of globalized culture as chaotic not orderly-cultural - components are all ‘relativised’ Overall theme of globalized culture as chaotic not orderly-cultural - components are all ‘relativised’ Culture as ‘disembedded’- signs and symbols rather than ‘real’ experiences Culture as ‘disembedded’- signs and symbols rather than ‘real’ experiences Notion of ‘scapes’ as globalized mental pictures of the social world in a global ‘cultural economy’ Notion of ‘scapes’ as globalized mental pictures of the social world in a global ‘cultural economy’

10 Characterising globalization: key features re social policy Quantitative and qualitative spread of capitalism over the whole world- a globalized economy Quantitative and qualitative spread of capitalism over the whole world- a globalized economy End of nation-state autonomy and end of inter-state and intra-state politics End of nation-state autonomy and end of inter-state and intra-state politics Changed time-space distanciation- the ‘shrinking’ of space in time Changed time-space distanciation- the ‘shrinking’ of space in time Disembedding of the social and the cultural from local/national contexts Disembedding of the social and the cultural from local/national contexts

11 What are the links between globalization and welfare states? Three perspectives: 1. Globalization causes welfare retrenchment 2. Globalization has little effect on welfare states 3. Politics matters – globalization’s effects upon welfare states are mediated by national politics

12 1: Globalization causes welfare retrenchment through capitalism’s dominance internationalization of the world economy implies the demise of nation-state autonomy, a reduction of national governments’ policy options and a weakening of labour movements – i.e. main foundations of the national welfare state are fundamentally weakened internationalization of the world economy implies the demise of nation-state autonomy, a reduction of national governments’ policy options and a weakening of labour movements – i.e. main foundations of the national welfare state are fundamentally weakened development of global capitalism responsible for unemployment and rising inequality, creating worsening problems for the welfare states development of global capitalism responsible for unemployment and rising inequality, creating worsening problems for the welfare states both international trade and technological change create a significant decline in demand for unskilled, semi- skilled and traditionally skilled workers both international trade and technological change create a significant decline in demand for unskilled, semi- skilled and traditionally skilled workers need for national economies to compete in world market exerts pressure for reduction in social expenditure by governments and private firms need for national economies to compete in world market exerts pressure for reduction in social expenditure by governments and private firms all the above create pressures to shift from social- democratic and collectivist to neo-liberal and individualist welfare ideologies – overall retrenchment and decline of welfare states all the above create pressures to shift from social- democratic and collectivist to neo-liberal and individualist welfare ideologies – overall retrenchment and decline of welfare states

13 2: Globalization has little effect upon welfare states changes in the world economy are less widespread, smaller and more gradual than the full-blown globalization thesis suggests changes in the world economy are less widespread, smaller and more gradual than the full-blown globalization thesis suggests even if globalization has occurred, welfare states remain compatible with this process - globalized economies need to provide some sort of social welfare and political counterbalance to the effects of economic change even if globalization has occurred, welfare states remain compatible with this process - globalized economies need to provide some sort of social welfare and political counterbalance to the effects of economic change ‘threat of globalization’ more an ideological ploy of national governments wishing to restructure welfare than an unchallengeable economic force ‘threat of globalization’ more an ideological ploy of national governments wishing to restructure welfare than an unchallengeable economic force welfare states are changing, but due to factors other than globalization (e.g. population ageing; technology, changes in family structures, new risks) welfare states are changing, but due to factors other than globalization (e.g. population ageing; technology, changes in family structures, new risks)

14 3: Globalization’s effects on welfare states are mediated by national politics external global forces are impacting upon national welfare state changes external global forces are impacting upon national welfare state changes certain types of welfare state are more compatible with economic competitiveness than others, and can adapt better than others to the new environment certain types of welfare state are more compatible with economic competitiveness than others, and can adapt better than others to the new environment world-wide competitive economic environment means that high wage national economies will lose jobs to low(er)-wage countries unless checked world-wide competitive economic environment means that high wage national economies will lose jobs to low(er)-wage countries unless checked particular character of the previous political and institutional arrangements (i.e. form of welfare state) in different countries will heavily affect responses to global challenges particular character of the previous political and institutional arrangements (i.e. form of welfare state) in different countries will heavily affect responses to global challenges thus, different welfare states will change in different ways in responding to globalization – not simple welfare retrenchment or decline – and the support of different constituencies (unions, politicians, voters etc.) will ensure continuation of welfare state in some form thus, different welfare states will change in different ways in responding to globalization – not simple welfare retrenchment or decline – and the support of different constituencies (unions, politicians, voters etc.) will ensure continuation of welfare state in some form