A number of important issues can be noticed especially the important aspects of economic, political and cultural globalization, up to the internal situations (crises) of the nation- state which have made the state open to being undermined by globalization, moreover, if economy and culture are more globalized in a way which undermine the power and sovereignty of the state, then the obvious alternative for politics is to organize elsewhere such as through international or transnational levels, and as the world economy is quite interdependent and interlocking, the rules, standards are going to be enacted depending on globally coordinated action .
This chapter is going to be divided into three sections, the first one of them will describe the Contemporary understanding of globalization which often focus on the transnational of economic production, the financial markets, but without, of course, overlooked that globalization as a process entails a lot more than material and economic forces. Political and legal regulation will be necessary to make globalization work, and to establish the institutions that make the basic capitalism elements of economic globalization function adequately .
Second section emphasizes the fact that economic globalization and other factors helped increase the interconnectedness between states by events and decisions made beyond their territorial reach, at the same time the activities undertaken by states progressively have more consequences not only within their own jurisdiction but elsewhere as well. As a result is an increasing demand for political cooperation across borders, the developments of cross border cooperation takes place in three major ways; expand especially through IGOs; trans-governmental relations have grown- ministries and other units of government are connected with in dense web of policy networks; third the expansion transnational relations, that is, cross border relations between individuals, groups and organizations from civil society .
Third, in addition to such integration there is a powerful recognition of common framework of values and norms. if globalization implies a growing interdependence between actors in the world economy, moral duties across borders may play a larger role than they did before in a world consisting mainly of sovereign nation-states. Globalization not only entails the global spread capitalism economic market, but also the emergence of global norms and behavioral standards enshrined in international institutions .
Today there is not a single issue area in international affairs which is not regulated by at least some international norms and rules. The globalization of international legal norms can be observed across a whole variety of issue areas in world politics .
Section one: economic, political, cultural globalization
We live in an era of ever increasing interconnectedness of people, places, capital, goods and services. Societies which had been able to live in almost total ignorance of each other- up to a few decades ago are now in increasingly regular contact. Hundreds of actors are pouring actions into the international arena at the same time, and those actions are being variously deflected and aggregated and combined with one another .
As the number of actors and forms of action climbs, the number and variety of inputs into the international arena skyrocket. We are witnessing an increase and an intensification of political, economic and cultural interactions across territorial borders, and outside the central control of the foreign policy organs – such as the rapid transfer of capital from one country to another that occurs daily in the world stock and money markets, and certain forms of terrorism.
Whenever there is interaction, there is an aggregation- commercial transactions, industrial wastes, aggressive behaviors, co-operative actions, technological innovations, social innovations, communications- and ,therefore, more aggregative and combinatory processes must come into play .
The resulting combinations often offer reciprocal influences, that are ever more numerous, and impressive examples of interdependence and how it is becoming a multidimensional .
Aggregative processes by themselves and in combination with one another involve the linking of processes within functional categories as well as across functional boundaries, and produce inadvertent consequences .
It is a movement towards integration and interdependence between different parts of the world where ideas, technologies, fads, and modes of behavior now more easily across national boundaries; perturbations in the international system that once have spent their force locally now transmitted through an entire region or across the globe.
As the web of interaction has become more dense, the international system, as a large and complex system, has also become more effective as a transmission medium which describes a bewildering number of relationships and arrangements that are subject to strategic, political, social and cultural as well as economic influences.
What is clear is that globalization occurs in a number of ways via processes of interactions, emulation, and norm-building that affects our identity, and perspective of what it means to be global .
Here one must note that movements in both the intensity and the extent of international interactions; in the farmer sense, globalization overlaps with related ideas of integration, interdependence, multilateralism openness and interpenetration. In the latter, it points to the geographical spread of these tendencies and it is cognate with globalism, spatial compression, homogeneity .
Although there is as yet, no clear and generally accepted definition of what exactly globalization means and includes as a process by which events, decisions and activities in one part of the world come to have significant consequences for individuals and communities in quite distant part of the globe , there are a number of characteristics which can used to describe this phenomenon: the globalization of financial markets, the internationalization of corporate strategies; the diffusion of technology and knowledge worldwide, the transformation of consumption patterns into cultural products with worldwide consumer markets; the internationalization of the regulatory capability of national societies into a global political economic system, the diminish role of national governments in designing the rules for global governance .
The development of human social life was presented as a progression from simple to complex forms by means of continuous processes of growth and specialization . At this point, in order to generalize the effect of today with the cause of yesterday one must emphasize that globalization is a historical process which is integrally related to the historical process of capitalist social development. It has been a political project of an identifiable constellation of dominant social forces, reflects the development of structural forces in world affairs .
Starting with this modern world, it was the emergence in the sixteenth century of capitalistic world economy whose geographic bounds were initially largely in Europe, but which has since come to cover the entire globe .
What distinguishes capitalism from prior systems is the orientation of production to capital accumulation via profit realized on a market- the world market, and it recognizes neither spatial nor social boundaries .
This makes capitalism into a form of social organization which is premised upon accumulation for its own sake- endless accumulation, and whose prime object is its own perpetuation in an ever-expanding form .
This historical structures of capitalism effect a formal separation of politics from economics, Capitalism as an economic mode is based on the fact that the economic factors operate within an arena larger than that which any political entity can totally control, and in doing so privilege the private powers exercised by capital in the economy, at the same time they individuate political subjects and evacuate from the explicitly sphere any real capacity for democratic deliberation and communal self-determination in and through social relations .
The fundamental structural feature of the modern world system is an economic arena larger than any political units within which regions might be classified as performing the roles of core or peripheral areas. Since political boundaries (states) are smaller than the economic whole, they will each reflect different groupings of economic tasks and strengths in the world market .
Economic globalization;
The modern world system – as a capitalistic world economy – has been more and more integrated and interdependence where Instability or changes in one place have repercussion internationally, multinational corporations have spread, finance has been globalized, and trade and capital are mobile as well .
For many observer of contemporary world, globalization refers to the formation of an integrated world economy; Networks of economic interdependence that span the global increased as costs of communication and transportation have decline and shrunk the effects of distance; larger parts of economic activity become organized primarily by transnational corporation TNCs; Deep integration extends to the level of production of goods and services, and increases visible and invisible trade linkages between national economies are, therefore, increasingly influenced by the cross- border value adding activities within TNCs and with networks established by TNCs .
The capitalist world economy is a system socially structured by an integrated axial division of labour whose guiding principle is the ceaseless accumulation of capital, to accumulation capital one must realize profit, to realize profit commodities must be sold on a market, to buy commodities someone must have money, and once the commodities are bought they are consumed .
The key mechanism to realize this principle has been the construction of extensive commodity chains of production that cross multiple political boundaries. The chains of series of operation that are meaningful as nodes in a chain, and profit is usually made at all the nodes along a chain, but greater profit is the consequence of a higher degree of monopolization at a particular node .
Economic globalization represents the intensification of all kind of economic relations across boarders- production, distribution, finance, management the national economies of the world are more interconnected than ever before .
Many production processes are global since different stages in the production and development of products occur in different locations, sometimes these activities are performed by large MNGs but, also, global alliances between different firms occur frequently.
Furthermore, economic globalization means that finance has become global; Banks provide finance all over the globe and investors maintain global portfolios .
The role of market has also increased as a result of new information and transportation technologies, technological advances, privatization, trade and investment liberalization as well as changed attitudes about the role of governments .
in sum, ensemble of flows and exchanges of raw materials, finished and semi-finished products, services, and money refers to the global economy which, then, institutionalized through global capital markets, global labour markets, globally integrated financial system, as well as through global trade and global production networks- there is an accelerated growth of industrial production in both developed and developing countries and an increasing degree of homogeneity in the structures of production and consumption in the more developed industrial countries, and more tendencies to move from mono to multi-polarity in international economic relations along with an intensification of the international division of labour .
Global market
While a liberal economic system allowed capitalist financial, industrial, and trade to develop autonomously, the result has been a widespread internationalization in the form of international investment, and a monopolistic control of international markets , thus, the prominence of global market structure which is one of the biggest differences between the modern international system and those the ancient and classical era .
Basically a market is the coordinating mechanism where the forces of supply and demand in an economy determine prices, output and methods of production via the automatic adjustment of price movements .
Markets, in fact, are not autonomous, they depend ,in various ways, on political and societal structures; they are partly a function of economic growth, partly of better transportation and communication, partly of breaking down the numerous local tolls, tariff and inspections which worked to preserve local markets .
The combined effect of the huge surge in interaction capacity; the overall shift from linear to multi-ordinate system structure; and the huge increase in trade and financial activity, rabidly, structure a global market, a single market, within which calculations of maximum profitability are made, and, therefore, determine the amount of productive activity, the degree of specialization, the modes of payment for labour, goods and services , and, because it lies together production, trade and finance on a system wide scale, a global market imposes the patterns of economic cycles on the whole system as well as an increasingly important and penetrative influence on all actors in the system.
The effects of a global market structure are numerous and diverse since the operation of the market creates pressure towards a single universal price for like goods, it overrides local economic both by challenging them with cheap imports, and by demanding from them particular types of products, and it overpowers older economic system (barter, Luxury, trade, command economies) .
Market and state
Over time, patterns of trade and finance contribute to shaping a country’s international economic position measured in terms of market shares.In contrast, the state structures function as ways for particular groups to affect and distort the functioning of the market. The stronger that state machinery’s the more its ability to distort the world market in favor of the interests it represents .
Throughout the history of national state, vital causal connections have existed between nationalism and the economic system. The nexus has proved to be reciprocal although the two chains of causation were of different importance in the successive stages of historical development .
In the last nineteenth century, the Leaders of most of states thought that the economy was subordinate to the interests of the state. It was deemed appropriate for governments to intervene in trade issues and economic issues in general if this strengthened the state, but this view is now completely out of fashion .
Government used to manage their economies, they were able to do so by controlling capital markets- in general, state acts on the market in the short run by the use of its legal prerogatives to constrain economic activities within or across it borders. But it also acts on the market over the long run by seeking to create institutional proclivities from the conveniences of established currency and trade channels to limitations of knowledge of economic alternatives- but this is no longer the case, high interest rates, new kinds of financial instruments and electronic networking globally have changed the strategy of firm and governments , and it is now obvious that the political authority of governments no longer corresponds to the geography of the markets and production networks in which firms and workers now operate .
Market forces, today, are in command, intent on disciplining national governments, who want to hold onto the instrument of national power, as well as create increasing pressure for harmonization of domestic policies as a consequence of international trade and financial regimes .
It is obvious now that the development of the world economy is outpacing the capacity to govern it at both the national as well as the international level, and globalization has been widely held to mean the increased freedom of market forces, and diminishing role of political actors- mainly national states – in softening the impact of market outcomes .
States are unlikely to stand still and remain in indifferent to the greater possibilities for cooperation at international level.
states operate under different circumstances than before; they operate under financial markets that, now, monitor many aspects of state spending and, therefore, are able to set broad policy goals with respect to employment, social welfare policy, taxation and the like . In some way they are subject to new constraints, but they have also developed new ways of regulating the market. They have to change and adapt to new circumstances for vast majority of nation states, and, faced with a new global order, state intervention no longer means using public power to organize the private sector, but is now equated with the unleashing of markets forms .
The state is becoming diffused into complex networks involving a range of other actors, and political authority is being disaggregated into a diverse array of various government or public agencies, each of which interacts with a wide range of private companies, groups and organizations. On the one hand, there is a movement away from the central role of the official state apparatus, on the other hand, the making of state regulation, to large extent, takes place in trans-governmental networks also involving a diverse group of other actors .
Moreover, a world market creates a system management problem that grows in size as the market becomes more extensive and more elaborate . But, inadequate global management make it harder for governments to take full advantage of the opportunities of globalization, it also threatens political support for an open world economy. More effective management, in turn, will require new policies, institutions reform and leadership strategy consistent with the challenges ahead .
Transnational firms
A tension between autonomous economic interests and the nation-state can result mainly from that situation of internationalization of an industrial, business or financial undertaking by establishment of affiliated undertaking in other states, particularly in political developed states , these include the offshoring of factories, the expansion of global networks of affiliates and subsidiaries, the creation of production capability of a firm in another country via direct subsidiaries, acquisitions or various types of cooperation- commercial, financial, technological and industrial, and the formation of global financial markets with a growing number of participating countries .
The growing globalization of economy along with the emergence of global markets for finance and specialized services, and the growth of investment as a major type of international transaction have contributed to expansion in command functions and in the demand for specialized services for firms .
an acceleration of the process of centralization and concentration of capital leading to an increasing superiority of a limited number of large companies on the national economic level as well as in the field of international investment and trade .
Today, a key factor in economic globalization is said to be the role and rise of multinational or transnational corporations (MNCS).
While the national space is being replaced by the nascent global space, the role and power of nation-state has been replaced in economic sphere by transnational firms .
They develop primarily in the search for profit, even when they have a clear national base, their interest is above all in global profitability, cheaper labour, expanding market, buying off the competition, getting more of a monopolistic grasp of the market in their area, diversifying into new areas of production and consumption, thus not only they rebate profits to the core states and transferring wealth from the developing to the developed nations, but also tend to develop extractive or primary goods industries that supply raw materials to the rich countries .
The size and economic mobility of MNCs will allow them to move their activities to territories where it will be the cheapest to perform them, that is, they are moving from one country to another looking to compete on labour costs, they seek national jurisdictions where employment standards are lowest .
International organizations constitute an attempt to overcome international anarchy through multilateral cooperation . They help to raise standards, bring products to developing countries while they provide them with access to global market, and supply cheaper products of increasing quality to developed nations. They are involved in the sort of capital mobility that involves direct investment or speculation in stocks and shares, that is, this foreign direct investment, in one way or another, has done much to narrow the gap between some developing and developed countries .
MNCs frequently are so big and power that they dominate smaller economies who host them and, sometimes, their power allows them to play politics, and they may have a destabilizing influence on politics of nation states, these corporations also prevent the host governments from gaining control over and knowledge of their own resources, lacking such control, the developing countries are in a poor position to attempt appropriate planning, to assess taxes adequately, or to obtain a proper ultimate return on their resource endowments, this is true as the level of employment investment and revenue within a country are, to large extent, subordinated to the production location decisions of multinational corporations .
They prefer to deal with other MNCs, or prevent smaller developing countries from establishing powerful indigenous firms on a broad, and make it difficult for domestic firms to compete with them or to grow sufficiently .
Since the power is a primary factor in influence, it is assumed that there is likely to be a connection between a state’s power in relation to other states, and its influence in international organizations generally.
Here, the economic development of state is important in determining the power and demands the state will place on international organization, but, the scope of the government, especially in protecting us, is much less than it was, partly due to the lack of control, but also to the lack of will of governments .
These reductions in power of governments are not necessarily because they have been ceded to anyone else, even the multinational corporation which have great power in directing economic flows, nevertheless, are not particularly interested in taking over the issues of governance which the state cannot longer cope with .
However, international organizations are not fully autonomous; rather they are subject to environmental factors that become major constraints upon the determinant of decision.
In this context, three major variables can be mentioned: the stratification of state power, the economic and political characteristic of states, and the patterns of alignment and conflict among states .
Finance
Money (capital mobility) is Another important area of economic globalization, it is the basis of exchange and transactions in economies; it can be moved more easily across national boundaries as a result of technology and political changes; it is also concern because of its capacity to evade state control, move across boundaries to places where it can exploit more relaxed regulations , this power of transnationally mobile capital to override democratic processes and public deliberation has vastly increase along with the growth of international liquidity, and the sophistication and speed of exchange in the world’s financial market .
High levels of international capital mobility imply large amount of international financial transaction in foreign exchange, stocks and bonds, business and factories . The volume and speed of this movement of capital has heightened the potential disciplinary effect of a threatened capital strike.
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