MAN 3350: COMPARATIVE INDUSTRIAL RELATIONS
Towards a Definition
Globalisation has become a buzz-word for political, economic, sociological and environmental trends that are said to present world-wide challenges. We need to be careful about how the word is used – and why.
Two accounts of globalisation that some of you will have seen before:
“the process that reduces barriers between countries, thereby encouraging closer integration of economic, political and society activity. Economic aspects are the most important.” (Frenkel and Peetz:1998:282)
“Globalisation is a word suitable for a world without illusions, but it is also one that robs us of hope.” (Wiseman:1998:11)
A single definition can be problematic because the word is used in a number of senses and interchangeably with ‘global restructuring’. Broomhill (1995:40) states that
“Some might suggest that the term global restructuring has become rather meaningless. For some it is seen as the cause of everything that’s wrong with our economies. For others, the internationalisation (or ‘liberalisation’) of the global economy is seen as the basis of an unprecedented era of growth and prosperity for all economies.”
We might even see that the meaning of globalisation has both material and ideological connotations. Robertson (1992) (cited in Hall and Hartley:1995:71) suggests that it is a concept “that refers both to the compression of the world and the intensification of the consciousness of the world as a whole.” Materially, the world is said to have shrunk and ideologically ideas about globalisation and its effects have become more concentrated, more accessible and more imperative. We need to question the way in which the word is used, whether or not globalisation was inevitable and, indeed, whether or not certain phenomena in our economic, social and work lives are a direct result of globalisation or if globalisation is used as an excuse for other agendas.
A New Phenomenon?
Global trade is not a new phenomenon; it’s been going on for centuries. Nor is the fact that certain countries have always had comparative advantage over others in certain areas of production. Colonising nations such as the English, Dutch and Spaniards exploited the raw materials of their colonies, turned these into manufactured good and sold to other countries – and back to those colonies.
Put simply, international trade can advantage both capital and individual nations, by providing opportunities for specialisation. Countries can take advantage of areas of production where they have a comparative advantage, which in turn leads to differences in the consumption and production structures of economies. The interdependency of different countries and the integration of their economies into ‘the global economy’ are increased.
What has happened in the last 30 years or so has been that international trade has grown faster on average than production. It is the scale and nature of current international developments that distinguish them from the past.
Globalisation is less about the flow of goods and more about the flow of money in a so-called borderless world.
Some observers identify a new trend in the dramatic increase in the international redistribution of ownership that has occurred, particularly since the early 1980s. Flows of foreign direct investment (FDI) have grown more than four times faster than international trade flows. In addition to this, other forms of international investment cooperation such as licensing, off-shore processing and ‘strategic alliances have become more important. FDI by investors based in the European Union, the USA and Japan has become a major vehicle of globalising production patterns.
So, while goods flowing around the world is part of globalisation, it is only part. The distinguishing feature of globalisation is the freer flow of capital. I don’t know what the...