Globalization and Change by variablepitch338


									The Dynamics of Globalization and its Impact on Society in the 21st Century
Berch Berberoglu
Department of Sociology University of Nevada, Reno U.S.A.

Prepared for presentation at Kocaeli University March 25, 2008

Prof. Dr. Berch Berberoğlu is Chairman of the Sociology Department and Director of Graduate Studies in Sociology at the University of Nevada, Reno, USA. He received his Ph.D. from the University of Oregon in 1977. He has been teaching and conducting research at the University of Nevada, Reno for the past 30 years. His areas of specialization include international political economy, globalization, development, political sociology, class analysis, and comparative-historical sociology. Prof. Dr. Berberoğlu has written and edited 26 books and many articles. His most recent books include Labor and Capital in the Age of Globalization (2002), Globalization of Capital and the Nation-State (2003), Nationalism and Ethnic Conflict: Class, State, and Nation in the Age of Globalization (2004) and Globalization and Change (2005). His latest book is The State and Revolution in the Twentieth Century: Major Social Transformations of Our Time, which was published in 2007. He is currently editing a new book titled Globalization, the State, and the Rise of Nationalism in Turkey, which will be published by Istanbul Bilgi University Press this year.

Books on Globalization and Development


Berch Berberoğlu

Books on Globalization, Development, and the Third World
by Berch Berberoğlu

Some Basic Questions
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What is globalization and what are its dynamics? What are its social, economic, political, cultural, and ideological characteristics? What are the contradictions of globalization and its social consequences? What is the relationship between the various institutional agents of globalization? What is the relationship between the transnational corporations and the state?






What are the economic and political consequences of neo-liberal globalization? What are the major societal problems created by this process and how are people affected by it? What role does the state play in this, and how does it respond to its manifestations? How can globalization and its contradictions be explained in class terms? How are people around the world responding to the consequences of neo-liberal globalization?

What is Globalization?

Globalization is the most advanced and accelerated stage of worldwide economic expansion facilitated by transnational capital in the late 20th and early 21st century.

Nature of Globalization
Globalization involves a multitude of spheres within which it operates. These are economic, social, political, ideological, cultural, and environmental, to mention the most central. All of these spheres function within the framework of the prevailing social-economic system and have immense political implications.

Logic of Neoliberal Globalization
Neoliberal Globalization, much as during earlier stages of global economic expansion, is driven by:
the logic of profit for the private accumulation of capital through the use of low-wage labor, raw materials, and new markets abroad.

This is the logic of what is commonly called “neoliberal” or capitalist globalization

Globalization: Its Particular Characteristics
Economic Social Political / Military

Ideological Cultural Environmental


Economic export of capital by transnational corporations control of labor, resources, and markets profit-making on a global scale accumulation of capital in private hands globally

Table 1 The Growth of U.S. Private Investment Abroad, 1950-2005 (in billions of dollars) ________________________________________________________ Value of Assets* _________________________________________________ Year Total** Long-Term Direct ________________________________________________________ 1950 19.0 17.5 11.8 1955 29.1 26.8 19.4 1960 49.4 44.4 31.8 1965 81.1 70.9 49.3 1970 118.8 104.2 75.5 1975 237.6 174.9 124.2 1980 516.6 298.1 215.4 1985 821.8 346.8 232.7 1990 1,920.0 959.3 616.7 1995 3,225.1 2,089.4 885.5 2000 6,025.2 3,957.1 1,531.6 2005 9,743.1 6,527.9 2,453.9 _______________________________________________________ Notes: * At year end and at current cost. ** In addition to direct investments, the total figure represents such items as foreign dollar bonds, foreign corporate stocks, and claims reported by U.S. banks (these are all forms of “portfolio” investments). Sources: U.S. Department of Commerce, Survey of Current Business (monthly) annual articles on U.S. foreign investment; U.S. Bureau of the Census, Statistical Abstract of the United States: 1968, p. 791; 1978, p. 864; 1987, p. 779; 2006, p. 823; 2007, p. 796.

increasing income and wealth inequality worldwide between labor and capital
domination of the global economy by transnational capital for greater profits

Table 2 U.S. Corporate Profits: Financial and Non-Financial Industries, 1970-2005 (in billions of current $) _____________________________________________________________________________ Domestic Industries** ___________________________________________ Total Corporate NonYear Profits* Total Financial financial _____________________________________________________________________________ 1970 1975 1980 1985 1990 1995 2000 74.4 135.0 211.4 257.5 396.6 656.0 759.3 67.3 120.4 175.9 219.4 320.5 563.2 613.6 15.4 20.2 34.0 45.9 94.4 162.2 203.8 52.0 100.2 141.9 173.5 226.1 401.0 409.8

2005*** 1,365.9 1,161.3 335.1 826.1 _____________________________________________________________________________ Notes: Industry data on Standard Industrial Classification (SIC) basis for 1970-2000 and North American Industry Classification System (NAICS) basis are not necessarily the same and are not strictly comparable. * Includes domestic and foreign profits, with inventory valuation adjustment and without capital consumption adjustment. ** Domestic profits, with inventory valuation adjustment and without capital consumption adjustment. *** Data for 1970-2000 include transportation and utilities. Data for 2005 include transportation and warehousing; calculated on the basis of data available for the first three quarters of 2005 only. Source: U.S. Council of Economic Advisers, Economic Report of the President, 2006, p. 388.


transformation of peripheral societies to marketoriented ones integrated into the global economy restructuring of the international division of labor through transfer of manufacturing to low-wage third world countries women workers constituting bulk of low-wage labor in third world export processing zones, and increasingly elsewhere in the periphery

global domination of transnational capital over wage-labor in all aspects of social life conflict in the social and economic spheres lead to political conflict between labor and capital on a world scale



Political / Military
transnational corporate control and influence over national states has led to the erosion of democratic governance support of right-wing authoritarian regimes in the periphery has led to bureaucratic corruption and violation of human rights the leading state of the global economy (currently the USA) now dominates the “new world order” and dictates its terms over all other states as a politicalmilitary superpower

this has led to rivalry and political-diplomatic crises between the major powers that may lead to political instability and world war, as has occurred in the past and the cost of maintaining a global political-military empire has been enormous, leading to the virtual bankruptcy of the U.S. state

Table 3 U.S. Military Spending, Federal Deficit, and Interest Paid on Debt, 1970-2006 (in billions of current $) ____________________________________________________________ Gross Annual Net Military Federal Budget Interest Year Spending Debt Deficits Paid ____________________________________________________________ 1970 1975 1980 1985 1990 1995 2000 2005 81.7 86.5 134.0 252.7 299.3 272.1 294.5 495.3 380.9 541.9 909.0 1,817.4 3,206.3 4,920.6 5,628.7 7,905.3 -2.8 -53.2 -73.8 -212.3 -221.0 -164.0 236.2 -318.3 14.4 23.2 52.5 129.5 184.3 232.1 222.9 184.0

2006* 535.9 8,611.5 -423.2 220.1 __________________________________________________________ Notes: * Estimate. Sources: U.S. Council of Economic Advisers, Economic Report of the President, 2006, pp. 375, 377.


neoliberal globalization propagates the superiority of a private economy that promotes privatization and private profits it celebrates private ownership and criticizes the public sphere as inefficient and undesirable these ideas are a reflection of the class interests of capital and are propagated by the corporate media and the state to legitimize the rule of capital over labor

as the legitimacy of global profit-making comes under attack, however, the ideology of neoliberal globalization is beginning to face opposition from popular forces
These oppositional forces are advocating an alternative to the current neoliberal global political-economic order which they feel must be replaced with one that is equitable and just

Cultural In the cultural sphere, the globalization of capital fosters cultural domination (i.e., cultural imperialism) it involves the imposition of cultural values on other societies to integrate them into the global political-economic system the dominant values promoted by this form of globalization become the new values adopted by societies around the world

such values are easily translated into consumerism, private accumulation, and other individualistic practices that are opposed to cooperation and community-based social values the globalization of capital is able in this way to promote the spread of its values and culture across the globe to legitimize its political-economic system on a worldwide basis

the destruction of the ecosystem and the living space through pollution, contamination, and disposal of hazardous chemicals to increase profits has led to a global ecological crisis the deterioration of the quality of air, water, and soil has longrange consequences that are irreversible

in their drive to maximize profits, the transnational corporations have turned much of the world into a dumping ground the destruction of the environment through this process has placed the future of our planet into great risk

Impact of Globalization on Labor
In the Third World
source of cheap labor for the transnationals (workers earn as little as $3 a day in Mexico, the Philippines, and other third world countries) high rates of exploitation of labor and immense profits for the transnationals

sweatshop conditions in the global garment and electronics industries with long hours of work

poor working conditions, high accident rates and health hazards by exposure to toxic chemicals

marginalization of labor through mass migration to urban areas, leading to widespread unemployment and poverty
anti-union, anti-democratic laws and human rights abuses by repressive states that are subservient to the neoliberal imperial state

Impact of Neoliberal Globalization on Labor
in the Advanced Capitalist countries

decline in domestic industrial production, due to transfer of manufacturing to cheap labor areas in the third world

immense dislocations in the national economies of advanced capitalist states
the massive expansion of capital worldwide has resulted in hundreds of plant closings


higher unemployment and under-employment, and shift in jobs to the low-wage service sector decline in union membership, due to loss of unionized jobs
decline in wages of millions of workers and a drop in income and living standards further polarization in income and wealth between labor and capital, has led to class inequalities

Table 4 Distribution of Wealth in the United States, 2001, by Type of Asset (in percentages) ____________________________________________________________ Investment Assets Top 1% Top 10% Bottom 90% ____________________________________________________________

Stocks and mutual funds
Financial securities Trusts Business equity

58.0 46.3 57.3

88.6 86.7 89.6

11.3 13.3 10.4

Non-home real estate 34.9 78.5 21.5 ___________________________________________________________ Total for group 47.8 85.5 14.5 ___________________________________________________________ Source: Edward N. Wolff, “Changes in Household Wealth in the 1980s and 1990s in the U.S.,” Working Paper No. 407 (May 2004), p. 34.

The contradictions of the global political economy have led to renewed conflict between labor and capital
the greater control and exploitation of labor has further intensified class conflict on a world scale
the global hegemony of capital over labor and the state has led to increasing worker resistance this, in turn, has brought together forces that have similar interests in confronting global capital (i.e., international labor solidarity)

The politicization of labor’s response to neoliberal globalization has resulted in
increasing number of strikes, demonstrations, and protests
formation of new political organizations of labor

promotion of class politics to confront capital and the state
organizing efforts by labor unions to mobilize workers across national boundaries a broader global unity of working people is becoming labor’s response to neoliberal globalization

As the restructuring of the global economy moves ahead with increasing speed, and as conditions deteriorate for working people throughout the world, the potential for a renewed labor activism and struggle increases. This struggle, which becomes political over time, evolves into a struggle between labor and capital at global proportions.

Therein lies the possibility of a renewed global solidarity of labor that leads to new forms of struggle and resistance against neoliberal globalization on a worldwide basis.

And in this sense, we can identify at least one positive outcome of the neoliberal globalization process. And that is, neoliberal globalization creates the conditions and social forces for its own eventual transformation…


Appendix A
Origins and Development of Globalization

Appendix B
Globalization and Class Relations On a World Scale

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Globalization, the State, and the Rise of Nationalism in Turkey
Neoliberalism, Islamic Politics, and Nationalist Response
Edited by Berch Berberoglu University of Nevada, Reno

Istanbul Bilgi University Press

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