Points covered:- What is “globalization”?- End of the nation-state?- Race to the bottom

What is it and is there reason for scepticism?

Hirst, P., Thompson, G. and Bromley, S. (2009). Globalization in Question, 3rd edition (Cambridge: Polity Press).

1948-2005: Value of exported goods increased from US$58bn. to $10159bn.

Value of imported goods increased from $66bn. to $10511bn.

Between 1948 and 2005 some regions’ share of world trade declined:

Africa’s (excl. S. Africa) share decreased from 7.3% to 2.9% (exports) and 7.6% to 2.4% (imports).

Large industrial countries (US, UK, Germany, France, Japan) are only just catching up with their ratio from 1913.

There is nothing unprecedented about the current trade : GDP ratio (cf.

Mosley, p. 109).

One indication of globalization is increased mobility across boarders:

1)Foreign direct investment (FDI)

2)Finance 3)Goods (trade)

What is not mobile?People, especially those

with “low skills”: there is far less mobility of people today than in the late 19th and early 20th centuries.

Developed countries accounted for 84% of world FDI outflow (2006).

Where is it going (inflows)?

Multinational companies (MNCs) are the main source of FDI to developing countries.

What is the impact on host countries in the developing world?

MNCs can have a positive effect on host developing countries:

1)Technology transfer2)Skill enhancement3)Increased exports4)Employment

Employment effects of MNCs:a)Job creationb)Higher wages c)Better working conditionsd)More benefitsAre MNCs obliged to help developing countries more than they currently do?

Does globalization mean that economic conditions in poorer countries are improving?

Is the nation-state powerless against the power of international capital?

Does globalization intensify competition amongst nation-states?

Three ingredients to competition:1)Who (or what) is competing with

each other (or: who are the competitors)?

2)What are the competitors competing for?

3)How are they competing with each other?

Ingredients of the RTB (Mosley, pp. 110-12):

1)Who are the competitors?‘Jurisdictions’, e.g. nation-states, regions of a country, supranational organizations like the EU.

2) What are they competing for?Mobile resources, particularly

foreign investment (‘capital’).

3) How are they competing?By creating policies favourable to

international capital in order to attract capital.

Effects of the RTB:c) Policy convergence across

jurisdictions.d) Policy reaches lowest

common denominator (the ‘bottom’).

e) Undermining democracy.

Mosley (pp. 112-14):Little evidence of a systematic RTB; some evidence that certain countries and sectors are affected. Hence no imminent “end” of the nation-state.

Why?

François Hollande announced a new “rich tax” (highest tax bracket of 75%) in France (2012).

Actor Gérard Depardieu, along with other French high earners declared that he would leave the country.