The Globalisation Debate
Anthony Giddens and Leslie Sklair

Session 3 Global Interdependence

Intro Session 1 Session 2

In its simplest sense, globalisation can be defined as increasing global interdependence. The globalisation debate has moved through two phases.


GiddensLecture video Anthony Giddens defines global interdependence
(8:58 min)

Up to approximately three or four years ago, the core of the debate on globalisation concerned whether the phenomenon existed at all. Many people felt that all the talk about globalisation did not signify a reality. These people have sometimes come to be called globalisation sceptics. They argue that if, for example, you look back to the late nineteenth century there were already open markets, a good deal of trade in currencies and much migration across the world where, for the most part, people did not even need passports. Thus they questioned whether there was anything new about the contemporary phase, suggesting that all the talk about globalisation is simply hype. There has been a lot of research since then.

My view is that that debate is over. The first globalisation debate is now over.

Anyone who has studied the phenomenon in depth recognises that this is a new era. Whatever affinities it might have with it, the current global age is not merely a replica of the past. There are massive changes affecting our world. The globalisation debate itself has become global in a way that would simply not have been possible before the advent of recent global communication systems.

Thinking Point
How would you define globalisation? Anthony Giddens argues that the globalisation debate has moved on, from arguments about whether globalisation existed at all, to focus on the consequences of globalisation. Do you think that the definition of globalisation one uses affects the consequences one attributes to the phenomenon?
The second globalisation debate is now under way. That debate is not about whether globalisation exists but what the consequences of globalisation are. That debate is not just an intellectual debate. It is not just an academic discussion. That debate has brought people out into the streets. Since the meetings in Seattle, through to the anticapitalist carnivals in London, massive demonstrations in Buenos Aires, when the IMF were there, and more recently in Prague, there is a massive confrontation around the whole notion of globalisation and what it means for us.

Although there is a good deal of violence in all this on the streets, in a way I think it is right and proper, because the globalisation debate is perhaps the most important debate currently ongoing. It is a debate about how we can shape the big changes affecting our lives in such a way as to try to settle the fate of this century. The unfolding shape of this century will be strongly influenced by how we react to the debate about globalisation.

What were the people on the streets of Seattle saying? We know they were disparate groups and were not just people who were for or against globalisation. The protesters are themselves part and parcel of globalising processes, because, for example, they used the Internet to assemble there. Chris Patten gave a funny example of a placard that was being held up in Seattle. Someone was saying, "Join the worldwide movement against globalisation." That demonstrates that you are dealing with the contact, friction and dialogue between what you might call globalisation from above and globalisation from below.

In the streets, people were against globalisation. In the plush meeting rooms, people from the WTO (World Trade Organization) and IMF (International Monetary Fund) were for globalisation. To me, both these positions are incoherent. You cannot take such a position, because globalisation is a complex phenomenon, not a single phenomenon, and it comes from more than one source, perhaps the dominant source being changes in communications. Globalisation should be identified neither with liberal market policies nor with the expansion of the global economy. I believe there is a much more profound restructuring of global institutions going on, to which phenomena such as the ending of the Cold War and other dynamic influences contribute. Therefore, you cannot be for or against globalisation; you have to disentangle the undeniably positive aspects of a more global and cosmopolitan world from the harmful and destructive ones which undoubtedly also exist.

Corporate power and inequality

The people in the streets were concerned with at least two phenomena: corporate power and inequality. Is it true that corporations run the world? If so, that surely cannot be right and proper. Is it true that expanding globalising processes are producing a more unequal world?

I believe we do require more regulation of corporate power. That is possible. However, regulation must be on a transnational as well as national level and involve incentives as well as negative measures. Regulation must also involve those types of issues that the OECD (Organization for Economic Cooperation and Development) are now working on centrally--for example, closing down of tax havens and increased regulation of anonymous banking accounts. You do not want a world which is simply enthralled to corporate power.

On the other hand, it is a fundamental mistake to demonise business, demonise corporations, because corporate involvement is needed for investment and, under the right conditions, corporate investment in poorer countries is wanted. The question is how to achieve that. It would be stupid to simply say that corporate power should in some sense wholly be held back from the developing world. It has aptly been said that the only thing worse than being exploited by a multinational corporation is not being exploited by one. Corporate investment is wanted, but only under regulated conditions.

Does globalisation increase inequality? People on the streets seem to think so, but if you examine the evidence that assertion cannot be supported. In this case, it does not matter what view of globalisation you have, even if it is a very thin view of globalisation as free trade. If you examine the recent studies, there is no clear connection between the expansion of free trade and the development of inequalities. On the contrary, on the whole, open poor economies perform better than closed poor economies. In terms of growth rates, over the past 15 years the comparison is zero growth for closed poor economies and approximately 5 percent growth for open poor economies. Moreover, in the open poor economies there is a reduction in inequality rather than an increase.

Fundamentally, inequality comes from a cluster of other sources--corruption, the overextended power of states, technological change, demographic change and disease, the spread of AIDS in Africa. Globalisation, engagement with the wider changes in the world, is as crucial for the less developed countries as it is for the more developed ones. No country which has cut itself off from the wider world has prospered.

You only have to look at North Korea or Burma to see what it is like in a country which tries to simply isolate itself from the world economy. There is no future in regionalism or blunt protectionism. That does not mean you should simply accept free trade. Industries should only be opened up to markets when certain institutionalised conditions prevail. Nevertheless, you do need to engage with the wider global economy. The main question for poorer countries is what the conditions of that engagement are.

 

This session is taken from a lecture given at a debate entitled "Globalisation: Good or Bad?" at The London School of Economics and Political Science on October 11, 2000. Copyright The London School of Economics and Political Science.