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Globalization - Understanding globalization - Rise of neoliberal globalization

6 important questions on Globalization - Understanding globalization - Rise of neoliberal globalization

What are earlier forms of globalization?

Usually established transnational economic organizations on the back of expansionist political projects.
Empires never succeeded in obliterating boundaries and borders; they merely readjusted them to the benefit of politically dominant powers.

What is the contemporary form of globalization?

Web of economic interconnectedness and interdependence has extended so far that it is possible to conceive of the world economy as a single global entity. (borderless economic life)
+ it has gone hand in hand with the advance of neoliberalism.

Why are globalization and neoliberalism so closely linked?

- Intensified international competition encouraged governments to deregulate their economies and reduce tax levels in the hope of attracting 'inward' investment and preventing TNCs from relocating elsewhere.
--> strong downward pressure exerted on public spending and welfare budgets (in a context of heightened global competition, the control of inflation has displaced the maintenance of full employment as the principle goal of economic policy).

Has led to neoliberalism as dominant ideology.

What else has stimulated the remaking of the world economy on neoliberal lines?

-By the conversion (during the 1990s) of the institutions (world bank and the IMF) of global economic governance to the ideas the Washington consensus (favour the reconstruction of economies in the developing world- after collapse of communism: stabilize, privatize and liberalize).

- Strong faith in open markets and trade liberalization and a shift in many developed economies from manufacturing to services, the former increasingly being exported to the developing world.

What is at the core of the neoliberal growth model?

Financial markets and the process of 'financialization' (reconstruction of finances of businesses, public bodies and individual citizens to allow them to borrow money and so raise their spendings).
--> made possible by a massive expansion of the financial sector of the economy.

In the process: capitalism was turned into 'turbo-capitalism', benefiting from greatly expanded monetary flows that were seeking an outlet in increased investment and higher consumption. Although this process involved a considerable growth of public and often private debt, this was thought to be sustainable due to the underlying growth that the debt fuelled.

What are critiques on neoliberal globalization?

- in rolling back welfare provision and promoting an ethic or material self-interest, neoliberalism struggles to maintain popular legitimacy as an economic doctrine because of its association with widening inequality and social breakdown.

In Russia this created a backlash against market reform and led to strengthened support for nationalist and authoritarian movements.