Globalization and its Driving Forces

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This paper is a critical assessment of the phenomenon known as globalization and the driving forces behind it. Devastated by the tragedy of WWII, the international community was in need of a forum for international relations and dispute settlement. As the United Nations was born, so were organizations like the World Bank and the World Trade Organizations, as well as much regional cooperation. Each organization holds a common theme in their missions – to eliminate poverty and promote equal growth and prosperity for people worldwide. It is hypothesized that as we would like to think that everybody is growing equally in this age of increasing global connectivity, the contrast appears to be the reality. Groups like the ones mentioned above, in their effort to promote growth and prosperity, have in fact made it easier for the already wealthy to further increase their wealth at the expense of those impoverished. Only if there is accountability for even the world’s greatest powers can true equal growth and prosperity takes place.

Introduction

In early August 1945, two atomic bombs were dropped on the cities Nagasaki and Hiroshima Japan to conclude the single bloodiest war in the history of humanity, World War II. To prevent such a tragedy from ever occurring again, a global effort was made to provide means to conduct international relations in a civil manner. Thus, the United Nations was born, and with it sub-organizations and affiliates like the World Bank Group, the World Trade Organization, and other multinational cooperation organizations around the world. Since then, a phenomenon has been taking place known as Globalization. A basic definition noted by sociologist Roland Robertson is, “Globalization as a concept refers both to the compression of the world and the intensification of consciousness of the world as a whole…both concrete global interdependence and consciousness of the global whole in the twentieth century”. With the compression of the world and the exponential increase in trade comes an increasing interdependence. As the world becomes more interdependent and combined, a new array of issues and challenges present themselves. This paper is a critical analysis of the globalization phenomenon and the driving forces behind its tremendous benefits to society, as well as its explicit and evilly implicit costs. While there have been tremendous benefits to the global community in development and living standards, there are also certain evils remaining from our horrid past that are ambitiously trying to take advantage of the world’s unknowing population. In order to address the troubles of today, humanity’s past must be briefly assessed.

The State of Nature

In a state of nature, there is no money. There are no buildings and cities, nor are there governments and social policies. The state of nature exists naturally as is, and it is from this state of nature that we as a species evolved and developed over time. In his book Guns, Germs and Steel, sociologist Jared Diamond describes the evolution of humanity from the state of nature to the current world of money and institutions. Originating from Africa, the human species spread throughout the world in their continuous search of food. In the initial stages of human history, migration patterns followed that of animals all throughout Asia through the Bering Strait to North America, and eventually down into South America. Humans also spread into central and South Africa, as well as into Europe.  The times of steady migration in search of food would end with the agricultural revolution. Known as the Neolithic Revolution, it is the first wide-scale transition from a migratory lifestyle to a settled agriculture lifestyle ranging from 10,000 BC to 5,000 BC. These early settlements are marked by ancient ruins all over the world as evidenced by pyramids in Egypt and Central America, and ancient river valley settlement remains around the world. With the formation of the early settlements of groups of people, they interact and share with one another in the form of food, ideas, and services. Generally speaking, there has always been a certain leader or group of leaders that guide the decision making of the group as a whole. These people are generally well respected, well educated and have the best interest of the people in mind. As population rates grow due to settlement and demand for farm labor, some type of order is needed to account for the work and effort put in to produce sustenance; money is born.

The Creation of Money

There are several functions money provides, both abstract and concrete. Some of these practical functions are a common measure of value, a medium of exchange, a means of payment and a store of value. Money has existed in many different forms throughout history such as amber, rice, ivory, jade, and salt just to name a few. Originally, humans would just trade on item for another of similar value. This system is known as the barter system. But as societies expanded and the variety of products within the society increased, there was a need for a common medium of exchange between one person and another. This made it easier to trade with someone even if there was nothing one of the parties could offer to satisfy the terms of trade. At first, money was backed by gold because of its visual and physical appeal. Gold was one of the rare metals that did not undergo corrosion and could, therefore, be stored. Each societies leader as discussed in the previous paragraph engaged in some type of wealth reserve with some sort of money system. Each society worked to increase its production capabilities and better the living standards of the society at large. But as societies worked to grow, their growth and expansion would begin to overlap. As a result of this overlap and a conflict of interests, disputes and disagreements over territory, religion, philosophy, and plain ethnocentrism would result in the physical confrontations between societies known as wars.

War

For as long as there has been money there has been war. The seemingly eternally existing money system was created simultaneously from society to society during a spread of time known as the agricultural revolution. Along with the creation of humanity’s first pre-modern societies came the creation of war. History’s earliest battles took place before the creation of writing and documentation and therefore, are scarcely recorded. “The earliest armed conflicts were most likely fought among settlements that were competing for resources or land or between townsfolk and marauding bands of nomads looking to plunder food or livestock”.  As money continued to grow as a means to acquire resources, an accumulation and stockpiling of this money among the “leaders” of these societies took place. This stockpiling would be used in early foreign negotiation for indigenous resources such as spices and fruits. As the use of money became customary among the international community, the accumulation of money determined the standing of a nation in terms of power. And in order to maintain domestic order as well as protect from foreign invasion, leaders were transformed into government with lawmaking and enforcing capabilities. Unfortunately, the intent of protection of the best interests of the people shifted as leaders became comfortable in their positions for generations to come, forgetting why they are in the position initially. Therefore, every now and then there would be a revolution or overthrowing of the current government system in replace of a new one. This new government system would be left to deal with foreign trade and affairs. For every conflict of interest, there was a war to settle the dispute, and with this, violence became a means of relations. Eventually, countries in Europe were able to advance and develop capabilities with guns and boats. As they sailed around the world and saw people with different physical complexions and practices than them, they used their unmatchable weaponry (guns) and enslaved masses of them. When it as decided that slavery was wrong and abolished, individuals profiting from such a practice were ambitious to continue their exploitation of the lesser advanced and underdeveloped. 

The Global Awakening

It was not until the world spread the horror of WWII that the world developed its first signs of international consciousness and understood the factors in international relations. With millions dead in a meaningless struggle for power that does not exist in the state of nature, an effort had to be made by the global community to cooperate and settle disputes without large scale violence destroying cities and millions of lives. As a result, the United Nations was created as well as many transnational and regional organizations. The creation of the United Nations marks the beginning of modern international affairs and the beginning of globalization. Through this forum, organizations like the International Monetary Fund, the World Trade Organization and the International Court of Justice were created. Overall, the intent of these organizations has been pure; help those countries with less resource develop and modernize to the benefit of both the developing country and the developed country helping. However, this seemingly righteous intent was backed with an underhanded, implicit intent to increase the developing countries dependency on developed powers to the further advantage of the developed powers. These effects can be assessed through five case examples of transnational cooperation.

Near the conclusion of WWII, the United Nations Monetary and Financial Conference was held to discuss the rebuilding operations to take place after the conclusion of WWII. Devastated by the damages to each country’s resources and capital, a monetary and financial order was needed to ensure timely recovery of the damaged nations. This conference, known as the Bretton Woods conference, concluded with the development of the International Bank for Reconstruction Development (IBRD), the International Monetary Fund (IMF), and the General Agreement on Tariffs and Trade (GATT). A latter creation of this global cooperation effort is the World Trade Organization (WTO). These five cooperation efforts, as well as the role of super-corporations in utilizing these agreements and the ultimate people left with the burden of these agreements and decisions are the major driving forces behind the phenomenon known as globalization.

The Bretton Woods Conference

The Bretton Woods conference was a conference that focused on the reconstruction and development of the countries and people damaged by the horrors of WWII. While the immediate damages from WWII may have been repaired after years of cooperation and reparation, there are still many issues lingering from the era that continue today. The way money and business are practiced today, significant bargaining power is given to the corporations and producers while social principles of justice, equity, and human rights are seemingly disregarded. The website of brettonwoodsproject.org shows the continuing efforts of the project3. The vision of the BWP is similar to what it always has been, “...a global economic system that operates on the primary principles of justice, equity, human rights, and environmental sustainability, with international institutions that are democratic, transparent, accountable and responsive to the poorest and most vulnerable citizens”. While such a righteous vision can be deemed as idealistic, it is questionable whether or not this is the true intent of the project, or if it is a facade used to blindly exploit the masses of people around the world.  

With the United Kingdom facing its ultimate defeat at the hands of the Germans during WWII, the chancellor of England at the time, Winston Churchill sought help from the neutral United States. During the Atlantic Charter, it was agreed that the United States with help the United Kingdom if and only if the UK released the control on all of their colonies so that the US could open trade with them. Facing such a desperate situation, the UK agreed. Whereas it would be great to assume this condition was made to liberate people around the world, the motive behind it was to continue exploiting the colonies and their resources without enslavement or colonization. They did this through the creation of an international monetary regime.

An International Monetary Regime

The Bretton Woods Conference resulted in the creation of the International Bank for Reconstruction Development (IBRD) and the International Monetary Fund (IMF). These two organizations are the founding components of the World Bank Group. The IBRD’s primary objective after the recovery of damages in Europe after WWII was to advance development and infrastructure in countries around the world as it claims on their website web.worldbank.org in the section about the IBRD. The same is true for the IMF, but with different more specific objectives such as securing financial stability, facilitating international trade and promoting high employment and sustainable economic growth. Overall, the mission of the World Bank Group as a whole is “to reduce poverty around the world” as claimed numerous times on their websites. While the ideals of global monetary cooperation may have been well intended, because such cooperation is unprecedented in human history, it is almost certain that some would try to take advantage of a vulnerable world. Although unclear if the actual policymakers in the IBRD and IMF were aware of the consequences of such decisions, governments and corporations motivated by self-interests were quickly able to capitalize on the seemingly “friendly” global environment. What ensued after WWII was a period of international lending to recently independent territories from the period of European colonization. As countries like Ghana, Angola and the Ivory Coast gained their independents; leaders were put in place that had friendly and cooperative relations with the European power that recently ruled them. Therefore, it was implied that the newly empowered leader would do whatever the dominant recommended. Thus, the system of colonization and taking of resources for free turned into a system of modernized slavery with the creation and lending of more “paper money”. The weak and developing nations, knowing the atomic capabilities of the foreign powers were left with no choice but to comply with the recommendations of these foreign powers, regardless of their implications. 

Essentially, these financial organizations loaned developing countries macroeconomic amounts of money. The money was given to each country’s leaders respectively. Coming out of a period of European rule, it is likely that the people placed in the new governments were people who had previous relations with their colonizers. For example, the people that sold slaves to the Europeans were African “leaders” in exchange for gold, money, and guns. Hundreds of years later, there are select “leaders” that allow for the European operations take place. These leaders are the ones placed in these independent governments after WWII. With corrupt leaders in power, the money loaned to the developing countries was not used for schools and investment in production capabilities, rather it was used for building trains to the resources of each country to be transported to sea and shipped to the European countries. They then manufacture it into products and sell it to their domestic consumers as well as around the world. With slavery eliminated, this is simply a plan to re-enslave people backed by the concept of “money”. Not able to meet their production demand, the African countries are left with tremendous debt, unable to even pay the interest rate accumulating. Even if the European countries wipe the debt clean, they still made out with all of the resources.

Non-Governmental Organizations: An Outside Perspective

It is important to realize that an organization that is knowingly trying to take advantage of a situation is going to present itself as an ethical, responsible corporation with the person as its sole motive. Taking a comment about The World Bank in the “About Us” section of its website is not credible enough. Websites like Third World Network and Open Society Foundations are independent accounts of these global organizations that can be useful in assessing the effectiveness of these all-encompassing world organizations. Third World Network offers independent research reports and scholarly articles about global financial and monetary issues. The Soros foundation is similar but different in that it is one man’s experience, George Soros, and the books he has written discussing international monetary practices. 

Both of these are examples of how big global giants such as the IBRD and IMF can be monitored and held accountable. “It is true that many opponents of globalization have invoked national sovereignty as a first line of defense against this new wave of aggressive capitalist expansion” . While it would be nice to think such a power founded by powerful leaders around the world indeed does have the best interests of the people in mind, such thinking is idealistic and evidence can be found in the externalities and debts these countries are left to burden. Accountability among even the highest national officials in this increasingly internationalized and globalized world is important for continued positive growth. Without accountability, there will be no justice, and if there is no justice, there will never be equality. Without equality, there will never be peace. But with accountability and justice in sight, peace and equality can be attained

The International Forum on Globalization

Modern international cooperation began with the conclusion of World War II and with that came the first world superpower, the United States. One of the lead innovators in mass production capabilities and industrialization, in conjunction with arguably the most powerful military in the world, made the United States one of the most idolized countries in the world. The International Forum for Globalization advertises and event known as “Teach-In : Confronting Militarization, Resource Theft, Globalization & America’s Pacific Pivot , providing an extensive source of information for those who seek it. As the greatest winners of WWII, the United States set out to begin its enjoyment of the world and its resources as the British did when they expanded during the period of colonization and imperialism, especially in the pacific. U.S. corporations quickly realized the differences in labor practices and protection in underdeveloped countries and were quick to capitalize. “Instead of producing goods in the U.S. to export, they moved more and more toward producing goods overseas to sell to consumers in those countries and at home” . What started out as an effort to promote global development and equality quickly turned into a savage game of increasing profits. Sociologist William Robinson titled Transnational Capitalism; he describes the mechanisms that facilitate the transnationalization of capital such as the global stock market and foreign exchange. As capital ownership transnationalized, he says, “A transnational capitalist class has come into existence as the manifest agent of capitalist globalization” . As the classic saying goes, the rich get richer and the poor get poorer, this is an example of when such a saying holds true. But, while capitalists motivated by self-interests may value profits than societal growth, there are many benefits of the global inclusiveness of globalization.

The World Trade Organization

It is indisputable that much of the growth seen around the world is due to increasing trade opportunities among countries around the world. Much of this growth can be attributed to major groups like the United Nations, the World Bank Group, and the World Trade Organization. The WTO is an organization recently implemented in 1995 under the Marrakech Agreement, as a replacement of the General Agreement on Tariffs and Trade (GATT). This organization was similar in its objectives to eliminate tariffs and trade barriers around the world, but much more effective and liberal in its effect on international trade. The WTO seeks to virtually eliminate all trade barriers around the world. It currently has 159 member states and is headquartered in Geneva Switzerland as mentioned on their website wto.org . The organization has made effective contributions to international trade as they oversee around 60 agreements as binding as international legal texts. General examples of these agreements are the Agreement on Agriculture, the General Agreement on Trade in Services, the Agreement on Trade-Related Aspects of Intellectual Property Rights. These agreements set binding standards in their respective focuses and serve a precedent for behavior of all sorts of transnational actors, both governments and corporations. While organizations like the World Bank and WTO have made it easier for capitalist giants to further increase their profits, perhaps organizations like the United Nations and International Criminal Court can play a more binding role on the regulation of business practices around the world to prevent such atrocities as child labor in China or factory conditions in other developing countries. All in all, while globalization has sprung our global community into the modern age, there are still many issues with unregulated capitalist practices that affect populations of the world, with a brunt of the burden on the poorest and most under-developed and unknowing nations. 

Conclusion

In conclusion, the conclusion of WWII has sprung our world into an unprecedented unifying structure. With organizations like the United Nations, World Bank, and World Trade Organization, international relations can be conducted in a civil manner without the destruction of wars in the past. However, while it may be nice to pretend that everyone is better off because of the globalization phenomenon and our world is diligently working towards growth and the elimination of poverty, there are still many examples of capitalists increasing their profits at the expense of the poor underdeveloped countries and their labor forces. It seems as if the top officials in each national government have gotten together and made it easier for them to make more money, macroeconomic money that can change nations. But instead of contributing to the true development of struggling countries around the world, it appears that the profits only stay in the hands of those making it and used to make even more money. There is hope that as binding as trade agreements are becoming to ensure these capitalists make their profits, organizations like the United Nations and the International Court of Justice can play a more binding role on regulating the externalities of these transnational entities, for they are more powerful than most individuals in a given country. Only by holding the most powerful accountable for their actions can the true ideal of global equality and justice be attained. 

References

1Diamond, Jared M. Guns, Germs, and Steel: The Fates of Human Societies. New York: W.W. Norton &, 1998. Print.

2Mallett, N. H. "FIRST BLOOD – HISTORY’S EARLIEST RECORDED BATTLES AND WARS." Military History Now. N.p., 12 Sept. 2012. Web. 31 May 2013. <http://militaryhistorynow.com/about-me/>.

3"What Is the Bretton Woods Project?" Bretton Woods Project. N.p., n.d. Web. 31 May 2013. <http://www.brettonwoodsproject.org/project/about.shtml>."

4About the IBRD." IBRD. World Bank Group, n.d. Web. 31 May 2013. <http://web.worldbank.org>.

5"Welcome to Third World Network." Third World Network (TWN). N.p., n.d. Web. 31 May 2013. <http://www.twnside.org.sg/>.

6"George Soros." Open Society Foundations (OSF). N.p., n.d. Web. 31 May 2013. <http://www.opensocietyfoundations.org/people/george-soros>.

7SOURCE 2 READING 3404 ABC’s of Free-Trade Agreements.

8" People's of the Pacific - Confronting Militarization, Resource Theft, Globalization and America's Pacific Pivot." International Forum on Globalization. N.p., n.d. Web. 10 June 2013. <http://www.ifg.org/>.

9SOURCE 1 READING - 3399-1 International Institutions and Trade Agreements the ABCs of the Global Economy.

10SOURCE 3 READING 3410 Transnational Capitalism William Robinson Znet activism.

11"What Is the WTO?" WTO. World Trade Organization, n.d. Web. 31 May 2013. <http://www.wto.org/english/thewto_e/whatis_e/whatis_e.htm>.