Globalization

By David Held and Anthony McGrew

Entry for Oxford Companion to Politics

David Held is Graham Wallas Professor of Political Science at theLSE;

Anthony McGrew is Professor of International Relations atSouthampton University.

Globalization can be conceived as a process (or set of processes)which embodies a transformation in the spatial organization ofsocial relations and transactions, expressed in transcontinental orinterregional flows and networks of activity, interaction and power(see Held and McGrew, et al, 1999). It is characterized by fourtypes of change. First, it involves a stretching of social,political and economic activities across frontiers, regions andcontinents. Second, it is marked by the intensification, or thegrowing magnitude, of interconnectedness and flows of trade,investment, finance, migration, culture, etc. Third, it can belinked to a speeding up of global interactions and processes, as thedevelopment of world-wide systems of transport and communicationincreases the velocity of the diffusion of ideas, goods,information, capital and people. And, fourth, the growing extensity,intensity and velocity of global interactions can be associated withtheir deepening impact such that the effects of distant events canbe highly significant elsewhere and specific local developments cancome to have considerable global consequences. In this sense, theboundaries between domestic matters and global affairs becomeincreasingly fluid. Globalization, in short, can be thought of asthe widening, intensifying, speeding up, and growing impact ofworld-wide interconnectedness.

Three broad accounts of the nature and meaning of globalization canbe identified, referred to here as the hyperglobalist, thesceptical, and the transformationalist views. These define theconceptual space of the current intensive debate aboutglobalization.

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The Hyperglobalists

What distinguishes the present era from the past ,argue the hyper-globalists , is the existence of a single global economytranscending and integrating the world's major economic regions(see, for instance, Ohmae, 1990). In variously referring to 'maniccapitalism', 'turbo-capitalism', or 'supra-territorial capitalism',these globalists seek to capture the qualitative shift occurring inthe spatial organization and dynamics of a new global capitalistformation . Inscribed in the dynamics of this new global capitalismis, they argue, an irresistible imperative towards the de-nationalization of strategic economic activities. Today it is globalfinance and corporate capital , rather than states, which exercisedecisive influence over the organization, location and distributionof economic power and wealth.

Since the authority of states is territorially bound, global marketscan escape effective political regulation. In this borderlesseconomy, states have no option other than to accommodate globalmarket forces. Moreover, the existing multilateral institutions ofglobal economic surveillance, especially the G7,IMF, World Bank andWTO, largely function to nurture this nascent 'global marketcivilisation' .

In this 'runaway world' nation states are becoming 'transitionalmodes of economic organization and regulation' since they can no

longer effectively manage or regulate their own national economies.Economic globalization spells the end of the welfare state andsocial democracy. In effect, the hyperglobalists hold, the autonomyand sovereignty of nation-states have been eclipsed by contemporaryprocesses of economic globalization.

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The Sceptics

By comparison the sceptical position is much more cautious about therevolutionary character of globalization (see, for example, Hirstand Thompson, 1999). Whilst generally recognizing that recentdecades have witnessed a considerable intensification ofinternational interdependence, the sceptical interpretation disputesits novelty . By comparison with the belle époque of 1890-1914, theintensity of contemporary global interdependence is considerablyexaggerated. Moreover, the spatially concentrated nature of actualpatterns of economic interdependence suggest that globalization isprimarily a phenomenon largely confined to the major OECD states.Further, these states have been the very architects of a more openliberal international economy. Dismissing the idea of a unifiedglobal economy, the sceptical position concludes that the world isbreaking up into several major economic and political blocs , withinwhich very different forms of capitalism continue to flourish.Theemphasis upon footloose capital and a new global capitalist order isoverstated as is the decline of the welfare state. Rather than a newworld order , the post Cold War global system has witnessed a returnto old style geo-politics and neo-imperialism, through which themost powerful states and social forces have consolidated theirglobal dominance . In presuming the novelty of the present, so thesceptical position suggests, the hyperglobalists ignore thecontinued primacy of national power and sovereignty.

What is to be made of these accounts? Are we on the edge of a globalshift - a fundamental shake-out of world order? Or is the narrativeof globalization simply mere rhetoric? Is a productive synthesisbetween these two positions possible?

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An intermediate way: the Transformationalist Analysis

To begin with, it is crucial to acknowledge that globalization doesnot simply denote a shift in the extensity or scale of socialrelations and activity. Much more significantly,argue thetransformationalists, it also involves the spatial re-organizationand re-articulation of economic, political, military and culturalpower (see Held and McGrew, et al, 1999). The current debate aboutglobalization ought primarily to be about the question of power: itsmodalities, instrumentalities, organization and distribution.Globalization can thus be understood as involving a shift ortransformation in the scale of human social organization thatextends the reach of power relations across the world's majorregions and continents. It implies a world in which developments inone region can come to shape the life chances of communities indistant parts of the globe. Highly uneven in its embrace and impact,it divides as it integrates. Globalization may mean a shrinkingworld for some but for the majority it creates a distancing orprofound disembedding of power relations. As the East Asian crisisof 1998 demonstrated, key sites of global power can be quiteliterally oceans apart from the subjects and communities whosefuture they determine.

Globalization too has to be understood as a multidimensional processwhich is not reducible to an economic logic and which hasdifferential impacts across the world's regions and upon individualstates . Nor is it a novel process but rather has a long history -from the age of pre-modern empire building to the contemporary era

of corporate empires. Of course, its contemporary articulation hasmany unique and distinctive attributes - not least amongst them nearreal time communication.

Historically, globalization has always been and remains a vigorouslycontested process - from the struggles against slavery , nationalindependence to the more recent global protest against the WTOsmillennium trade round. Indeed, it can be argued that across manydomains - from the cultural to the technological - globalization hascontributed to a remarkable politicization of social life whilstalso creating new modalities and institutional arenas through whichits imperatives are contested. Such developments are most inevidence in respect of economic and political globalization.

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Economic Globalization

Contemporary patterns of economic globalization have been stronglyassociated with a reframing of the relationship between states andmarkets. Although the global economy as a single entity is by nomeans as highly integrated as the most robust national economies,the trends point unambiguously towards intensifying integrationwithin and across regions. Patterns of contemporary economicglobalization have woven strong and enduring webs across the world'smajor regions such that their economic fate is intimately connected.Levels of inter-regional trade are largely unprecedented whilst theform which trade takes has changed considerably. Despite the factthere is a tendency to exaggerate the power of global financialmarkets, ignoring the centrality of states to sustaining theireffective operation especially in times of crisis, there is muchcompelling evidence to suggest that contemporary financialglobalization is a market, rather than a state, driven phenomenon.Reinforced by financial liberalization, the accompanying shifttowards markets and private financial institutions as the

'authoritative actors' in the global financial system poses seriousquestions about the nature of state power and economic sovereignty.

Alongside financial integration the operations of multinationalcorporations integrate national and local economies into global andregional production networks .Under these conditions, nationaleconomies no longer function as autonomous systems of wealthcreation since national borders are no longer significant barriersto the conduct and organization of economic activity. Thedistinction between domestic economic activity and worldwideeconomic activity, as the range of products in any superstore willconfirm, is becoming increasingly difficult to sustain.

Central to the organization of this new global capitalist order isthe multinational corporation. In 1999 there were over 60,000 MNCsworldwide with 500,000 foreign subsidiaries, selling $9.5 trillionof goods and services across the globe. Today transnationalproduction considerably exceeds the level of global exports and hasbecome the primary means for selling goods and services abroad.Multinational corporations now account, according to some estimates,for at least 20 per cent of world production and 70 per cent ofworld trade . It is global corporate capital, rather than states,which exercises decisive influence over the organization, locationand distribution of economic power and resources in the contemporaryglobal economy.

Contemporary patterns of economic globalization have beenaccompanied by a new global division of labour brought about, inpart, by the activities of multinationals themselves . Developingcountries are being re-ordered into clear winners and losers, as theexperience of the East Asian tiger economies shows. Suchrestructuring is, moreover, replicated within countries, both Northand South, as communities and particular locales closely integratedinto global production networks reap significant rewards whilst therest struggle on its margins. Economic globalization has broughtwith it an increasingly unified world for elites - national,regional and global - but divided nations and communities as the

global workforce is segmented, within rich and poor countries alike,into winners and losers .

Furthermore, the globalization of economic activity exceeds theregulatory reach of national governments while, at the same time,existing multilateral institutions of global economic governancehave limited authority because states, still jealously guardingtheir national sovereignty, refuse to cede these institutionssubstantial power. Under such conditions, global markets mayeffectively escape political regulation. For the most part, thegovernance structures of the global economy operate principally tonurture and reproduce the forces of economic globalization whilstalso serving to discipline and streamline this nascent 'globalmarket civilisation'. Yet, in some contexts, these governancestructures may carve out considerable autonomy from the dictates ofglobal capital and/or the G7 states. Hence, multilateralinstitutions have become increasingly important sites through whicheconomic globalization is contested, by weaker states and by theagencies of transnational civil society. The G7 states andrepresentatives of global capital have found themselves on manyoccasions at odds with collective decisions or rule making .Moreover, the political dynamics of multilateral institutions tendto mediate great power control, for instance through consensualmodes of decision making, such that they are never merely tools ofdominant states and particular social groupings.

Alongside these global institutions, there also exist a parallel setof regional bodies, from APEC to the EU, which represent anadditional attempt to shift the terms of engagement with globalmarket forces. Within the interstices of this system operate thesocial groups of an emerging transnational civil society, from theInternational Chamber of Commerce to the Jubilee 2000 campaign,seeking to promote, contest and bring to account the agencies ofeconomic globalization. Economic globalization has been accompaniedby a significant internationalization of political authorityassociated with a corresponding globalization of political activity.

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Political Globalization

Two fundamental transformations have shaped the constitution ofcontemporary political life. The first of these involved thedevelopment of territorially based political communities - modernnation-states. The second more recent transformation has by no meansreplaced the first in all respects, but it has led to a break in theexclusive link between geography and political power. It can beillustrated by a number of developments.

In the first instance, there has been an institutionalization of afragile system of multilayered global and regional governance. Atthe beginning of the twentieth century there were 37intergovernmental organizations (IGOs); by its close, somethingapproaching 300 were delivering important global or regionalcollective goods.This multilateral system institutionalizes aprocess of political co-ordination amongst governments,intergovernmental and transnational agencies - public and private -designed to realize common purposes or collective goods throughmaking or implementing global or transnational rules, and managingtrans-border problems, e.g. the WTO. Of course, it is scarred byenormous inequalities of power, and remains a product of the inter-state system. But it has, nevertheless, created the infrastructureof a global polity and new arenas through which globalization itselfis promoted,contested or regulated. It has also instigated new formsof multilateral, regional and transnational politics.

Associated with this internationalization of the state has been aremarkable transnationalization of political activity. In 1909 therewere 371 officially recognized INGOs (from the International Chamberof Commerce, International Trades Unions, to the RainforestFoundation), by 2000 there were in the region of 25,000 . Theseinclude a proliferation of associations, social movements, advocacy

networks - from the womens' movement to nazis on the net - andcitizens groups mobilizing, organizing, and exercising people-poweracross national boundaries. This explosion of 'citizen diplomacy'creates the basis of communities of interest or association whichspan national borders, with the purpose of advancing mutual goals orbringing governments and the formal institutions of globalgovernance to account for their activities. Whether it constitutesthe infrastructure of a transnational civil society remains open todebate.

There has, moreover, been an important change in the scope andcontent of international law. Twentieth century forms ofinternational law - from the law governing war, to that concerningcrimes against humanity, environmental issues and human rights -have created the basis of what can be thought of as an emergingframework of 'cosmopolitan law', law which circumscribes anddelimits the political power of individual states. In principle,states are no longer able to treat their citizens as they think fit.Although, in practice, many states still violate these standards,nearly all now accept general duties of protection and provision, aswell as of restraint, in their own practices and procedures. Thisinternalization or nationalization of international law has beenevident in other areas too. There has , for instance , been anexplosive growth of private international and commercial law .Thesedevelopments have encouraged what some legal scholars refer to as ashift from a monistic conception to a polycentric conception oflegal sovereignty.

As governments and their citizens have become embedded in moreexpansive networks and layers of regional and global governance,they have become subject to new loci of authority above, below andalongside the state. Indeed, the form and intensity of contemporarypolitical globalization poses a profound challenge to theWestphalian 'states as containers' view of political life. Inparticular, political space and political community are no longercoterminous with national territory, and national governments can nolonger be regarded as the sole masters of their own or theircitizens fate. But this does not mean that national governments or

national sovereignty have been eclipsed by the forces of politicalglobalization; the state is not in decline, as many hyperglobalistssuggest.

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Globalization and the transformation of political community

Contemporary globalization is associated with a transformation ofstate power as the roles and functions of states are re-articulated,reconstituted and re-embedded at the intersection of globalizing andregionalising networks and systems. The metaphors of the loss,diminution or erosion of state power can misrepresent thisreconfiguration.For whilst globalization is engendering, forinstance, a reconfiguration of state-market relations in theeconomic domain, states and international public authorities aredeeply implicated in this very process. Economic globalization by nomeans necessarily translates into a diminution of state power;rather, it is transforming the conditions under which state power isexercised. Moreover, in other domains, such as the environmental,states have adopted a more activist posture whilst in the politicaldomain they have been central to the explosive growth andinstitutionalization of regional and global governance. These arenot developments which can be explained convincingly through thelanguage of the decline, erosion or loss of state power per se. Forsuch metaphors (mistakenly) presume that state power was muchgreater in previous epochs; and, on almost every conceivablemeasure, states, especially in the developed world, are far morepowerful than their antecedents. But so too are the demands placedupon them. The apparent simultaneous weakening and expansion in thepower of states under conditions of contemporary globalization issymptomatic of an underlying structural transformation. This isnowhere so evident as in respect of state sovereignty and autonomy,which constitute the very ideological foundations of the modernstate.

There are many good reasons for doubting the theoretical andempirical basis of claims that states are being eclipsed bycontemporary patterns of globalization.We would emphasize that whileregional and global interaction networks are strengthening, theyhave multiple and variable impacts across diverse locales. Neitherthe sovereignty nor the autonomy of states are simply diminished bysuch processes. Indeed, any assessment of the cumulative impacts ofglobalization must acknowledge their highly differentiated charactersince it is not experienced uniformly by all states. Globalizationis by no means a homogenising force. The impact of globalization ismediated significantly by a state's position in global political,military and economic hierarchies; its domestic economic andpolitical structures; the institutional pattern of domesticpolitics; and specific government as well as societal strategies forcontesting, managing or ameliorating globalizing imperatives. Theon-going transformation of the Westphalian regime of sovereignty andautonomy has differential consequences for different states.

Whilst for many hyperglobalizers contemporary globalization isassociated with new limits to politics and the erosion of statepower, the transformationalist argument developed here is criticalof such political fatalism. For contemporary globalization has notonly triggered and encouraged a significant politicisation of agrowing array of issue-areas, but has also been accompanied by anextraordinary growth of institutionalized arenas and networks ofpolitical mobilization, surveillance, decision-making and regulatoryactivity which transcend national political jurisdictions. This hasexpanded enormously the capacity for, and scope of, politicalactivity and the exercise of political authority. Neither thehyperglobalists nor the sceptics provide the proper conceptualresources to grasp this. Globalization does not prefigure the 'endof politics', nor the simple persistance of old state ways; instead,it signals the continuation of politics by new means. Yet, this isnot to overlook the profound intellectual, institutional andnormative challenges which it presents to the organization of modernpolitical communities.

Political communities are in the process of being transformed. Atthe heart of this lies a growth in transborder political issues andproblems which erode clear cut distinctions between domestic andforeign affairs, internal political issues and external questions,the sovereign concerns of the nation-state and internationalconsiderations. In nearly all major areas of public policy, theenmeshment of national political communities in regional and globalprocesses involves them in intensive issues of transboundary co-ordination and regulation. Political space for the development andpursuit of effective government and the accountability of politicalpower is no longer coterminous with a delimited national territory.The growth of transboundary problems creates 'overlappingcommunities of fate'; that is, a state of affairs in which thefortune and prospects of individual political communities areincreasingly bound together. Political communities are locked into adiversity of processes and structures which range in and throughthem, linking and fragmenting them into complex constellations.National governments by no means simply determine what is right orappropriate exclusively for their own citizens.

This condition is most apparent in Europe, where the development ofthe EU has created intensive discussion about the future of nationalsovereignty and autonomy . But the issues are important not just forEurope and the West, but for countries in other parts of the world,for example, Japan and South Korea. These countries must recognisenew emerging problems, for instance, problems concerning AIDS,migration and new challenges to peace, security and economicprosperity, which spill over the boundaries of nation-states . Thereare emerging overlapping communities of fate generating commonproblems within and across the East Asian region.

Political communities today are no longer discrete worlds . Growingenmeshment in regional and global orders and the proliferation oftransborder problems has created a plurality of diverse andoverlapping collectivites which span borders binding togetherdirectly and indirectly the fate of communities in differentlocations and regions of the globe. In this context the articulationof the public good is prised away from its embeddness in the bounded

political community : it is being re-configured in the context ofglobal,regional and transnational orders. The contemporary world isno longer 'a world of closed communities with mutually impenetrableways of thought, self-sufficient economies and ideally sovereignstates' (O'Neill, 1991, p. 282).This is not to assert thatterritorial political communities are becoming obsolete but, rather,to recognize that they are nested within global,regional andtransnational communities of fate, identity,association,andsolidarity. Political community today is being transformed to accordwith a world of 'ruptured boundaries'.

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References

•Held, D. and McGrew, A., Goldblatt, D. and Perraton, J. (1999),Global Transformations: Politics,Economics and Culture, PolityPress, Cambridge.

•Hirst, P. and Thompson, G. (1999), Globalization in Question,second edition, Polity Press, Cambridge.

•Ohmae, K. (1990), The Borderless World, Collins, London.

•O'Neill, O. (1991), 'Transnational justice' in D.Held ed.,Political Theory Today, Polity Press,Cambridge

Introduction

•Globalization - the 'big idea' of the late twentieth century -lacks precise definition. More than this, it is in danger ofbecoming, if it has not already become, the cliché of our times.

•Nonetheless, the term globalization captures elements of awidespread perception that there is a broadening, deepening andspeeding up of world-wide interconnectedness in all aspects of life,from the cultural to the criminal, the financial to theenvironmental. At issue appears to be 'a global shift'; that is, aworld being moulded, by economic and technological forces, into ashared economic and political arena.

•Behind the rhetoric of globalization - rhetoric found in public aswell as academic debate - lie three broad accounts of the nature andmeaning of globalization today, referred to here as thehyperglobalist, the sceptical, and the transformationalist views.

- Hyperglobalists argue that we live in an increasingly globalworld in which states are being subject to massive economic andpolitical processes of change. These are eroding and fragmentingnation-states and diminishing the power of politicians. In thesecircumstances, states are increasingly the 'decision- takers' andnot the 'decision-makers'.

- The sceptics strongly resist this view and believe thatcontemporary global circumstances are not unprecedented. In theiraccount, while there has been an intensification of internationaland social activity in recent times, this has reinforced andenhanced state powers in many domains.

- The transformationalists argue that globalization is creating neweconomic, political and social circumstances which, howeverunevenly, are serving to transform state powers and the context inwhich states operate. They do not predict the outcome - indeed, theybelieve it is uncertain - but argue that politics is no longer, andcan no longer simply be, based on nation-states.

• What is to be made of these different positions? Are we, or are wenot, on the edge of a global shift with massive political, economicand cultural implications?

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2. What is Globalization?

•Globalization can usefully be conceived as a process (or set ofprocesses) which embodies a transformation in the spatialorganization of social relations and transactions, generating

transcontinental or interregional flows and networks of activity,interaction and power.

•It is characterized by four types of change:

- First, it involves a stretching of social, political and economicactivities across political frontiers, regions and continents.

- Second, it suggests the intensification, or the growingmagnitude, of interconnectedness and flows of trade, investment,finance, migration, culture, etc.

- Third, the growing extensity and intensity of globalinterconnectedness can be linked to a speeding up of globalinteractions and processes, as the evolution of world-wide systemsof transport and communication increases the velocity of thediffusion of ideas, goods, information, capital, and people.

- Fourth, the growing extensity, intensity and velocity of globalinteractions can be associated with their deepening impact such thatthe effects of distant events can be highly significant elsewhereand even the most local developments may come to have enormousglobal consequences. In this sense, the boundaries between domesticmatters and global affairs can become increasingly blurred.

In sum, globalization can be thought of as the widening,intensifying, speeding up, and growing impact of world-wideinterconnectedness. By conceiving of globalization in this way, itbecomes possible to map empirically patterns of world-wide links andrelations across all key domains of human activity, from themilitary to the cultural.

• From the pre-modern, through to the early modern (1500-1800),modern (19th to early 20th century), to the contemporary period,distinctive patterns of globalization can be identified in respectof their different systemic and organizational features - uneven asthey often are. These patterns constitute distinctive historicalforms of globalization. By comparing and contrasting these changinghistorical forms, it is possible to identify more precisely what isnovel about the present epoch.

• Accordingly, to advance an account of globalization it isnecessary to turn from a general concern with its conceptualizationto an examination of the key domains of activity and interaction inand through which global processes evolve.

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3. People on the Move

• Human beings have been migrating, journeying and travelling formillennia, across great distances. It is only in this millenniumthat New Zealand and many Pacific Islands were finally reached byhumans.

• For most of recorded history migrations have taken three mainforms. Elite migrations from the core of empires to their peripheryin acts of conquest and conversion followed by settlers; elite andmass migrations to imperial cores and cities from the hinterlandsand the countryside in search of work; the expansion and contractionof nomadic societies. Most of these have been regional in scope,though the early Islamic and later Mongol Empires had a globalreach.

• From the sixteenth century onwards the shape of global migrationwas transformed by the European conquest of the Americas and thenOceania as well as more tentative colonial expansion in Africa andAsia.

• The first great wave of early modern migrations involved theforced movements of the transatlantic slave trade which shiftedaround 9-12 million people by the mid-nineteenth century. Bycomparison, the more regional Arabic slave trades and the earlymodern European emigration to the New World were minor.

•From the mid nineteenth century onwards, the slave trade wasdwarfed in extent by an extraordinary outpouring of Europe's poor tothe New World, overwhelmingly the USA. This was accompanied,beginning in the last quarter of the nineteenth century, by a seriesof Asian migrations (predominantly of indentured labourers) to theUSA, Canada and European colonies. Over 40 million people moved inthis way in the quarter century before the First World War.

• During the First World War, international migration plummeted.Although the war triggered some forced migrations, of Armenians andGreeks from Turkey for example, international migrations withinEurope almost ceased. North America closed its borders, creating thefirst set of systematic border controls and immigration legislationin the modern era.

• The bitter struggles and ethnic violence of the Second World warled to unprecedented levels of forced migrations, refugee and asylummovements. Ethnic Germans fled the Soviet Union and Eastern Europe,Jews headed for Israel, Pakistan and India exchanged millions andKoreans flooded south.

• Economic migration and the rebirth of Western European economiesin the 1950s and 1960s drove a renewed epoch of global migration.Despite the oil shocks of the 1970s and the closure of many Europeanimmigration programmes, Western Europe's foreign population andethnic mix have grown as family reunions, unpoliceable borders andsheer demand for labour have driven migration from the Europeanperipheries (Turkey, North Africa ) as well as the most distantoutposts of old European empires (Southern Asia, East and WestAfrica etc.) to the continent.

• In the 1970s these waves of migration were accompanied by a take-off in legal and illegal migration to the USA and Australasia,enormous flows to the oil-rich and labour-scarce Middle East and newpatterns of regional migration within Africa, Latin America, Oceaniaand East Asia. In the late 1990s, the USA in particular has beenexperiencing levels of migration that are comparable to the greattransatlantic push of the late nineteenth century.

• Moreover, recent economic migration has been accompanied by anastronomical rise in asylum seeking, displaced persons and refugees

from wars of state formation (and disintegration) in the developingworld.

• For OECD states, the current era is characterised by high levelsof global and regional migration, borders that are difficult topolice, a range of migrations and travellers that are hard tocontrol and in Europe, in particular, unprecedented levels of ethnicdiversity. Over 10% of Swedes are foreign born for example.

• Attempts at international regulation of migratory flows have metwith limited success. Many states find it very difficult to mobiliseinternal support for tracking illegal migrants and are in some caseshighly dependent economically on their labour. Simultaneously, allstates are having to reassess the meaning and practice of nationalcitizenship in an era of increasing heterogeneity. Dual nationalityis on the rise.

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4. The Fate of National Cultures

• The globalization of culture has a long history. The formation andexpansion of the great world religions are one of the best examplesof the capacity of ideas and beliefs to cross great distances withdecisive social impacts. No less important are the great pre-modernempires which, in the absence of direct military and politicalcontrol, held their domains together through a shared and extensiveruling class culture.

• For most of human history these extensive ruling cultures passedthrough a fragmented mosaic of local cultures and particularisms -little stood between the court and the village. It was only with theemergence of nation-states and national cultures that a form ofcultural identity coalesced between these two extremes.

• With the rise of nation-states and nationalist projects, theglobalization of culture was truncated. Nation-states took controlof educational practices, linguistic policies, postal and telephonicsystems, etc. However, from the eighteenth century onwards asEuropean empires began to entrench themselves and as a series oftechnological innovations came on stream (regularised mechanicaltransport and the telegraph most notably), new forms of culturalglobalization emerged. These were accompanied by new privateinternational institutions like publishing houses and news agencies,but their impact on more local and national cultures remainedlimited.

• The most important ideas and arguments to emerge out of the Westin the era of its expansion were science, liberalism and socialism.Each of these modes of thought and the practices that came with themtransformed the ruling cultures of almost every society on theplanet. They have certainly had a more considerable impact onnational and local cultures than contemporary popular cultures.

• In the period since the Second World War, however, the extensity,intensity, speed and sheer volume of cultural communication at aglobal level are unsurpassed. The global diffusion of radio,television, the Internet, satellite and digital technologies, and soon, has made instantaneous communication possible, rendered manyborder checks and controls over information ineffective, and exposedan enormous constituency to diverse cultural outputs and values.While linguistic differences continue to be a barrier to theseprocesses, the global dominance of English provides a linguisticinfrastructure that parallels the technological infrastructures ofthe era. In contrast to earlier periods in which states andtheocracies have been central to cultural globalisation, the currentera is one in which corporations are the central producers anddistributors of cultural products.

• The vast majority of these cultural products originate within theUSA and certain key Western societies. However, the evidenceavailable in support of a crude thesis of 'cultural imperialism' isthin. National and local cultures remain robust, nationalinstitutions continue in many states to have a central impact onpublic life, foreign products are constantly read and reinterpretedin novel ways by national audiences.

• Those states which seek to pursue rigid closed-door policies oninformation and culture are certainly under threat from these newcommunication processes and technologies, and it is likely that theconduct of economic life everywhere will be transformed by them aswell.

• Cultural flows are transforming the politics of national identityand the politics of identity more generally.

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5. The Territorial State and Global Politics

•Conventional maps of the political world disclose a very particularconception of the geography of political power. With their clear-cutboundary lines and unambiguous colour patches, they demarcateterritorial areas within which there is assumed to be anindivisible, illimitable and exclusive sovereign state withinternationally recognized borders. At the beginning of the secondmillennium, this cartography would have appeared practicallyincomprehensible; even the most well-travelled civilisations wouldhave been able to make little sense of the details of the knownworld today.

•Two fundamental transformations have affected the shape and form ofmodern politics. The first of these involved the development ofterritorially based political communities. The second has led to anera of emerging multilayered regional and global governance.

• The first transformation was marked by the growing centralizationof political power within Europe, the sedimentation of politicalrule into state structures, the territorialization of politics, thespread of the interstate order, the development of forms ofaccountability within certain states and, at the same time, the

denial of such accountability to others through colonial expansion,the creation of empires and war.

• The second transformation by no means replaced the first in allrespects, although it was correlated with the final demise ofempires. It has involved the spread of layers of governance bothwithin and across political boundaries. It has been marked by theinternationalization and transnationalization of politics, thedeterritorialization of aspects of political decision-making, thedevelopment of regional and global organizations and institutions,the emergence of regional and global law and a multilayered systemof global governance, formal and informal.

•This second transformation can be illustrated by a number ofdevelopments including the rapid emergence of international agenciesand organizations. New forms of multilateral and global politicshave been established involving governments, intergovernmentalorganizations (IGOs) and a wide variety of transnational pressuregroups and international non-governmental organizations (INGOs). In1909 there were 37 IGOs and 176 INGOs, while in 1996 there werenearly 260 IGOs and nearly five and a half thousand INGOs. Inaddition, there has been an explosive development in the number ofinternational treaties in force, as well as in the number ofinternational regimes, such as the Nuclear Non-Proliferation regime.

• To this pattern of extensive political interconnectedness can beadded the dense web of activity of the key international policy-making fora, including the UN, G7, IMF, WTO, EU, APEC, ARF andMERCOUSUR summits and many other official and unofficial meetings.In the middle of the nineteenth century there were two or threeinterstate conferences or congresses per annum; today the numbertotals over four thousand annually. National government isincreasingly locked into an array of global, regional andmultilayered systems of governance - and can barely monitor it all,let alone stay in command.

• The substantial growth of major global and regional institutionsshould be highlighted. In the context of state history the latterare remarkable political innovations. While the UN remains acreature of the interstate system, it has, despite all itslimitations, developed an innovative system of global governancewhich delivers significant international public goods - from air

traffic control and the management of telecommunications to thecontrol of contagious diseases, humanitarian relief for refugees andsome protection of the environmental commons.

• At the regional level the EU, in remarkably little time, has takenEurope from the disarray of the post Second World War era to a worldin which sovereignty is pooled across a growing number of areas ofcommon concern. Despite its contested nature, the EU represents ahighly innovative form of governance which creates a framework ofcollaboration for addressing transborder issues. There has also beenan acceleration in regional relations beyond Europe: in theAmericas, Asia-Pacific and, to a lesser degree, in Africa. While theform taken by this type of regionalism is very different from themodel of the EU, it has nonetheless had significant consequences forpolitical power, particularly in the Asia-Pacific (ASEAN, APEC, ARF,PBEC, and many other groupings). Furthermore, there has been agrowth in interregional diplomacy as old and new regional groupingsseek to consolidate their relationships with each other. In thisrespect, regionalism has not been a barrier to changing forms ofpolitical globalization - involving the shifting reach of politicalpower, authority and forms of rule - but, on the contrary, has beencompatible with it.

• There has, moreover, been an important change in the scope andcontent of international law. Twentieth century forms ofinternational law - from the law governing war, to that concerningcrimes against humanity, environmental issues and human rights -have created the basis of what can be thought of as an emergingframework of 'cosmopolitan law', law which circumscribes anddelimits the political power of individual states. In principle,states are no longer able to treat their citizens as they think fit.Although, in practice, many states still violate these standards,nearly all now accept general duties of protection and provision, aswell as of restraint, in their own practices and procedures.

• Global politics today is anchored not just in traditionalgeopolitical concerns, but also in a large diversity of economic,social and ecological questions. Pollution, drugs, terrorism, humanrights are amongst an increasing number of transnational policyissues which cut across territorial jurisdictions and existing

political alignments. These require, and will continue to require,international cooperation for their effective resolution.

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6. The Globalization of Organized Violence

•War, military force and organized violence have been central to theglobalization of human affairs for much of history, especially inthe modern epoch and more recently in the Cold War era.

• By comparison with previous epochs, contemporary militaryglobalization is remarkably extensive and intensive (measured , forinstance, in terms of military diplomatic links, arms sales andglobal military production) for an era distinguished by the absenceof empires, great power conflict and interstate war.

• Since the end of the Cold War there has been a continuinginstitutionalisation and (albeit uneven) regionalization of militaryand security affairs to the extent that a majority of states are nowenmeshed in multilateral arrangements or multilateral fora formilitary or security matters, and neutrality no longer appears acredible defence posture.

• In comparison with previous epochs, there has been over the courseof the last fifty years a rapid world-wide proliferation ofunprecedented military capability and the capacity to projectmilitary power across increasing distances, including the capacityto produce and utilise weapons of mass destruction, which is bothtransforming the pattern of stratification in the world militaryorder and creating new global and regional risks which requiremultilateral action.

•Even though the end of the Cold War has undermined the logic of theglobal arms dynamic, the Cold War itself ensured the accelerateddiffusion of military-technological innovation across the world's

major regions such that, for instance, whereas it took two centuriesfor the gunpowder revolution to reach Europe from China in themiddle ages, it took less than five decades for India to acquire itsexisting nuclear capability.

• In comparison with earlier periods there has been a significantshift in the organization of defence production in the direction ofmore extensive and intensive transnationalization through licensing,co-production agreements, joint ventures, corporate alliances, sub-contracting, etc. Few countries today, including the US, can claimto have an autonomous military production capacity.

• The same infrastructures which facilitate global flows of goods,people and capital have generated new potential security threats forstates, in the form of cyber-war, international terrorism, eco-terrorism and transnational organized crime, which are no longerprimarily external or military in character and which require acombination of multilateral and domestic policy responses.

• Despite the ending of the Cold War, global arms sales (in realterms) have remained above the level of the 1960s and since the mid1990s have continued to increase, whilst the number of countriesmanufacturing arms (40) or purchasing arms (100) is probably greaterthan at any time since the 1930s, an era of regional and globalcrises.

• In the post Cold War period all major arms producers have becomeincreasingly reliant upon export markets; the imperatives drivingdefence industrial restructuring have intensified to the extent thatregional and transregional production arrangements are beingstrengthened. Few states can realistically continue to aspire, as inprevious periods, to an autonomous defence industrial base. This isespecially so as key civil technologies, such as electronics, whichare vital to advanced weapons system production, are themselves theproducts of highly globalized industries.

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7. The Global Economy

Trade

•International trade has grown to unprecedented levels, bothabsolutely and relatively in relation to national income. Incomparison with the late nineteenth century - an era of rapid tradegrowth - export levels today (measured as a share of GDP) are muchgreater for OECD states. As barriers to trade have fallen across theworld, global markets have emerged for many goods and, increasingly,services.

• During the post-war period an extensive network of trade emergedin which most countries became locked into a multiplicity of traderelationships. Although there are major trading blocs in Europe,North America and Asia-Pacific, these are not regional fortresses;on the contrary, they remain open to competition from the rest ofthe world. Through the 1980s and 1990s, developing and transitioneconomies have become significantly open to trade. Their shares ofworld trade, particularly of manufactures, have risencorrespondingly.

• The growing extensity and intensity of trade has led to theincreasing enmeshment of national economies with each other. A newglobal division of labour in the production of goods is emerging.The stages of the production process are being sliced up and locatedin different countries, especially in developing and emergingeconomies. Thus not only do countries increasingly consume goodsfrom abroad, but their own production processes are significantlydependent on components produced overseas. The impact of this isthat economic activity in any one country is strongly affected(through trade networks) by economic activity in other countries.

• Intra-industry trade, particularly amongst OECD economies, nowforms the majority of trade in manufactures. This has intensifiedcompetition across national boundaries. Trade competition has also

intensified because a greater proportion of domestic output istraded than in the past. Trade activity is now deeply enmeshed withdomestic economic activity. This does not mean, however, thatcountries' fortunes are simply determined by their'competitiveness': countries still specialize according tocomparative advantage and cannot be competitive in everything ornothing. National economies can gain overall from increased trade.Nevertheless, the distribution of gains from trade are uneven.Increased trade with developing countries, for example, adverselyaffects low skilled workers in developed countries whilst increasingthe incomes of higher skilled workers. There are clear winners andlosers from trade.

•Social protection and the welfare state play an important role inameliorating the impact of structural change arising from trade.However, increased demands on and costs of the welfare state tend tobe resisted by employers in the tradable industries vulnerable toglobal competition.

•Although markets may be global, regulation remains largelynational. Differences in regulation are causing internationalfriction, as the EU versus USA banana dispute illustrates, whilstthe World Trade Organization (a powerful advocate of de-regulationand trade liberalization) is in its infancy in harmonizing nationalregulatory regimes. Further, if market failures and externalitiesexist, they may be expected in global markets. However, we largelylack international systems of regulation to correct for thesefailures.

Finance

• World financial flows have grown exponentially since the 1970s.Daily turnover on the foreign exchange markets exceeds $1.5 trillionand billions of dollars of financial assets are traded globally,particularly through derivative products. Most countries today areincorporated into global financial markets, but the nature of theiraccess to these markets is highly uneven.

• International banking, bond issues and equities trading have risenfrom negligible levels to historically significant levels measuredin relation to world or national output respectively. The level of

cross-border transactions is unprecedented. Transactions are almostinstantaneous with 24 hour global financial markets. Where onceinternational financial markets operated to finance trade and longterm investment, much of this activity is now speculative. Theannual turnover of foreign exchange markets stands at a staggering60 times the value of world trade.

• Levels of speculative activity can induce rapid and volatilemovements in asset prices which increase risks to financialinstitutions, as the 1998 crisis at the Long Term Capital Managementhedge fund showed. Countries' long term interest rates and exchangerates are determined within global financial markets. This does notmean that financial markets simply set the terms of nationaleconomic policy, although they can radically alter the costs ofparticular policy options. Perhaps the key difficulty for policymakers is the uncertainty surrounding, and the volatility of, marketresponses. This tends to induce a distinctly risk averse approach toeconomic policy and thus a more conservative macro-economicstrategy.

• Financial flows to developing countries rose in the early 1990s,although they have fallen back since. This period saw heavy flows toEast Asia, which later proved disruptive to these economies sincethey were often channelled into speculative activity. The outflowssince the 1997 crisis have turned these economies from 'show cases'to 'problem cases', with their currencies falling heavily in excessof any real economic imbalances. The crisis highlighted the shiftingbalance between public and private power in global financialmarkets, as well as the limitations of the existing global financialregime (the IMF, BIS, etc.) in preventing global financial turmoil.It also demonstrated how enmeshed national fortunes have become asthe collapse of the Thai baht triggered global financial disruptionand highlighted the vulnerability of OECD economies to developmentson the periphery.

• The 1990s exchange rate crises suggest that fixed exchange ratesare ceasing to be a viable policy option, with countries facing achoice increasingly between floating rates and monetary union(notably EMU and discussion of dollarization in Latin America).

Production

• In 1997 there were 53,000 MNCs world-wide with 450,000 foreignsubsidiaries selling $9.5 trillion of goods and services across theglobe. Today transnational production exceeds the level of globalexports and has become the primary means for selling goods andservices abroad.

• Multinational corporations have grown relative to the worldeconomy and now account, according to some estimates, for at least20 per cent of world production and 70 per cent of world trade.Further, they are developing relationships increasingly with smallernational firms, linking these into transnational production chains.MNCs are central to global trade, with between a quarter and a thirdof world trade estimated to be intra-firm trade between branches ofMNCs. They are fundamental to the generation and internationaltransfer of technology.

• Although MNC activity is concentrated in developed countries and asmall number of developing ones, it is extensive since almost allcountries have some inward foreign direct investment. Restrictionson MNC activity have been substantially reduced in the 1980s and1990s. FDI flows to (and from) developing countries have taken anincreasing share of the global total. MNCs' investment andproduction in Central and East European transition economies andChina are growing rapidly. Although MNCs typically only account fora minority of national production, this tends to understate theirstrategic importance. For they are often concentrated in the mosttechnologically advanced economic sectors and in export industries.Especially in developing countries, even where independent firmsproduce for export, MNCs often control global distribution networks.

• MNCs have both created, and are subject to, global competition ina range of industries. They have developed transnational networks ofproduction to take advantage of differences in national costconditions. Production has to take place somewhere and the costs ofshifting production internationally vary between industries andfirms. Nevertheless, the exit power of MNCs has increased over time,although they are by no means 'footloose'.

• Transnational production can have an important impact on nationalprosperity. Not only do MNCs play a key role in diffusing technical

knowledge, they are finding their home base increasinglyinsufficient to generate competitive advantage. As a result, therehas been a significant growth in transnational corporate alliancesand investment in foreign innovation clusters. There has also been aphenomenal expansion in transnational mergers and acquisitions,e.g., Chrysler-Daimler. In the past technological advantages mightbe largely realised in their country of origin and shared amongstvarious national stakeholders. Transnational production restrictssuch sharing and can undermine national social bargains. It alsolimits the options for effective national industrial strategies(such as national champions) and generates significant pressure forthe transnational harmonization of corporate practices, tax andbusiness regimes.

• MNCs' increased power relative to national governments isreflected in the widespread provision of subsidies to inwardinvestment. MNCs (and associated transnational production networks)are now critical to the location, organization and distribution ofproductive power in the world economy.

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8. Globalization and the Environment

• The globalization of environmental affairs takes a number of forms, including: the encounters between previously separated ecologicalsystems from different parts of the planet; the pollution anddegradation of the global commons (such as the oceans and theatmosphere); the overspill of the effects of environmentaldegradation from one state to another (environmental refugees);transboundary pollution and risks (nuclear power, acid rain); thetransportation and diffusion of wastes and polluting products acrossthe globe (toxic waste trade, global relocation of dirtyindustries); and, finally, the formation of global institutions,

regimes, networks and treaties that seek to regulate all these formsof environmental degradation.

• For most of human history, the main way in which environmentalimpacts circulated around the earth was via the unintentionaltransport of flora, fauna and microbes, of which the great plaguesare the sharpest example.

• The globalization of environmental affairs took a distinct leapwith the European colonisation of the New World and the unequalexchange of flora, fauna and microbes across the Atlantic. Within ageneration a substantial majority of the indigenous populations ofthe Caribbean, Mexico and other parts of Latin America had beenwiped out. Over the following centuries , the ecosystems, landscapesand agricultural systems of these societies were transformed byEuropean agriculture, flora and fauna.

• The early history of colonialism also threw up new forms ofenvironmental degradation driven by consumer demand in Europe andAmerica. This led to the intensive exploitation of Sumatran andIndian forests, the extinction of some species of whale, the over-hunting of seals.

• However, until the mid twentieth century, most forms ofenvironmental degradation - at least the degradation that could beperceived - were overwhelmingly local.

• In the post Second World War era, the globalization ofenvironmental degradation has been massively accelerated by a numberof factors: fifty years of extraordinary resource-intensive, high-pollution growth in the OECD; the industrialisation of Russia,Eastern Europe and the ex-Soviet states; the breakneckindustrialisation of many parts of the South; and a massive rise inglobal population. In addition, we are now able to perceive risk andenvironmental change with much greater depth and accuracy.

• Humankind faces an unprecedented array of truly global andregional environmental problems, the reach of which is greater thanany single national community (or generation) and the solutions towhich cannot be tackled at the level of the nation-state alone;these include, most obviously, global warming, ozone depletion;destruction of global rainforests and loss of biodiversity; oceanicand riverine pollution; global level nuclear threats and risks.

• Over the twentieth century these transformations have beenparalleled by the unprecedented growth of global and regionalenvironmental movements, regimes and international treaties.However, none of these institutions has as yet been able to amasssufficient political power, domestic support or internationalauthority to do more than limit the worst excesses of some of theseglobal environmental threats.

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9. Conclusion

•Contemporary patterns of globalization mark a new epoch in humanaffairs. Just as the industrial revolution and the expansion of theWest in the nineteenth century defined a new age in world history sotoday the microchip and the satellite are icons of a new historicalconjuncture.

• By comparison with previous periods, globalization today combinesa remarkable confluence of dense patterns of globalinterconnectedness, alongside their unprecedentedinstitutionalisation through new global and regional infrastructuresof control and communication, from the WTO to APEC. Driven byinterrelated political, economic and technological changes,globalization is transforming societies and world order.

• Contemporary patterns of globalization are associated with amultilayered system of governance, the diffusion of political power,a widening gap between the richest and poorest countries, and thefurther segmentation of societies into 'winners' and 'losers'. As aconsequence, globalization has become increasingly politicised andcontested. Competing national and transnational social forcesstruggle, within and outside prevailing structures of global andregional governance, to resist, promote, manage or direct itsimpulses. This is evident in, amongst other things, the contemporary

debates about reforming global finance, ensuring universal humanrights and regulating the trade in genetically modified crops andorganisms.

• Sandwiched between global forces and local demands, nationalgovernments are having to reconsider their roles and functions. Itis frequently alleged that the intensification of regional andglobal political relations has diminished the powers of nationalstates. It is also sometimes asserted that the national state is asrobust and integrated as it ever was. However, while regional andglobal interconnectedness are transforming state power and thenature of political community, any account of this as a simple lossor the diminution of national powers distorts what is happening - asdoes any suggestion that nothing much has changed. While on manyfundamental measures of state power (from the capacity to raisetaxes and revenues to the ability to hurl concentrated force atenemies) states are, at least throughout most of the OECD world, aspowerful if not more powerful than their predecessors, it is alsothe case that the demands upon them have grown rapidly as well.

• Increasingly, the nurturing and enhancement of the public goodrequires co-ordinated multilateral action (e.g. to prevent globalrecession). At the same time, the resolution of transboundary issues(e.g. responsibility for acid rain) may often impose significantdomestic adjustments. In this respect, politicians are witnessing areconfiguration of state power and political authority. This isarticulated most visibly in the shift from government to multilevelgovernance as states have become embedded within global and regionalregimes. In essence, in a more complex transnational world, statesdeploy their sovereignty and autonomy as bargaining chips innegotiations involving coordination and collaboration acrossshifting transnational and international networks.

• The power, authority and operations of national government are,accordingly, altering, but not all in one direction. The entitlementof states to rule within circumscribed territories - theirsovereignty - is not on the edge of collapse, although the practicalnature of this entitlement - the actual capacity of states to rule -is changing its shape. A new regime of government and governance isemerging which is displacing traditional conceptions of state poweras an indivisible, territorially exclusive form of public power. Far

from globalization leading to 'the end of the state', it isstimulating a range of government and governance strategies and, insome fundamental respects, a more activist state. In this context,it makes more sense to speak about the transformation of statepower.

• These developments pose very significant questions for democracysince the expanding scale on which political and economic power isexercised frequently escapes effective mechanisms of democraticcontrol. Democracy remains rooted in a fixed and bounded territorialconception of political community. Yet globalization disrupts thisneat correspondence between national territory, sovereignty,political space and the democratic political community; it enablespower to flow across, around and over territorial boundaries.Globalization therefore generates new political tasks:

Intellectual - recasting established notions of social justice,equality, and liberty into a coherent political project which isrobust enough to confront a world in which power is exercised on atransnational scale. This involves reconstructing the principleswhich underpin the democratic political community and citizenshipfor an epoch marked by transboundary politics and overlappingcommunities of fate.

Institutional - combining the institutions and practices ofdemocracy with the effective governance of globalization withinregional and global (public and private) authorities.

• Globalization is not, as some suggest, narrowing or foreclosingpolitical options and discussion; on the contrary, it isreilluminating and reinvigorating the contemporary politicalterrain.