The concept of neoliberal globalization
The concept of neoliberal globalization
Introduction
The concept of neoliberal globalization has over the years become a source of great controversy and criticism among anti-globalization theorists (Ercan & Oguz, 2007). More specifically, the role of IMF and World Bank in proliferating neoliberal policies that seem to promote the imposition indirect control over most certain states by the dominant state actors such as the United States and the promotion of inequalities and elitist interest worldwide (Mueller,2011). In much of the Third World and other transition economies (with the exception of China) for instance, the United States has successfully dictated neoliberal policies by partially acting through World Bank and IMF and partially through direct coercion (Kotz, 2000, p.1). In this paper, we present an elaborate discussion on globalization by studying the work of Mueller (2011). Our specific focus is the identification of arguments against the text from the pro-globalization theorists. We also investigate how Mueller’s (2011) discussion of the ‘state’ ties into discussions of the nation-state and globalization.
Neoliberalism and Globalization
The concepts of neoliberalism and globalizations are often used in similar contexts. Neoliberalism is an elaborate set of economic and social policies in which the control of all economic factors are migrated from the public sector the private one. It is based upon the basic ideologies of neoclassical economics that suggests that nation-states (governments) should reduce all cases of deficit spending, reform tax in order to broaden the existing tax base, limit all forms of subsidies, eliminate fixed exchange rates, open up the markets by limiting all forms of protectionism, allow private property, privatize all state-run enterprises and support deregulation. Most of these neoliberal policies are controversial and anti-globalization theorists have stood their grounds in dispelling their efficiency.
The work of Harvey (2005, p. 2) provided a condensed definition of neoliberalism with a specific emphasis of its main characteristics. According to him, neoliberalism is in the first cases , a theory of dominant political economic practices that postulates that human well-being can be best achieved by liberating people’s entrepreneurial freedoms as well as personal skills within the existing institutional framework that is characterized by free markets, sturdy private property rights and free trade. Within this framework, the role of the state is to ensure the creation as well as preservation of the appropriate institutional framework that can support free markets, sturdy private property rights, and free trade. For instance, the state must guarantee the integrity and quality of money. It must also come up with defense, military, police as well as legal structures as well as functions that are necessary for securing private property rights and to guarantee even by force and coercion, the proper operations of the markets. This state must sure that if certain markets and services do not exists (such as health care, water, social security, land, environmental pollution) then they must be created by the given state. The state must however venture beyond these tasks. State intervention in the existing markets must also be maintained at a bare minimum due to the fact that according to neoliberalism theory, the state can never possess adequate information to effectively second-guess the market signals (commodity prices) and due to the fact that extremely powerful actors will without doubt, distort as well as bias state interventions for the sake of their own profits. The concept of neoliberalism is arguably the most dominant ideology that is currently shaping our contemporary society. We in essence, live in the age of glaring neoliberalism (Saad-Filho & Johnston, 2005, p.1; Thorsen, 2009)
Neoliberal economic globalization
According to Robertson (1992, p.8), globalization is a concept that refers to the intensification of consciousness of the contemporary world and compression of the same world. It emphasizes on the existence of a concrete system of global interdependence as well as consciousness. Giddens (1990, p.64) on the other hand defined globalization as the intensification of global social relations that links distant localities in a manner that local happenings are created and influenced by events occurring several miles away. This is a rather dialectical process due to the fact that such local events may move in an opposite direction from the much distanced relations that influence them. The local transformation is an integral element of globalization. The goal of neoliberal economic globalization is the total elimination of barriers to commerce, as well as the privatization of all available services resources. In this specific scenario, public life will inevitable be at the mercy of prevailing market forces, due to the fact that extracted profits would not benefit the masses (Makwana, 2006).
Arguments against the Mueller’s (2011) anti-neoliberal economic globalization from the pro-globalization theorists
According to anti-globalization crusaders, neoliberal ideologies are an embodiment of rather selfish and outdated models of economy (Makwana,2006). This model was formulated by selfish old imperial colonialists and then adopted by the prominent and economically superior nations. Due to the current states of the global finance structure and trade, wealthy nations can maintain an unfair economic advantage by effectively pressurizing the developing nations to adopt these neo-liberal policies through bodies such as IMF. This is despite the fact that they themselves never apply such policies. This in the eyes of Mueller (2011) constitutes economic colonialism. As noted earlier, the ultimate goal of neoliberal economic globalization is the total elimination of barriers to commerce, as well as the privatization of all available services resources. In this specific scenario, public life will inevitable be at the mercy of prevailing market forces, due to the fact that extracted profits would not benefit the masses (Makwana, 2006). Despite all the anti-globalism sentiments and theories, there are also pro-globalization theorists who believe that neoliberal economic globalization policies are actually good to the world. One such theorist is Wolf (2005). Below are a series of rebuttals from pro-globalization theorist that seems to seem to go against Mueller’s (2011) arguments.
As these anti-globalization claims gain greater credence, pro-globalization theorists have come up with practical and empirical evidence to rebuff the claims by their anti-globalization counterparts. Economists as well as other playmakers who are in support of the policies aimed at reducing national barriers to exchange have come up with a series of books and articles to debunk the myriad claims of these anti-globalization theorists . Some of the most compelling arguments that can effectively rebuff Mueller’s (2011) arguments are by Wolf (2005). According to Wolf (2005), as compared to all the other forms of global economic arrangements or organizations, a system that is based on the power and functionalities of the principles of free markets would bring the greatest benefit and good to the masses. A market that is supported by the legal as well as popular sovereignty of a highly liberal democratic polity would even work better. This of course is the opposite of what Mueller (2011) suggests. Globalization effectively increases the market size that ultimately increases the number of opportunities for growth. This then leads to an increase in the number of zero-sum interactions when compared against zero-sum conflict. Critics of global market integrate ion such as Mueller (2011) are simply not able to propose a better global economic system or arrangement.
Globalization is good to the international community due to the fact that it allows the free movement of goods, services, as well as individuals across national borders while also resulting in division of labor between global governments and markets. Wolf (2005) noted that the arguments by anti-globalization theorists are flawed. This is because, for once, they tend to concentrate on a cross-national analysis such as comparing how various parts of the contemporary society experience (mal) distribution of the gains from globalization. This according to Wolf is flawed and such comparisons should be made on the basis if temporal comparisons. How much people benefits during the eras of globalization is what should be concentrated on as opposed to the periods that Wolf (2005) referred to as “periods of segmentation.” According to pro-globalization theorists, globalization has affectively generated much greater benefits/ gains than any other periods in human history. Most of the arguments in Mueller’s (2011) texts are what Wolf (2005) would refer to as invalid and lunatic claims. Such includes the notion that globalization increase global poverty and inequality.
Globalization reduces poverty and encourages equality
According to the James Wolfensohn, a former World Bank President, over the last couple of decades the number of individuals surviving on less than $1 a day had fallen by 2002 by close to 200 million. This is after a steady rise for 200 years (World Bank, 2002). Existing evidence also indicates that the current globalization wave, which commenced in the 1980s, has led to a promotion of economic equality as well as reduction of poverty (Dollar & Kraay, 2002). Further still, evidence indicates that between the 1980s and the 1990s, a general reduction in global inequality and poverty were witnessed due to globalization (Wolf, 2002).
According to pro-globalization theorists, Mueller’s arguments against globalization are invalid because the world has actually witnesses a great economic transformation over the last couple of years. This has fostered an increase in the global flow of goods, services, manpower as well as information and technology. These significant changes have effectively changed the way that domestic as well as global markets operate and ultimately have impacted, positively, the economic landscape of households, individuals, companies, as well as governments.
Globalization has effectively brought about an increased access to improved economic opportunities through institutions such as the IMF and World Bank. Trade openness as well as the proliferation of information and communication technologies (ICTs) have also lead to a reduction I gender inequality. For instance, accesses of women to economic activities as well as wages have been reported. In regard to gender equality, globalization has allowed women a chance by reducing the importance of great physical strengths while also increasing women’s cognitive skills (through ICT and economic empowerment). Globalization has in essence lead to an increase in female labor.
ICT, an element and agent of globalization has increased the access of women to markets among farmers and business women by easing mobility and time constraints. Globalization is also noted by Curan (2003) to lead to shift in gender roles and norms while also leading to economic empowerment. The increase in increased access to vital information, mainly through television and the World Wide Web, allows nations to learn about social norms in other places, which can change their perceptions and effectively promote the proliferation and final adoption of more egalitarian behaviors and attitudes. Globalization therefore, has a potential of transforming lives internationally by promoting economic and gender inequality.
The neoliberal school of thought postulates that the distribution of income between the international community or population has over the years become more equal over the last two decades and the number of individuals living in extreme poverty has drastically fallen. This reduction in poverty levels among the world’s poor is the fist in more than 1.5 centuries. These progressive global trends are to a large extent due to the rise in the density of international economic integration. This integration of economies due to globalization has led to an increase in the efficiency of resource utilization (Wade, 2004).
Existing evidence from the contemporary wave of globalization confirms that the neoliberal economic theory of more open economies leading to greater prosperity and that liberalized economies experience accelerated progress and economic growth. Organizations such as the IMF and other types and forms of multilateral economic institutions, are therefore argued by pro-globalization theorists, to be involved in the creation of an international “level playing” ground that is not distorted by various state-imposed sanctions and restrictions on the markets.
How Mueller’s (2011) discussion of the ‘state’ ties into discussions of the nation-state and globalization.
According to Mueller (2011), neoliberal globalization is based upon the ideologies of neoclassical economics that as noted earlier, suggests that nation-states (governments) should reduce all cases of deficit spending, reform tax in order to broaden the existing tax base, limit all forms of subsidies, eliminate fixed exchange rates, open up the markets by limiting all forms of protectionism, allow private property, privatize all state-run enterprises and support deregulation. Most of these neoliberal policies are controversial and anti-globalization theorists have stood their grounds in dispelling their efficiency. Within this neoliberal framework, the role of the state is to ensure the creation as well as preservation of the appropriate institutional framework that can support free markets, sturdy private property rights, and free trade. For instance, the state must guarantee the integrity and quality of money. It must also come up with defense, military, police as well as legal structures as well as functions that are necessary for securing private property rights and to guarantee even by force and coercion, the proper operations of the markets. This state must sure that if certain markets and services do not exists (such as health care, water, social security, land, environmental pollution) then they must be created by the given state. The state must however venture beyond these tasks. State intervention in the existing markets must also be maintained at a bare minimum due to the fact that according to neoliberalism theory, the state can never possess adequate information to effectively second-guess the market signals (commodity prices) and due to the fact that extremely powerful state actors will without doubt, distort as well as bias state interventions for the sake of their own profits. The concept of neoliberalism is arguably the most dominant ideology that is currently shaping our contemporary society. Mueller (2011) argued against the resulting hegemony that in his belief, results in the promotion of elitist interest and the creation of increased global inequality.
Conclusion
It is important not note that some of Mueller’s (2011) arguments are valid. The only problem is that his work does not provide an alternative global economic system that can result in greater gains than the current neoliberal globalization system. After all, every system efficient has weaknesses.
References
Ercan, F and Oğuz (2007).“Rethinking Anti-Neoliberal Strategies Through the Perspective of Value Theory: Insights from the Turkish Case”, Science&Society, vol. 71, no. 2, pp. 173–202
Giddens, A. (2000). Runaway World: How Globalization is Reshaping Our Lives. New York.
Harvey., D (2005). A. Brief History of. Neoliberalism. Oxford: Oxford. University.
Kotz, D. M. (2000). Globalization and Neo-liberlism. Massachusetts, USA: Department of Economics and Political Economy, University of Massachusetts.
Makwana , R (2006). Neoliberalism and Economic Globalization
Mueller., JL (2011).The IMF, Neoliberalism and Hegemony, Global Society,25:3, 377-402
Robertson-Snape, F (2000) “Moral complexity and the International Society.” Global Society.
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Saad-Filho, A., & Johnston, D. (2005). Neoliberalism: A critical reader. London: Pluto Press
Thorsen ,(2009). The Neoliberal Challenge -What is Neoliberalism? HYPERLINK “http://folk.uio.no/daget/neoliberalism2.pdf” http://folk.uio.no/daget/neoliberalism2.pdf
