Lecture: Capitalism and Globalization, Contemporary Economic Sociology: Globalization, Production, Inequality, Fran Tonkiss, 2006
Keywords: Capitalism, Emmanuel Wallerstein, Globalization, Karl Marx, Privatization
University of Delhi
Bachelor of Arts
Economic Sociology
Reading to be Covered: Tonkiss, Fran, 2006, Contemporary Economic Sociology: Globalization, Production, Inequality, London: Routledge, Chapter 1, Capitalism and Globalization, Pp. 3‐28
Course Structure
Important Points to be Kept in Mind While Studying the Article
Expected Outcome
Lecture in detail with comment and clarification
Introduction
Two Perspectives of Economic Sociology
Economic Globalization
Drivers of Globalization
Key Factor that lies Behind Process of Globalization
-A. Technological Innovation
-B. The Growing Reach of Transnational
Corporation (TNCs)
Features of Globalization
Patterns of globalization
The Capitalist World Economy
Types of Economic System: Wallerstein
Mini System or Mini Economic System
World System of World Economic System
Core or Core of Economy
Periphery or Periphery of Economy
Semi-periphery or Semi-periphery of Economy
The ‘new Imperialism’: Accumulation by Dispossession
Access to New Market
Access to Cheaper Inputs
The Shift to Wage Labour
Globalization as the new Imperialism
Conclusion
Important Points to be Kept in Mind While Studying the Article
Students should pay attention to how capitalism is operating? What are there components and how which factors helping them to spread across the globe?
Expected Outcome
Students will able to understand the main component of capitalism and which element helping them to rise of capitalism. Students will also be able to understand the role of division of labour in capitalism.
Introduction
[3] Globalization affected the social life, literature, culture, economic activities and every part of human life. Therefore the globalization becomes a central theme in the social analysis of the economy. Over recent decades this basic concept has come to represent a general condition of economic life, as well as the key tendency driving diverse economic process. A critical question, therefore, arises as to how far existing frameworks of socioeconomic analysis can account for the features and effects of globalization.
The globalization is not only related to economic globalization. The big idea of globalization extended beyond economic relations to describe a range of political, culture, military and technological factors. However, this article is basically focusing the economic globalization.
The question is can process of globalization be understood as the expression of a long-term capitalist logic? To what extent do global economic forms remain vulnerable to a critique of capital?
Two Perspectives of Economic Sociology
Three are two perspectives of the economic sociology-
The first perspective is world-systems theory, associated most notably with the world of the sociologist Emmanuel Wallerstein.
The second is no-Marxist, represented here by the critical geography of David Harvey.
[4] Wallestrein largely wrote about capitalism while Marxist wrote about capitalism from the historical perspective.
Economic Globalization
The concept of globalization is a contentious one, but in simple term, it refers to the idea that economic relations and activities operate on an increase through with distant and diverse, communication flows and commodities chains.
Approaches to globalization, however, often take this term to describe not simply these various empirical processes but also a large historical state of affairs.
Globalization in this sense can indicate both a process and a condition – a tendency within the economic and other spheres or the state of living in a globalize worlds.
Drivers of Globalization
[5] Key Factor that lies Behind Process of Globalization
The key factors of globalization are –
A. Technological Innovation in -
Information and communication technology
Transported technology
Production technology
These represent the key technical drivers of globalization.
B. The Growing Reach of Transnational Corporation (TNCs)
Transnational corporations can be seen as the institutional driver of globalization.
[6-9] Features of Globalization
These technical and institutional drives promote the process of economic globalization in the number of spheres. We might outline the characteristic features of globalization along the following lines;
A Trade
B Capital investment
C Finance Market
D Organization of production
E Organization of services
F The international division of labour
Patterns of globalization
These basic features of a globalization economy are structures in quite distinct ways. Indeed, a free-from language of globalization can obscure the systematic geographical that shape the international economy. It is important, therefore, to underline the structural feature of globalization, as well as certain structure trends. These are –
A. The power of the ‘Triad’
B. Changing the balance of economic relations
C. The shift to Asia (This is about shifting Asia as a trade centre.)
The Capitalist World Economy
Hopkins and Wallerstein analyzed the world economy from a structural point of view. For Wallerstein, the capitalist mode of production has shaped a world economy since the sixteenth entire. It is economically integrated by a single division of labour but includes different culture and political systems.
Wallerstein insisted that the study of world-systems is not about a total theory of the world, rather, it is a rejection of the way the social sciences typical have taken the nation-state or national society their frame of enquiry.
[10] Wallerstein dismisses the idea that capitalism only became a world system in the twentieth century. Rather a trace origin of a capitalist world economy to the early modern period.
Like Karl Marx, Wallerstein also argues that capital has never respected national borders. Its logic is always to expand and extend.
Types of Economic System: Wallerstein
Wallerstein distinguishes between two types of systems (1) Mini system, and (2) World system.
Mini System or Mini Economic System
Mini systems are based on a single division of labour also have unified cultures, for example, simple agricultural system and hunting and gathering society.
World System of World Economic System
Word system, in contrast, is characterized by a single division of labour across different couture’s. They involve economic networks that extend beyond and between societies and states.
[11] The modern world-system remained ‘multi-centric’ because it was based on the network of trade in capitalist commodities.
[12] The map of the modern world economy is not based on nation-states. Rather, the modern history of capitalist development divided the world into their broad economic zones, establishing dusting structure positions for different regions. The resulting modern in one of the best-known and most contrasting features of world-system theory. I mark out three structural zones in the world economy. He core,, periphery, and semi-periphery
Core or Core of Economy
The ‘core’ is the dominant region in the capitalist world economy. It originally was located in northwest Europe, based on specialized agriculture, margining property relations and the spread of wage labour. With the sire of industrial capitalism, the core came to b characterized by manufacturing production, strong states, a powerful bourgeoisies and a large working class.
Periphery or Periphery of Economy
The capitalist ‘periphery’ is a source of raw material and commodities exports to the core, historically typified by weak status and large peasant population. The early capitalist relations between core and periphery were based on slavery, indentured labour or cash-crop production by peasant workers. The basic division of labour between core and periphery divides the world economy between those regions that produce high-grade products using more advanced technologies and those peripheral economics that supply cheap, labour resources and agricultural products.
[13] Semi-periphery or Semi-periphery of Economy
The ‘semi-periphery’ is positions between core and periphery. It is based on intermediary or transitional economies, with either quite specialized or uncertain economic and political roles. Wallerstein suggests that semi-periphery, whatever the different political structure it might contain is critical in maintaining the overall stability of the world economy.
[14] These above classifications were criticized on the basis that they are Eurocentric.
This also argues that Rise of China in the twenty-first century does not, therefore, indicate the emergence of a neo economic core, but to revive of an older power after a relatively brief period of decline.
[15] The model of core, periphery and semi-periphery may be a rather blunt instrument for analyzing lines of economic power and inequality, but it remains come real critical currency.
[16] The ‘new Imperialism’: Accumulation by Dispossession
World-systems theory offers a large-scale account of capitalist expansion over time, but it also looks to the way ties economic system integrates and segments space.
The widening and deepening of capitalist social relations with time are, surely, one of the most singular and indisputable facts of recent historical geography.
Rapid production and cutting edge technology not only increase the volume of production but also help to expend the globalization.
[17] As production and distribution systems advance technological changes and efficiency gains, more goods and services can be produced and circulated, typically requiring fewer workers in those parts of the production process.
[18] In practice, various neo-Keynesian strategies remain crucial to the management of contemporary economics, however ‘post-national’ or ‘post-welfare’ they might appear, the strategy of temporal displacement is evident in the British government’s economic glided rule of the early twenty-first century.
This is important to note that Rosa Luxemburg argues that the capitalist crisis predicted by Karl Marx had not come about because capitalist was able to shore p profit by exploiting ‘pre-capitalist’ social formational as cheap sources of war material and labour.
[19] Harve in his book The New Imperialism draws on Luxemburg’s argument to consider contemporary modes of what he terms ‘accumulation by dispossession’. His account, moreover, offers a compelling reworking of Marx’s notion of ‘primitive accumulation. Marx used this concept in Capital (vol. 1) to refer the preconditions for capitalist production that marked the transition from feudalism.
Access to New Market
The over-supply or stagnant growth in the existing market is to seek alternative markets elsewhere. This was the basic premise of both liberal and Marxist analysis of nineteenth and early twentieth-century imperialism.
[20] Access to Cheaper Inputs
Another response to accumulation problems is to increase profit margins by lowering the costs of production. Apart from seeking new markets elsewhere, producers can also shore up profits in the existing market by seeking to reduce their costs. The search for cheaper inputs – which under the ‘old’ Imperialism largely involves the exploitations overseas territories for raw materials and resources – is exemplified today by practices of foreign outsourcing and subcontracting.
[21] The search for lower-cost inputs does not only affect the organization of production but is also evident in the ‘offshore’ of business activities and services in search of cheaper labour.
Privatization and marketisation the geographical search for new consumer, supply and labour markets is a tactic o what Hawvey cells ‘spatial displacement’, and capital seeks out opportunities for investment and profit-making elsewhere.
[22] It is evident in the free market being established in public goods and services – in health, municipal contracts, water, sewage, power and so on – by IMF/ World Bank loan conditions and via the WTO.
AN agenda of ‘progressive liberalization’, as built into the General Agreement of Trade in Services (GATS), has been European Union.
Further opportunities for investment and profit arise in wider strategies of commoditization and mercerization. In the endless creativity and invocation of the capitalist logic, new commodities can be invented, for example, via the patenting of novel kinds of intellectual property of generic materials.
Commodification is a key feature of the expansion of the capitalist market into new spatial or sectoral contexts.
[23] Conversion of alternative property right into private property.
The new opportunities for profit arise as various forms of property – collective, public, common, and tradition – are converted to private property. The dominance of private property I a familiar features of advanced capitalist economies, but the conversion of alternative property holding is also a condition of the transnational economic process.
Private property rights have been promoted by structural adjustment programme, free trade agreements and broader neoliberal strategies for international competitiveness.
The Shift to Wage Labour
The creation of a proletariat – a class of workers who possessed no land or productive capital and were impelled to sell their labour-power as a commodity – was, of course, crucial to Marx’s account of the development of capitalism.
As capital seeks new and cheaper resources of labour, it also creates capitalist among markets in places where previously there had not existed.
[24] The new capitalism need cheaper labour, these tendencies lead to labour exploitation, bound labour and other kinds of exploitation like child labour. The exploitation of child and female labour in the international division of labour tends to blur the distinction between labour commoditization and slavery, each of which Marx saw as elements of primitive accusations and both of which fir with Harvey’s contemporary account of capital accumulation by dispossession.
Globalization as the new Imperialism
Access to credit and money and exchange are important means of economic development and self-sufficiency, as is evident in numerous micro-credit initiatives involving the woman in particular.
[25] Growth in the international economy frequently involves practices of expropriation, usurpation and theft. In these terms, there is a dual logic at work in capitalist development: ‘expanded reproductions in the one hand and the often violent process of dispossession on the other have shaped the historical geography of capitalism’
[26] Harvey’s new imperialism is not politically organized, as were nineteenth-century empires, around a competitive system of nation-states which posses and control foreign territories. ‘Contemporary imperialist practises; in contrast, assumes a different political form and a different kind of state project.
[27] Wallesrstein’s original analysis of the development of modern capitalism has been critically updated in the contact of more recent behaved over globalization. While the language of ‘globalization; may be relatively new, these arguments suggest that the patterns of integration are relatively new, these arguments suggest that the patterns in integration it describes are very long-standing.
While the language of globalization may be relatively new, these arguments suggest that the patterns of integration it describes are very longstanding.
[28] Conclusion
This chapter was based on the economic ideas on Wallerstein and his colleagues. Globalization means that a growing number of the world’s population is incorporated into a capitalist economic system, as capitalist relations extend on a transnational scale.
Drawing on political-economic forms remains susceptible to a neo-Marxist critique of capital.
Other Marxist critique saying that contemporary globalization is dominated and capitalist elations and process, globalization in itself is not necessarily or inevitably capitalist.
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Image Credit: Trade Ship Wood-cut of Red Dragon 1602, From the Dutch CollectionTrade Ship Wood-cut of Red Dragon 1602, From the Dutch Collection of East-India Voyages, 1645-46, Copyright Public Domain
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