» Geography of the Globalization

Geography of the Globalization

GLOBALIZATION IS A term that is used quite frequently but whose meaning remains obscure. One definition of globalization is that is a process of complex interconnections between societies, cultures, institutions, and individuals that takes place worldwide. It also describes the increased mobility of goods, services, labor, technology, and capital. Although globalization is not a new development, it has rapidly increased with the introduction of new technologies. Globalization is often referred to as a contemporary or modern phenomenon, but it can also be studied from a historical perspective; the result of human innovation and technological progress (biotechnologies, miniaturization, digitalization, and photonics). These activities represent more than just the simple globalization of economic activity; they refer to the increasing integration of economies and societies across the world. Unfortunately, not everyone is represented equally in the globalization process as it is affected by wealth, access to global communication media, work, financial assets, and cultural norms. Therefore, the processes of globalization have been reshaping the geography of the global economy. Globalization is a process in which geographic distances become less a factor in the sustaining of rigid land borders, long-distance economics, and political and socio-cultural relationships. Networks of relationships and cooperation cross land borders and oceans and occur worldwide. As globalization grows, geographic distance is less of a factor as the Earth does not really shrink, but “relative” distances do. Therefore, worldwide networks of agreements/cooperation can be established. The transformative ability of the globalization process has commonly been associated with both material outcomes in such specific spatial units as localities, regions, and nation-states and peculiar discursive practices by societal partners. At the opposite, many researchers consider that globalization is associated with the declining influence of space in relationships among societies. The debate on the ideology of globalization can be categorized into 4 different areas: 1) Free trade globalization is a way to enhance prosperity; 2) the adverse view: the potential dangers of globalization include increasing inequalities, marginalization of some regions or countries, social exclusion, crisis tendencies and simultaneous loss of political control; 3) globalization is thought of as a myth since the theory is not justified by the actual development; and 4) lastly, some economists view globalization as nothing new, as economic affiliation is as intense today as it was before World War I, 100 years ago. Globalization can also be thought of as an ideology. The slogan of globalization is “Either globalize or perish.” As an ideology, globalization implies both the inevitability and the desirability of the tendency toward integration, and not the adverse. On 1 hand, globalization has been accepted as the unavoidable pathway to economic prosperity and success. If a national country’s economy is not performing well, it must be because the economy does not have “enough” economic globalization. On the other hand, anti-globalization views economic globalization as the cause of socioeconomic malaise.

Finance and transnational corporations are the core subjects of economic geography. Any viable geography of finance must have something credible to say about market patterns and processes. The power exerted by finance is represented by the growing role of capital markets in the globalization processes (the rise and spread of institutional investors). The national specificity of capital markets explains why there is not a truly global capital market. To some people, globalization means the ability of transnational corporations, through the use of free trade agreements and free trade zones, to transform space. Financial liberalization enhances capital mobility and shapes global values. In this view, transnational corporations attempt to dominate the world through the eradication of governmental controls and the homogenization of economies for their own profits, while marginalizing the rest. The expansion of the role of transnational corporations through the mechanism of foreign direct investment in the world economy is the driving force behind globalization. Furthermore, globalization increases the access to global resources for a small corporate elite. Globalization means the concentration of power and wealth in the few hands of multinational corporations whose only mandate is profit (shareholder value creation). As a result, this leads to disempowerment of civil society and the homogenization of culture worldwide. From a cultural perspective, there are 2 positions taken for and against the phenomenon of globalization. It is thought that globalization will lead to a homogenization of culture as people around the world will devalue their local culture and adopt American or Westernized ways. However, the goal of globalization is not that the entire world would become Westernized and capitalist, but that the Western culture becomes the standard by which other cultures measure themselves. Critics of globalization suggest that globalization is a self-propelling social dynamic; others argue this is not true. In reality, the economic sphere is directed by the World Trade Organization (WTO) with its underlying goal of economic equality in political and cultural influence, through the powerful means of information technology, dominated by the West. The weak cultures may not be able to resist forces of globalization, but third world countries should not be unaware of the “hidden agenda” of globalization. It is argued that the transnational class of elite export a set of values consistent with the American ideology of liberalism and capitalism. This view argues that globalization is a new form of activity in which a society moves from industrial capitalism to a postindustrial idea of economic relationships. This change is driven by a revolution among the techno-industrial elite that will eventually consolidate into a single global market. Recently, the information technology revolution has opened up new possibilities of communications and monitoring abilities across long distances, and has made it easier for transnational corporations to outsource some parts of their business. There is a widening structural differentiation of goods and services that have spread influence across traditional political borders and economic sectors, and it has resulted in the greater influence of political and economic changes. These changes have transnational and multinational dynamics that are a major influence on outcomes in determining “issue-areas” (for instance, environment, trade, and world regulation) and may encourage global and local companies to be more autonomous from a traditionally exclusive government decision-making and policy. Globalization can also be considered as the result of a larger building process of the world market. Nevertheless, globalization is neither uniform nor homogeneous. There is a marked difference between the degree of globalization as reflected in trade, foreign direct investment (FDI), and international finance. Its boundaries are unclear and its constituent elements and multidimensional character have yet to be adequately explored. Some scientists have considered globalization as a first step to complex interdependence, which accepts the notion of transnational interpenetration. Other experts contend that globalization modifies deeply the structural framework of rational choice in world relations, since the role of the key factor that commonly defines both international and domestic relations (that is, the government) is subject to a critical structural transformation. The government commonly faces crises of both organizational efficiency toward the consumer and institutional legitimacy toward the citizen. Therefore, there is a need to understand and propose new governance structures and mechanisms at the global and local levels, encompassing political and social needs of the government, social movements, nongovernmental organizations (NGOs), grassroots movements, the media, transnationals, organized citizens, the science community, and religious movements.

Historically, economic activity has been tied to geographic location. This relationship emerged around 1000 C.E., as political-military organization (empires, monarchies) absorbed autonomous cities that were the centers of economic activity in their geographic territory. The geographic merger of military and economic activities was transformed into a modern global interstate system that demarcates the physical boundaries of the world today. To understand economic geography is to see the world as a mosaic of regions. Many researchers associate globalization with deterritorialization, where a variety of socioeconomic activities take place irrespective of the geographical location of the individuals or activities. One of the paradoxes addressed by researchers is why there has been a growth of dynamic local economies at a time when places are increasingly under the influence of, and threat of competition from, distant places—threats that are a consequence of the globalization of the markets. One of the possible answers to this question is that local technological dynamism depends on local non-tradable assets such as trust or social capital. Does 1 refer to geography as preexisting spatial configurations that simply do not wither away in the midst of globalization processes? Or perhaps more significant, what is the explanatory relationship between geography and globalization? Is geography simply an outcome of globalization that poses as the cause? How does geography matter in our explanations of globalization? This last question points to a significant inversion of cause (geography) and outcome (globalization). On the other hand, many of the contemporary views on trade theory and international economics predict that globalization will lead to more intra-industry specialization because of locational concentration. Territory, in the sense of a traditional sense of a geographically identifiable location, no longer constitutes the whole. The rise of globalization seeks to capture the twoway interaction of global processes and local conditions to generate new adaptations. Globalization is associated with the production of new scales in economic and political space. It enhances the importance of supra-national and subnational scale processes. In particular, it underlies the arguments of a number of economic geographers that localized agglomerations of economic activity are a product of globalization. While this may be shown at the local level within the nationstate, it may also be argued at a more macro-level in such a regional formation as the European Union (EU), seeking to define a “European identity” for its member states in a new global era. The hegemony of neo-liberal ideology is about the triumph of market-oriented ideology, the economization of life, mass consumption and entertainment, deregulation, and so on. It is a global ideological breakthrough in which democracy is considered to be a twin of the market economy, and these together are supported to form a winning team. Frequently, it is theorized that economic globalization leads to deepening income inequality and unemployment. Similarly, debates on the winners and losers of economic globalization have also demonized globalization as a mythical juggernaut that is powerful enough to cause all sorts of socioeconomic miseries and political problems. More specifically, the intrinsic spatiality of economic globalization sets some necessary, but not sufficient, preconditions for it to effect empirical changes and outcomes. To define the spatiality of economic globalization, we have to look into specific geographic foundations that presuppose and legitimize economic globalization: the transcendence and switchability of geographic scales and discursive practices as socio-spatial constructions. When coupled with other substantive political-economic forces, these geographic preconditions—not economic globalization per se—help to explain empirical consequences and outcomes. Additionally, economic globalization represents a major transformation in the territory of key economic sectors. To what extent it also represents a possible transformation in the structures of politicoeconomic power is a difficult question. The major dynamics at work in the global economy contain the capacity to undo the interaction of sovereignty and territory embedded in the modern state system. This does not necessarily mean that sovereignty is less of a feature under conditions of globalization. Rather, it may signal the relocation of some components of state sovereignty onto supranational authorities. Similarly, economic globalization does not eliminate the government’s exclusive control over its territory, but alters the particular type of institutional encasing of territory that has developed since World War II. Globalization is the focus for popular fears about American power, the might of big business, the pace of economic change, and a sense of powerlessness in the face of intangible global forces. The debate is increasingly polarized between market fundamentalists and anticapitalists. To satisfy short-term institutional investors and inflate the value of their share options, bosses gamble with their companies’ future to ramp up the stock price. Unsurprisingly, trust in the financial system has evaporated since the collapse of Enron, Worldcom, Ahold, Parmalat, and others.

The debate over globalization can be broken up into 2 main camps: the globalists and the skeptics. Globalists claim that globalization is a new transformation of world order and a positive change. They point to the interchanges between cultures, economies, and people. They herald the time-space compression as a seamless means for fixing many of the world’s problems. The skeptics, on the other hand, do not think that globalization is occurring, or if they do, they think it is a negative phenomenon. The skeptics also point to the growing size of state budgets, nationalism, and agreements between countries in regions, all processes that are regional, not global. Globalization, as a myth, is the belief is that we are witnessing a process of regionalization with competing trade blocs. International economic integration has tended to be a regional rather than a global phenomenon. That is, the linkages among the world’s economies have tended to be stronger, within defined geographic regions or blocs, than between those regions. Examples of these groups or blocs would include NAFTA (North American Free Trade Agreement), the EU, and Asian regional organizations. A regional pattern is clearly evident in the data on global trade flows. For the 3 regions cited above (which together account for about 80 percent of global gross domestic product), intra-regional trade in goods now accounts for 50 percent or more of exports. Also, it is clear that formal regional trade agreements such as NAFTA and the EU potentially foster intraregional trade. Globalization versus localization suggests that distance matters, irrespective of transportation costs, so that spatial proximity of countries influences sales patterns over and above regional trade liberalization. It also seems clear that borders matter irrespective of distance. Globalization is sometimes credited with or blamed for influencing both domestic economic performance and the capacity of domestic policies to effect changes in that performance. The power of national governments is reinforced, not weakened. The structural adjustments of the World Bank and IMF (International Monetary Fund), bilateral conditions, rationalization of existing structures, and new regimes under the WTO are factors that aid the globalization process. These processes are closing the policy choices for developing countries, which are losing their options. Developing countries are struggling to cope with the new conditions of development and survival. The process of globalization exacerbates the existing poverty and inequality situations within and among countries. Also, globalization is accompanied by the rising of inequalities within and between countries. Consequently, globalization can expose the internal problems and tensions among the states, societies, transnational corporations, and other global factors. The current agenda will be to delineate the path to achieve sustainable development and minimize the risks.
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