Globalisation or "Glocalisation"?
International trade, viewed as the primary agent of both the process of globalisation and of domestic growth is, however far from an entirely modern phenomena. During Britain's Industrial dominance as the "workshop of the world" British manufactured goods were exported around the world. At the dawn of the twentieth century at least forty percent of the world's commercial shipping tonnage had been built on the Clyde. Foreign investment is likewise no novelty. In 1914 for example Britisn financial institutions held $7,000million dollars of Industrial investment in North America alone.
Primary produce from the British empire gave the British public access to as wide a selection of exotic food, fabrics and luxuries as is currently available for those with resources to make those choices.
The World Economy was a reality before the chaos of the Great War: "European colonial expansion created a world economy not only by the establishment of regular communications (telegraph cables joined most of the "civilised" world by 1900) and the exchange of goods and people, but by financial ties through capital investment even more widespread than territorial dominion"(Philips Atlas of World History p125/67)
The end of the Great War saw a period of almost global protectionism and the virtual collapse of the international trading system. After the Second World War international efforts were made to prevent the recurrence of the inter war years of depression and, at least in the Core economies a long boom ensued. If you were born between 1949 and 1963 you are an individual product of that period of growth in prosperity. The economic resurgence of the former axis powers and the rise to superpower status militarily, economically and politically of the USA were also dependent of the reestablishment of the International trade in goods services and the ever increasing mobility of capital resources.
What is also a feature of this period is Britain's inability to keep pace at the international level to retain it's erstwhile position of Global leader. When the global economy faltered in the nineteen seventies, the effects were world wide and enduring.
Whilst the long boom had been accompanied by a dominance of Neo- Keynesian economics (especially the central belief in the power of the Nation State to direct and even cause economic growth) the period from the late seventies has seen the rise at the International level of a free market, free trade ideology.
The last thirty years have also seen major shifts in the nature and direction of trade. During the seventies, eighties and nineties trade between the countries of The European Union grew rapidly within the context of a developing political social and cultural convergence. The pacific rim rose in importance both as a consequence of inter-regional trade and as part of an increasing assimilation of the region into the global market, a development lead by Japan, by then the second largest economy in the world.
At the political level the emergence of regional Tariff free areas, of which the European Union is the most consolidated, have accelerated the trends to towards what has been termed "glocalisation". Put simply glocalisation involves the decline in national boundaries importance within a specific region or area - a good example of this is the importance of proximate markets - trade in goods and services between France and Germany for example. It is also sobering to know for Scottish National Party that the rest of the United Kingdom is the largest destination of exported Scottish goods and services- greater that the rest of the whole of the world market combined.
Within Europe indeed, even at the level of individual firms there has been a growth in cross national investment and ownership. (What is a British car -the Reliant Robin?). Franco-German, Anglo-Dutch, or Swiss-Italian corporations are a commonplace feature of the modern economy.
With the growth of Intra-Regional trade there has been an exponential growth in intra-corporation trade- now 40% of all world trade takes place within corporations rather than between them.
There has been and continues to be a growing trend towards intra-industry trade- a trend much encouraged by Governments. Both intra-corporation and intra-industry trade tend to act against the general impetus that international trade has in pushing down wages and employment, at least in the Industrial societies.
"Many people fear that globalisation - increased international trade and economic integration - will inevitably put downward pressure on the wages of most workers and inhibit unions capacity to demand higher wages. But ..... the dramatic growth of intra-industry or two-way trade - where the same products feature as both a country's exports and imports - means that increasing integration need not have a negative impact on wages.
The impact of increased economic integration on the behaviour of union wage-bargainers will vary across industries and product markets. Crucially, it depends on the nature of trade in that product market. The question is whether trade takes the form of inter-industry or intra-industry trade. Intra-industry trade is when, even for tightly defined product lines, trade is two-way: there are high levels of both imports and exports for the specified good.
When trade is primarily intra-industry, increased trade and integration are likely to make unions more not less assertive in bargaining for higher wages. This is because although integration makes the home market more vulnerable to import penetration - and hence puts downward pressure on domestic wages - it also raises the demand for exports - and hence enables unions to be more demanding of higher wages."(Union Wage Strategies and International Trade by Robin Naylor is published in the January 1999 issue of the Economic Journal.)
The growth in trade and the impetus towards a closely integrated global market with transnational corporations integrating their productive process both vertically and horizontally has had both short term and long term effects on income level and employment in the Core Economies.
The mercuric rise in electronic communications over the last decade has also seen a enormous growth in the Internationalisation of the service sector. The Internet is serving currently to impel this process further and in the next ten years e-commerce as it has been dubbed will no doubt be taken as an ordinary experience for the majority of the populations of the Advanced Industrial or "post-industrial" societies.
The key point however is that the developments in trade discussed above have largely been confined to the core economies. There was during the 70s and 80s a general movement in the core and under the direction of transnationals a relocation of production facilities out to some peripheral economies allowing some to further integrate into the world system. This is certainly the case for example in the electronics industry in the pacific rim, as it is for the software industry in South Asia. These however are not representative of the trade position of the periphery as a whole.
The integration of selected peripheral economies in to the world system and the intimate inter linking of the Western societies at the social and political levels has if anything increased the isolation of the poorest Post-colonial nations. The external economic relationships of the periphery to the core remains as dependent as ever, in particular for the least industrially developed heavily indebted, primary commodity export revenue dependent nations. In this group of nations little if any integration into the world trading system has occurred since the boom years of the three decades following the end of the Second World War. With consistent downwards pressure on commodity prices for most of the last three decades many of the least developed peripheral economies have in fact either stagnated or even retrenched economically and socially.
The end result of this process in far too many cases has been a lapse into chaos, corruption and brutal conflict. Internally, in many cases, the main beneficiaries of what limited income growth there has been has been restricted to a tiny socio-economic and political elite, who have successfully integrated themselves into the "international jet-set". The opulently luxurious lifestyles of the industrial commercial and political elites of the Third World is starkly contrasted by the direst poverty imaginable within the same nations. The international social integration of the Oil rich Sheiks of the OPEC nations, the military-political classes of Latin America and Africa, the super rich of the landed gentry and the entertainment industry in South Asia has taken place within the context of stagnating or even regressive social and economic development across the world.
Brian Mulrine 2003.
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