Big picture
Globalisation means the worldwide flow of ideas, capital, commodities and people, which makes the world more interconnected. A phone designed in one country, assembled in another and sold everywhere; music and films shared across continents; money moving instantly across stock markets: all are signs of globalisation.
Globalisation has political, economic and cultural consequences, both positive and negative, and it has provoked strong resistance. This chapter examines these effects and India's experience.
Learning goals
Explain the concept of globalisation and its causes.
Explain its political consequences for the state.
Explain its economic consequences, with benefits and criticisms.
Explain its cultural consequences: homogenisation and heterogenisation.
Explain India's experience of globalisation.
Explain resistance to globalisation in the world and in India.
Core ideas
1. The concept of globalisation
Globalisation involves flows: of ideas (from one part of the world to another), capital (investment across countries), commodities (trade) and people (migration in search of better livelihoods).
It creates worldwide interconnectedness. It is a multidimensional concept, with political, economic and cultural aspects, and its effects are uneven across countries and groups.
Globalisation is not only economic, and it doesn't always mean that the world becomes one.
2. Causes of globalisation
Technology is the most important cause. Inventions like the telegraph, telephone and microchip revolutionised communication; the internet and computers made instant flows of information and capital possible.
Advances in transport reduced the cost and time of moving goods and people.
Global problems (such as environmental issues and epidemics) require countries to cooperate.
Political choices, especially economic liberalisation after the Cold War, opened economies to the world.
3. Political consequences
Erosion of state capacity: the old welfare state has given way to a minimalist state that performs only core functions such as law and order and security. It withdraws from many welfare functions, and the market becomes the main determinant of economic and social priorities. Multinational corporations (MNCs) become powerful and can influence governments.
State remains important: the state continues to be the primary actor in political community, and it still controls law, order and national security. In some respects, the state has become more powerful: technology enables states to gather information about citizens and govern more effectively.
4. Economic consequences
Economic globalisation involves greater trade, investment and technology flows, with organisations like the IMF and WTO playing key roles, and countries reducing restrictions on imports and foreign investment.
Benefits (supporters' view): greater economic growth; more choice and better products for consumers; jobs and investment; spread of technology; greater cooperation and interdependence between countries.
Criticisms:
It has not benefited everyone equally; it has widened inequality between and within countries.
Governments' withdrawal from social welfare (health, education) hurts the poor. Critics call for a "social safety net" to protect the weak.
Some describe it as re-colonisation of the world, with rich countries and MNCs dominating poor countries.
Movement of people is restricted (rich countries guard their borders and visas), while capital and goods move freely.
5. Cultural consequences
Cultural homogenisation: the rise of a uniform culture, often dominated by Western (especially American) culture; critics call this the "McDonaldisation" of the world. Local and traditional cultures may be threatened, impoverishing global cultural heritage.
Cultural heterogenisation: external influences can enlarge choices and combine with local traditions to create new forms. For example, blue jeans worn with a khadi kurta combine global and local styles; a hybrid culture emerges.
Globalisation can thus both narrow and enrich cultures.
6. India and globalisation
Flows between India and the world are old: through trade and cultural contact in ancient times, and under colonialism, when India exported raw materials and imported finished goods.
After independence, India followed protectionism, emphasising self-reliance and limiting imports and foreign investment.
In 1991, facing a financial crisis, India began economic reforms (liberalisation, privatisation and globalisation), opening up to trade and foreign investment. The economy grew faster, the services and IT sectors boomed, and consumer choices expanded; but critics point to rising inequality, distress in agriculture and job insecurity.
7. Resistance to globalisation
Critics from different sides:
Left critics argue that globalisation is a phase of global capitalism that makes the rich richer and the poor poorer, and weakens the state's ability to protect the poor.
Right critics worry about the political and cultural effects: weakening of the state, and the loss of traditional culture and sense of identity.
Some critics are not against globalisation itself but against its particular form, which they call imperialism.
Global movements:
Anti-globalisation protests took place at the WTO meeting in Seattle (1999), alleging unfair trade practices by rich countries.
The World Social Forum (WSF) is an open platform for human rights activists, environmentalists, labour, youth and women activists opposed to neo-liberal globalisation. Its first meeting was in Porto Alegre, Brazil, in 2001; the fourth was held in Mumbai in 2004.
Resistance in India:
Trade unions of industrial workers protested against the entry of MNCs; farmers protested against the entry of some MNCs in agriculture and against patents on traditional plants such as neem.
The Indian Social Forum voiced concerns about globalisation.
Resistance also came from the political right, opposing cultural influences such as foreign TV channels and the celebration of Valentine's Day.
A reliable approach to questions
Define globalisation in terms of flows of ideas, capital, commodities and people.
Give technology as the main cause.
For each consequence (political, economic, cultural), give arguments on both sides.
For India, contrast protectionism before 1991 with reforms after 1991.
For resistance, name the WSF, Seattle 1999 and Indian examples.
Connections that matter
International organisations explains the IMF, World Bank and WTO.
Contemporary centres of power shows how the EU, ASEAN and China gained from global integration.
Business Studies and Economics cover India's 1991 reforms.
Common mistakes
Saying globalisation is only economic. It also has political and cultural dimensions.
Saying the state has disappeared under globalisation. It remains the primary political actor.
Confusing homogenisation (sameness) with heterogenisation (mixing and diversity).
Dating the first World Social Forum to Mumbai. It was in Porto Alegre in 2001; Mumbai hosted it in 2004.
Revision checklist
I can define globalisation and explain its causes.
I can explain its political consequences for the state.
I can explain its economic benefits and criticisms.
I can explain cultural homogenisation and heterogenisation.
I can explain India's experience and resistance to globalisation.