Renewing the State

Article excerpt

Many view globalization as a technology-driven global order that has led to an intensification of interconnectedness among nations. This, however, is merely one facet of globalization, and does not presuppose the ideological homogenization or the rapid retrenchment of the welfare state that is currently underway.

The dispute over globalization is not about the intensification of global interconnectedness. Rather, it is over the vision of the global system that globalization projects. This vision entails a global economic system with identifiable rules of behaviour in trade, finance, taxation, investment policy, intellectual property rights, and currency convertibility, all of which are crafted along neo-liberal principles with minimal governmental regulation. As the political economist Ellen Wood perceptively notes, this vision of a global system represents a new phase of capitalism which is "more universal, more unchallenged, more pure and more unadulterated than ever before."

For many critics, globalization is essentially an anti-democratic process that excludes the interests of a wide range of groups. But the process is not shaped by market forces alone. It is only made possible by the acquiescence if not active support of governments, especially those in advanced countries.

Governments in developing countries, meanwhile, are often said to be unable to stand up to globalization without incurring severe costs. The government of South Africa, for example, could be punished by capital flight if it insists on implementing its agenda of social reform. The masses of South Africa, however, are likely to sustain heavier costs if the government abandons its reforming mandate. Faced with such a dilemma, governments have generally selected the side of capital for a simple reason: as the economist Paul Krugman has noted, the collapse of communism has taken the heart out of opposition to capitalism.

The list of problems caused by globalization is long. In low-income countries, such as those in Sub-Saharan Africa, where governments have been unable or unwilling to provide their populations with even the most basic protection from the new phase of global capitalism and structural adjustment programmes, the people's plight has been particularly severe. …