The notion that an integrated global economy has developed in recent decades has become part of the new common sense. It is widely believed that nations, firms, and individuals have no option but to adapt to the intensifying global competitive pressures or go under. Distinct national economies, it is claimed, have dissolved into the world system, and with them has gone the possibility of macroeconomic management by national governments. The new global system is driven by uncontrollable international market forces and is dominated by transnational companies that produce and sell wherever economic advantage dictates. States cannot govern world markets and if they are not to disadvantage their societies, they have to accept that the only role remaining to them is to help make their territory attractive to internationally mobile capital.
Globalization is not just a trendy concept; its acceptance by politicians, media commentators, and academics is politically highly consequential. The question is whether globalization is indeed the case, whether world market forces that are beyond all governance have in fact developed. We shall consider the evidence for and against the existence of a process of globalization. But first we need to spell out the social and political issues at stake, for if globalization is occurring then we face a very bleak future indeed. A truly global economy will make the expectations developed in the advanced world during the long boom after 1945 completely obsolete.
Some commentators see the process of globalization as an entirely positive development. In his influential book The Borderless World, the management guru Kenichi Ohmae argues that globalization means that