Vulnerability of socio-economic systems to globalization

Globalization of the world system has progressed in three phases: expansion of trade, internationalization of financial markets, through increasing flows of investment accompanied by increased corporate and research networking. This accelerating interdependence has as its primary agent the transnational enterprise and is driven by the revolution of information and communication technology. Although globalization enhances opportunities for growth (through improved efficiency, methods of production, and new technologies), risk and vulnerability increase because globalization creates pressures for convergence policies which threaten national sovereignty. It enhances competition amongst systems and has a low tolerance for system diversity engendered by different cultural histories and institutional preferences.

Because of the erosion of national markets, the state is now a weakened instrument against the forces of globalization in the face of the networks of transnational corporations. Thus in a context of market deregulation and liberalization, financial and industrial mobility at world level bypasses the regulatory frameworks of the nation-state. In a growing number of financial and industrial sectors there is a strong tendency towards oligopolistic structures. Labour legislation and social welfare programmes are weakened or slowly dismantled while mass unemployment has become one of the major social issues. Indifference to those marginalized by these processes increases, notably under the form of increasing intolerance, social exclusion and delinking between regions. Finally, in order to increase competitiveness, there is increasing pressure for the cancellation of regulations concerning environmental protection.

A truly globalized economy would be characterized by four features. It would be determined by primarily international processes, rather than the differential performance of national economics or of corporate and government elites. Domestic economies would be subsumed by open world market processes and governments would become merely local service providers, subordinate to the decision-making of major corporations and markets. The main players would thus become the TNCs without any particular home base. Globalization would signal a final decline in the political influence and bargaining power of organized labour which would be effectively localized. Finally states that rejected the dominant logic of economic efficiency in favour of national political considerations would lose out, as would those that challenged the transnational corporations.

Turbulence in the ERM in the period 1992-1993 has reawakened fears that even trade blocs such as the EEC/EU have limited economic influence when confronted by internationally mobile capital.

1. If capitalism were collapsing, would we see the warning signs? (Willis Harman).

2. The process of globalization of finance, industry, consumer markets, information and communication infrastructures, as well as military security based on high technology, has accentuated the transformation of competition from being a means and a particular mode of economic functioning into an ideology and an aggressive goal for survival and hegemony.

3. Globalization means the undermining of the livelihoods and cultural identities of the majority of the world's people. It has been estimated that at least two thirds of the population of the world are excluded, harmed or marginalized by globalization.

4. The cycle of long-term crisis which started in the early 1970s is the result of capitalist transnationalization of international economic relations. This phenomenon can now extend worldwide and represents a modern form of colonial imperialism and plundering of the planet's resources, including senseless waste of non-renewable resources, for the exclusive benefit of transnational financial and industrial groups. The braking effect of the bloc confrontation of the preceding period, which was also an obstacle to development, disappeared before new checks and balances, new priorities and alternative development strategies were devised or while their introduction was blocked.

1. Vulnerability of social systems
2. Global financial crisis

1. Monopoly of the economy by corporations
2. Internationalization of capitalist production
3. International economic interdependence
4. Globalized trade malpractice
5. Globalization trap
6. Globalization of consumerism
7. Globalization of agriculture
8. Elitist control of global economy
9. Destabilizing corporate expansion

1. Socio-economic poverty
2. Socio-cultural environment degradation
3. Perverse globalization
4. Loss of cultural diversity
5. Homogenization of cultures
6. Financial instability of national economies
7. Destabilization of social systems
8. Decline of the nation-state
9. Cultural imperialism
10. Competitive techno-economic warfare

1. Uncontrollability of world social systems
2. Unconstrained free trade
3. Unbridled economic competition
4. Socially unaccountable global governance
5. Oligopolies
6. Lack of protective legislation
7. Interaction of deficiencies in world economical systems
8. Inappropriate modernization of agriculture
9. Collusive international trade arrangements
10. Autarky

1. Lack of economic adaptation of indigenous systems

1. Vulnerability of environmental systems to globalization
2. Cover up of convergence in practice of apparently opposed ideologies

1. Using alternative economic systems
2. Protecting national socio-economic systems from globalization
3. Mitigating social consequences of structural adjustment programmes
4. Keeping pace with globalizing economy
5. Increasing international economic cooperation
6. Evaluating effects of world trade agreements on investment
7. Evaluating effects of globalization on biodiversity conservation
8. Challenging globalization
9. Ameliorating negative consequences of economic globalization

1. Vulnerability
2. Uneconomic
3. Uncompetitive
4. Invulnerability
5. Competition [D]