Is Globalization On Its Way Out?

In the early 1990s, when the present era of globalization began, it was asserted that its course was irreversible. The New Economy, given birth by revolutionary changes in the sphere of information technology was immune to business cycles. There was no challenge to capitalism because the Soviet Union had collapsed and China had begun adapting itself to the new era. All the national economies were sooner or later going to be integrated into one global entity, and the world was sure to become borderless as nation-state was on its way out. This process could neither be held back nor reversed. The people opposed to this march of history were dubbed as lunatics or modern day Luddites. What is the situation after one and a half decades? No integrated global economy is visible even on the distant horizon. Bello says, “…despite runaway shops and outsourcing, what passes for an international economy remains a collection of national economies. These economies are interdependent, no doubt, but domestic factors still largely determine their dynamics. Globalization, in fact, has reached its high-water mark and is receding.” When the present era of globalization was on ascendancy, it was declared by propagandists like Thomas L. Friedman from housetops that state policies had become irrelevant and MNCs were going to be (the) domineering and driving force. Yet, the European Union, the US government and the Chinese state are stronger today than what they were a decade and a half ago. The nation-states in Latin America have become more assertive now. The MNCs have to obey their dictates even if they do not like to do so. Bello underlines: “Moreover, state policies that interfere with the market to build up industrial structures or protect employment still make a difference. Indeed, over the past 10 years, interventionist government policies have spelled the difference between development and underdevelopment, prosperity and poverty. Malaysia’s imposition of capital controls during the Asian financial crisis in 1997-98 prevented it from unraveling like Thailand or Indonesia. Strict controls also insulated China from the economic collapse engulfing its neighbours.” http://mostlywater.org/is_globalization_on_its_way_out [Proofreader's note: this article was edited for spelling and typos on January 22, 2007]

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