The lesson of history is that nation states flounder in their efforts to tame the forces of globalisation. Only the most effective forms of global governance can exploit or resist its momentum for the common good.

Globalisation is defined by the integration of people, goods, finance, knowledge and culture throughout the living world. Each of these dimensions of globalisation has advanced since the dawn of civilisation, at a pace determined by the available technologies for transport and communications.

The impact of globalisation on middle class families of fully developed economies is no longer considered remarkable. A significant proportion of consumer goods are imported from Southeast or East Asia; simple enquiries about banking or insurance may involve a call centre in India; affordable opportunities for international travel and education are available and a globetrotting executive can sustain family intimacy through social media tools.

These illustrations of globalisation are broadly positive in their effect on individuals, creating space for personal fulfilment, stimulating wealth and encouraging cross-cultural experience.  However, the more disruptive social, economic and environmental consequences of globalisation in the modern era have exposed the limitations of nation states to work together on the global stage.

Accelerated in the modern era by computing power, satellite technology and the efficiency of container shipping, globalisation has drawn attention to itself on account of its far-reaching consequences.

Thomas Friedman, author of The World is Flat, explains his interpretation of the history of globalization; from United Way of Greater New Haven


The 1990s slide towards greater poverty and environmental breakdown, together with the dilution of powers of developing countries to manage their own affairs, led to a strong public reaction against global bodies deemed to be responsible. Although the activists became known as the anti-globalisation movement, their grievances were equally vehement on capitalism, corporate power and US economic and cultural imperialism.

Naimi Klein, a champion of anti-globalisation, grapples with a vision of a sustainable economy; from BBC Newsnight

After violent clashes at a World Trade Organization (WTO) meeting in Seattle in 1999, subsequent gatherings of G8 world leaders and international financial institutions retreated to inaccessible and remote locations, encircled by massive security operations.

The 2008 financial crisis revived anti-globalisation sentiment, but from a rather different perspective. Replacing the Seattle focus on injustice experienced in the developing world at the hands of global governance, contemporary protests – such as the Occupy Movement – are concerned for the poor everywhere, the 99% disadvantaged by economic globalisation. Oxfam research concludes that “eight men own the same wealth as the 3.6 billion people who make up the poorest half of humanity,”

Winners and Losers

The economic benefits of greater international trade and investment tend to be distributed unevenly. Concerns about global inequality, especially since the financial crash of 2008, portray globalisation as a zero sum game, in which the winners in our interdependent world may gain their prosperity at the expense of the losers.

Nancy Birdsall, President of the Center for Global Development, offers a very brief explanation of why we should be concerned about the effect of globalization on inequality

This negative perspective points to the loss of traditional factory jobs in US and Europe, undercut by low wage economies led by China. It might equally point to the failure of African agriculture to modernise, its more promising crops undercut by imports from US and European farmers, whose government subsidies might have been blocked in a fairer global trade regime.

Meanwhile, the economic opportunities presented by globalisation have been optimised in Southeast and East Asia where many countries have achieved the dual goals of eliminating extreme poverty and facilitating a dynamic business environment. The capital-owning classes in the West are also seen as winners of globalisation, enjoying real increases in asset values in spite of, or possibly even as a consequence of the banking collapse of 2007/8,

However, the broad international picture sees most low income countries as falling behind. Despite the rise in foreign trade and investment over the last thirty years, the number of people living in extreme poverty in sub-Saharan Africa increased by 113 million between 1990 and 2013, the most recent year for which reliable data is available.

Whereas internet technology has revolutionised our capacity for knowledge and interaction, swathes of South Asia and Africa provide no electricity, let alone computers. Whereas the global supply chains of our supermarket culture deliver exotic year-round affordable foods, over 800 million people in the developing world experience hunger.

For a long period, the post-1945 growth in prosperity ensured that the economic tools of globalisation enjoyed mainstream political support. Now, those comforting theories that rising wealth “trickles down” or “floats all boats” are losing credibility, whether between richer and poorer countries or within a single country.

Martin Whittaker on inequality and capitalism; from Ford Foundation

Contemporary globalisation is therefore blamed for the unaccustomed stagnation of living standards amongst large sections of European and North American societies. Although many economists challenge this analysis, pointing instead to the role of new technologies and the absence of adequate retraining programmes or welfare safety nets, the political backlash against labour migration and free trade holds up the mirror to public opinion.

No greater damage could be done to the creed of globalisation than the extensive state support for failed western banks that prevailed for years after the crisis. World leaders continue to convey a sense of helplessness at the sheer complexity of the interdependent world created by globalisation. Artificial monetary measures such as quantitative easing and negative interest rates have unknown consequences.

There are many signs of globalisation in retreat, none more dramatic than the UK public vote to withdraw from the European Union, the world’s most ambitious economic and political integration of nation states. In the US, there is a backlash against international outsourcing of back office functions and mass production. The association of cyber-crime, trafficking, terrorism and super-bugs with porous borders adds to the woes of globalisation.

Traditional US enthusiasm for trade agreements has abruptly reversed with the election of President Trump. Instead of celebrating low prices of consumer goods, many workers now blame international competition for stagnant wages and loss of jobs in traditional manufacturing industries. Features of contemporary trade agreements, such as investor-state dispute settlement, appear to bestow corporations with powers normally the domain of national governments.

Despite these setbacks, globalisation has avoided a knockout punch. No credible alternative global economic model emerged, even when the world’s investment banks were at the mercy of public opprobrium. Anti-globalisation sentiment has missed its golden opportunity.


more Governance briefings (updated December 2017)
Post-war legacy
International Development Model
Tax Justice
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