Globalization in question: the international economy and the possibilities of governance is a noted text on globalization by Paul Hirst

Paul Hirst

Paul Hirst was a British sociologist and political theorist. He became Professor of Social Theory at Birkbeck, University of London....

 and Grahame Thompson

Grahame Thompson

Grahame Thompson is a Professor of Political Economy in the Department of Politics & International Studies at the Open University, serving also as a visiting professor at Copenhagen Business School.- Training and career :...

. Published in 1996 by Polity Press.

Background

Hirst and Thompson note that Globalization

Globalization

Globalization refers to the increasingly global relationships of culture, people and economic activity. Most often, it refers to economics: the global distribution of the production of goods and services, through reduction of barriers to international trade such as tariffs, export fees, and import...

 is an important topic, not only in economics, but also in the social, political and managerial sciences. There is much talk of the global village

Global Village (term)

Global Village is a term closely associated with Marshall McLuhan, popularized in his books The Gutenberg Galaxy: The Making of Typographic Man and Understanding Media . McLuhan described how the globe has been contracted into a village by electric technology and the instantaneous movement of...

and it is often argued that a truly global economy has emerged, or is the process of emerging. This global economy, it is further argued in what might be termed the `globalisation hypothesis', has made domestic economic strategies useless in the face of the world market; a world market in which a new breed of truly transnational corporations are the dominant actors. The authors question the extent to which this ‘globalisation hypothesis’ is firstly an accurate portrayal of how things actually are, and secondly whether this is how they ought to be. There is a strong polemic element to the book.

Five important criticisms of the globalisation hypothesis

They argue, against the globalisation hypothesis, or rather against what is best described by them as strong versions of the hypothesis, on the basis of the following five interrelated points:

1. those advancing the `globalisation thesis' do not provide a coherent concept of the world economy in which supra-national forces and agents are decisive.
2. that pointing to evidence of the enhanced internationalisation of economic relationships since the 1970s is not in itself proof of the emergence of a distinctly `global' economic structure.
3. that the international economy has been subject to major structural changes in the last century and that there have been earlier periods of internationalisation of trade, capital flows and the monetary system (especially 1870-1914).
4. there are very few truly global TNCs. Most so called TNCs are really only multinational corporations which continue to operate from distinct national bases.
5. that the prospects for regulation by international cooperation, the formation of trading blocs, and the development of new national strategies that take account of internationalization are by no means exhausted.

Five important major characteristics of the international economy

Having criticised a strong version of the globalisation thesis Hirst and Thompson then identify five major characteristics of the international economy that they wish to emphasise.

1. The most important relationships are still between the most developed market economies.
2. There has been a progressive internationalization of money and capital markets since 1970s.
3. There has been an increasing volume of trade in semi-manufactured and manufactured goods between the industrialized economies.
4. The progressive development of internationalised companies.
5. The formation of supranational trading blocs.

Conclusion

Hirst and Thompson ask the question as to whether or not the globalisation hypothesis is overstated, or is it the case that we are really in a new stage in international economic, political and cultural relationships. In doing this they trace out the present configuration of international economic, political (and even cultural) tendencies. They look at the implications of these for policy and for the likely future direction of development.

They stress, as a crucial issue, as the title suggests, the importance of "governance" and the relationship between the way in which nation and international governance might interact with the processes at work. Their aim is to provide a rebuttal to the arguments of those who think that global market forces should be, and cannot but, be obeyed. Their conclusion is "that there are still opportunities for the development of governance mechanism at the level of the international economy that neither undermine national governance nor hinder the creation of national strategies for international control."

Reviews

Questioning Globalization - Globalization in Question: The International Economy and the Possibilities of Governance - Review Monthly Review, Oct, 2001 by William K. Tabb

Globaloney? - Susan Strange - Review of International Political Economy, Vol. 5, No. 4 (Winter, 1998), pp. 704-711

Globalization and the Myth of the Powerless State - by Linda Weiss; New Left Review, Vol. a, 1997