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  • Subject area(s): Marketing
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  • Published on: 14th September 2019
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The volume and speed of this movement of capital has heightened the potential disciplinary effect of a threatened capital strike as well as governments are increasingly obliged to weight carefully their welfare, fiscal and monetary policies .

While Capital movement has big economic consequences, and political and cultural implications, states are keen to try to control or attract capital as investment affects the wealth of any economy, economic growth, and employment. But after all, if state fails to maintain conditions of business confidence, or if it enacts policies which appear threatening the interest of the owing class, investors, then, may decline to invest there .

Capital can move to look for the best investment, the cheapest workers, and the most relaxed environment regulations, so that, a successful capitalist has no intrinsic commitment to product, to place, to country, or to type of economic activity. The commitment is to the accumulation capital, and the capitalist will shift locus of economic engagement as shifts occur in the opportunities to maximize revenues from undertaking .

 This is connected to the fact that governments cannot rely on money to stay in their country , and those citizens who want to achieve goals of high employment, egalitarian development, and sustainable growth are paralyzed by the threat that any policy that lowers the rate of profit will cause capital to be moved to profitable environs, thereby reducing investment .

As the state depends, for its economic viability, upon the investment activities of class private owners of the social means of production, it is effectively subject to their collective blackmail, and if they want to have certain types of capital mobility, then that implies serious constrains on the institutional structures and economic policies that they pursue .

 This reduces the strength and autonomy of governments in terms of what policies they can pursue. These policies are more likely to be neoliberal- lower taxes, lower public spending, and fewer regulations on companies- as their policies are now determined, in part by the need to be attractive to global capital.

In fact, regulations to restrict the movement of capital globally have been relaxed in line with more neoliberal policies, with fewer legal constraints on the movement of money across national borders .

 Practical experience has shown that trade and investment not only bring economic development, but often bring higher standard of human rights and environmental protections as well. All these things come together when countries adopt appropriate policies and institutions .

At a deep level, countries now do borrow and lend large amount over a long period of time, and the sheer quantity of short-term finance moving around the global has become startlingly large, and what is needed is not new shackles for world investment, but greater determination by governments to tackle social and political issues directly, and to give the institutions, that exist for that purpose, the fund and the authority they need .

Interdependence - inequality

Economic processes become progressively internationalized in a number of key spheres: communication, production, trade, finance and in many matters of economic coordination, there may be a great deal of interactive behavior as thousands of business concerns engage in millions of transactions and extensive communications, which, in turn, has led to an increase and spread of trade, investment, economic opportunities, efficiency, productivity, and higher living standards .

 The growing interconnectedness and expansion of contracts across borders as well as their intensification, and the speeding up of communication have made many people aware of the fact that they live in a more globalized world, within which true globalization occurs if it involves not only interconnections between two areas, but also interdependency where they are not just linked but also affect one another, there must be a situation in which actors or events in different parts of a system effect each other along with a reciprocal influence is continuous shaping an interactive process which, in turn, leading to a modification of rules and institutions .

This element of realization and self-refection is sometimes connected to a larger awareness of others in a distant location as fellow human being .

 Today, Interdependence incorporates and necessitates a high degree of cooperation in the behavior of the actors, and the relationships among different networks have become more important, thicker, and quicker ; there is, for example, a clear intensification of transfers among three economic macro-regions - North America, Europe, and Asian specific; around each macro region an economic hinterland has been created, that is, being gradually incorporated into the global economy through its links with the dominant region .

what can be noticed above is that interdependence, thoroughly, creates mutual dependence, which results from highly unequal power and trade relationships between commodity producing countries and the core state, as well as mixes domestic foreign issues which gives rise to much more complex coalitions, more intricate patterns of conflict, and a different way of distribution of benefits than in the past .

Not only different goods have been produced in different sectors of the world economy, but the workers who produced these different goods have been paid differential wages, which has been at one and at the same time a mean of transferring surplus from one area to another, and a mean of becalming social protest in politically key core area of the world economy .

While economic are strongly affected by domestic circumstances- such as national policies and culture- external economic factors, such as  demand from overseas for exported goods, inward investment from outside, stability and confidence in the economy, the cost and availability of energy supplies, events such as war or climate change, have a big influence too  .

As many of the dependent countries (core states), for instance, are single commodity producers, having agriculturally based economic, this means that they are often subject both to wide fluctuations in commodity prices, and to imported inflation from the industrial countries .

However, the significance of core state to the commodity producer, both as a market for its exports and a source of industrial imports is thought to be overwhelming.

In this way, national economies are integrated into the global economy even though the extent and type of this may vary from nation to nation .

As the producers of raw materials realize the vast political and economic advantages of uniting their forces and cooperating to control price and production levels, the less nations of the world are starting to band together to form much more cohesive political blocs- these blocs of developing nations, frequently, are regional in nature .

Indeed, globalization is accompanied by increasing gaps between the rich and the poor. The victors in the globalization race win on a global scale, the losers fall further behind in relative terms. The winners become more powerful and the losers more important .

Because cooperation and consensus are emphasized, and power politics is missing or constrained, interdependence and cooperation will not replace competition, and even if interdependence creates joint benefits that encourage cooperation among interdependent countries, there will be conflict over who get more or less of joint gain, and will be, as a result, almost always some political conflict in economic interdependence .

In any case, there is no automatic relationship between inequality and political reactions, but the former can give rise to the latter particularly when inequality is combined with instability such as financial crises and recessions that throw people out of work .

It seems that globalization has power to do well, but for others it has been an unmitigated disaster which does imply either homogenization or equality which, in turn, has caused considerable harm .

Globalization creates greater inequality or at least magnifies existing inequality that has often benefited the economically powerful, even though the weak are also able to interconnect and mobilize globally, but they have used greeter connectivity to promote their interests .

 While the inequality of the exchange has remained constant, the degree of inequality has varied in response to the cycles of overall expansion and contraction of the world economy, especially, with the wide swings in movements of international capital and fluctuations of exchange rates and financial values that have increased uncertain, insecurity and vulnerability .  

Even if the recent period of globalization has been associated with increasing inequality among and within some countries, it is difficult to find any countries that have prospered while close themselves off from globalization .

Because of that developing countries are right to seek better access in foreign markets for their exports; they are right when they undertake judicious and well planned reforms to open their markets and encourage investment. But to take full advantage of the opportunities that would market offer them they also need to pay attention to the gamut of other factors human resources, policies, laws, administration that contribute to a successful enterprise economy .

Political economic globalization

If globalization is a fundamental change, and go, in a broad sense, beyond economics to include any processes that tend to make economic, political, and cultural human relations, then it seems passible that there will be important political events to which it is related as both cause and effect.

This is to suggest that globalization is reinforced and reproduced by and through social and political practices, and these practices can change as a result of which the cause of globalization will change .

In order to understand fully associated with the linkages between economic globalization and national governments, we need to connect events in global markets with changes in government policy. We must consider how various domestic institutions and ideologies mediate these changes. This section has considered one aspect of political economy of globalization, namely, the extent to which trade and financial openness lead to changes in processes of national policymaking, and to a reduction of the influence of domestic variables on national policy outcomes .

It is clear that expansionist tendencies in a system premised on endless accumulation for its own sake, do not operate in the abstract or automatically .

Even if globalization is often equaled with economic globalization, and economies is often behind it in different spheres of society, but, the significance of social and political globalization should not be underestimated , and prioritizing economic causation does not mean that economic motivations are always dominant, unaffected by political and cultural factors that can underlie such motivations, or take things in another direction .

It is true that globalization is driven by economic incentives, but this does not necessarily mean it is caused by the economy as a structure or by economic actors, it is important to appreciate the influence of political variables on international economic behavior, as well as the impact of economic variables on nation activities, there is an integrated approach to international political economy can be represented within a general framework.

Economics does not actualize in a vacuum, it is combined with other political and cultural factors which are, often, behind the economics or shaping the path it takes .

There is an inevitable interdependence between economic policies and political behavior, this interdependence serves to shape the range, scope, and type of interactions among nations and the changes that are feasible .

while Political institutions, forces and ideas are generally believed to be responding to phenomena that are located in other social realms, the political institutions and traditions of a country may affect the reception of globalization, and the political behavior (in terms of cooperation and conflict) which is determined by the political capability of nations and their alliance commitments, constrained, therefore,  by their international payments position and transaction, as well as internal political influences and military activities .  

In the domestic realm, political structures of power determine the basic framework of economic activity, but, at the same time, this domestic economic situation, clearly, affects its government���s response to international economic pressures .  

taking into account that economic position such as trade patterns, the finance capacities, are determined domestically by factor endowments and other variables, and constrained or influenced by a country���s diplomatic alliances, military capacity and power in international relations , it seems that although there are some pressures for convergence in both developed and developing nations, there are also forces leading to cross national divergence.  This means, particularly, some forces include domestic institutions which mediate influences emanating from the global economy, and domestic interests which may push for compensatory policies in some nations but not in others .

As a result, one must delineate the economic policies or economic choices that will be determined in large part by government preferences and policies, and how they influence a country���s political position, their international policies, and their international behavior which shaped by their capabilities and constants, and the choice among economic policy alternatives can, in turn, have important political implications .

On the international level, Political capability is affected by trade patterns and international payments position, military allocations and activities, size and spheres of influence and alliance commitments , but, in contrast, patterns of trade and payments affect the nature of political relations among nations and changes in these relations; the international payments position of countries is influenced by political and economic policies and by international political and economic variables, this means that Capitalism has opened up possibilities for new forms of political practice which are not circumscribed by the territorial state, or by conventional separation of politics from the economics; the nature and the distribution of power in this system provide the institutional framework within which regimes governing economic relations are generated, and every action a country takes to change and/or maintain its international economic position will have an effect on itself, as well as other countries within this framework, even though, the type and nature of these effects will differ according to the polity and the centrality of the country to the international economy as a whole, as well as to the economies of its trading patterns .

There is a continuing shift of control over investment and production from generally economic forces to a mixture of both economic and political forces .

Reactions about policy shifts, interpreted policy shifts, weekly arrays of economic and unrelated events can cause massive movement of funds between instruments and/or currencies, and frequent financial crises, on the other hand, or sharp increases in unemployment could lead to popular movements to limit interdependence .

For instance, from an economists view, any stabilizing action carried out by producers requires that supplies be either bought up or cut down. This means that producers will have to accept lower revenues for a certain time. The least costly of cutting back supplies is domestic production quotes, but this requires a strong, stable political position in the country concerned, because it means persuading or forcing domestic producers to accept an initial reduction in revenue in hopes that restrictive action will lead in time to a higher export price and increased revenue .

Clearly, not all states are interested into the international economy to the same extent, in the same way, but they are, always almost, motivated by a desire to secure economic benefits within their territory in such way that affects economic interactions, particularly in shaping the composition and magnitude of trade in goods and services, and in influencing the composition of the balance of payments and its adjustments .

However, there is a gap between the formal domain of political authority and the actual economics system of production, distribution and exchange which in many ways serves to limit or undermine the actual power or scope of national political authority , which means that whatever the efforts of government to cooperate, the political process will always be partly slow in comparison to the reactions of financial market, which implies limits to the stabilizing impact of fully coordinated economic policies.  

There is always a time lag between what is happening at the economic base on the one hand, and at the level of the institutionalization of political purposes on the other .

Globalization of culture

Globalization has come to mean more than just how capitalism and market forces are expanding; the term reveals most about social relations and intensification of the social and cultural connections between people in different parts of the world .

New technology has radically increased the mobility of economic unite and the sensitivity of markets, it forges new forms of culture, identity, consumption and style in the everyday life of individuals, as well as their systematic applications in economic transactions have made the world a much smaller place, they have resulted in the shrinking of distances with faster and improved connection between places .

Modern identities are formed in a dynamic interplay of different cultural elements from the composite living world, and the vast expansion of transnational channels of contact generated by the media and a profusion of non-governmental organizations means that more issues are up for grabs internationally .

The main point is, these connections between locations have become almost instantaneous, and social life has become embedded in global networks, and local events are shaped by events occurring many miles away and vice versa .

Culture cannot be separated out from power and economic structure which has impacted on the behavior of consumers and marketing, and tends to link culture with occupation in a world economy .

This fact has emphasized in  ï¿½ï¿½ï¿½social constructivism��� approach  which insists that actors try to figure out the appropriate rule in given social situation, it follows that actors such as national governments, firms, or interest  groups are deeply embedded in and affected  by the social institutions in which they act; human agents, in this point of view, do not exist independently from their social environment and its collectively shared systems of meanings that define who we are, our identity as social beings, at the same time, human agency creates, reproduces and changes culture through our daily practices .

Culture is produced and distributed globally when there is money to be made from it within a truly globalized market which would mean free flows of goods, people, capital, and similar interest rates .

Today, the ���culturalization��� of modern life refers to the fact that consumer products, such as food, drink, fashion, music, and media, have spread and expanded around the globe, by changes in technology, deregulation, and corporate ownership, It seems that people are more and more watching the same sorts of programs, as well as, consuming the same products, it  goes hand in hand with the spread of market styles, and in doing so  it brings the same or similar cultures to many parts of the world,  there are reverse cultural flows from East to West, and South to North .

 The global economy has become dependent upon the spread of global communication networks.

It is clear that communications costs have erased the significance of distance, and participation in global interdependence has increased as a result of the new communication media which allow the generation and dissemination of economically valuable data, as well as values and beliefs of a political or religious sort alongside ways of life and traditions .  

These values cannot be separated from media; they are often bought and sold or transmitted through the media which make possible the transfer of mental images, exposing the recipients of these images to similar ways of thinking and acting .

 Media and images, in general, have an impact on the culture and identity of the societies exposed to them. This implies that the constraints of space on social and cultural arrangements are reducing and few communities have been able to maintain their life styles in the race of globalization .

It is natural that increased interactions between cultures will reduce diversity, but it would be a complete over-simplification to suggest that global culture has become homogenized in any substantive sense .

The actual movement of ideas and information is virtually instantaneous, but their comprehension and acceptance depends on cultural differences.

In fact, if globalization implies shrinking of distance, these distances have shrunk at different rates for different people and on different issues, for instance many people are only tenuously connected to any communications networks , and many do not use global communication methods, consume globally produced or marketed products, or participate in global civil society associations.

Even if this group is relatively small but, however, indicates that globalization has not involved everyone to the same extent, it can link people anywhere, but it does not follow that it links everywhere .

Moreover, what media mean depends not only on what is in the media, but also on what happens to it when it enters different contexts within which it may be read in varying ways, there is some degree of autonomy on the part of listeners, readers, or viewers in making an active interpretation of what they see, hear or read, rather than just accepting a message.

In this process, which has become known as the localization of globalization,  meaning of media and culture is mediate by national or local cultures as attempt, In part, to turning away from global integration and negative resistance to homogenization. At the same time, it is a turning to more positive identity locally .

Globalization has made national boundaries more porous but not irrelevant, audience is still active readers of culture, and In some cases this will lead to conflict and tensions between localities and the incoming culture which can be counter to or not supportive of the values of local ways of life.

 In social terms, this is true as contracts among people with different religious beliefs and other deeply held values have often led to conflict .

It seems that cultures may do not simply coexist next to each other, but, despite some conflicts between certain cultures generally, it does appear that cultures often interpenetrate without crashes, and they may intermingle to create new hybrid cultural forms as a result.

Seeing cultures in a process of intermingling with one another rather than reduced to just on of them means heterogeneity where combinations of cultures live a long side one another rather than become mixed . But this is not particularly the case when we look at economic factors and relations of power and inequality.

Over the last few decades, the spread of free market regimes across the world given rise to up apparent increase in inequality . The structure of inequality and dependence of the global economic system are, thus, buttressed by the control over communication media by the economically powerful and capitalist institutions .

There may be hybridity as a result of globalization of culture, but in a situation where some actors have greater powers through ownership of production and distribution to influence what is made and disseminated.

It is clear now that because corporations are seem as powerful and influential economic actor, they often acquire the capacity to control the host country���s economy, and they provoke a strong cultural and political nationalistic reaction .

For instance, today there is no denying the fact that global culture remains to a large extent, centered in and bound to the west, relies on western technology, the concentration of capital in the west, the concentration of advanced labour in the western society .


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