The second prime mover of globalisation is the hegemony of the neo-liberal ideology. This is about the triumph of the market-ideology, the economisation of life, mass-consumption and entertainment, deregulation and so on. It is a global ideological breakthrough in which democracy is considered to be a twin of the market-economy and these together are supposed to form a winning team.
Indeed, there has been and still is an enormous interaction between technological and ideological globalisation. This interaction has led to globalisation of and by economy.
The actuality of globalisation can be understood by focusing on the two prime movers: 'new technology' and 'hegemony of neo-liberal values'. Certainly, the hegemony of neo-liberalism became especially visible and got an extra dimension after the end of the Cold War. The model of free market plus democracy became more convincing because of the collapse of the 'empire of the evil'. The fall of the Berlin wall to many seemed to be the long awaited last victory of the Western winning team. However, the popularity of Thatcher’s and Reagonomics started before that, while the economisation of life, the ongoing individualization, materialism and also the problems of the social-democratic 'welfare states' started already in the early seventies. Seen in that light, writers such as Fukyama argue that
the collapse of communism was one important momentum in a process of 'neo liberal victory' that was already underway.
One could also assert that it is not so much ideological or technological, but economic developments and turbulences that caused globalisation. The internationalisation of economic processes, both in production and consumption, the consequent emergence of a world market and Trans-National Corporations (TNCs), worldwide capital flows, growing economic interdependence between countries and so on gave birth to globalisation. Borders ceased to be meaningful, states lost power to economic actors who had become 'footloose'. The dynamic of the free world market thus forced us into globalisation.
This interpretation is actually quite popular, but inadequate. The internationalisation of economic life could not have gained so much strength without state policies and policies of intergovernmental organizations (IGOs) supporting it. The neo-liberal ideology invited policymakers to liberalize markets, to deregulate economies and to privatise state-firms. Than, technological innovations, ICT in particular, made it possible for economic actors to take full advantage of the possibilities opened up in the free markets. ICT made it possible to let capital flow around the world within a split-second. Both ICT, the miniaturization process and the earlier transport revolutions made it attractive to produce several parts of a product in different continents, to later bring them together and than distribute them to consumer markets worldwide. Producing, selling and buying was less confined to actual geographic markets and production places as ever before. Lending and borrowing, investing and speculating became 'around the globe' activities. This was because the neo-liberal ideology urged policy makers to take away any 'market barriers' and because technological innovations made it possible for goods, money, symbols and people to cross borders fast and cheap.
In our view therefore it was not the economy that forced the world into globalisation, it was human made technology and human made plus accepted ideology by which a collectivity of people forced itself into the process of internationalisation. Or more precisely forced it into creating a more and more borderless world, less and less characterized by territories with as a consequence a new 'geography of power'. This process than gained power of itself and became a no longer controllable force. In sociological terms we might state that globalisation is a perfect illustration of the Thomas-theorem: 'if men define situations as real, they are real in their consequences'. Accepting neo-liberal ideology, made people acting in accordance with it, to the extent that the world indeed became a world working according to the logic of that ideology. Globalisation is than the 'Durkheimian social fact' caused by neo-liberalism and made possible by technological innovations of the last half of this century.
Although the hegemony of neo-liberalism can be considered a driving force behind globalisation, it cannot be said that all consequences of globalisation were wanted or even foreseen by protagonists of that ideology. Neo-liberal ideology for example is based on the concept of democracy (with the nation as a political entity, the state as the exclusive authority within specific borders, with legitimacy of authority organized within national borders based on a constitution and the political. In this model the international space is organized within an interstate system). Neo-liberalism took for granted the blessings of this system: via the democratic states both in- and external security would be guaranteed, the market both national and global would be organized and so on. However, due to globalisation democracies based on territorial nation states began to fail.
Although, neo-liberalism can be seen as a cause of globalisation, this does not mean that all the consequences of globalisation therefore fit in the neo-liberalist 'agenda'.
To understand and describe globalisation it is not enough to concentrate on the prime movers and the primary phenomena. Not less important for the globalisation dynamic are the consequences and rebound effects.
The consequences follow from the fact that the traditional tasks of states are being less fulfilled. This is partly so because states, by acting in accordance with neo-liberal ideology and in adapting to globalisation, have transformed themselves from 'neo-Keynesian guardians of the national public good' to 'neo-liberal guardians of international private capital' respectively of the functioning of a worldwide market system. On the other hand, since the globalisation process has now gained strength of itself, states are also becoming objectively less powerful, less capable of fulfilling traditional 'social' tasks like redistributing welfare and protecting the environment. Furthermore, they are becoming less capable of fulfilling tasks necessary for international capital itself: securing property-rights and ownership, securing social order, fighting criminality, safeguarding peace and so on.
State authority is bound to a specific territory. With globalisation, borders become permeable, more and more processes now have a boundary character, some cannot even be localized (they come from 'virtual reality). It is hard, if not impossible for states to regulate these processes that have sometimes quite worrisome effects on national economies, societies and/or politics. States do however; in some instances regain some of their governance-capacity by pooling authority on a higher geographical level, in regional political institutions and in IGOs. Still, we can say that the governance capacity and the will to govern are diminishing. This threatens quality of life in the globalising world in several ways. It particularly causes four 'governance deficits': a social, democratic, ecological and security deficit.
There exists a social deficit in two ways. First, globalisation invites states to create 'national comparative advantages' with regard to other states, in favour of TNC's and investors. Trying to create a competitive national economic climate, states run the risk of getting involved in a 'race to the bottom'. Welfare arrangements are dismantled; taxes on capital gains, income out of capital and on easily geographically transferable income are lowered; subsidies with which the weak are empowered are lowered. Income gaps within countries thus grow.
Globalisation also raises an international 'fairness-issue'. There is an intrinsic relation between the economic space and the social space, when it comes to redistribution aspects. An organized market-economy provokes social questions concerning redistribution aspects of the gross national product. This is understood to be fair and compelling, whatever the characteristics of the redistribution mechanisms. Now economic space is globalising, so the social question is globalising as well. Thus, globalisation invites to broaden (territorially) the redistribute questions, while at the same time globalisation weakens the potential for redistribution because of the primacy of the market and the weakness of the state.
Another social problem is that it is troublesome to create enough jobs for every potential worker on the right level. This is due to two factors. Firstly due to technological innovations labour market structures are changing: low-wage jobs for the low educated become scarcer, the amount of low paid jobs for higher educated grow. This causes a mismatch between available labour and demanded labour. Those with a lack of vocational training are excluded. It becomes difficult for them to catch up. At the same time, because of globalisation, the supply of labour from less developed countries affects the market position of all those who are not scarce. In short, only the strong can keep their relative income position. Even middle class people are losing out in comparison with those who have income out of capital and those who can take profit from their positions in management, scarce labour and training in new technologies.
At the same time in the less matured economies numbers of people are still excluded, living in poverty or being exploited. This is not only about income. An additional problem is the very bad labour conditions some of the labourers have to work in. Especially in the so-called free trade zones in Sri Lanka and Mexico, but pretty much everywhere in the former third world, labour conditions are unacceptably low according to Western standards. Child labour is practiced, safety measures are minimal, working hours very long, pay minimal, the freedom to form organizations-organizations non-existent. Of course it is in those countries that Western companies can manufacture cheaply and from where they can buy cheap parts and services. This all is already very painful in real facts and figures. The experienced social deficit is even larger. In the West people can now see the injustice done to workers and poor in the less developed countries. Out of this arises a general feeling of discontent. In the less developed countries people get a glance, via tourism, advertisement and TV, of the 'rich life' in the West. It is not too speculative to suppose that this aggravates feelings of 'relative deprivation'. Social space thus becomes more 'one' because of Tran boundary communication and information.
Next to the social, there is also a democratic discrepancy, this notion captures two problems. First, national democracies are weakening. The state is less effective in realizing societal values and therefore politics becomes less credible. Politicians and citizens often believe and vocalize that government has to be based on 'the voice of the market' instead of the 'voice of the people'.
The interstate/IGO system deepens the democratic deficit. Sovereignty of the people as guaranteed by national parliaments is limited to national policies. The more these policies are being embedded in and dependent on the supra-national juridical-political surrounding, the less meaningful parliaments can be. On the international level, there is no representation of the people. With international treaties, parliaments only have the right to veto. Furthermore, international organizations usually have no parliament at all and if they do (the EU), parliamentary power is restricted. In short, the more the international and supra-national level gains in importance for world-governance, the less power there is for national parliament and the bigger the democratic deficit will be.
Thirdly, we have to speak of a security shortfall. A threat to the global social order in today's world is the violence within failed states: Rwanda, Congo, Yugoslavia, Ethiopia, Somalia, Sri-Lanka, and so on. It is difficult for the international community to interfere, partly because of the nature of civil war, partly because of the -divided- nature of the international community and partly because interference in civil wars is limited by the UN-Charter to those situations that endanger the international stability.
This security deficit causes the refugee-problem. People from failed states seek asylum in safer areas. The number of refugees is growing very fast and for the receiving countries it is often impossible to determine whether an asylum seeker is a political or an economic refugee. Although the richer countries seem to complain hardest about the refugee-problem, usually it is the (often poor) surrounding countries that have to receive the most people.
Security is furthermore threatened by the growth of international criminality and 'national survival criminality'. The first being conducted by professional criminal organizations making good use of ICT and mobility, the second being conducted by members of the global undercaste who are excluded from the fruits of globalisation. Both threaten the social order, but they ask for very different measures.
Lastly, there exists an environmental deficit. Our natural environment is deteriorating fast. The negative external effects of economic production and consumption cause this. With global economic growth, external effects grow as well. The situation is also less well manageable, since states hold on to different environment standards. In the global economy it is economically attractive to apply as low standards as possible (not only in relation to environment, but also to health and labour conditions), so there is a certain downward pressure. Because the state is focusing on 'economic governance', environmental issues tend to be neglected. Besides, many environmental problems are not national, but global in character. National states do not feel responsible for them, while there is no powerful international body that can effectively protect the earth against the 'self destructive consumerism' of the human species.
The developments of and reactions against those deficits are also part and parcel of the globalising world. Next to the consequences of globalisation in terms of deficits, we can also see rebound effects, these are counter-reactions to globalisations: people react against the globalisation of American images and values by stressing their own roots and local identity.
The masses also react against the primacy of technology and economy by (re) exploring emotions and spiritual values. Individuals counter universal materialism by stressing non-materialistic values. Furthermore people retort against the pooling of governance-capacity on supra-national scale, by demanding decentralization and decisions nearby. Finally, people are perhaps inclined to react against unsafely by looking for scapegoats, by demanding 'protection from the terrifying foreign' be it foreign refugees, foreign cultures, foreign products or foreign investors.
These 'counter-reactions' give the globalisation process its dialectical character. Some of these reactions get an institutional structure. The need for the spiritual and supra-natural gains substance within religious movements. The cry for values beyond materialism gains voice within Non Governmental Organizations (NGOs), religious movements and New Social Movements (NSMs). The fear for the foreign materializes within extreme nationalist groups and conservative political parties. It is interesting to see that some of those institutions, strengthened by globalisation, gain governance-capacity beyond the state within globalising society.
Contemporary patterns of globalisation mark a new epoch in human affairs. Just as the industrial revolution and the expansion of the West in the nineteenth century defined a new age in world history so today the microchip and the satellite are icons of a new historical conjuncture. Crudely, Globalisation is about: two prime movers: globalisation by and of technology; globalization by and of ideology (American Values). Globalisation is also about two types of consequences: consequences in terms of the democratic, social, environmental and security deficit because of less territorial borders; consequences as rebound effects in terms of attitudes and new institutions rebelling against globalisation (some achieving new governance where democracies fail). This medium: are two dimensional and dialectical. It is about thesis and anti-thesis. Because we cannot yet clearly assess the strength of the prime movers and the consequences, we cannot predict exactly the outcome of the process. The complexities of the process called into life by human technology, human ideology and human conduct are so great that the human mind, despite all the technological support available to it, cannot predict its course. However, these developments pose very significant questions for democracy since the expanding scale of which political and economic power is exercised frequently escapes effective mechanisms of democratic control. Democracy remains rooted in a fixed and bounded territorial conception of political community. Yet globalisation disrupts this neat correspondence between national territory, sovereignty, political space and the democratic political community; it enables power to flow across and over territorial boundaries. If one thing is clear it is this: globalisation is not, as some suggest, narrowing or foreclosing political options and discussion; on the contrary, it is re-illuminating and reinvigorating the contemporary political terrain.
