Topic 1: Globalization

The aim of this course is to analyze the impact of globalization on different spheres of the
society. This process is characterized in different ways, and there is no unique definition. Between
1870 and 1930 there was an expansion or intensification on the flow of capital, goods and people,
known as the first globalization wave. We are now in the second globalization wave according to
most social scientists, which started in the 1980s and has surpassed in intensity the first wave. This
intensification continues today in spite of increasing protectionist pressures, and it was based on a
series of institutional changes after the end of World War II in 1945.
In order to understand why the globalization process started, we should analyze two major
factors combined. If both factors were separated, no globalization process would have taken place.
The following are the two main technological changes:

1. Transportation revolution: At first sight, we may think that transport is now cheaper
and faster than years before. However, cost is similar, with the exception of low-cost
companies in Europe, and speed hasn’t suffered major changes. Even in the past some
airplanes (“the Concorde”) were faster.
a. The real transportation revolution is based on the box, being the container the main
invention. Big, rectangular boxes which carry a lot of merchandise. A very important
feature is that they were standardized objects worldwide, they could be easily moved
from the boats to trucks. Otherwise, it would not be possible to have globalization
without standardization agencies that allowed for global exchanges. For example:
currently there are negotiations to develop standard electric vehicles; or to make sure
that the same plugs can be used anywhere in the world. Thus, globalization and
standardization are very closely related. Besides, container has cheapened and made
faster transportation costs. Despite their efficiency though, containers entail several
security problems. As a consequence of standardization, the human force is no longer
required, and machines can be used.
b. The invention of the container is associated to the Korean and Vietnam War, as the
US needed to transport machinery and military equipment in an efficient and fast way.
When the conflict ended, it was adopted for civil purposes. Surprisingly, the Defense
ministry has caused several innovations that have been later used for civilian purposes
(also the Internet).
c. The container is considered to be revolutionary due to the fall of transportation costs.
Before the invention, 12% of the cost was transportation, so it was prohibitive for
almost everyone. This reduced the competitive edge and gave advantage to national
firms, as they didn’t have so big transportation costs. With the container, there was
near 0 cost (price of transportation close to zero), being even smaller (negative) in
large scales.
d. The reduction in transport costs has motivated small and middle firms to conquer new
countries, increasing competition and reducing prices. Firms have reduced profits
(lowered prices) to be competitive, and consumers purchase many products at low
prices. This has had an obvious benefit for consumers, due to the dramatic increase in
the range of products that can be consumed at low prices.

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 e. The invention of the container has also changed how companies produce. Before,
international companies were multinationals with headquarters in a country, creating
“clones” in other countries. Therefore, the same production process was done in every
country. With the container, transnational corporations appeared, which operated in
many countries although they were organized and directed from one country.
Corporations organize their production process wherever it suits them best. For
example, Zara has its marketing headquarters in Galicia but its production in Asia,
even if it operates as one single company.
f. The container and easy shipping have maximized efficiency and talent and minimized
labor costs. Production today is global. However, it should be mentioned that the
container alone isn’t enough.
g. Regarding negative externalities, those workers who uploaded and downloaded boxes
have been eliminated. Within the worker movement, it was one of the most belligerent
and powerful trade unions. Bargaining power of employees has diminished, having
worse wages and working conditions. Therefore, it has weakened the strength of labor
within societies.

2. Telecommunication revolution: The telecommunication revolution is based on offering high

speeds at cheap prices, so that the general public is able to access to information and to
communicate in a more frequent way. The most plausible change was the invention of the internet.
The major mover of these changes were wars, which created an effort to centralize control of
information and to process it from different sources in efficient ways.
a. The origins of the Internet are in the US, in the Defense Department and Universities.
The members of the military tried to use efficiently the information gathered by
computer programs and telephone messages. As the data was scattered into different
pieces and formats, it was difficult to combine it and use it in war. After some time,
technology to send and use the information in an efficient way was discovered, using
telephones and computers. This technology needed to be safe, so that Soviets wouldn’t
interfere. The safest way was using telephone lines. To complete the process to
communicate and share information two decades were required.

b. Three technological developments were needed. Interface Message Processes (IMP),

were intermediary machines which received information and translated it into “normal”
language. It was a hardware. The digitalization of information and breaking down into
pieces was done to ensure safety and avoid security problems, by using 0-1 codes. By
using efficiently the existing telecommunications lines, bigger flows of data were sent
by breaking them into small packets. Therefore, there was a transmission of several
different digital packets that were safer because if the enemy got one message, they
would only have a part of it. To join the packets again, Transmission Control Protocols
(TCP) were used. They are a piece of software which provides an identifier and codes
to join the packets when they arrived.

c. When war is over, Universities took the initiative. During the 60s, the cultural
revolution known as the hippie movement took place. University students rejected the
Vietnam War and tried to democratize technology, so it was useful for ordinary people.

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 The hippie movement (Flower Power Revolution in the 60s) had an anarchic approach
to society, so they tried to beat the big companies, which at that time were the phone
firms, by using technology. Modems and computers were designed to have
conversations and send messages for free. University students created a new highway
by taking advantage of the same operative system of all computers.

d. While the Security agencies used ARPANET (resulting network of computers used by
the Defense Department that helped develop the network), university students used
USENET. They were against the war, fighting for democracy and against big
companies, so many hackers started ways of using computers to pursue that effort. In
Berkeley, students invented an operating system used to connect computers at the
university level to communicate with each other and avoid the cost of using the phone.
Expanding USENET to households beyond campus was expensive. Therefore, the
union of ARPANET (bigger network) and USENET gave birth to INTERNET. After
its invention in the US, the internet was adopted in many other countries. Without
internet, transnational corporations would be inconceivable because it would be very
expensive for them to transfer information.

e. Internet can be considered revolutionary because the transfer of information and

communication was done for free. Telephone companies had competition as they tried
to buy and develop new uses for the internet. The new ways of using free internet
services, such as Skype, made prices in telecommunications to drop. This is one
difference with the transport revolution, were there was no considerable drop in prices.
With low prices, the patterns of migration changed. It encouraged people to travel,
benefiting the rich and poor. The increase in speed communication helped the spread of
transnational corporations. One control place can administer all the plants in the world,
as there is instant communication at low cost or even free.

The container and the telecommunications revolution fostered the easy movement of people and
goods. Before WWII, there were high tariffs and barriers, which impeded it. Tariff barriers are taxes
that the producer pays when it ships goods to another country. At the end of WWII they were very
high, representing up to a 40% of the value of the product. Therefore, there was no competition
between countries, with the only exception of those goods which couldn’t be imitated. All this
measured impeded trade. With high tariffs (taxes on imports that makes goods more expensive), the
container and internet wouldn’t benefit all they could.

Liberalization refers to the elimination of barriers to the movement of goods, capital, services
and people. Deregulation refers to the elimination of any kind of rules that made economic
exchange difficult or expensive. Globalization happened as a consequence of both. After WWII,
countries agreed to lower tariffs, specially the powerful ones. Then, the little ones joined.
Negotiations took place under the GATT, General Agreement on Tariffs and Trade. Between 1947
and 1993, several rounds of negotiations under the GATT were hold to increase trade between
countries. The cuts in tariffs was done because of the shared understanding of allies that
protectionism would lead to war. By lowering them, States are highly intertwined so there is no
interest on war due to the tremendous losses it causes. If economic interests are connected, no major

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actor in any country would have an interest in a war against another. For example: if the US has
millions invested in China, it has no interest in a war against China. With a web of intersecting
interests and common objectives between producers of different countries, there is no gain on war.
The efforts to unify Europe and create the European Union (which started as the European
Economic Community  from the Treaty of Rome to the creation of the Single Market) were done
for the same reason. The GATT (1947-1993) is one of the major actors in the liberalization process.

The successor of the GATT was the WTO, World Trade Organization. This organization
lowered tariffs and tried to eliminate non-tariff barriers, which don’t take form of tax on imports.
Non-tariffs are based on the bureaucracy needed to enter goods in a country, such as safety or
environmental standards. They can’t be considered as barriers, but they work as such. Besides, they
are impediments to trade even bigger than barriers. Companies are competitive if they produce in
big scale. If they can’t sell abroad, they lose economies of scale. In order to eliminate them, 2 ways
are used. Negotiation, which is difficult due to national interests, and mutual recognition, which
requires high levels of trust (example: EU). By mutual recognition, if a product passes the standards
in Germany it does so in Spain, even if they have different requirements.

However, there are non-tariff barriers to trade. They are regulations that exist in many
countries about how and what to produce which, in effect, are the same as actual barriers to trade.
For example, if toys made for children are required to be built by using only non-plastic materials
like wood or non-chemical raw materials, in effect, a tariff is imposed to the import of toys made by
plastic as those from China. Critics say that it is for consumer to choose what they buy or not, not
for regulators to ban certain products and therefore prevent citizens from accessing certain goods.

One region in the world that was particularly successful in eliminating this type of non-tariff
barriers was the European union with the European Single Market (1993). Actually, in 1968 all
tariff barriers had been eliminated within the area that comprises the Six Founding Members of the
EU: the Benelux, France, Germany and Italy. The way Europe eliminated them was ingenious. By
using the same standards, there is no sense on preventing imports. The problem was that the market
is composed of millions of different goods. To some extent, it is virtually impossible to eliminate
non-tariff barriers in all products. The only way to achieve it is the EU way: every member of the
EU will accept and import goods produce in any other European country and accepted by its
legislation. Members of the Union agreed to accept the different organization of production made in
each country and trusted that it would follow European rules. However, this is difficult to achieve
on the global level.

The benefits of capital liberalization are still controversial (East-Asian countries). During the
80s, States liberalized capital flows and some countries believed that big movements of capital
would create problems. They proposed capital controls, but as economic growth continued
capitalists realized that by investing in capital markets, they had more profits. An initial agreement
between US, Germany, Japan and UK was done to allow the flow of capital between those countries
because they saw opportunities to make profit from that movement. The OECD was more
conservative. When France saw that those States within the agreement were richer, it agreed to
capital movements. France wanted to control and regulate it, liberalizing the capital market but with
the same rules for everyone. In the 80s and 90s the free movement expanded, being especially

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important for the EU, as the single market wasn’t complete if there aren’t free movements of
capital.

Topic 2: Convergence and Divergence

From the beginning of globalization people wondered what effect it would cause on society.

Would these changes bring the world together?

First globalization wave

Answer: globalization would bring homogeneity and convergence across the world.
Criticism: deplorable for those who valued their languages, cultures, traditions (threat of
english as universal language); at a level of consumption (American threat of adopting their
culture, food, music, cinema)

Second globalization wave

Social scientist—Is this prediction right?

Is homogenization taking place and convergence? Are people just imitating one model and
adapting it to their country? Homogenization was not taking place as much as predicted.

Third globalization wave

Real consequences of globalization? On how we behave and how policies are developed or
how we consume?

Emergence of new forms of production, consumption, that are rather new, combining old and
new, but no convergence. Globalization is promoting Hybridization (Global or foreign meets
and mixes with indigenous (GLOCALIZATION) Convergence)

Two major theories

McDonalization of society: developed by Ritzer (US).

Critical of convergence and homogenization, but thought still that globalization breeds
competition, it forces producers of goods and services to develop optimal and efficient ways to
beat their competition. Models, ways of producing or delivering emerge and are soon to be
imitated by others. Optimal way of doing things. Globalization ⇒ intensified competition ⇒
Convergence toward optimum and most efficient ways. McDonalds as an example, as

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McDonalds had pushed this rationalizing, that they became a model everybody was imitating,
not only in the world of hamburgers, but also chicken, coffee, food, etc.

McDonaldization implies a search for maximum efficiency in increasingly numerous

and diverse social settings. Efficiency means choosing the optimum means to a given end

In a McDonaldized society, people rarely search for the best means to an end on their
own. Rather, they rely on the optimum means that have been previously discovered and
institutionalized in a variety of social settings. Thus, the best means may be part of a
technology, written into an organization’s rules and regulations, or taught to employees during
the process of occupational socialization. It would be inefficient if people always had to
discover for themselves the optimum means to ends....

What was happening in rest of industries? Similar forces applying. Ex:

In tourism: Mass tourism became a phenomenon, packages were created, and defined a
standardized model for companies to offer. Shopping Malls: all shops concentrated in one
place, easier to purchase.
Assumption: there is an efficiency optimum, in order for competition to bring convergence to
optimal and efficiency.

World Society Theory: 2nd Alternative theory that predicted convergence By Meyer

Predicted homogenization and convergence but by a different mechanism, globalization does

not fuel competition, but more importantly it motivates proliferation of International
Organizations/Institutions. ( IOs, IGOs, NGOs, civil societies associations, etc) which are key
for convergence.

Globalization⇒ Proliferation of international and transnational organizations. Proliferation of

Int Orgs, led to think of what ideas, legislation or acts they promoted. Within this IOs people
talk, debate, present, share new ways of doing things, and CONSENSUS arrives which brings
WORLD SCRIPTS; World Scripts (i.e. beliefs about how the world works; prescriptions about
how to do things) People take the new ideas, and shares them and introduce them in the
organization of our lives, and contribute to homogenization.

Causal effect of World scripts: facilitate by the fact the the world is carved into a homogeneous
set of national states. The World Script operates in a world of similar nations, with similar
mechanisms, and structures (there are differences of course) but most states operate similar in
structure. World organized around a standardized container.

Many features of the contemporary nation-state derive from worldwide models constructed and
propagated through global cultural and associational processes. These models and the purposes
they reflect (e.g., equality, socioeconomic progress, human development) are highly

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rationalized, articulated, and often surprisingly consensual.

After this first stage, studies conducted to see if homogenization was really taking
place, contrary to the early predictions the world was not becoming more similar in many ways.

Homogenization: The Survival of the Fittest and The End of History (Fukuyama)

ex:The decline in diversity is manifest in the extension of the fast-food model to all sorts of
ethnic foods. People are hard-pressed to find an authentically different meal in an ethnic fast-
food chain. The food has been rationalized and compromised so that it is acceptable to the
tastes of virtually all diners. Paradoxically, while fast-food restaurants have permitted far more
people to experience ethnic food, the food that they eat has lost many of its distinguishing
characteristics. The settings are also all modeled after McDonald’s in one way or another.

Globalization⇒ Competition⇒ Survival of the fittest (Force/Power more than Efficiency

Optimum)

Example: Competition between two systems—capitalism/Communism. The Fall of the Berlin

wall and the triumph of neoliberalist capitalism.

Critiques of the homogenization Thesis:

1st theory: Critique of the Efficiency Optimum Assumption ( Guillem) ESP there is no
efficient optimum, because what is optimum for each good or service depends on the context,
ex: countries, cultures, strengths, weaknesses. Guillen agrees that globalization increases

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competition, but competition motivates actors into borrowing selectively from the global
environment to get a more efficient use of their local environment. A Local optimal to
differentiate themselves from their local competitors, and that actors that simply imitate are
bound to fail. There is an incentive to “ be different”, to pursue locally independent optimum,
as there are structural, cultural and determinant differences.

Ex. Automobile industry; ARG fail, ESP, Korea, Taiwan success, due to their advantages and
strengths adapted to their countries and resources.

2nd Theory : Critique of determinist understanding of the diffusion of World Society

Scripts ( Wimmer, Meyer and Rowan)

Scripts are broad and general, so the international setting tends to bring Consensus, so in order
to get consensus, actors tend to find a common denominator, which makes facts rather general
so that actors agree in the international arena. Different World Scripts can contradict each
other( heterogeneity) ex: neoliberal prescriptions and human rights (child labor)Different
countries emphasize one script or another ⇒ Heterogeneity ex: contradiction between religious
scripts and economically-inspired scripts ⇒ Heterogeneity

Often there is resistance to scripts, legislation, etc. The picture is complicated and one should
not expect convergence. Because they are broad and general, scripts can be implemented
differently: E.g. Different understanding of Democratic Governance in Russia or US; Formal
adoption of scripts but lack of actual implementation (e.g. R&D or Social Responsibility
Divisions in Firms).

ex: National self-determination Mexico, Chiapas, 19th century in modernization, initial

resistance to direct rule and reorganization of land, they succeeded by sending officials that
bargained with local people and communities. Locals lost the land, but were able to preserve
local cultures and the land to fest and celebrate only.

edn of 2000s, there are forces that pushes actors to convergence, but also there are other that
push them to divergence.

Hybridization/Glocalization instead of Convergence or Permanent Difference

The ways in which forms become separated from existing practices and recombine with new
forms in new practices. (Neverdeen Pieterse)

Hybrid Forms: mix elements borrowed from elsewhere and combines them with national ones.
What is distinctive is that global models meet resistance when they try to implement it in a
wrong concept, and that can lead to the emergence of mixed or hybrid forms. It all depends in
how institutions implement and preserve cultures or traditions. Everyday culture is not strongly

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institutionalized, but there are no legal codes that mandate everyday orders. Authors predict
more convergence or homogenization where institutions are not as formal. There are many
World Scripts prescriptions that are not accepted worldwide, due to matters of religion, culture,
traditions, society, believes, etc.

Assumptions:

1. Competition as just one motivational force (other motivations: value priorities, ways of
seeing the world; resource constraints, different capabilities)

2. Scepticism over the omnipotence of Global actors and scripts (Broad and Polysemic scripts;
Coercion is rare)
3. Emphasis on the agency of local actors (e.g. resistance to world scripts, selective borrowing)

Analytical Framework: Global Actors and Global Scripts meet Autonomous local Actors and
Scripts

Expectations: Homogenization greater in the realm of everyday culture and consumption than
in the realms of core norms and beliefs, because the latter are more institutionalized.

Concepts:

Isomorphism: “Similarities between countries that are the product of reaction to a common set
of conditions”

Glocalization: “The simultaneity and the interpretation of the global and the local” → Local
traditions are carefully produced in interaction with global forces. Many aspects of global
culture depend upon cultural heterogeneity.