Globalization: The Economic Dominatrix Submitted by: Spencer Rice Submitted to: Dr.

Neil Cruickshank Course: POLI 1016 Date: December 1st, 2011 Word Count: 1,357

Globalization is the current economic order spreading across four oceans and seven continents. In an economic sense, globalization is the mass accumulation of resources and labour (in the form of goods and services) by a handful of countries a kin to a core and reliant upon the inexpensive provisions of goods and services by countries in the periphery. The core and periphery are metaphors coming from the dependency theory to explain the disproportionate circulation of the worlds resources. These resources are obtained from the periphery by means of accumulation by dispossession to meet the capitalist ideology of primitive accumulation. The above hypothesis is neo-Marxist in nature and provides an explanation into the international functions and variables of globalization as well as a means of proving its dominance in global economic affairs. In a more basic framing one can say the who and where is globalization, the what is dependency theory, the how is accumulation by dispossession, and the when and why is primitive accumulation. Dependency Theory What explains this global economic phenomenon called Globalization? Dependency theory hypothesizes globalizations ability to operate as a global entity and explains the variance with its presence worldwide. Dependency theory has three major components; the core, the periphery, and their codependent relationship. The core is best explained as the bottomless pit beneath the funnel, all goods and services go into the pit. These goods and services come from the periphery which happens to be the source flowing into said funnel. The dynamics of this relationship provides insight into the codependence shared between both parties. The core keeps the periphery underdeveloped by establishing a banking institution that force peripherys to commit to negotiations of debt management in order to compensate for massive economic recessions. The peripherys seemingly exponential supply of resources allows the core to

maintain its excessive standard of living. This theory is particularly helpful in demonstrating the unequal disposition put upon second and third world peripheries by the first world cores. The institution of banking and debt dependence will shed light on the variance of globalization. After World War 2 the Bretton Woods conference was held to create economic order for nations. There were two interesting institutions that were birthed at this conference; the International Monetary Fund and the International Bank for Reconstruction and Development (eventually becoming the World Bank) (Barracks 1946). Both of these institutions are monumental in the manipulation of global economies. Originally established to maintain the stability of markets to prevent economic depressions; they became the overseers of nations debts. Similar to any bank, the IMF and World Bank can create loan stipulations in order to ensure that the debt can be paid off. These stipulations typically involve the restructuring of a countrys economic system in order for it to generate a surplus of wealth. However, the majority of countries find themselves struggling within the new economic systems (normally heavily reliant upon trade) and become waterlogged with debt. This waterlogging creates a cycle of loans to pay off debts and debts to pay off loans. This is called debt dependency. Debt dependency measures came to be considered a countrys primary indicator of their status in the global hierarchy of international trade (Burns 2004). The fiscal constraints to which both of these institutions [IMF and World Bank] have subjected African countries have actually hindered further progress in agriculture, the area of greatest import to most Africans (Cheru 1988). This occurs because these global financial institutions were established in order to maintain control for the core by inhibiting the peripherys economic progress. Therefore, the necessary unequal distribution of wealth and debt create the global variations of globalization.

Accumulation by Dispossession How does globalization create economic disparities in nations and within social classes? The preferred method is accumulation by dispossession which is often institutionalized by core states to ensure that internally and externally they can maintain control. Accumulation by dispossession has four main principles; privatization of public resources, increase of financialization of global economies, eroding economic security through the management and manipulation of debt, and state redistributions that end in reductions of taxes on high incomes and capital wealth. These four principles make up the legs of the table that globalization receives its dominance from. These principles as well as accumulation by dispossession were defined by David Harvey (Polivka and Estes 2009). Privatization of public resources is more often described as the enclosure of the commons. The commons consist of a space that is shared by the whole of the community. These can be spaces such as parks or more importantly resources such as water or air. The enclosing of the commons began in 17th century England with the removal of shared lands for farmers by the monarchy (De Angelis 2001). In other words, privatization is the deregulation of a good or service that then becomes a commodity in the market. The commodification of goods and services becomes a profit for the markets which is the second principle; financialization of global markets. A hypothetical example is the privatization of public pensions and healthcare [which] would move hundreds of billions of dollars into the financial markets and increase the capacity of finance capital to control the international economy, extract speculative profits, destabilize selected economies, and further erode the economic security of workers through the management and manipulation of debt and disinvestment (Polivka and Estes 2009). The

previous quote alluded to the transition of privatization into financialization it also demonstrated the progression of financialization into debt manipulation and management. This third principle is not only present within accumulation by dispossession but also in Dependency theory, outlining the major themes in the explanation of globalizations entrenchment. The fourth principle, tax reductions for the upper class and wealthy, is a method of rationalizing privatization by saying public programs are creating deficits and therefore need to be deregulated (Polivka and Estes 2009). Primitive Accumulation Why does globalization entrench its control globally and when did this process begin? Globalization entrenches itself because it operates under the theory of primitive accumulation and, roughly, western European nations began to adopt primitive accumulation during their transition from a feudal system to one of capitalism. Primitive accumulation is defined by Marx as nothing else than the historical process of divorcing the producer from the means of production (De Angelis 2001). This means that workers are separated from owning the means of their production. This separation is one of the central categories of accumulation and primitive accumulation; the distinction between the two is how the separation is implemented (De Angelis 2001). Primitive accumulation is the initial circumstance that creates the separation. This primitive accumulation is imposed through the State or particular sections of social class taking the form of a strategy to separate people with direct access to the means of production from the means of production (De Angelis 2001). Although roughly defined, De Angelis states that primitive accumulation cannot be confined to a distant past. This is to say that primitive accumulation can still be present within mature capitalist states (De Angelis 2001). The attempted development of the Woodward store in Vancouvers downtown eastside is a modern

example of primitive accumulation (Blomley 2008). The development of this store and neighbourhood would be the initial separation for residents of the area from their ability to have control over their own living spaces. This separation would then give way to accumulation by dispossession therefore ensuring the capitalization of that neighbourhood. In the end I have offered a hypothesis as to the dominance of globalization. I offered theories explaining why globalization looks different around the world. We saw who Globalization is, where it is located, what it does to entrench itself, how it ensures domination, why it seeks to dominate, and when it all began. There were patterns that emerged; the separation of workers from the ability to own, the use of international institutions to squash periphery progress, and the systematic hording of global resources. It is my pleasure to present our economic dominatrix; Globalization. Shes abusive to all workers around the world but even still our apathy creates a mirage of enjoyment. Regardless, heres to hoping our economic system weans from its fixation.

Works Cited
Barracks, Carlisle. "Conference at Bretton Woods." iBiblio. May 1946. http://www.ibiblio.org/pha/policy/1944/440722a.html (accessed November 26, 2011). Blomley, Nicholas. "Enclosure, Common Right and the Property of the Poor." Social and Legal Studies, 2008: 311-331. Burns, Jackie R. "Dependency, Debt relief, and Macroeconomic Policies: How does the structure of external and domestic debt affect the well being of a country's citizenry?" College Station: Proquest Information and Learning Company, December 2004. Cheru, Fantu. "Development, Debt, and Dependency." Multi National Monitor. 1988. http://multinationalmonitor.org/hyper/issues/1988/07/mm0788_05.html (accessed November 28, 2011). De Angelis, Massimo. "Marx and primitive accumulation: The continuos character of capital's "enclosures"." The Commoner, 2001: 1-22. Polivka, Larry, and Carroll L Estes. "The Economic Meltdown and Old Age Politics." American Society on Aging, 2009: 56-62.