Sociology · Ch 11 — Globalisation and Social Change
The Different Dimensions of Globalisation
The Different Dimensions of Globalisation
The Different Dimensions of Globalisation
Globalisation is not a single, uniform process. It unfolds across several interconnected dimensions — economic, political, cultural, and technological. The textbook focuses on the economic dimension in detail, because economic changes have been the most visible and forceful drivers of globalisation in India.
The Economic Dimension
In India, the terms liberalisation and globalisation are often used together, but they are not the same thing. Liberalisation refers to a specific set of policy decisions taken by the Indian state since 1991 to open up the Indian economy to the world market. Globalisation, on the other hand, is the broader process of stretching social and economic relationships across the world — liberalisation is one of the policies that pushes this stretching forward.
Before 1991, India followed a protectionist economic policy. After independence, the state had put in place many laws to protect the Indian market and indigenous businesses from foreign competition. The underlying assumption was that a former colonial country would be at a disadvantage in a free market. Liberalisation marked a break from this earlier approach.
Liberalisation means the steady removal of rules that regulated Indian trade and finance. These measures are also called economic reforms.
Since July 1991, reforms have been introduced in all major sectors: agriculture, industry, trade, foreign investment and technology, the public sector, and financial institutions. The basic assumption behind these reforms was that greater integration into the global market would benefit the Indian economy.
The process of liberalisation also involved taking loans from international institutions such as the International Monetary Fund (IMF). These loans come with conditions. The government must commit to pursuing certain economic measures, including a policy of structural adjustments. These adjustments usually mean cuts in state expenditure on the social sector — health, education, and social security. There is also a greater say for international institutions like the World Trade Organisation (WTO) in shaping India's economic policies.
The Transnational Corporations (TNCs)
Among the many economic factors driving globalisation, the role of transnational corporations is particularly important. TNCs are companies that produce goods or market services in more than one country. They can be relatively small firms with one or two factories outside their home country, or gigantic international corporations whose operations criss-cross the globe.
Some of the biggest TNCs are household names worldwide: Coca Cola, General Motors, Colgate-Palmolive, Kodak, Mitsubishi, and many others. These corporations are oriented to global markets and global profits, even though they have a clear national base. Some Indian corporations are also becoming transnational, though it is not yet clear what this trend will mean for the people of India as a whole.
Make a list of products you use or see in the market that are produced by TNCs. Examples include shoes, cameras, computers, televisions, cars, music systems, cosmetics, clothes, processed food, tea, coffee, and milk powder.
The Electronic Economy
The electronic economy is another factor that underpins economic globalisation. Banks, corporations, fund managers, and individual investors can now shift funds internationally with the click of a mouse. This ability to move 'electronic money' instantaneously carries great risks.
In India, this is often discussed in the context of rising stock markets and sudden dips caused by foreign investors buying stocks, making a profit, and then selling them off. Such transactions are possible only because of the communication revolution.
The Weightless Economy or Knowledge Economy
Unlike previous eras, the global economy is no longer primarily agricultural or industrial in its basis. The weightless economy is one in which products have their base in information — for example, computer software, media and entertainment products, and internet-based services.
A knowledge economy is one in which much of the workforce is involved not in the physical production or distribution of material goods, but in their design, development, technology, marketing, sale, and servicing. This can range from a neighbourhood catering service to large organisations that provide services for professional conferences or family events like weddings. Many new occupations have emerged that were unheard of a few decades ago — for instance, event managers.