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Imagine an American fast-food chain. If said fast-food chain were to expand and appeal to foreign markets by opening locations in different states, that would constitute globalization. Globalization is the networking between nations via their many different markets through goods and services, which can include media, immigration, and communication. It is composed of the distribution of things such as products and information across different nation-states across the globe. While globalization may appear to be strengthening the economy through trade, it weakens the nation-state due to its impact on the working class through capitalist globalization.
Globalization is the process in which different states attempt to expand their reach of power (Baylis, John, et al.). Organizations or businesses usually start as regional or national and later expand to become fully international. They operate through the distribution of their products, culture, jobs, and information; allowing them to strengthen their control over the global market. It is an act of distributing a good or service to become more global and to secure more power across different nation-states around the globe. International trade is one of the main components of globalization, which is also frequently associated with capitalism. Globalization has strong economic effects on the working class, especially in capitalist societies where the working class is in a way, perceived as not nearly as “significant” because they ultimately hold the least power.
By distributing different goods and services, whatever they may be, large organizations and companies can make significantly more profit, especially if they utilize trade with other nation-states. International trade allows for the production and distribution of goods, predominantly in states with a very low production cost. This seemingly endorses capitalism, which is a system of production that is privately owned by either companies or individuals rather than by the state. Capitalism is primarily fueled by profit and operates in a free market economy, which is based on the laws of supply and demand. A higher price for a good or service results in a larger amount of supply for said good or service, and the more demand there is for a good or service leads to a higher price (Amadeo). In capitalist economies, the government’s role is to encourage and control the free market. Globalization weakens nation-states because it helps appeal capitalism to the powerful and wealthy, which usually results in increased costs and fewer natural resources for the public.
The working class makes up most of a developed nation’s population, but in capitalist societies, their opinions and rights are essentially brushed aside and put on a standstill as the main incentive for capitalism is profit. Unfortunately, usually, only large companies or the wealthy few can fully experience the benefits of it. Of course, consumers are also given some benefits as they are given the option to freely pick between whichever products they desire (Pettinger). In the case of the working class, there are few opportunities for job advancement.
In an article written by Milojevic, she corroborates the argument by reporting that studies show that these job opportunities and consumer choices are usually given to those who are young and educated (82). Additionally, Milojevic states that women are still expected to provide services that slow the goal of “economic restructuring caused by the extension of global capitalism” (82). Also mentioned is that “the discourse on globalization also presents capitalism as an irresistible force” (Milojevic, 75), further backing the argument regarding the rise of capitalism as a result of globalization. She explains that the world is made up of consumers within different societies who are driven by profit (Milojevic, 75), similar to capitalism where the main driving force behind it is profit. These consumers place more interest in the instantaneous satisfaction of fulfilling their wants and needs (Milojevic, 75). The article mentions that there is an increasing amount of material products and choices for these consumers to fulfill their wants and needs (Milojevic, 75). This ties back into the laws of supply and demand, which is part of the free market that capitalism operates on.
Milojevic then explains that globalization was promoted with the particular goal of creating an economically advanced global society, but is instead taking the route towards an insecure, challenging, and competitive society (75); which is also further backed in a second source which mentions that when there is an increased amount of interdependence of overseas markets; competition between businesses become more intense, there are drastic changes in price and profit, and there is a surge of imitation products (Mourdoukoutas), thus posing a problem to nation-states.
Consider Mainland China, a very capitalistic nation with one of the strongest economies in the world due to its large proportion of exports. Their gross domestic product (GDP) is one of the highest in the world and Mainland China is heavily involved in trading, usually by producing and exporting products. As a capitalist nation, Mainland China is also home to a very large amount of counterfeit products, which are made and sold as a source of quick profit. In 2013, it was reported that over sixty-three percent of all counterfeit goods were produced and sold in Mainland China (“Global Trade in Fake Goods”). This verifies the claim made regarding the rise of imitation products.
Capitalism puts economic power in the hands of the powerful or the wealthy. This results in an injustice for the people as the economy is essentially operating mainly for either large corporations or wealthy individuals rather than the majority. As previously mentioned, the working class makes up most of a developed nation’s population and yet, many people feel that there is injustice in the economy. Of 1600 respondents to a recent poll regarding government-led economic reforms in Britain, over sixty percent of respondents stated that they wanted moderate or radical changes (Inman). This goes to show that many people all across the political spectrum, from Labour voters to Conservative voters, share the same belief that the economy is being run for the benefit of large companies or the wealthy, rather than for the majority.
Therefore, globalization, which in some ways promotes capitalism, leads to wealth inequality. Regarding the perceived economic inequality in Britain, the benefits that come with globalization “can be unfairly skewed towards rich nations or individuals” (Kuepper), potentially causing poorer equity distribution and conflict both within a nation or even internationally.
In the article “Capitalist Globalization: Fatal Flaws and Necessity for Alternatives” by Leslie Sklair, he explains that there is a dire need for some sort of alternative to capitalist globalization because “capitalism cannot provide the conditions for most people on the planet to have satisfying lives” (29); which can be tied back to the case in Britain. It is explicitly stated that capitalism does not benefit the majority, which in the mentioned case, is the working class. These alternatives are methods of action and changes that need to be done to balance out the inequality in the economy.
Sklair mentions that capitalism is rapidly globalizing (30), and as mentioned previously, there are certainly some good that can come from capitalism as it does provide certain benefits. However, it does not benefit everyone and the consequences heavily outweigh the benefits. This further indicates that globalization is weakening the nation-state, especially since capitalism can lead to a monopoly via private ownership in product and labor markets. Private ownership of these markets solidifies the argument about economic inequality for the working class. The working class ultimately suffers as a result of capitalism, as supported by Sklair who states the globalization of economic and social human rights needs to be promoted instead (29).
The article states that the major transnational corporations (TNCs) are the most powerful globalization institutions (Sklair, 31). Their role is to make capitalist globalization the dominant form of globalization and are both run and owned by the transnational capitalist class (TCC), who have very similar interests; which is to spread the idea that capitalism provides happiness on a global scale through consumerism (Sklair, 31). Based on these reports, since these institutions are so powerful and have a goal of promoting capitalism, it can be deduced that globalization is weakening nation-states.
A counter-argument is presented by Martin Wolff who claims that the extent to which globalization can occur is based on what policymakers allow (183). Societies utilize the opportunities caused by economic integration like property rights and personal security, but without the proper legal framework, this becomes less possible (Wolff, 189). Wolff argues that nation-states choose to engage in globalization because of the benefits and that this type of integration emphasizes the flaws and differences between good and bad states. He concludes his argument by stating that globalization is essential and in the future, will be as effective as ever (Wolff, 189).
Wolff claims that policymakers are the ones who control globalization (183). However, in societies where it is the government that controls and encourages the free market, capitalism occurs; leading to economic inequality as the economy continues to operate in ways that benefit the wealthy, especially in the presence of a monopoly. Wolff continues, stating that international institutions contribute to the growth of global integration, but some of these institutions have specific goals and interests. In the case reported in Sklair’s article, these institutions can promote capitalist globalization and therefore weaken the nation-state (31).
Globalization is a powerful tool that can provide many nations with benefits, especially through the usage of international trade as it helps to boost a nation’s economic standing through their GDP. However, the integration of international trade (production, export, and import of goods and services), promotes capitalism, allowing for poor equity distribution for the majority, which is the working class. It leaves wealth and power in the hands of large companies or individuals. While trade is widely believed to be a beneficial aspect of the economy, fueling it is capitalism from which it can be concluded that capitalist globalization is in fact, weakening the nation-state due to its negative impact on the working class.
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