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POLS 374 Foundations of Global Politics

Lectures 9-10: Globalization and Production

October 24 and 31, 2006

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Globalization and Production

Chapter: Main Points

The relationship between capitalism and globalization is reciprocal. That is, capitalist development drives globalization, but globalization also drives capitalism

This reciprocal relationship, in general, has created the basis for the development of a new form of capitalism, which the author refers to as hypercapitalism

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Globalization and Production

Hypercapitalism

Hypercapitalism, to repeat, is an extreme form of capitalism. Extreme in terms of reach and embeddedness in society

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Globalization and Production

Hypercapitalism: Commodification

In terms of reach, hypercapitalism stretches to virtually every corner of the world today, including to such supposedly isolated spots as North Korea

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Globalization and Production

Hypercapitalism: Commodification

Capitalism in North Korea?

To see a video on the Kaesong Industrial Complex: Click on either picture

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Globalization and Production

Hypercapitalism--Embeddedness

The expansion of capitalism has also entailed greater and greater embeddedness, not only in economic matters, but also in our consciousness

Today, people throughout the world increasingly associate capitalism with democracy, freedom, progress, and with the fulfillment of human potential

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Globalization and Production

Expanded Commodification

Author breaks down the process of commodification into several areas:

primary and industrial capital consumer capital finance capital information and communications capital genetic and atomic capital care capital

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Globalization and Production

Expanded Commodification

Primary and industrial capital—e.g., agricultural products, mining, heavy manufacturing (steel, chemicals, shipbuilding), construction, oil and gas

These used to be the core of any major economy, but they have been steadily declining in relative importance

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Globalization and Production

Expanded Commodification: Consumer Capital

Consumer capital: Refers to surplus accumulation that is realized in the context of hedonistic consumption

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Globalization and Production

Expanded Commodification: Consumer Capital

An Example of Consumer Capital: The Diet Industry

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Globalization and Production

Expanded Commodification: Consumer Capital

Key Point: Consumer capital and globalization are intimately related

For instance, once a new desire is created in one part of the globe it quickly spreads to other parts of the globe:

Commodities become largely de-nationalized in a globalized world, which spurs even greater accumulation

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Globalization and Production

Expanded Commodification: Consumer Capital

Denationalized Products: Athletic Shoes

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Globalization and Production

Expanded Commodification: Finance capital

Key point: In the past, “finance” was primarily a medium of exchange

It still is today, but it is also a commodity in that people use the trading and selling of money itself to accumulate a surplus

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Globalization and Production

Expanded Commodification: Finance capital

Another Example: Real Estate In real estate, an increasing number of people buy

houses not to live in them, but to profit from “flipping them”

This is made even easier by the fact that banks have come out with new types of loans “products” (stated-income, ARMs, “principal only” loans) that make it possible for even relatively poor people to buy multiple properties

For an interesting case, click here

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Globalization and Production

Expanded Commodification: Other forms

Information and communications capital (ICC)

Genetic and atomic capital (e.g., biotechnology and nanotechnology)

Care capital

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Globalization and Production

Expanded Commodification

Summary: globalization has played an important role in widening the range of capitalism and reorienting the relative weights of accumulation away from “merchandise” (commercial and industrial capital) toward “intangibles” (finance, information, communications, genetic and nano capital). To this extent the “real” economy has acquired a different reality.

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Globalization and Production

Altered Organization

Globalization and hypercapitalism are characterized by significant shifts in organization; these shifts are most clearly emphasized in the following areas:

Proliferation of offshore centers Emergence of global companies Dramatic increase in mergers and acquisitions Rise in concentration

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Globalization and Production

Altered Organization

Offshore Gambling Sites: Recently offshore gambling has become a major enterprise. Consider the following site:

o http://www.gambling-internet.org/

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Globalization and Production

Altered Organization

Global Companies

o List of Largest Global Companies:

http://money.cnn.com/magazines/fortune/global500/2006/

o Compare to economic size of countri es

http://www.answers.com/topic/list-of-countries-by-gdp-nominal