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The phenomenon of globalization goes far beyond its literal meaning as the integration of national economies into a global, borderless and ‘flattened’ world order of trade and cultural exchange.  Widely referred to as ‘economic’ or ‘corporate’ globalization by its critics, the less popularised but equally crucial term ‘neoliberalism’ distinguishes the political-economic theory behind its implementation. Since the early 1980s, this new economic configuration - broadly characterised by the opening of markets, government de-regulation and wholesale privatisation - has come to dominate international affairs. 

Marked by two distinct camps of proponents and detractors in a complex ideological debate, a precise definition of globalization is limited to the differing vocabulary of both sides.  Following Margaret Thatcher’s famous proclamation in the 1980s that ‘There is no alternative’ (to free market capitalism), and Francis Fukuyama’s later pronouncement of ‘The end of history’ (meaning the final form of human government), the assumed inevitability of economic globalization has spread to every corner of the globe.

People versus Profit

In more recent years, especially since the first so-called anti-globalization protests in Seattle 1999, a worldwide phenomenon of grassroots, populist global justice movements have developed which together challenge the neoliberal ideology of unrestrained market forces.  As notably reasoned by Noam Chomsky, however, the use of the term globalization is often a misnomer. Both sides of the globalization debate argue for the same ultimate goals – a more equal, poverty-free, inclusive and peaceful global society.  Their essential differences can rather be summarised in terms of fundamental priorities, with the detractors favouring a globalization directed to the needs and concerns of people - as opposed to investors and financial institutions.

Much of the world has become hugely affluent as a result of industrial capitalism, with more people living longer, healthier and more productive lives than at any other time in human history, but the unresolved question is – to what cost?  The gap between rich and poor has never been so wide, local cultures are being subsumed by transnational corporations, thousands of people continue to die needlessly from hunger, global warming is signposting widespread environmental catastrophe, biological diversity is being threatened, food systems are in disarray, the threat of a global war over natural resources is looming - and so the list goes on.  While the proponents of globalisation cite an ever-increasing level of global economic wealth, the heavy social consequences continue to intensify, including rampant crime, pervasive cases of mental illness, loss of job security, and the dismantling of social safety nets.

Questioning Neoliberalism

Now that the term globalization has gone mainstream since the Clinton years, these critical questions have led to an abrupt shift in the debate.  Many leading thinkers are beginning to query the inevitability of neoliberal theory and its conceptual partner, free trade.  As summarised by the philosopher John Ralston Paul, leading society “through the prism of economics has been an experiment never before tried.”  The transient nature of globalization, he writes, “comes in part from the intellectual innocence or naivety that surrounds it.”  What could be more idealistic, in other words, than to believe in one abstract approach to human life based upon certain unachievable conditions: a never ending supply of inexpensive resources, an ever-expanding supply of new markets, and a steady supply of cheap labour to exploit.  Such reasoning poses a sharp contrast to the earlier rhetoric of neoliberal economists who most strongly advocated the underlining principles of the ‘Washington Consensus’, in particular the late Milton Friedman who likened the unrestrained market mechanism to a “force of nature”.

The ideology of neoliberalism and free markets, once critically referred to as the “new religion” of establishment economists, is now being widely contradicted from its supposed outcome of superseding governments and the nation state.  In the face of a growing financial crisis, the spiralling prices of basic foods, and the threatening ascendancy of emerging economies like China and India, capitalist elites are progressively resorting to nationalist strategies of protection and government intervention.  The double standards of international trade have also been long cited, pointing out that rich countries preaching the free trade gospel remain staunch protectionists through restrictive trade barriers.  In effect, the world’s poorest countries often face the highest hurdles to entering the globalised market, with import barriers several times higher than those faced by producers in rich countries.

Official History Contradicted

The official history of post-1945 globalization is similarly contradicted by many critics.  All countries following John Maynard Keynes’ prescriptions of government intervention in the economy during the 1960 to 1980 period actually grew faster, with more equitable income distribution, than in the following three decades of uncontrolled neoliberal globalization.  The Structural Adjustment programmes imposed on developing countries by the IMF and World Bank (LINK) from 1980 were, according to a factual analysis, based on theories that no Western economy had successfully followed during its own industrial development.

Another key assumption of neoliberal theory, that sustained economic growth is the sole appointed road to human progress, has long been challenged and negated by progressive economists and analysts.  A central justification for the neoliberal approach to development is the belief that an ever-increasing growth in world income has a ‘trickle down’ effect which directly reduces poverty.  Research shows, however, that growth is an extremely inefficient method of poverty reduction as there are insufficient redistributive mechanisms within most developed countries – and these processes are virtually absent at the international level.  After two decades of relentlessly liberated markets in developing countries, statistics reveal that pro-growth policies in fact  mainly result in a ‘trickle up’ of wealth into the hands of an increasing minority, as evidenced in the growing levels of inequality both within and between nations.

Well-being and Consumerism

In a wider analysis, the neoliberal theory that justifies and determines economic globalization embodies a philosophy of human nature as much as a mere economic model.  Its underlying assumptions about man’s behaviour, which literally condone and sanctify gross consumerism, greed, a spirit of selfish individualism and ruthless competitiveness, are leading to a gradual reassessment of the meaning of happiness or the ‘good life’.  A consumer society that alienates individuals, erodes community and family values, creates long hours of stress in the workplace, and endlessly manufactures wants and perceived needs through advertising is a subject of deep discussion among psychologists.  A consensus of opinion now holds that excessive consumerism, as encouraged by the current economic system, fails to achieve a satisfying and happy life or increased levels of well-being.

The world direction is gradually showing signs of change.  Several countries in Latin America have rejected the U.S.-led neoliberal doctrine of state withdrawal and unrestrained market forces, globalization has turned into a media buzzword that is no longer considered as ‘without alternative’, and the emergent power of world opinion has become a vital hope in counteracting government inertia and denial.  What still crucially lacks is an international acknowledgement of the present danger and unsustainable nature of economic globalization, and the necessary mobilisation of the global public to collectively pressure world governments to change course. A newly structured economic system, based on the guiding principles of sharing and cooperation, has become the inevitable challenge of our generation.