Business 21C - Published by UTS Business

Globalisation is so last century, argues Professor Stewart Clegg. If we want to understand what’s going on in the world today, we should analyse the flows that encourage the process of globalising.

American sociologist George Ritzer defines globalisation as a transplanetary set of processes involving increasing liquidity and the growing multidimensional flows of people, objects, places, and information as well as the structures they encounter and create that are barriers to, or expedite, those flows.

Globalisation intensifies social relations over ever-greater distances, linking different and previously separated peoples, transforming the spatial and temporal organisation of social relations and transactions. It is premised on global flows of power, people, ideas and things.

The result is that the world is compressed while, simultaneously, experience of (and in) it is intensified.

As globalisation is a relational process, it is better to think of it as a verb – ‘globalising’ – than as a noun. Globalising processes have been underway since humans first moved out of Africa. Qualitatively different phenomena have been progressively globalising through the translation of innovations from one place to another, whether carried by genes, viruses, militarisation, agriculture, navigation, terrorism, crime or finance. In contemporary times, globalising increasingly flows through immaterial forms such as financial innovation – immaterial forms that have substantial material consequences.

Globalisation in the contemporary world is a process organised through four major flows: people, procurement, communication and finance. These flows are affected by ‘islands’ around which they must navigate: the organisational responses of states. The paradoxical result of the extreme financialisation of financial flows has been to weaken both markets and states in the neoliberal arenas of globalisation.

Over the millennia, there have been distinct waves of globalisation and, as any surfer will tell you, waves often carry diverse flows – rips, gutters, breaks and dumps – to catch the unwary. Indeed, flows can be more important than waves.

Liquid globalising and the circuits of power

In globalising, shapes and forms shift rapidly, flows change abruptly and liquid phenomena fix neither time nor space. Continuous flux is the norm, and though time is relative and plural, not absolute, flows of time associated with digital immediacy become dominant globally. Presence and immediacy hasten the adoption of dominant discourses, as they can flow anywhere and everywhere simultaneously.

Globalisation has involved not merely economic forms but whole forms of life. Contemporary globalising and organising occurs at its core through four major systems of tightly coupled flows: procurement, people, communication and finance.

People flows

The four flows of globalisation

1. People flows

When the 2009 GFC hit China, there were reports of millions of employees returning to the interior of China from the trading zones of coastal cities. These workers had come in their millions to be transformed from peasants to proletarians in one generation, one of the most significant internal migrations in history.

Elsewhere, cities such as Mexico City, Sao Paulo and Mumbai act as magnets, attracting global and national investment capital and previously peasant labour to take up employment opportunities created by that capital.

Globalising neoliberalism places barriers around marginal forms of materiality, creating in much of the developing world tightly regulated special trading and export zones in which capital, not citizens or the state, shapes the rules. The firms are highly competitive on price but, typically, don’t give a damn about criteria such as sustainability, human development, liberty, equality or fraternity.

We can distinguish between different types of global flows of people: tourists, corporate elites, entrepreneurs of the criminal narco-economy, and the celebrity elites of football, popular music and cinema.

Procurement flows

The four flows of globalisation

2. Procurement flows

The diagram opposite shows the basic model of procurement flows. Wherever matter can be moved easily around the world, outsourcing of labour can cheapen production. Activities that can be performed anywhere, such as call-centre work, processing of accounting data, interpretation of radiological data or preparing manuscripts for publication, can be digitised, then located in cheaper labour markets, organised globally so the flow continues 24 hours a day.

Outsourcing also occurs when organisations seek to lower costs of activities by arranging for some elements to be done more cheaply by specialists. Sometimes outsourcing overlaps with tourism, like medical tourism, where people undergo surgical procedures in countries where health-care costs are lower, or the military, which has outsourced much work supporting the war in Iraq to companies like Halliburton. While outsourcing may increase corporate profit, it can lessen corporate control, a spectacular example being the recent recall of more than eight million Toyota vehicles worldwide.

Communication flows

The four flows of globalisation

3. Communication flows

Ever since Marx and Engels wrote The German Ideology in 1848, there has been a conviction that the most fundamental form of power lies in the ability to shape the human mind. Communication and its control is at the heart of this modality. Power is never-ending in its struggles, operates at every level and in all types of social practice, and includes relational, asymmetric, resistance-inducing power to as well as power over; hence, there is always power and resistance.

The rise of mass self-communication makes the privatisation of the digital commons profitable for those commanding networked and network-making power. However, the space constituted through its messages is anarchic, a space in which new pluralities of ideas can and do circulate, with subversive, resistant effects. Think of the role of social media in building internal political opposition to the Iranian regime and its clerical supporters. Mass self-communication through new social technologies is undoubtedly of great sociological and organisational significance.

Financial flows

The four flows of globalisation

4. Financial flows

The fusion of neoclassical economics and political liberalism, with their joint adherence to privileging individual subjects and their liberties, became a central node of political flows in the 1980s. The liberalisation of the financial system, along with the digital revolution, led to widespread use of new financial instruments. These became de rigeur as finance capital took on a hyper-real quality.

The flip side of the neoliberal coin was an anti-regulation and anti-state pose, with programs that practised deregulation, privatisation and the externalisation of unavoidable costs (ecological despoliation, pollution) to the developing world. Domestically, taxation reform favoured the elites, while elsewhere, its remedies for capitalism’s ills imposing harsh welfare-to-work transition regimes on the poor. Naomi Klein refers to it as a shock therapy that creates little but destroys much.

Globalising neoliberalism furthered the integration of financial markets, collapsing the importance of local time and creating instantaneous financial transactions in an economy increasingly premised on financial significations. Globally integrated financial markets increased the speed of information flows and directness of transactions. Instantaneous financial trading means shocks felt in one market are communicated immediately around the world, as was the case with US subprime loans. The tight coupling of the world’s financial system, and its subsequent chaos, limited nation-states’ ability to control capital flows and, hence, fiscal and monetary policy.

Modern processes of globalising contain paradoxes. It is a world of power circuits, comprising flows of people, procurement, communication and finance meeting the solidity of states as islands in the flow. The networks of power in and around states constitute default networks for global liquidity, as witnessed in the GFC. The continuing importance of the state as an organisational form and object of analysis has not been well served by the relative isolation of organisation from state theory. It has been detrimental to the development of both.

This article is an edited version of a paper delivered as the keynote address to the 26th European Group for Organisation Studies (EGOS) Colloquium in Lisbon in July, 2010.

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