Jeffry Frieden’s book Global Capitalism: Its Fall and Rise in the Twentieth century is a highly relevant topic today. Consistent with Frieden’s hypothesis, global economic integration has grown to new levels during the last century. Several arguments could be forwarded supporting the merits and demerits of this new economic order and its overall value as a politico-economic theory. But this essay will confine itself to the task of verifying the claims made by Frieden’s in his book. The rest of the essay will argue that ‘economic globalization’ has indeed seen a spectacular growth in the second half of the twentieth century; and while its ascendancy is beyond dispute its usefulness and compatibility with the newly evolving twentieth century global political situation remains a point of debate.
Frieden is right in his assessment that globalization has become ubiquitous in the new neo-liberal world order of the last few decades. However, all too often, the flaws inherent in this system have caused distress to populations negatively affected by it. Moreover, the loopholes of international business law allow Multinational Enterprises (MNEs) to go scot-free and evade accountability toward the citizens of the countries in which they operate on. While the activities of Multinational Enterprises in developing countries can either be beneficial or disadvantageous to a country, recent evidence suggests that there are more cases of the latter than the former. The primary criticism leveled against economic globalization is that it perpetuates lack of accountability and irresponsibility on part if its practitioners. While global financiers and speculators can accurately evaluate the values of tangible assets, more often than not the measure of intangible consequences of an MNE’s operations are not accounted. In other words, certain ‘externalities’ such as pollution of water sources, global warming, internal displacement of people are not accounted for.
As pointed out by Frieden, globalization has led to the practice of exploitation of cheap labor offered by Third World nations. A highly publicized recent case is the operations of sportswear maker Nike in countries such as Indonesia and Philippines. Documentary filmmakers have recorded the inhuman working conditions offered to laborers in Nike plants in these countries. Moreover, these workers were never offered medical insurance or prescribed minimum wages. As a consequence of this negative publicity, many consumers in the West have refused to consume products that were manufactured through exploitation of labor in developing nations. While the condition in manufacturing hubs of Taiwan, Thailand and China are not as harsh as in Indonesia and Philippines, they only barely adhere to international human rights standards. So, while global capitalism is further developing the length and breadth of its reach, it benefits certain sections of people while disadvantaging others.
Frieden explains in detail the unethical practices of proponents of globalization. For example, billionaire investors such as George Soros have tacitly aided corruption in the countries they operate in. For example, in Southeast Asian nations of Indonesia, Thailand; Asian nations of Bangladesh, India and Pakistan, and several East European countries such as Belarus, Georgia, and Croatia and to a lesser extent in China, the levels of corruption have increased since the opening up of their economies. The misuse of public power for private gain is growing into epidemic proportions in developing nations.