Complex Interdependence and Globalization Research Paper

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I. Introduction

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II. Globalization: A Theory of Expectations

III. Global Networks: Applications and Empirical Evidence

IV. Global Threats and Challenges: Policy Implications

V. Future Conceptual Directions

VI. Conclusion

I. Introduction

Complex interdependence and globalization have become core concepts in most academics’ minds. Nonetheless, disagreement on working definitions has led to conceptions centering mostly on the ideas of economic, cultural, and technological interdependence and interconnectedness.

Most scholars acknowledge that the concept of globalization has the merit of amalgamating social organizations unto one global society. As a matter of fact, highly intricate relations of push and pull forces are producing simultaneous integration, degeneration and divergence, order and chaos at the interregional or transnational level.

These are unifying and conflict-ridden forces within globalization, which can generate remarkable opportunities for affluence, peace, and democracy but also threats for divergence, business supremacy, and lack of consideration for world citizens and civilizations.

II. Globalization: A Theory of Expectations

Globalization has always been equated by many analysts with economic interdependence (Bhagwati, 2007). Indeed, nowadays, the extent and level of global economic relations appears to be unparalleled in world history, mainly in terms of the immense quantity of capital flows.

Emergent countries, also, are progressively becoming a part of global business and investment flows. Modern-day economic globalization models imply a new international division of labor reflecting the new global economy, whereby economic and financial integration do not remain solely concentrated amid the industrialized countries of North America, Europe, and East Asia (Amin, 1996). As a matter of fact, global capital has not stimulated enough policy homogenization, and significant differences in economic structuring subside.

Multinational corporations, for instance, which are seen by many as globalization’s leading agents, remain mostly active in their country of origin. The debate as to whether economic globalization will aggravate economic inequalities or contribute to advancing economic justice lead to a considerable amount of literature on the impact of globalization on wealth distribution amid both most-developed countries and less developed countries (Friedman & Kaplan, 2002).

What has been observed is that the effect of globalization has been both positive and negative, and the effect was largely dependent on a range of internal and external variables. Countries that are trade partners, for instance, because they actually trade more with each other, are less likely to enter into conflictual relations with one another.

In fact, greater ties from interdependence have been argued to lead to both greater cooperation and conflict. It has been observed that greater trade led to peace and peace leads to greater trade. Many nongovernmental organizations, and global civil society in general, are resisting some aspects of globalization, advocating that human rights and environmental protection should be aligned with economic efficiency.

Restructuring the global system or just reforming the existing one has always been a fundamental question. Antiglobalization activists seek a more equitable distribution of wealth, greater societal participation, and immediate solutions for the global environmental crisis (Fukuyama, 2001).

III. Global Networks: Applications and Empirical Evidence

While interdependence refers to a state of affairs, globalization implies that something is ever increasing. Globalization can be contrasted with localization, nationalization, or regionalization; it refers to the contraction of distance on a large scale.

As for deglobalization, it refers to the decline of globalism. As such, globalism refers to networks of connections, involving not only regional networks but networks of interdependence at multicontinental distances. Interdependence refers therefore to any situation characterized by dialectical effects among countries or actors in different countries (Oneal & Russett, 1997).

Scholars Keohane and Nye (1998) have extended the analysis of transnational relations away from classical political economy to include contentious international politics. These scholars initiated a new way of looking at the world of politics via observing the relationships between economics and politics, and the patterns of institutionalized international cooperation while retaining key realist insights about the roles that power and interests play in world politics.

The multiple linkages take the form of flows of capital and goods, as well as information and ideas between the center and the periphery. Interdependence and globalism are both multidimensional phenomena, essentially defined in economic terms, as if economic factors are the sole determinant of globalism. In fact, economic globalism involves long-distance flows of goods, services, and capital, as well as the information, perceptions, and organizational processes carried by market exchange. However, social and cultural globalism involves the movement of ideas, information, images, and peoples behind it, such as the movement of religions or the diffusion of scientific knowledge.

A central feature of social globalism involves the imitation of one society’s practices and institutions by others, what some sociologists refer to as isomorphism, demonstration effect, or transfer of social technology (Laouisset, 2009), and in doing so flow across geographical and political boundaries, hence transforming societies and markets and affecting the consciousness of individuals, their personal identities, and their attitudes toward culture and politics.

Social globalism is also impacted by the phenomenon of network effects. For professional economists, the term network effects refers to situations where a product becomes more valuable once many people use it, such as the Internet. As such, a knowledge-based economy generates powerful spillover effects, which spread rapidly, trigger additional innovation, and lead to chain reactions of new inventions (Stieglitz, 2006). Moreover, as interdependence and globalism become thicker, systemic relationships among different networks intensifies.

The worldwide impact of the financial crisis that began in the United States in 2008 illustrates the extent of these network interconnections. Unexpectedly, what first appeared as an isolated real estate-related crisis had severe global effects. It generated losses everywhere, and for instance, in the case of the United Arab Emirates, particularly the Emirate of Dubai, it prompted emergency meetings at the highest level of local finance and huge rescue packages orchestrated by the Emirate of Abu Dhabi, and it led eventually to a general loss of confidence in the United Arab Emirates real estate market and the efficacy of the country’s economic model (Davidson, 2009).

The financial crisis of 2008 and 2009 was not the first to be global in magnitude. The Wall Street crisis in 1929 triggered a worldwide financial crisis and depression. But some characteristics of the 2008 and 2009 crisis differentiate it from preceding ones. Most economists, governments, and international financial institutions failed to predict the crisis, and intricate new financial instruments made it difficult to understand (Eichengreen, 2006). Even countries such as Canada that had been praised for their sound economic policies and performance were no less vulnerable to the financial contamination triggered by speculative offensives and capricious changes in market feeling. Sheer magnitude, complexity, and speed distinguish contemporary globalization from earlier periods (Greenspan, 2007).

The ever-increasing thickness of globalism and the density of networks of interdependence is not just a variation in degree, but thickness means that diverse relationships of interdependence interconnect more intensely at more points. Hence, the effects of events in one geographical area, on one dimension, can have profound effects in other geographical areas, on other dimensions.

As in chaos theory, small events taking place in a specific time and space can have catastrophic effects in another time and space. Such systems being difficult to comprehend, their effects are therefore difficult to predict. As a result, globalism will likely be accompanied by omnipresent ambiguity.

There will be constant competition between increased complexity and uncertainty and efforts by governments, market participants, and other actors to comprehend and manage these increasingly complex interconnected systems (Burtless, 2007).

Globalization, therefore, does not merely have an effect on governance; it is in turn as much affected by governance, and scholars prefer to use the term global governance, in contrast to the traditional meaning of the term governance, to denote the regulation of interdependent relations in the absence of an overarching political authority obviously benefiting from an extensive use of networks (Rosenau, 2007).

IV. Global Threats and Challenges: Policy Implications

International trade, international capital flows, and transnational corporations have a direct impact on our lives, and never before have there been so many poor and so many disparities (Kothari, 1997). This fact alone constitutes a legitimate basis for revolts and conflicts. Critics of globalization denounce lowering of real wages, deregulation, and lowering social benefits, as well as privatizations of public services, relocating factories, and loosening the grip of organized labor.

When directed at the Structural Adjustment Programs of the 1980s and 1990s, these charges are seemingly justified. Governments were basically losing their economic authority, even within their own countries. Poor countries, living in considerable monetary instability, cannot stop poverty from growing, nor can they pull their economies out of dependency.

Globalization appears to bring greater insecurity for labor, making unemployment and underemployment chronic social ills and leading to greater inequality in income levels. The South has its North: the rich elite who is part of the world’s top income bracket. Similarly, the North has its South: the immigrants and the unemployed (Rodrik, 2002).

National institutions in MDCs have not yet developed appropriate policies, measures, and mechanisms that truly protect people from the ravages of free market capitalism. The costs of this system are so visible in terms of social and racial fragmentation, criminality, and the collapse of family and community.

One of the most negative impacts of globalization is environmental degradation, a very serious international threat to the extent that environmental and health-related concerns challenge the narrowed dimension of the state-centered model, hence redefine the concept of united community, promote the idea of global public goods, and address global public ills via collaborative networks (Mittelman, 2002). However, when we address globalization and globalism, we perceive globalism as a rooted historical trend and globalization as the process of this ever-increasing globalism (Scholte, 1997).

The question to be asked is not how old globalism is, but rather how thin or thick it is in space and time. Thin globalization can provide an economic and cultural connection between trading partners, and traded goods impact only a small number of consumers. In contrast, thick globalization (Held, 2007) engages large and uninterrupted long-distance flows, affecting the lives of many consumers. For instance, the 2008 and 2009 operations of global financial markets had an ill effect on everyone, mainly because globalization is the process by which globalism become increasingly thick.

The degree of thickening of globalism is giving rise to three changes in degree and in kind, such as increased density of networks, increased institutional velocity, and increased transnational participation (Greenspan, 2007). This participation and consequent transparency has been a byproduct of the information revolution that is at the center of economic and social globalization; it has made possible the transnational organization of work and the growth of markets, thereby facilitating a new international division of labor.

The division of labor being limited by the extent of the market (Smith, 1776), the information revolution had a major impact on attempts to expand globalism. However, globalization divides and polarizes fragments.

While complex interdependence between national economies and societies has increased significantly, social relations between societies have increased considerably. Globalization, the term used to summarize the ever more complex interdependence among nations and societies in terms of financial flows, trade, industry, and communication, has likewise lead to some economic growth and contributed noticeably to a reduction in poverty in the Asian and Pacific region. However, the impact of these aspects of globalization has not been uniform, and socioeconomic disparities between and within some countries and areas in Asia and the Pacific have sometimes widened during that same period (Owens, Baylis, & Smith, 2008).

To ease these harmful aspects of globalization, a greater consideration to social development is recommended, both as the critical goal of economic development and as a means of achieving such development. For economic development to persist, social development must be self-sustaining, and social and economic policies must be integrated for either to be effective and sustaining. For this to happen, an adequate amount of investment in human resources is required, such as the provision of education, health, shelter, and sanitation. Productive employment and economic empowerment are the most valuable means for citizens to contribute to social and economic development.

Citizens must play a part also in the decision-making processes that shape their lives at the local and national levels (Laouisset, 2009). Global citizens are also interested in the way conflicts are resolved, how international politics are managed by states, and obviously, this interest exposes them to both situations of realism and idealism as paradigms in international affairs. Realism is a perception named as such because authors of this theory believed it more realistic.

By rejecting idealism (Kant, 2003), these people believe peace is more possible by following the path they recommend and hence do not believe cooperation is achievable in the manner idealists wish for (Locke, 1997). Being the core components of the system, states interact in a seemingly anarchic system, since they lack central authority such as an idealized world government (Angell, 1912). It is therefore difficult to build cooperative structures, and it makes conflict inevitable in world affairs. However, humans do have the capacity for rationality, and that capacity is what can allow statesmen to construct a system that can peacefully deal with conflicts of interest.

Rational states wish to maximize relative power, and this is achieved whenever systemic status quo is maintained. Rational leaders, for instance U.S. government leaders, recognized that even though human rights were not respected in Algeria during the 1990s political crisis, support for the Algerian military dictatorial regime was necessary. Hence, realists can sacrifice democracy and international morality for foreign policy gains and perceived national interest and security, hiding sometimes behind foreign sovereignty principles. Realists argue that in the current international system one must accept that other states will have their own way of doing things (Kennan, 1984).

This necessitates accepting that a state may be dictatorial; as long as they are not trying to alter the system, you can deal with them (Kissinger, 1973). The theory of complex interdependence has argued that realism is becoming archaic, liberalism is a superior approach to international affairs. This argument has modified conventional liberalism by emphasizing international institutions as facilitated global free trade and cooperation, and this approach has been labeled neo-liberalism (Keohane, 1998).

Realists need to address the impact of economics and especially economic interdependence on power relations. Whenever two countries are interdependent, then the conservative approach to look at competition as a zero-sum game is sometimes seen as old-fashioned.

But real life is not a zero-sum game, our best prospects are usually in cooperative efforts, and it does in fact move from zero sum to positive sum. Hence, the game theoretic approach has clarified the conditions required for the evolution and persistence of cooperation and shown how Darwinian natural selection can lead to complex behavior, including notions of morality, fairness, and justice. It is shown that the nature of self-interest is more profound than previously considered, and that behavior that seems altruistic may, in a broader view, be individually beneficial (Axelrod, 1997).

Moreover, war and military conflict would be even more costly since they would not only destroy people and things but would also break the entire economic systems of both or all states involved. This makes military power less important than the past and economic links a stronger variable.

V. Future Conceptual Directions

The concept of complex interdependence is being replaced by the concept of globalization, since the latter reflects both interdependence and its consequent ramifications. The concept of interdependence has been developed on the premises that inequalities and injustices appear as a result of history and social behavior (Huntington, 1996).

The establishment of global citizenship allows each citizen of each nation to be fully aware of his or her rights and duties not only in the face of national government and law but also in the face of international law and order. The concept of interdependent globalization seems much too complex, but globalization provides exciting opportunities for those committed to human solidarity and justice as well as immense new challenges for globalization in solidarity and globalization without marginalization. Globalization is a process, not a static event, and it involves complex, interdependent networks (Krugman & Venables, 1995).

The concept of globalization belongs to the 1990s social, economic, and political literature, just as interdependence belongs to the 1970s scene (Amin, 1996). Like all concepts meant to cover complex phenomena, both interdependence and globalization have various meanings. As governance structures are established at the global level in order to deal effectively with the increasing number of global issues, conflicts have also emerged as how to make international organizations more democratically accountable.

To deal with such developments, states have found it useful to erect international organizations and endow them with significant decision-making authority. It became increasingly obvious that real authority has been hence transferred to international organizations and other nonstate actors. Civil society pressure groups have had, so far, a major effect on nation-states and international organizations (Hirst & Grahame, 2001). Given the close relationship between globalization and technological innovation, the literature has also examined how new technologies will affect concepts of citizenship and democracy in allowing citizens to challenge authoritarian governments and truly participate in advanced industrial democracies.

The substitution of blue-collar labor intensive technologies with white-collar highly capital-intensive technologies, the communication revolution, and the proliferation of global media may also make it easy to customize the information citizens receive, thereby lessening opposing views and increasing social discipline and political silence. However, the emergence of nongovernmental organizations and global social movements as new political actors provide evidence for a global civil society and a new culture.

This cultural globalization phenomenon, seen also as a Westernization process, is for the most part driven by corporations, rather than countries, and aims at the broadening of consumer culture (Hirst & Grahame, 2001). However, the greatest challenge of globalization lies in the cultural sphere. In fact, there is the corruption of local cultures to create one global culture of consumerism via television and the Internet and the feeling of alienation and confusion it produces in some sectors because of the breakdown of the local cultural fabric (Appadurai, 1990).

We all have our own values, cultures, and social life to root and ground us, and indeed in a time of painful transition, culture is the most important jewel to safeguard. However, globalization has also generated impressive solidarity in transnational social movements that work for genuinely implementing the United Nations Charter, the Universal Declaration of Human Rights, protection of the environment, the protection of refugees, and the establishment of an International Criminal Tribunal.

State sovereignty is being redefined by the forces of globalization and international cooperation whereby states are now widely understood to be instruments at the service of their people, and not the contrary (Bohman, 1999). Hence, individuals are first of all members of the worldwide community, with rights that derive from their humanity, and second, they are members of the communities of existing nation-states, calling hence for the globalization of citizenship.

VI. Conclusion

Globalization is an attempt to describe new features of the interaction of people and institutions in our postmodern world. Among the central challenges of effective leadership in the 21st century are understanding and responding to the patterns of interdependence that now increasingly characterize the social, economic, and political spheres. It is no longer possible to address effectively local concerns except in complex, global contexts. Neither is it possible to respond aptly to confounding, large-scale global issues without assessing and attending to local subtexts.

The scale and depth of interdependence characteristic of the contemporary world are bringing a variety of social, economic, and political communities and institutions into unprecedented close relationships. But it is also bringing about the interfusion of widely differing cultures and interests. The choices confronting contemporary societies thus cannot be limited to deciding on factual solutions under the assumption of essentially shared values but necessarily entail negotiating broad assent on both common norms and the meaning of beneficial change. “We cannot expect to solve today’s problems with the same thinking that created them” (Einstein, 1954).

The search for solutions to the global problems needs to be local, regional, and global so as to unite the world so that its abundant skills and resources may be directed toward the challenges of the real problems of humankind. It is difficult to deny that significant changes are occurring throughout the world.

Globalization is seen in the export of economics, politics, and culture. It seems reasonable to assume that this new sharing of information and culture would help people in the world to understand each other better, which would encourage peace and help nations to live and work more successfully together.

By sharing these aspects of our lives, we are creating a global community. It seems possible that one day there will be a global culture and one global economy. The future effects of globalization are and will still continue to be widely debated. Will globalization end economic, political, and cultural differences throughout the world? Or will it serve only to widen and exacerbate these differences? We believe that globalization does have the potential to end longstanding national differences, but we believe it is happening at a slower pace than it may appear on the surface.

We also believe that for globalization to be ultimately successful in this endeavor and maximize winners, there are still many challenges to come that must be overcome, among them the necessary sensitivity and understanding of other cultures, traditions, and belief systems.

Culture should not be sacrificed at the altar of globalization. If handled with care, globalization could one day greatly reduce differences in political, economic, and cultural systems, while preserving what is unique and special in various countries (Laouisset, 2009). If well monitored, globalization can lead to global prosperity and a bigger market of goods through a wider freedom of movement for goods and people in the global economy.


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