Understanding International Relations, Third Edition

particularly the growing salience of giant corporations operating as ‘multi-
nationals’ and integrating production on a global scale, and the emergence
of a 24-hour, integrated, global capital market created by the fusion of
national capital markets. These changes – in short, the emergence of an inte-
grated global economy – are central to any account of globalization, but
what has really made the difference has been the force behind these changes,
which has been the runaway growth of the information technology industries.
The rate of change in the area of information technology (IT) is staggering.
‘Moore’s Law’ – named for the co-founder of Intel, Gordon Moore – states
that the performance of processors will double every 18 to 24 months; phys-
ical limitations as to what can be done with silicon may end this process
within the next decade, but the possibility of ‘molecular electronics’ could
extend exponential growth into the 2050s (Overton 2000). Numbers of
personal computers (PCs) and mobile phones, and use of e-mail and the
Internet has been increasing exponentially, and as saturation point is reached
with one technology, another takes its place. The ‘runaway world’ seems
a reasonably sober characterization of this rate of change (Giddens 1999).
It should be noted that this progress is, for the most part, not being driven
by need. For word-processing, e-mail and Internet access and the use of
spreadsheets – that is, for the things that most people buy PCs for – high
processing speeds are more or less irrelevant, and large memories are only
necessary because of the existence of complicated programmes which contain
features that most people do not need, and because of continual upgrades of
operating systems, the benefits of which for ordinary users are, again,
doubtful. It is not without significance that the single individual who is the
most potent symbol of the new technology – Bill Gates of Microsoft – is at
root a businessman rather than a scientist or technologist. It is international
business that drives forward this technology, although, arguably, it has now
reached the point where the dynamic is self-sustaining.
The new technologies have already revolutionized the way people in the
advanced industrial world live. Most of the readers of this book will be
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involved in education in one way or another, and the majority will have
first-hand experience of the way in which the Internet can be used for the
transmission of knowledge. Researchers exchange findings by e-mail and
the World Wide Web, and international collaboration is easier than it has
ever been. But it is not simply the intellectual proletariat whose lives have
been transformed; the worker who reads your gas meter, or repairs your
refrigerator will down-load the results via a laptop, modem and mobile
phone, and order spares in the same way. De-skilling and re-skilling takes
place in a great many professions and occupations; some things become eas-
ier, requiring fewer skills – shop assistants no longer actually have to work
their cash registers and bank clerks no longer have to total-up manually at
the end of the day – others more difficult – it is unlikely that fridge repair-
ers ten years ago would have needed basic IT skills. And all this has taken
place in the last decade; even such basic technologies as the photocopier, fax
and word-processor have only been in general usage in the last 25 years.
Describing to today’s students how mimeos were ‘run off’ in the1970s gen-
erates stares of blank incomprehension.
All this is in the rich world; the increasing importance of IT has had a major
effect on rich–poor relations, on the whole, heightening differences between
nations and continents, but not in the kind of systematic way that would re-
legitimate talk of the South as a coherent entity. The rich world possesses
three-quarters of the world’s telephone lines – the single most important indi-
cator of the ability to use the new technologies – and is home to nearly 19 out
of every 20 Internet users. But elsewhere, there are also differentials; Thailand
is not yet part of the rich world, but is estimated to have more mobile tele-
phones in use than the whole of sub-Saharan Africa. Even the comparatively
wealthy inhabitants of African cities cannot reliably access the Internet via the
unreliable telephone systems available to them, although this section of the
population will benefit from the availability of inexpensive satellite phones in
the near future. On the other hand, there have been some clear gainers on
the periphery of the world economy. India’s ‘silicon valley’ in and around
Bangalore has benefited greatly from the presence of a well-educated,
English-speaking population a convenient number of time-zones away from
the United States; software problems can be passed at the end of the American
working day from New York and Los Angeles to Indian programmers, in the
hope that solutions can be found overnight – and many Indian programmers
have made successful careers in the US as valued migrants. If the computer
you bought in the UK develops a fault, it is a safe bet that the service centre
that answers your call for help will be in South India – the telephone call hav-
ing been re-routed via the Internet. And, speaking of peripheries, Internet use
in New Zealand is just about the highest in the world.
Put the impact of IT together with the trend towards an integrated global
economy and the central features of the political economy of globalization
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become apparent. They are the dematerialization and disembedding of
production. Dematerialization refers to the fact that the cutting edge of
contemporary capitalism is not about the production of physical goods –
which increasingly takes place in the more politically stable parts of the old
South – but the manipulation of symbols. American global dominance used
to be symbolized by US Steel and General Motors; now it is Microsoft,
Intel, Time-Warner and Disney that symbolize this dominance, and the
actual physical products they are still involved with – for example, Intel’s
Pentium chips – are largely made outside the US. In the early 1980s Bill
Gates turned Microsoft into a world leader by realizing that there was more
money to be made from producing the operating systems used by computers
than by producing the computers themselves. Once-mighty IBM allowed
him to dominate the software market and nearly went under. In the 1990s,
Gates himself nearly made the same mistake, allowing the emergence of an
independent Internet browser; Microsoft’s subsequent attempt to destroy
Netscape led it directly into an anti-trust suit that may yet signal the partial
downfall of the firm. Meanwhile, in August 2004, Google, a search engine
that can use either Netscape or Internet Explorer, was launched as a public
company and initially valued at around $25 billion.
Disembedding follows from dematerialization. When what was being
produced were things, where they were produced was crucial, and one could
still plausibly think about a national economy. Is this still the case? The extent
to which national economies have disappeared can be exaggerated. There are
still a lot of actual material things being produced in the advanced industrial
world – although often as top-of-the-range, niche products rather than as
genuine mass market goods, and even your new BMW, Mercedes or Saab will
be made out of a large number of components imported from lower wage
economies – and, as Paul Hirst and Grahame Thompson (1999) have elo-
quently and persuasively argued, the statistical evidence on capital creation
suggests that the national economy remains far more central than one might
have expected. Still, the integration of global production and the emergence
of global capital markets combined with the impact of the new technologies
does suggest that it is more difficult than it once was to conceptualize the idea
of a national economy. The next question is, what are the implications of
these trends for the theories of political economy set out in the last chapter?