UNIVERSITY OF SOUTH AFRICA

SOC 2601
THEORIES OF SOCIAL CHANGE
Assignment 2 - 861477

of Globalization, and an Exploration of Her Concepts of

Abstract/short summary

Author:

Ashleigh Naidoo
62806250

2 April 2019
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Table of contents

1. Introduction 2

2. Main currents in the theories of globalisation 2

2.1 The Sceptics 2

2.2 Hyperglobalists 3

2.3 Transformationalists 3

3. Main influences on Hoogvelt’s theory 4

3.1 Roland Robertson – Compression of the World and Global Consciousness 4

3.2 David Harvey and Anthony Giddens – Time and Space 4

3.3 Manuel Castells – The Global Informational Network Society 5

3.4 Hoogvelt on Globalisation in Modern Society and Africa 5

4. Hoogvelt on the Economics of Globalization 6

4.1 The Global Market Discipline 6

4.2 The New Global Division of Labour 7

4.3 Financial Deepening in the Core – Implosion 7

4.4 Africa – The Exclusion of the Periphery 8

5. Conclusion 9

6. List of Sources 10

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1. Introduction

Globalisation is a process of integration between people, businesses, and governments

across international borders. Ankie Hoogvelt’s approach to globalisation is multi-causal;

Hoogvelt draws on the ideas of different currents in globalisation. Though these currents

are often seen to be at odds with each other, Hoogvelt contends that they may complement

each other. Her work explores how the expansion of capitalism has driven the world to

occupy a single social space, and how that single social space is driving further capital

accumulation. Hoogvelt examines the social, financial, and political implications of

globalisation to develop a better understanding of the economic processes around the

world in the informational age (Hoogvelt 2001:121-131).

2. Main currents in the theories of globalisation

It is widely accepted that globalisation has facilitated important transformations in the

world, but, the extent and nature of these transformations are debated. Three main currents

in globalisation are identified in Global Transformations (Held 1999), and provide a

variety of approaches to the study of globalisation.

2.1 The Sceptics

The Sceptics view of globalisation focuses primarily on economics, and they understand

globalisation as “a worldwide process of integration of national economies”. Sceptics, in

globalisation theory, contend that present levels of economic interdependence are not

unprecedented (Giddens 2006:60), and that worldwide integration of national economies

was greater during the late colonial period (Hoogvelt 2001).

Sceptics point to the regionalisation within the world economy as evidence that the world

is less integrated than it once was (Giddens 2006:61). The formation of trading blocs in

Europe and Asia-Pacific means that the bulk of trade happens between countries that are

culturally, and economically similar, and generally, geographically close. They believe that

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economic activity remains nationally and regionally based, and directed by national

institutions and economic policy (Thomas 2012:180).

A common controversy associated with this view is that the sceptics often underestimate

the far reaching implications of globalisation, especially in the contemporary organisation

of the global market (Giddens 2006:62).

2.2 Hyperglobalists

The focus of Hyperglobalists tends toward political power, and the changing role of the

nation state (Giddens 2006:61). Hyperglobalists hold a declinist view of the state, arguing

that transnational institutions have become predominant over nation-states, and rendered

nation sates practically irrelevant (Hoogvelt 2001:120). In addition to transnational

financial powers, Hyperglobalists argue that the power of national governments is also

challenged by international organisations like the European Union and the World Trade

Organisation. Controversy associated with the Hyperglobalist view is that it is overly

simplistic; analysing globalisation in only economic terms, and seeing it as a one-way

process (Giddens 2006:62).

2.3 Transformationalists

Transformationalists view globalisation as a dynamic process that is open to change, and

pay special attention to cultural influences. The role of global migration, media and

advanced telecommunications is credited with the creation of multicultural global

communities (Giddens 2006:62).

Social phenomena and cultural change is seen as influencing the globalisation process, and

further facilitating the integration of economic, social, cultural, and political activity of

international communities (Thomas 2012:180). The Transformationalist view is more

cognisant of the different aspects contributing to, and resulting from, the process of

globalisation.

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3. Main influences on Hoogvelt’s theory

3.1 Roland Robertson – Compression of the World and Global

Hoogvelt’s theory of globalisation is influenced by the work of other contemporary social

scientists. Roland Robertson is one such influence. His globalisation theory is influenced

by Parsons’ theory of social systems, comprising 4 integrated subsystems (Thomas

2012:182).

Robertson contends that political and economic integration was a feature of pre-capitalist

period, while cultural integration faced the hindrance of 3 main obstacles, until recently.

These obstacles of religious division, legal-diplomatic differences, and cultural divisions

between developed and developing nations have, in recent decades, been minimized

(Thomas 2012:182). Robertson credits the “compression of the world”, with the

development of a global consciousness; and credited this global consciousness, with

facilitating globalisation at a cultural level (Thomas 2012:182).

3.2 David Harvey and Anthony Giddens – Time and Space

Another influence on Hoogvelt’s work is time-space compression, advanced by David

Harvey and Anthony Giddens. David Harvey, asserts that the organization of space defines

social relationships (Hoogvelt 2001:123), and that time defines the value of money itself:

in capitalist economies, interest rates are calculated as “the time value of money”

(Hoogvelt 2001:124). The relationship between space and time is explored in Anthony

Giddens’ time-space distantiation.

Technological advancements in telecommunications and transportation allows the global

community to “overcome space through the mastery of time” (Thomas 2012:183). The

electronic age, and the advent of the internet, has facilitated increasing global social

interaction. The transformation in space and time allows for “action at a distance” to

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conduct business, and the real-time operation of the world’s financial markets (Thomas

2012:183). In 21st century markets, even seconds are precious.

3.3 Manuel Castells – The Global Informational Network Society

Manuel Castells gave special attention to the changes in social organisation of

communication and information in his theory of globalisation. Castells views globalisation

as a network of production, culture, and power, which is constantly shaped by

advancements in technology. He suggests that the rules of global capitalism have changed

to embrace new information technologies that have essentially “compressed time and space

connections” (Thomas 2012:184).

In Castells understanding, power that used to flow from corporations and states, now flows

through informational hierarchies and codes that connect the corporations and states to the

world. The Information Age has not made the world flat, but through new hierarchies, has

created a “market deepening” in some places, and an exclusion in others (Hoogvelt 2001).

3.4 Hoogvelt on Globalisation in Modern Society and Africa

In Globalisation and the Postcolonial World, Hoogvelt warns that globalisation must not

be confused with the integration of real territorial economies worldwide: “While

globalisation has proceeded in the last few decades, the geographical reach of world

capitalism has receded” (Hoogvelt 2001:115). The core countries in the capitalist economy

have greater access to systems that allow them to compress space through time, conduct

business at a distance, and participate fully in the global market. The access to these

systems gives them power that the periphery does not have.

Technological advancements at the end of the 20th century have allowed core regions to

replace raw materials, and services, previously provided by the periphery (Thomas

2012:190). These advancements render South Africa, and other raw material-rich countries

in Africa and Latin America, structurally irrelevant.

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In this way, the periphery has become less and less significant to capitalism, evident in the

withdrawal of trade and capital linkages from the periphery, and the intensification of these

linkages in the core (Thomas 2012:189-190).

4. Hoogvelt on the Economics of Globalization

Ankie Hoogvelt’s theory suggests that time-space compression drives the economics of

globalisation in 3 ways. Firstly, the “shared phenomenal world” supports the emergence of

a global market discipline. Secondly, time-space compression reorders the organisation of

economic activity (Hoogvelt 1997:121). The third way is the transformation of money into

a real-time resource, permitting international mobility.

4.1 The Global Market Discipline

A global marketplace entails an international division of labour, and an international

market exchange between different goods and services, produced in different countries.

This complementary system, allowed countries access to goods that they did not produce

themselves. The dominant international trade in the pre- and post-war era was that of a

global marketplace (Hoogvelt 1997:122).

Following the evolution of transnational companies, inter-product trade was replaced by

intra-product trade – the production and export of the same product by different countries.

This eroded the international division of labour, and created export competition (Hoogvelt

2001:122).

The global market principle is when dominant standards of price, quality, and efficiency is

imposed on the domestic supply of consumer goods, raw materials, labour, and technology

(Hoogvelt 2001). businesses in South Africa needing to compete with global standards of

quality, and reduced prices, in order to survive in the marketplace is an example of the

global market principle at work.

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4.2 The New Global Division of Labour

According to Hoogvelt, the emergence of a new global division of labour has been fostered

by new technologies. Computer technology and telecommunications makes it possible for

corporations to relocate an ever-widening range of operations to wherever cheap labour,

assets, and infrastructure are available (Hoogvelt 1997:126).

Corporations in the core countries are able to export low value-added manufacturing jobs

to the periphery; although new technologies also permit the relocation of certain high

value-added knowledge work (Thomas 2012:193). Core and periphery regions, says

Hoogvelt (2001:135), now also refers to a social relationship, rather than just a geographic

location.

4.3 Financial Deepening in the Core – Implosion

The early period of capitalism was characterized by expansion or widening; the extension

of trade and productive investment into more and more areas of the globe. This phase of

expansion, Hoogvelt argues, has been replaced by a phase of deepening (Hoogvelt

1997:115).

Financial deepening refers to the increased provision of financial services with broader

alternatives of services available to people and domestic or foreign investors (Post 2019).

This financial deepening in the core countries results in the growth of financial transactions

far exceeding the growth of actual production and trade in those countries (Hoogvelt

1997:128). This process of financial deepening has largely been facilitated by deregulation,

and technological advancements that allow the compression of space and time (Hoogvelt

1997:129).

Money is increasingly being made out of the circulation of money itself, rather than trade

and production, unrestricted by the traditional constraints of space and time. The removal

of the friction of space and time disentangles social relationships in which money and

wealth were previously embedded.

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Financial deregulation and the advancement of information technologies has allowed a

massive increase in the international mobility of capital, and removed the need to anchor it

in national social relationships. Rational economic interests in the global economy do not

promote social responsibility. Relieving money from social relationships results in the

greatest proportion of financial capital flows mainly to the core regions, regions that

guarantee a quick and substantial profit (Thomas 2012:196). Hoogvelt calls this deepening

of interaction among the core regions, the “implosion” of capitalism.

In the age of the informational economy, economic growth has become dependent on high

value-added inputs and expansion in the core markets. Periphery economies are able only

to offer limited, difficult markets, and primary commodities – largely devalued in the

industrialized economy – and thereby become less relevant to the global economic

processes (Castells 1993).

Labour costs have become less and less important as a competitive factor. Historically,

cheap labour has allowed exploitation of the periphery; in the new economy the role of the

periphery proves obsolete to the core, resulting in the shift from exploited to “excluded”

(Castells 1993).

4.4 Africa – The Exclusion of the Periphery

Castells defines exclusion as, “the process by which certain individuals and groups are

systemically barred from access to positions that would enable them to an autonomous

livelihood within the social standards framed by institutions and values in a given context”

(Castells 2010). Exclusion in the network society concerns both people and territories.

Under certain conditions, entire countries, regions, cities, and neighbourhoods become

excluded, embracing in this exclusion most, or all, of their populations (Castells 2010).

Sub-Saharan Africa, barring a few countries, are deprived of the basic technological

infrastructure that would allow them to communicate, innovate, produce, consume, and

even live, in today’s world (Castells 2010).

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With lower access to information technologies than the rest of the world, capital

investment in Africa is incompatible with the quick capital turnover, and the accumulation

of capital. Furthermore, political instability further dissuades financial interest. African

exports, have decreased considerably since 1980 (Castells 2010), and are still largely

commodity-based; although commodities no longer form the basis of the world economy.

Sub-Saharan Africa, bypassed by flows of wealth, are further unable to improve

technological infrastructure that could facilitate participation in the global economy on a

more significant scale. New technologies, though not available to the masses, are an asset

of the African elite. Also seeking certain and substantial returns, the tendency of the

African elite to invest in core regions exacerbates the increased flow of wealth out of

Africa, while the flow into Africa dwindles.

5. Conclusion

The extension of economic activity into more areas of the world, also known as the

expansion of capitalism, has been replaced by a deepening of economic activity in core

regions. This deepening in capitalist integration is a product of technologies that

“overcome the friction of space”, and in this way, cause the exclusion of periphery regions

in the global market.

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6. List of Sources

Gibbon, P. 1992. The World Bank and African Poverty, 1973-91. The Journal of Modern
African Studies, 30(2).

Giddens, A. 2006. Sociology. 5th ed. Cambridge: Polity.

Thomas, CG. 2012. Theories of Social Change. Pretoria: University of South Africa.

Castells, M. 1993. The New Global Economy in the Information Age. New York: The
Pennsylvania State University Press

Castells, M. 1996. The Rise of the Network Society. In: The Information Age. Cambridge,
Mass. & Oxford: Blackwell.

Castells, M., 1998. End of Millenium. In: The Information Age. 1st ed. Oxford &
Massachusetts: Wiley-Blackwell.

Genova, N. D., n.d. Inclusion through Exclusion: Explosion or Implosion?. Amsterdam

Post, T. 2019. Analysis: The importance of financial deepening in Indonesia. [Online] The
Jakarta Post. Available at: https://www.thejakartapost.com/news/2015/02/18/analysis-the-
importance-financial-deepening-indonesia.html [Accessed 20 March 2019].

Hoogvelt, AMM. 1997. Globalisation and the Postcolonial World: The New Political
Economy of Development. London: Macmillan.

Hoogvelt, AMM. 2001. Globalisation and the Postcolonial World: The New Political
Economy of Development. 2nd ed. London: Macmillan.

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