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Global Capitalism and Dynamic Economic System
The global capitalism is the contemporary and dynamic economic system. It is characterized by transnational capital flow, transnational capital class, and transnational state amongst others. The global capitalism can determine labor systems, production dynamics, and capital accumulation. It results from the interaction of diverse social forces across the globe. This paper aims to describe the intricate interplay of various concepts including labor, capital, states, and neo-liberalism capitalism; which are embedded within the heart of the worldwide free enterprise.
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Global capitalism is a broad concept; William Robinson (2014) describes its idea as a qualitative new arena in the open-ended evolution of capitalism; its classic characteristics include transnational capitalist class, the rise of transnational capital, inequality in global society and relational powers, and transnational state (Robinson, 2014). The global capitalism started in the mid-twentieth century. Robinson argues that it has been evolving over time; the system crisis experienced in the 1930s or 1970s is not the same as that of the twenty-first century. The earlier forms include mercantile, classical, and national corporate capitalism (Dirlik, 2015). The international free enterprise can be described as the fourth and contemporary epoch of capitalism (Robinson, 2014). The current age of such an economic system regards diverse nations in the world; thus, it became rationally global capitalism. Furthermore, Robinson (2014) claims that the global capitalistic economy is a result of the market liberalization, the emergence of new laws and regulatory superstructures for the international economy, internal restructuring and worldwide incorporation of the each state economy. Liberalized markets characterize the international economy.
The global capitalism involves the economy which transcends many nations. Firstly, the production process is global or worldwide in its nature. Companies can undertake manufacturing activities in a diverse nation. For example, the corporation can produce car engines in a particular country; but the completion through car assembling can be done in another one. The production enterprises can also acquire raw materials from different states. Secondly, there is a free movement of capital and labor in the global arena. Since the production and distribution of products are not limited to a nation, there is the incorporation of the human workforce from different countries. The company can employ foreigners and relocate its business to a territory where there are cheaper workforce or more skilled employees. The labor is highly flexible in the global economy. Thirdly, wealth accumulation and financial systems have reached international levels. The corporations and the individuals have freedom to invest in any part of the world and even are able to acquire property in any nation. Fourthly, particular institutions e.g. World Bank, World Trade Organization, International Monetary Fund and Group 20have drafted policies and regulations that enable harmonization of trade, global production, and finances. These institutions form a universal system of authority, administration, and governance; this global economy system of administration is called transnational state. The latter enforces the rules of capitalism which include setting agenda for worldwide production and commerce that countries are expected to practice if they are willing to be partners of the system. Finally, the transnational class of capitalists is a unique characteristics of the global capitalism. The transnational class of capitalists are the high-level financiers, who own the means of production and appear to be investors. Such industrialists have shared interests, which determine practices and policies associated with the global trade, production, and finances.
Interaction between Labor, Capital, and State
Robinson (2014) emphasizes the creation of new capital-labor relations, which are grounded on two fronts; the de-regulated or de-unionized labor force and cheaper labor. Capital seeking and reciprocity were utilized in the earlier epochs of capitalism to stabilize the social generation of labor; however, neither the former nor the latter characterized the contemporary capital-labor relation.
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Robinson (2014) claims that the current labor is feminized. He argues that women form a significant portion of the global workforce, and they tend to experience more exploitation than the men counterparts in the capitalistic system of economy. The economic exploitation is a purely patriarchal domination.
The capital has grown and expanded both intensively and extensively. The extensive expansion is due to the entrances by countries into the economic system; these particular states have not joined the system previously. They include Third World states (Nicaragua, Angola, and Mozambique), China and the former Soviet Union (Cuba, Hungary, Bulgaria,Poland,Romania,Czechoslovakia and East Germany).Some of the states were capitalistic, but they had not associated themselves with the global capitalistic relations; such countries include Southern Mexico which later got incorporated into global capitalism. The intensive capital growth arises due to the widespread privatization, massive commodity conversion, and profit making ventures. The intensive financial expansion has occurred in spheres, which were deemed earlier to be public, and these areas can include health, public housing, education, and state enterprises. Furthermore, it is significant to note that the intellectual property rights and other forms of non-tangible resources have been converted and accumulated into commodities and wealth, which value can be ascertained in monetary parameters.
The neo-liberal structural programs have been at the center stage of enabling the existence of global relations amongst capital, labor, and states. The neo-liberal adjustments seek to create an environment with favorable conditions that allow the free operations of transnational capital across the national borders and within each country. The removal of barriers and stifling regulations that had hindered global trade relations facilitated international capital mobility. The eradication of worldwide economic relation hindrances has become possible due to two factors. Firstly, new technologies and innovations e.g., in transport and communication industries were a vital advancement that aided economic operations amongst the diverse states and trade associations. The communication revolution has facilitated efficient exchange of information at global levels and this scenario assists in the establishment of the worldwide economic relationships. Secondly, there is the emergence of neo-liberal structural adjustments that have lifted global political trade constraints in the states as it is mentioned above.
The transnational capital is an end product of dismantling of national economies. The process occurs due to the efforts to reorganize and reconstitute the state industries in a bid to become components of the worldwide production and international financial systems. In the global capitalism, the financial structures and manufacturing systems are organized universally in a decentralized and fragmented manner. However, it is surprising to note that the control, power and authority, to organize and manage the decentralized and fragmented financial systems and production are still concentrated on the global level (Robinson, 2014). The management of production and financial systems is not vested to the state. Robinson argues that the internal financial architecture does not prevail anymore. The presence of the national currencies does not imply or demonstrate the existence of state financial systems. The transnational finance is at the helm of the global capitalism.
The current labor operates at the worldwide level. The employees can be described as the global working class. Millions of people work in farms, offices, and factories throughout the world. Thus, this workforce can also be referred to as a transnational working class. The states have experienced conflicting matters associated with both national and international economies. The stronger working class has utilized their positions, e.g. international bureaucrats and political shapers, to champion for particular global trade relations in which they can pursue their capitalistic interests.
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The transnational capitalist class contain the ruling elites who control the world economies (Robinson, 2012). There are the major financiers and stakeholders who organize, transfer and invest capital across the globe. They are the primary determinants of the international trade relations, and they work in conjunction with the transnational states, which provide with the need of legitimacy and social support. The flexible flow of capital is accompanied by labor mobility all over the world.
All states have been influenced either directly or indirectly by the changing economic systems. Robinson (2014) argues that the capital is not national anymore, but it has been trans-nationalized; what means that it crossed many national territories via global production circuits. The earlier epochs of capitalism demonstrated that capital was found in particular territories and could be utilized by the state to pursue its economic interests. Thus, previous periods of capitalism entailed the accumulation of the capital within the state territory, internal production and disciplining the labor force within the country’s territory in an attempt to compete for the international market and resources. However, the state internal production and regulation of labor is not true because the capital crossed the borders of the countries. The transnational capitalist class has interpenetrated in the diverse state or national bodies with the aim of capital accumulations, profit seeking and production. That class transcended the world in a bid to create a single unified arena for accumulation.
Despite the existence of relatively free and liberal markets, nations still have a critical role to play. The state provides a conducive environment, which facilitates global capitalism in a number of ways. Firstly, the government supports the infrastructure e.g. transport facilities and security, which aid in business operations. Secondly, the state is responsible for disciplining the labor. Finally, the local management of national capitalism is compelled by the global capitalism structural system. The legitimacy of the states is derived from the ability to attract and retain the contemporary worldwide accumulation to the territories in which they exercise the political control. Thus, there is a raging competition among the nations to attract the transnational capital and sustain global capital reproduction. The international corporations in 1990 utilize particular institutions in different nations in an attempt to eradicate trade regulations and other constraints, which were stifling the mobility of transnational capital (Robinson, 2014). Mutual agreements were used to chart trade relations amongst the states.
Robinson (2014) argues against giving too much focus on the nations when trying to understand the concept of capitalism with regard to labor, capital, and states. He notes that though the nations play a role, as a fixed character the state alone cannot be used to explain the global capitalism. He observes that it is a result of multiple social forces emanating from different sources all over the world as well as the interplay of these social forces that determine how the countries will react. The states can be described as power relations bodies and institutionalized practices that embody social and class relations.
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Global Capitalism relation to Neoliberal Capitalism
The global capitalism and neoliberal one have a fragile line between them. The former is a system of economy, which transcends nations due to the global production of goods, flexible mobility labor, and capital amongst the nations and market liberalization, was enabled through the removal of trade barriers. The transnational states created a favorable environment via relaxation of constrictive trade rules; this has allowed the transnational capitalist class to operate at the international levels in the accumulation of capital. The neo-liberal capitalism can be argued as the advanced form of capitalist economy. It is characterized by free liberalized markets. The neo-liberal capitalism has all the features found in the classical one, with the exception of deregulation or lack of government interventions.
The liberal capitalism is an economic system that revolves around production and exploits the labor. It is characterized by open and free markets, limited government involvement, deregulations and privatization (Streeck, 2014). The firm belief in this type of capitalism is that individuals, private entities, and corporations are in better positions than the authorities to shape the economic destinies. The neo-liberal capitalistic economies emerged from the argument that pure capitalistic systems were inadequate and prone to economic instabilities. The advocacy for the absence of government intervention in neo-liberal economies is a critical concept that delineates it from the global capitalism. The Keynesianism economics, which involves state interference to bring economic stability, has been fronted by several policymakers in the capitalist economies. The economist John Maynard Keynes argued that capitalism dis]d not function well in isolation unless there were state interventions (Streeck, 2014). Consequently, the Keynesian economics is a purely protective system.
The economic system has undergone many epochs of varied forms. The need to accumulate capital and profits caused the appearance of corporate and individual approaches to the exploitation of global markets. Particular regulations, poor communication and the lack of technological advancement proved the global trade to be inefficient. However, the technological development and the eradication of trade barriers are two critical factors that provided impetus to the worldwide commerce, hence, global capitalism. The facilitation of it was fueled by the international interaction of multiple socio-economic forces and was accompanied with flexibility and mobility of both labor and capital worldwide.
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