THE LIMITS OF GLOBALIZATION

Globalization emerged in the aftermath of the collapse of the Soviet Union and the end of the Cold War, which marked the dissolution of the bipolar world order. Initially perceived as an economic phenomenon, globalization has gradually expanded to incorporate cultural dimensions as well. Trade between the United States and the European Union reached its peak prior to World War I, declined during the interwar period, and increased again following World War II. With the widespread use of railways and steam-powered technologies, transportation costs decreased, while mass migration expanded the supply of labor. In this context, globalization should be understood not as a continuous process, but as one characterized by fluctuations and discontinuities.

Changes in the global economy, driven by technological advancements in transportation and communication, have transcended national borders, and no government intervention can fully reverse this trend. Protectionism cannot serve as a viable solution, as it reduces economic efficiency and generates its own internal social contradictions.

Economists tend to adopt an optimistic perspective on globalization. In global markets, the most effective policies are those that address the root causes of problems at the lowest possible cost. However, the real world is more complex than it appears, and ideal solutions are not always feasible. Therefore, economists often develop balanced approaches that aim to protect those most affected by globalization without significantly disrupting market mechanisms. On the other hand, while globalization increases the mobility of capital and employers, it also introduces various risks, such as security vulnerabilities.

In the post-World War II period, Keynesian growth policies implemented in developed countries began to lose effectiveness in the 1970s in the face of rising inflation, stagnation, unemployment, and recurring economic crises. These challenges led to a search for alternative policy approaches. While globalization has created significant opportunities for poverty reduction, it has also triggered processes that exacerbate poverty and inequality in developing countries. As pressure reduces workers’ bargaining power, their political influence also declines. As governments compete to attract capital, the interests of workers are increasingly pushed into the background. Moreover, the constant repetition of pro-labor discourse may diminish its perceived significance among the public.

Liberalization has, in many ways, facilitated globalization. The reduction of tariffs and the liberalization of international trade constitute the core elements of this process. However, when international trade is restricted within specific rules and regulatory frameworks, certain countries may gain greater advantages in the global arena. Today, the trade policies of the United States and the European Union, as well as the safeguard and exception clauses of the World Trade Organization (WTO), are largely shaped in line with the interests of these actors.

Social security policies also play a crucial role in sustaining the momentum of global trade. Social insurance, unemployment benefits, education programs, and pensions constitute major areas of public expenditure in developed countries. These policies aim to mitigate the insecurities generated by globalization. Conceptually, fair trade refers to a trading partnership that enables direct interaction between producers and consumers. It is fundamentally based on ensuring fair wages, improving living conditions, and preventing child labor in less developed or developing countries. However, despite these positive aspects, developed countries do not necessarily sacrifice their gains within the framework of fair trade. On the contrary, fair trade often leads to higher prices, facilitating greater financial flows toward developed economies. Furthermore, certification is required for fair production, and these certifications are often sold at high costs. Northern corporations that possess these certifications continue to extract greater value from southern countries through the exploitation of labor and resources.

Thus, globalization can be seen as part of a broader network that may also be described as marketization. The shrinking role of the state, the liberalization of economic activities, and the reduction of social obligations increase the interdependence of national economies, while simultaneously intensifying domestic vulnerabilities.

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***Translated by AI