Registration No.

: 20201210078

Economics Roll No: 78

“We have a world where our fates are linked, but India’s
specific concerns and aspirations don't get taken into account.
It brings a lot more anxiety” – Manmohan Singh

INTRODUCTION:
Any discussion on effect of globalization on democracy must start with a definition.
Globalization is a systematic process but it is also a revolution that has made the world and
people heavily interconnected. Though answers regarding when it began or where it began
require a whole another paper, it is 2 that the Globalization epoch has made it possible for
our economy, politics, culture and social life to be influenced by distant lands, an almost
borderless world most tangibly explained by the world-wide net and socio-informational
networks. A formal definition has been provided below:
“Globalization may be thought of as a process (or set of processes) which embodies a
transformation in the spatial organization of social relations and transactions – assessed in
terms of their extensity, intensity, velocity and impact, generating transcontinental or
interregional flows and networks of activity, interaction, and the exercise of power.” i
To the common man, either Globalization is a promise of wonderful progress by the neo-
liberal economists who are proponents of corporate capitalism and liberalization of
markets,ii or it is the West subjugating and exploiting the developing worldiii as in neo-
colonization.
OPPOSING CONCEPTIONS OR RESULT OF THE SAME CONDITON?
The opposing views are both valid because Globalization is essentially based on a free
market system. According to David Ricardo’s theory of comparative advantage and Adam
Smith’s postulation that ‘Division of Labour’ increases productivity, every economy will try
to specialize in a specific aspect and then these economies will fulfil the need of another. So,
an agrarian nation like India will trade with an industrialized nation like the USA and vice-
versa. Hence globalization is based on the idea of democracy. Economies and nation-states
have been used interchangeably here. But it is not necessary that both nations will benefit
equally as in an increasingly technocratic and productivity-oriented world under liberal
Globalization, the value of products from USA will be much higher than agro-products of
India. Who reaps the benefits of globalization is crucial to determine and according to one
theory, the global economy is a centre- periphery scheme with huge asymmetry – those at
the centre are the largest globalized economies (aka the West) who fare exponentially
better than weak globalized economies who lie at the peripheries.iv In this sense, it is an
exploitation and a cycle which creates dependency of weaker economies on the big brother
hegemonizers having knowledge and power. A much better example of such dependency
can be seen in Latin American states vis-à-vis USA or South-East Asian states vis-à-vis China.
Naturally anti-globalization sentiments start to brew from economic disparity, leading to
social protests from NGOs, government conservationist policy like illiberalism of Malaysia’s
Prime Minister Dr Mohamed Mahathir and growth of theories from academic movements
like the Dependency School of Thought in 1960s Latin America, which argued that under-
development as experienced in Latin America and elsewhere is the direct result of capital
intervention, rather than a condition of “lacking” development or investment. The processes
that generate high-incomes in Western Europe and the United States are those that
maintain the rest of the world in a state of dependency vis-à-vis wealth extraction. v The
common link that illustrates the opposing conceptions to be the result of the same
condition is the fact that both liberalism and democracy were aided by globalization.
RISE OF DEMOCRACY UNDER GLOBALIZATION:
French and American Revolutions marked the emergence of nation states, rule of law and
democratic accountability which would then give rise to a Liberal Democracy. This was
followed by colonization which birthed modern states out of previously more tribal or
disorganized nations and lead to creation of Institutions (though often absolutist) that
upheld administration, checks and balances that are characteristic of any society aspiring to
be democratic eventually. Finally, the Industrial revolution ushered in an era of massive
growth in productivity and income, the sustained economic growth leading to change in
“the nature of societies by mobilizing new classes of people—the bourgeoisie or middle
class, and the new industrial working class. They became self-conscious as groups with
common interests, they started to organize themselves politically and demanded the right
to participate in the political system.”vi The new middle class wanted to cash in on the
economic growth due to globalization for which they needed political franchise. Hence
benefiters from globalization became promoters of liberal democracy which gives them
power only kings and landowning-elites had previously- power to influence policy, market
and governance. It is also to be noted that since globalization dissolved barriers, movement
of ideas became as swift as movement of trade as people met across international
boundaries and institutions crucial in development of liberal democracy in the Western
World were rapidly adapted by nation-states all over. At the level of interdependence, the
world has achieved today, governments are no longer the monopoly in terms of public
services like defence, transportation, trade, health, economy which has also led to a
dissolution of the power of the nation state as a whole and has made it more reliant on the
global system. In today’s world, nation states are either a globalizer or a retainer of
globalization – the relative economic strengths dictate how powerful they are politically and
internationally.
IS A GLOBALIZED NATION DEMOCRATIC?
Looking backwards, Liberal democracy and free market economy has proved to be the best
method to organize society. It is a widely believed assumption that democratic ideas and
ideologies are promoted by globalization. But counter arguments also exist, that
globalization may not always promote democracy or a true democracy that is sustainable,
and actually a rule of the people, by the people, and for the people. One of the greatest
examples of this phenomenon is ASEAN, which is composed of countries like Singapore that
have remained semi authoritarian throughout the last few decades, while being rated as
“most global” on the A.T. Kearny/Foreign Policy magazine Globalization Index in terms of
cross-border contact between people. This is because in regional groups where the political
spectrum includes an equal number of democratic and nondemocratic states or where
authoritarian regimes are predominant, there is no weight of the democratic majority states
to help persuade nondemocratic states to liberalize. In regions lacking a widespread and
overt commitment to democracy, the best bet of Western policymakers and
nongovernmental groups trying to promote greater political liberalization is to make sure
authoritarian governments agree to a global regime to gain economic benefits and then can
be forced to accept the political pressure for democracy. vii But it often becomes the
opposite, and the economic prosperity of authoritarian regimes due to globalization
strengthen their popular legitimacy and lead to sustenance of bad regimes. Such regimes
also use economic reforms they can tightly control to open their market for eg; China has a
capitalist stock market, so as to get entry into global institutions that make policy decisions
for the world, hence leading to a dilution of the cause of spreading liberal democracy via
globalization. In case of failure, these authoritarian populist governments receive a boost by
blaming the bad economy on globalization and Western regime. The technology that drives
so much of the knowledge sharing in the world is just as easily used to spread mis-
information, manipulate and keep the people under surveillance; media can be bought too
and so people don’t know what is propaganda and what is truth anymore. Hence the
common people, the nonelites are poorly organized, or they fail to understand their own
interests correctly. In such a situation, corrupt government or elites are not voted out, the
conservatism makes reform slow. The result is political decay with increasing levels of
corruption, lower levels of government effectiveness, and violent populist reactions to
perceived elite manipulation.viii

GLOBALIZATION - A FLYTRAP OF CAPITALISM:

Economic integration to reap the benefit off of globalization requires some level of
integration of economic institutions with the global economy. Any country that wants to
globalize itself essentially ends up stripping away economic decision-making power from the
state and putting on a Golden Straightjacket i.e., making the private sector the primary
engine of its economic growth, deregulating its economy to promote domestic competition
and privatizing state-owned industries and utilities. The effect is growth in GDP but
shrinkage in politics since under such a regime, political and economic policy choices of
those in power and opposition barely vary from that of the western capitalist system thus
severely limiting political discourse and policies which are socialist.ix It is also to be noted
that since a nation state cannot deviate from the global economic architecture, they face a
trilemma. The trilemma posits that countries may choose only one option – open capitalist
account, fixed exchange rates or monetary policy when making fundamental decisions
about their international monetary policy agreements. This more severely affects weaker
economies under open markets.
Globalising economies also face a Grand trilemma with regards to political stances-
democracy, national sovereignty and global economic integration are mutually incompatible
and cannot be achieved simultaneously. This trilemma suggests that the backlash against
globalization in the last few decades is rooted in a desire to reclaim democracy and national
autonomy, even if it undermines economic integration.x The advent of globalisation has
brought a new contradiction between market and politics along economic lines- people who
are poor tend to use their political power more than the rich who have greater market
power - this is the paradox of liberal democracy. It is the responsibility of the state to
balance between democracy and market under which ideally the poor could use democracy
to bargain for their economic power. The absence of this mechanism in practice has led to
rise of tensions in society and rise of popularist (often hard right wing) politics.

National identity itself is dicey in a globalized world as many of the international agencies
which govern the world be it WTO, World Bank or Greenpeace are institutions which do not
have any interest in preserving the sovereign identity of the nation or its people. The
primary identity of the global citizen is their working identity and not religion, culture or
nationality. The result is ‘democratic capitalism’ i.e., consumers are free to vote their wealth
on competing goods in an efficient market but not ‘democracy’ as in vote their values and
beliefs on competing political candidatesxi

RISE OF ANTI-GLOBALISATION AND ANTI-WESTERN NATIONALISTS

The third estate always wants democratization for which globalization is necessary. The
promise of globalization included development. But this was realized only for certain
sections of society who have the necessary skills that are valuable in a competitive
globalized market. Under the open market system, the value of human capital is judged by
their productive capacity, the overarching capitalization and commodification of life has led
to a steady rise of technocracy and meritocracy. Historically or socio-economically
disadvantaged sections of society and even entire countries have failed to experience any
upliftment from Globalization in the past few decades, only the inequality gap has only
grown wider. For eg, in the recent covid crisis, economically weaker and marginalized
people in India could not opt into the new-age digitalization due to lack of access to
resources. The digital divide in turn also affected India as a country more than it affected
USA and a lot more domestic businesses went bankrupt in India because they couldn’t
compete with digitized nations. Inequitable access to resources, a dissolution of welfare
state and social safety nets like pensions, free healthcare and subsidized education,
exploitation of natural resources due to over-production has led to civil tensions within
several countries. It is now common for deadly civil wars to occur in Sub-Saharan Africa over
scarce water resources and for under-skilled and unemployed youth in under-developed
countries to resort to lawlessness and mass violence. Hence, the Anti-globalization protests
call for state to take back control and not be dictated by Global authorities. In states
following the ‘dictum of capital’, the sections of people who lack the class privilege to reap
the benefits of globalization, feel disempowered. Many such protests have been led by
socio-economically conscious groups against exploitation of domestic or indigenous land
and resources by foreign corporations and entrenched inequalities. Examples include the
civil disobedience movement Occupy Wall Streetxii and the Tata-Nano Singur dispute.
Though the terms Anti-Globalisation and Anti-Western are not exclusive, there meanings
here are slightly differentiated as follows:
a. Anti-globalisation refers to protests against the corporate capitalist nature of the
system
b. Anti-western refers to the protests against white-washing of culture, heritage and
national identity
Anti-globalists are nationalistic because their nationalism is a reaction and opposition to
globalisation. In the regions of economic crisis like in Asia, they call for protectionism of the
‘nation’ against international capitalism and predatory foreign investments. Post-crisis
populist politics that have emerged in the region especially call for self-reliance and self-
sufficiency. This approach is sometimes modified to also include a ‘cultural nationalism’,
where the ‘nation’ includes certain features deemed threatened by the power of
homogenising Westernisation.xiii
When we try to understand liberal democracy, we also understand that in many countries it
is an imposition of Western ideology without much adjustments to accommodate the local
contexts. In the peripheral economies, encroachment on resources displaces the life and
livelihood of local communities creating deep insecurities about their cultural identity. It is
the instances of these local communities wanting to escape the ‘homogenization’ and
‘Americanisation’ of culture and the ineffectiveness of the (often corrupt) Government that
they struggle to redraw state boundaries to maintain their parochial identities exclusive of
the ‘Mc World’. Hence the rise in ‘Jihad’ or the ‘Anti-Western’ nationalist sentiments which
seek to divide using warfare, religious fundamentalism and ironically the world-wide net,
intensifying ethnic prejudices and hatred.xiv What the world experiences as terrorism is the
culmination of all the issues into aggrandisement tactics of attacking pinnacles of globalized
life and economy as a protest against it and the willy-nilly of globalized cores; internationally
the west, locally the neighbours.
CONCLUSION
Though the democratized world owes much of the progress to rapid Globalization, it cannot
be said the effect of Globalisation on Democracy in theoretical or practical terms can be said
to be net positive. Similar to the impulse driving Jihad, Globalisation is primarily based on
self-interest of actors not on democratic principles- it needs liberal democracy only to the
extent of facilitating efficient free market, it needs freedom only to ensure citizens are free-
willed consumers, to allow Elon Musk to buy twitter for 46 billion but not spend 6 billion on
World Hunger. Globalization promises prosperity and unity but it comes at the cost of
individual identity. It is the lack of morality in the institutions and businessmen that govern
our societies and the creation of ‘products’ non-discriminately that is the true hazard of
globalisation on democracy
“The forces of Jihad and the forces of McWorld operate with
equal strength in opposite directions, the one driven by
parochial hatreds, the other by universalizing markets …. They
have one thing in common: neither offers much hope to
citizens looking for practical ways to govern themselves
democratically.”- Benjamin R Barber
i David Held, Professor of Political Science at the London School of Economics

ii Ohmae,1990

iii Chossudovsky, 1998

iv Love, J. L. (2011). The Latin American Contribution to Center-Periphery Perspectives: History and Prospect. In P. H. Reill & B. A. Szelényi (Eds.), Cores, Peripheries, and Globalization (NED-New edition, 1,

pp. 15–42). Central European University Press

v Steven Schmidt, January 21, 2018. "Latin American Dependency Theory" Global South Studies: A Collective Publication with The Global South

vi Francis Fukuyama, Political Order and Po1litical Decay, State University of New York Press, 1988

vii Catharin E. Dalpino, Does Globalization Promote Democracy? An early assessment, Brooking, 2001

viii Francis Fukuyama, Political Order and Political Decay, State University of New York Press, 1988

ix Friedman, T. (2000). The Golden Straightjacket. In The Lexus and the Olive Tree (pp. 101-111). New York, NY. Anchor Books

x Rodrik, Dani (2000). "How Far Will International Economic Integration Go?". Journal of Economic Perspectives. 14 (1): 177–186. doi:10.1257/jep.14.1.177. ISSN 0895-3309.

xi Benjamin R Barber, 1992, Jihad vs McWorld

xii Michael Levin, 2015, Triumph of Occupy Wall Street, The Atlantic

xiii Kevin Hewison, Liberalism and Globalisation, Southeast Asia Research Centre Working Paper Series, No.15, 2001

xiv Benjamin R Barber, 1992, Jihad vs McWorld