Liberalization and Globalization

The withdrawal or reduced expansion of public provision in health and education, which affects those who cannot buy alternatives.

Vulnerability to external shocks, which is intrinsic to interdependence: a financial crisis or a pandemic elsewhere is transmitted rapidly.

Cultural anxiety, discussed below.

Globalization

Its dimensions

Economic: trade, cross-border investment, global supply chains, and the movement of capital.

Political: international institutions and agreements, and the corresponding constraint on what a state can decide alone.

Cultural: the worldwide circulation of media, food, dress, music and language.

Technological and communicative: the internet and mobile telephony, which are its infrastructure.

Demographic: migration, both of labour and of the highly qualified.

Ecological: climate change and pollution, which is the dimension that makes interdependence undeniable, since no state can address it alone.

Its features

Compression of time and space; interdependence; the diminished significance of distance; the reduced autonomy of states in economic matters; and, in Robertson's formulation, an intensified consciousness of the world as a single place.

Culture: homogenisation, or something more complicated

The debate is examinable, and giving all three positions is what earns the marks.

Homogenisation. Local cultures are displaced by a global consumer culture carried by media and brands, so that cities everywhere come to resemble one another. Ritzer's account of the spread of standardised, rationalised, predictable forms of provision is the usual reference.

Cultural imperialism. The stronger version: the flow is not symmetrical, and what spreads is the culture of the economically dominant societies, so globalization is Westernization with better logistics.

Hybridisation and glocalisation, which is the position most sociologists now hold. Global forms are received, adapted and recombined locally: global cuisine adapted to local taste, global media formats remade with local content, and, in the other direction, Indian film, food, yoga and music circulating worldwide. The flow is uneven and it is not one way, and a good answer says so with examples.

And a paradox worth naming: globalization has strengthened local and regional identities as often as it has weakened them. The assertion of language, region and religion has grown in the same decades as global integration, which is the phenomenon [Post Modernism] describes as the assertion of difference.

The Indian record, stated carefully

What can be said with confidence: that the reforms of 1991 changed the structure of the Indian economy substantially; that growth was higher afterwards than before; that the service sector grew disproportionately; that inequality between groups and regions widened; that a large informal workforce persisted; and that Indian society became far more connected to the rest of the world in communication, consumption and employment.

What is contested: how much of the growth is attributable to the reforms; how much poverty fell and by what measure; and whether the distributional costs were necessary.

An answer should attribute contested claims to those who make them and avoid asserting a verdict, which is both accurate and, in an examination, safe.

Law and globalization

The section this audience should be able to write.

International obligations become domestic law. Membership of the World Trade Organization required changes in Indian intellectual property law, and the amendment of the Patents Act to comply with the TRIPS Agreement is the standard example.

New regulatory institutions appeared with the opening of sectors: securities, telecommunications, insurance, electricity and competition each acquired a regulator, which is the state changing shape rather than withdrawing.

Company and insolvency law were rewritten for an economy with foreign investment and cross-border creditors.

Labour law was consolidated into codes, with the flexibility debate at the centre of it.

Data, privacy and online conduct became subjects of law only because the technology arrived, which is cultural lag once more.

The proposition to state: liberalization did not reduce the amount of law. It changed its character, from law that licensed and allocated to law that regulates competition, protects consumers and investors, and enforces contracts. The state moved from being an owner and an allocator to being a regulator, and that is a change in the form of state power rather than in its quantity.

A worked example

A family in a district town, 1990 to 2020.

The father worked in a state undertaking with security, a pension and modest pay, and waited years for a telephone connection and a scooter.

The son works for a private firm serving clients abroad. He earns several times what his father did, has no security of tenure, changes employer every few years, and holds a mobile phone that has replaced the wait entirely.

The daughter works in a bank in a city and lives alone, which her grandmother could not have done.

Their cousin's family, cultivating three acres in the same district, has seen input costs rise, prices fluctuate with markets it cannot see, and one son migrate to a construction site in another state without a contract.

The chapter's argument is in the comparison. The same three decades produced, for one family, opportunity, income, mobility and independence for a daughter, and for the other, exposure, insecurity and migration into informal work. Both are true, they are consequences of the same process, and any answer that gives only one of them is not describing India.

Quick revision

1. Liberalization: reduction of state control over the economy. In India, from 1991, after a balance of payments crisis: licensing dismantled, public-sector reservation reduced, foreign investment permitted, tariffs cut, exchange rate adjusted, markets given regulators. LPG = liberalisation, privatisation, globalisation.
2. Gains usually cited: growth, new occupations, a larger service sector, an expanded urban middle class, consumer choice, communication, work abroad.
3. Costs usually cited: widened inequality, agrarian distress, informalisation of employment, pressure on public provision, exposure to external shocks.
4. Globalization dimensions: economic, political, cultural, technological, demographic, ecological.
5. Culture: homogenisation; cultural imperialism; and the position most now hold, hybridisation or glocalisation, with flows in both directions.
6. Paradox: global integration has coincided with the strengthening of local and regional identities.
7. Liberalization did not reduce the amount of law; it changed its character, from licensing and allocation to regulation, and the state became a regulator rather than an owner.

Test yourself

1. What did liberalization in India consist of? The reduction of state control over economic activity from 1991, following a balance of payments crisis: the dismantling of industrial licensing for most industries, the narrowing of the areas reserved for the public sector, the admission and progressive widening of foreign investment, the reduction of tariffs and quantitative restrictions on imports, adjustment of the exchange rate and later current account convertibility, and the opening of financial and capital markets under new regulators.

2. State the social consequences usually presented as gains and as costs. Gains: higher growth and average incomes with a falling proportion below the poverty line, new occupations and a much larger service sector, an expanded urban middle class, wider consumer choice, greatly improved communication and mobility, and new opportunities for women in service occupations. Costs: widening inequality between regions, between urban and rural areas and between the educated and the rest; agrarian distress; the concentration of employment growth in informal work without contracts or security; pressure on public provision in health and education; and increased vulnerability to external shocks.

3. Give the three positions in the debate about globalization and culture. Homogenisation, that local cultures are displaced by a standardised global consumer culture. Cultural imperialism, the stronger claim that the flow is asymmetrical and what spreads is the culture of the economically dominant societies, so that globalization is Westernization by another route. And hybridisation or glocalisation, the position most sociologists now hold, that global forms are received, adapted and recombined locally and that flows run in more than one direction, Indian film, food and music having circulated widely.

4. What is the paradox of globalization and identity? That global integration has coincided with, and appears in part to have provoked, the strengthening rather than the weakening of local, regional, linguistic and religious identities. The same decades that produced worldwide markets and communications have produced assertive claims of difference, which suggests that exposure to a wider world sharpens rather than dissolves the sense of belonging to a particular one.

5. Did liberalization reduce the amount of law? No; it changed its character. Law that licensed, allocated and rationed was replaced by law that regulates: securities, telecommunications, insurance, electricity and competition each acquired regulators, company and insolvency law were rewritten for an economy with foreign investment and cross-border creditors, intellectual property law was amended to meet international obligations, and entirely new fields of data and online conduct appeared. The state moved from owner and allocator to regulator, which is a change in the form of state power rather than in its quantity.