Global Integration: Currents and Counter-Currents

Abstract

I have—not altogether successfully—tried to avoid using the word “globalization” because it has no agreed definition even though it first appeared in 1986. Instead I have chosen the term “deeper integration” to refer to the ongoing process of ever-tighter linkages among countries proceeding in stages since the end of World War II, first by trade negotiations beginning in the 1950s, then intensifying with the liberation of capital flows and deregulation of financial markets in the 1970s and 1980s. By the end of the 1980s a new phase of interdependence was launched by a marked increase in foreign direct investment, and the multinational enterprises (“MNEs”) became the drivers of integration as they spread their production chains around the world. This third phase was and is closely linked to the revolution in information and communication technology and technological changes in transportation which made it cheaper and easier to manage far-flung production networks. With international rivalry intensifying, a wave of mergers and acquisitions has created an oligopoly of global giants in a number of sectors, as well as increasing flows of highly skilled and educated workers. Moreover, the emergence of E-commerce has, especially, but not only, in the service sectors, in effect, introduced a qualitatively different kind of integration which has been dubbed “fusion”. In a world of fusion, which does not, of course, yet exist, the term national policy would be an oxymoron.