Joachim Betz’s research while affiliated with German Institute for Global and Area Studies and other places

In other chapters, it has already been discussed to what extent international organizations, networks and NGOs have driven or limited globalization, that is, how they have acted as additional actors in the emerging complex world governance, which is now commonly referred to as ‘global governance’. What this global governance means, which international, state, societal and private actors are involved, why they should be involved and why governmental networks or organizations are no longer sufficient to cope with the increasingly complex problems of world governance, has been discussed over and over again, so it should only be summarized in the shortest possible way. It is less common to have an overview of how this world governance has been expressed in possibly sectorally different institutional forms and which problems, which have arisen or at least aggravated by the world economic and world social intertwinement, have been identified and—also or not—tackled.

Globalization does not only reduce to the economic sector, is also not an predominantly or almost exclusively by private actors driven networking of the world. It rather requires—as already mentioned in the context of the liberalization of foreign trade and capital flows—the political enablement through elimination or reduction of national obstacles of cross-border interaction. In the positive sense, the participation in globalization requires the political creation of conditions, so that societies can successfully network globally, for example the creation, maintenance and administration of cross-border infrastructure, the conclusion of inter-state, regional or global cooperation agreements, the agreement of certain product, process and legal and financial standards in transnational exchange, certainly also the empowerment of national actors in order to be able to compete internationally or to cushion its consequences.

A more interconnected world economy is—as seen—characterized by the increase in cross-border trade and the mobility of international capital. In theory, it would also be characterized by free movement of people—especially by the freedom of establishment of workers—across borders, since globalization would favor and make it profitable for (almost) all participants (see below). However, from the point of view of free choice of place of work in the global or even regional context, it cannot really be said that there is free movement of people.

The magazine ‘Der Spiegel’ already knows it quite exactly: “The age of globalization is coming to an end” (No. 26, 25.6.2022, p. 63). The authors agree with a whole range of academic observers, politicians and business representatives on this (cf. Chap. 1). This was heard years ago and even until recently quite differently, when almost everywhere the alternative-less triumphal march of globalization and the extension of the Global Governance accompanying it was talked about.

It is relatively easy and this experiment has also been undertaken many times to construct a direct connection between continued globalization and the worldwide advancement or decline of democracy or the preservation of democratic conditions. Internationally networked corporations, international agreements and external impairments caused by globalization (climate change, migration, etc.) have a strong and often negative impact on the life chances of many citizens in central areas of their well-being, without them or their national governments being adequately involved in the corresponding decisions, or being able to prevent them.

Foreign trade is rightly considered the earliest and perhaps still the most important facet of a stronger, international economic networking. For a long time it remained relatively small compared to the global gross domestic product, concentrated—because of the high transport costs at that time—essentially on luxury goods with a low weight in relation to the market price. This has changed significantly since the middle of the 19th century; until the outbreak of the 1st ???

The tough global competition for export markets, the establishment of transnational corporations and the acquisition of financial resources from international banks and investors by local players should actually—in view of the fact that international capital is mobile and can therefore be withdrawn relatively quickly again—lead to a worldwide race to reduce income and corporate taxes, resulting in a pressure on national social expenditure, regardless of whether financed by taxes or by social security contributions. This was also the tenor of initial contributions to the relationship between globalization and the social or welfare state (see below), which mostly assumed its widespread hollowing out everywhere (race to the bottom) and the basis for active social policy would disappear.

The most striking signs of globalization are undoubtedly foreign capital investments, predominantly made by transnational or multinational corporations (TNCs or MNCs), i.e. companies that have a branch office in at least one other country than their country of origin, in which they hold at least 10% of the capital shares. This definition of UNCTAD is relatively soft, which is why foreign investments and those made by TNCs are almost identical and the number of TNCs thus determined is high and of rapidly increasing nature. But even if one restricts oneself to the 100 TNCs with the highest sales, their share in global production, employment, private sector investment, foreign trade and global technology transfer is very considerable.

There has been a growing political reaction for several years against almost everything that can be associated with globalization, namely the loss of jobs, their increasingly precarious nature, the increase in inequality, rising legal and illegal migration, the erosion of democracy and cultural foreignization. This is associated in popular (and academic) perception with an increase in social polarization, the thinning of the middle class and a growing distance between citizens and their (elitist) representatives, accompanied by a loss of trust in political institutions.

A particularly negative perceived side of globalization is associated with the idea of financial jugglers on Wall Street and elsewhere, who at the push of a button and in seconds move huge financial flows across the globe, thereby enriching themselves excessively, potentially destabilizing companies and countries and plunging people into misery everywhere. In fact, every day unimaginably large values of shares, bonds, credit contracts and -certificates as well as currencies are traded on the global financial markets, which far exceed all other global economic transfers in value. To this development have contributed the worldwide liberalization of capital flows, the growth of internationally operating banks and other financial institutions, the development of new, highly complex financial instruments and of course the worldwide networking of financial actors with always fast-working IT infrastructure.