Globalization and the United States: Positive and Negative Impacts on American Domestic Policies

Globalization & Terrorism

Globalization and the United States:

Positive and Negative Impacts on American Domestic Policies

Harvard University - Public Policy

Globalization & Terrorism -

Globalization and the United States: Positive and Negative Impacts on American Domestic Policies ©

The United States is seen by much of the world as the strongest supporter of globalization - in fact, as pushing it on everyone else. We often think of globalization as something that impacts "other countries" - though it has had a strong impact on the U.S. as well. Compare and contrast the positive and negative aspects of globalization on U.S. domestic politics.

While globalization - an historical phenomenon which might be loosely defined as the increasing disintegration of national boundaries in favor a global economy, shared culture, and worldwide political integration - appears by all measures to be an inevitable and unstoppable progression, the likely impact and consequences of globalization remains the subject of debate. What is not questioned is the assertion that there will be both plusses and minuses, and costs and benefits, associated with globalization. The benefits to less developed cultures and nations are clear: by sharing in the global economy, these poorer nations stand to improve their economic conditions and - hopefully - advance the political freedoms of their citizenry. Similarly, the benefits of lowered trade restrictions and lessened national barriers to cultural interaction and economic integration are equally clear for the world's wealthier nations; for the United States and Western Europe, newly opened markets around the world create new opportunities for economic growth.[1] Correspondingly, for every positive impact of globalization there are negative consequences, as well the direct and indirect impact of globalization on American domestic policies is not yet fully apparent. As a nation and a culture, we are effectively surrendering part of our national sovereignty, with the hope that the benefits of globalization will offset any costs. While globalization is not a historically new phenomenon, it has never progressed as rapidly or dramatically as present- with so little understanding of the possible outcomes. Our willingness to choose globalization over national self-interest is almost unprecedented, and it behooves us to fully explore the impact on domestic policy before we have no choice but to accept the full consequences of globalization.

To truly understand the impact of globalization on American domestic (and foreign) policies, the historical role of the nation-state must be analyzed; perhaps more importantly, it must be accepted that to some degree, globalization represents a negation of the benefits afforded by nation-state politics. The concept of the modern nation-state can be defined as a sovereign political entity that governs a geographical region that is inhabited by a population with a shared sense of collective identity.[2] In simpler terms, the concept combines the idea of nation (a unified populace linked by heritage, belief, religion, or shared values) with the political construct of a state (centralized sovereign political power).[3] In the 21st century, the nation-state has become the dominant system of political organization worldwide; the vast majority of the global population now lives in these nation-states, governed by a sovereign authority that regulates a constituency with a shared cultural and social identity. Increasingly, however, globalization is serving as a counter-balance to nationalism - which has both benefits and disadvantages. The nation-state and the forces of nationalism represent competing paradigms: on the one hand, nationalism creates cohesion of shared cultural identity, but on the other nationalism breeds conflict with other nations based on competition for resources. In a balance-of-power model of global interaction, the rules governing that interaction amount to a basic balancing test. In choosing national courses of action, each nation-state must weigh its responsibility to the welfare of its own populace against long-term stability in the global community.[4] For much of the early history of nation-states, interactions were decided by opportunity and power: if a nation had the power to control a natural resource and the opportunity to do so, that course of action was often chosen. Today, international interaction is often constrained by the power of the international community acting together, as well as by the economic and political forces of globalization. Thus globalization is working to harness the destructive potential of runaway nationalism; however, globalization is also a barrier to the benefits of nationalism - such as space exploration, technological innovation, and other activities pursued as national attempts to achieve comparative excellence.

Nevertheless, the benefits of globalization are lucid, both on a worldwide scale and as they impact American domestic policy. Around the world, the economic domino effect of globalization have strengthened the economies of poor nations, decreased poverty levels, increased attention to environmental concerns, and led to more frequent intervention in national-level human rights abuses.[5] Although these benefits have been frequently political, they have origins in the economics of globalization; in both the United States and in poorer countries "the economic benefits from the increased prosperity that globalization will bring through trade, aid, investments, and technical change" have had significant national and global impact.[6] Ironically, for those opposed to globalization, the economic benefits are actually felt more strongly in poorer nations, as the consequences to U.S. domestic policy have often been lost employment opportunities for Americans:

Once Singer gets to the economics of globalization, he is on surer footing. He notes, for example, that you can't complain that nationalism is bad and then also complain that the World Trade Organization erodes national sovereignty. And he notes that the main effect of NAFTA, denounced by the anti-globalization left as a tool of corporate oligarchs, has been the creation of relatively high-paying jobs in Mexico. Half the point of NAFTA was to ship American jobs to Mexico, which is bad for American labor but great for Mexicans. "Any transfer of work from the United States to Mexico can be expected to raise the income of people who are, on average, much worse off than those U.S. workers who lose their jobs," Singer writes. "Those who favor reducing poverty globally, rather than just in their own country, should see this as a good thing."[7]

However, there have also been significant domestic benefits to globalization for wealthier nations like the United States. Lower trade barriers, increased economic interactions, significance increases in real-time communications abilities between international organizations, and more emphasis on international cooperation - all consequences of globalization - have served to strength the U.S. domestic economy.[8] Unfortunately, these economic benefits are offset by the fact that the U.S. is now operating under a massive trade deficit - a new and troubling impact of 21st century globalization. In past eras, wealthy nations benefits from globalization specifically because new markets were opened for goods and products; today, globalization has had a net effect of increasing deficits.

Today, as before 1914, the U.S. economy is the world's biggest, but it is now much more important as a market for the rest of the world than it was then... Whether to finance domestic investment (in the late 1990s) or government borrowing (after 2000), the United States has come to rely increasingly on foreign lending. As the current account deficit has widened (it is now approaching 6 percent of GDP), U.S. net overseas liabilities have risen steeply to around 25 percent of GDP. Half of the publicly held federal debt is now in foreign hands; at the end of August 2004, the combined U.S. Treasury holdings of China, Hong Kong, Japan, Singapore, South Korea, and Taiwan were $1.1 trillion, up by 22 percent from the end of 2003. A large proportion of this increase is a result of immense purchases by eastern Asian monetary authorities, designed to prevent their currencies from appreciating relative to the dollar. This deficit is the biggest difference between globalization past and globalization present. A hundred years ago, the global hegemon-the United Kingdom-was a net exporter of capital, channeling a high proportion of its savings overseas to finance the construction of infrastructure such as railways and ports in the Americas, Asia, Australasia, and Africa. Today, its successor as an Anglophone empire plays the diametrically opposite role-as the world's debtor rather than the world's creditor, absorbing around three-quarters of the rest of the world's surplus savings.[9]

In short, even where globalization has the highest potential to benefit U.S. domestic policy - in the achievable growth of our domestic economy - the realities of modern globalization arguably leave the disadvantages outweighing the benefits. As long the global economy continues to result in a net trade deficit for the United States, American domestic policy will suffer as a consequence.

Setting the all-important sphere of economics aside, no discussion of globalization can be complete without significant mention of the other major result of decreasing national sovereignty - the rise of global terrorism, the war against terrorism, and similar conflicts arising from the clash between globalization and national culture or religious identity. The inescapable reality of globalization is that "the world is becoming a smaller place. The interactions between peoples of different civilizations are increasing; these increasing interactions intensify civilization consciousness and awareness of differences between civilizations and commonalities within civilizations."[10] The resulting political, cultural, and economic benefits have been enormous - but so too have the costs. Specifically, the costs to the U.S. domestic economy and our own national policies have been unprecedented. The costs of the global war on terror, both financial and human, have indeed been very high. Prior to the invasion of Iraq, in January of 2003, the war on terror had already cost the U.S. government $65 billion; of that $30 billion was spent in military operations in Afghanistan, the rest on homeland defense and security in the United States.[11] If the cost of the war in Iraq is included as part of a broader war on global terrorism, the overall expenditure increases significantly. Following original budgets of $60 billion for the Iraq invasion allocated in early spring of 2003, Congress approved another $87 billion in October of that year.[12] As of January 2005, the military operation in Iraq had cost U.S. taxpayers $152 billion. By September 2006, the cost of the Iraq War to the American economy will reach an estimated $315 billion. Of course, none of these figures take into account the human cost in lives lost - nor the possible creation of future conflicts and new generations of terrorists.[13] These economic and human costs obviously have significant and often incalculable impacts on American domestic policy and the U.S. domestic economy.

There have been other costs to the war on terror ranging from unforeseen effects on the economy to a price we have all paid for curtailed civil liberties. For example, American corporations doing business in foreign markets now face significantly raised costs due to security concerns:

Companies that rely on global trade face increased risk, shipping delays and new costs from the menaces of terrorism and war with Iraq. The dual threats of terrorism and war may be able to achieve what the anti-globalization forces have not - a significant slowdown, even decline, in global trade and investment.... U.S. firms have adjusted to tighter security and new requirements at U.S. ports of entry since September 11. The start of war with Iraq added a new level of scrutiny to all cargo entering the country.[14]

Perhaps the most fundamentally damaging costs of all have come at the expense of our Constitutional freedoms, as the government has expanded its powers to deal with terrorism - in ways that often have at least the potential to infringe on the rights of all of us. Some civil rights activists argue that the "zeal in pursuing results in the war on terror is creating a ‘Darkness at Noon' legal system in the United States. Suspects who can be coerced into guilty pleas are given a public show trial. Recalcitrants are declared ‘enemy combatants' and shipped off to Guantanamo or held offshore on ships beyond the reach of the legal system. Even U.S. citizens are dealt with in this way.[15] These civil liberties issues are particularly troubling because in fighting a war to defend freedom, we are risking limiting the very freedoms we fight to preserve. There are few more explicit negative impacts on domestic U.S. policy than changes to our constitutional liberties arising directly from the negative consequences of globalization. Sadly and somewhat ironically, it must also be acknowledged that, while the "war on terror" and the conflict in Iraq are arguably direct consequences of globalization, failure in Iraq may serve to significantly slow the progress of globalization - at least as it pertains to American domestic policy. If the war in Iraq is lost or abandoned, "the idealistic effort to use American power to promote democracy and human rights abroad that may suffer the greatest setback. Perceived failure in Iraq has restored the authority of foreign policy "realists" in the tradition of Henry Kissinger. Already there is a host of books and articles decrying America's naïve Wilsonianism and attacking the notion of trying to democratize the world."[16] In short, the negative consequences of globalization and its impact on domestic U.S. policy may ultimately deprive us of the domestic benefits of the same global interaction and economic progression.

Barring a sudden reversal in globalization, perhaps as a backlash to changes in U.S. domestic policy, we must acknowledge the inevitable process and prepare accordingly. Globalization - and all of the positive and negative consequences it carries - is likely the inevitable future. "And therein lies a tale of technology and geo-economics that is fundamentally reshaping our lives - much, much more quickly than many people realize. It all happened while we were sleeping, or rather while we were focused on 9/11, the dot-com bust and Enron - which even prompted some to wonder whether globalization was over. Actually, just the opposite was true, which is why it's time to wake up and prepare ourselves for this flat world, because others already are, and there is no time to waste."[17] This is the reality: globalization is almost certain to continue, as technology increasingly renders national borders and national sovereignty meaningless. There will be no escaping the impact of globalization on U.S. domestic policy. As the dominant economic force in Earth, the U.S. stands to benefit enormously from globalization; however, to achieve those benefits, it is critical that we understand the political, cultural, social, and economic ramifications. A balance must be pursued and achieved between our national interests and increasing internationalism; our domestic policy must both embrace globalization and maintain the cultural and economic conditions that have led to our superpower status. Out-of-control globalization is as menacing a potential danger as unbridled nationalism, and our own domestic policy must be established to circumvent both dangers. In brief, globalization must be pursued as it furthers our national interest, rather than for the sake of globalization itself. Maintenance of constitutional authority, an expanding domestic economy, and more equality in trade relationships must be of paramount importance; if this is achieved, the net effect of globalization will be a positive one, both on U.S. domestic policy and on the global community.

References Cited

Brubaker, Rogers. Citizenship and Nationhood in France and Germany. Cambridge, MA: Harvard University Press, 1992.

Bhagwati, Jagdish. In Defense of Globalization. New York: Oxford University Press, 2004.

"Cost of War - Notes and Sources." National Priorities Project. Available Online

at: http://costofwar.com/numbers.html (11 July 2006).

Dinan, Stephen. "Senate Gets Iraq-Terror Spending Bill; Package Is $87 Billion." The Washington Times 1 Oct. 2003: A01.

Dunnigan, James. "The Costs of the War on Terror." StrategyWorld.com.

Available Online at: http://www.strategypage.com/dls/articles/ 20030121.asp (9 July 2006).

Easterbrook, Gregg. "Greatest Good for the Greatest Number: Philosopher Peter Singer Will Anger His Traditional Lefty Fans with a Clear-Eyed Account of the Benefits of Globalization." Washington Monthly Nov. 2002: 47-48.

Ferguson, Neil. (April, 2005). "Sinking Globalization." Foreign Affairs. Available online at: http://www.globalpolicy.org/globaliz/ econ/2005/03sinking.htm (10 July 2006).

Flora, Peter, Stein Kuhnle, and Derek Urwin, eds. State Formation, Nation-Building, and Mass Politics in Europe: The Theory of Stein Rokkan: Based on His Collected Works. Oxford: Oxford University, 1999.

Friedman, Thomas. (April 3, 2005). "It's a Flat World After All." New York Times

Magazine. Available online at: http://www.nytimes.com/2005/04/03/ magazine/03DOMINANCE.html?ex=1153281600&en=4f6eac995d8c4800&ei=5070 (11 July 2006).

Fukayama, Francis. "After Neoconservatism." New York Times Magazine.

Available online at: http://www.nytimes.com/2006/02/19/ magazine/neo.html?ex=1141362000&en=a6ab5b762c549c55&ei=5070&emc=eta1 (10 July 2006).

Huntington, Samuel. (Summer, 1993). "The Clash of Civilizations" Foreign

Affairs, Vol. 72, No. 3: 22-28. Available online at: www.alamut.com/subj/ economics/misc/clash.html (10 July 2006).

Michener, Roger, ed. Nationality, Patriotism, and Nationalism in Liberal Democratic Societies. St. Paul, MN: PWPA, 1993.

Roberts, Paul Craig. "Legal Costs of Terror War." The Washington Times 30 Mar. 2004: A19.

Sparshott, Jeffrey. "Terror to Take Toll on Trade." The Washington Times 21 Mar. 2003: C07.

Wenar, Leif. "One World: The Ethics of Globalization." Ethics & International Affairs 17.2 (2003): 121-127.

[1] Jagdish Bhagwati, In Defense of Globalization. (New York: Oxford University Press, 2004), p. 14.

[2] Peter Flora, Stein Kuhnle, and Derek Urwin, eds. State Formation, Nation-Building, and Mass Politics in Europe: The Theory of Stein Rokkan: Based on His Collected Works. (Oxford: Oxford University, 1999), 12.

[3] Roger Michener, ed. Nationality, Patriotism, and Nationalism in Liberal Democratic Societies. (St. Paul, MN: PWPA, 1993), 48.

[4] Rogers Brubaker, Citizenship and Nationhood in France and Germany. (Cambridge, MA: Harvard University Press, 1992.), 19.

[5] Leif Wenar, "One World: The Ethics of Globalization." Ethics & International Affairs 17.2 (2003): 122.

[6] Jagdish Bhagwati, In Defense of Globalization. (New York: Oxford University Press, 2004), p. 115.

[7] Gregg Easterbrook, "Greatest Good for the Greatest Number: Philosopher Peter Singer Will Anger His Traditional Lefty Fans with a Clear-Eyed Account of the Benefits of Globalization." Washington Monthly Nov. 2002: 48.

[8] Jagdish Bhagwati, In Defense of Globalization. (New York: Oxford University Press, 2004), p. 89.

[9] Neil Ferguson, (April, 2005). "Sinking Globalization." Foreign Affairs.

Available online at: http://www.globalpolicy.org/globaliz/ econ/2005/03sinking.htm (10 July

2006

[10] Samuel Huntington, (Summer, 1993). "The Clash of Civilizations" Foreign Affairs, Vol. 72, No. 3: 22-28.

Available online at: www.alamut.com/subj/ economics/misc/clash.html (10 July 2006).

[11] James Dunnigan, "The Costs of the War on Terror." StrategyWorld.com.

Available Online at: http://www.strategypage.com/dls/articles/ 20030121.asp (9 July 2006).

[12] Stephen Dinan, "Senate Gets Iraq-Terror Spending Bill; Package Is $87 Billion." The Washington Times 1 Oct. 2003: A01.

[13] "Cost of War - Notes and Sources." National Priorities Project.

Available Online at: http://costofwar.com/numbers.html (11 July 2006).

[14] Jeffrey Sparshott, "Terror to Take Toll on Trade." The Washington Times 21 Mar. 2003: C07.

[15] Paul Craig Roberts, "Legal Costs of Terror War." The Washington Times 30 Mar. 2004: A19.

[16] Fukayama, Francis. "After Neoconservatism." New York Times Magazine.

Available online at: http://www.nytimes.com/2006/02/19/magazine/ neo.html?ex=1141362000&en=a6ab5b762c549c55&ei=5070&emc=eta1 (10 July 2006).

[17] Friedman, Thomas. (April 3, 2005). "It's a Flat World After All." New York Times Magazine. Available online at: http://www.nytimes.com/2005/04/03/magazine/03DOMINANCE.html?ex=1153281600&en=4f6eac995d8c4800&ei=5070 (11 July 2006).

Comments 11 comments

andrea Moore 7 years ago

this essay sucks like seriously your not talking specifically about america but globalization in general its terrible with the title!!!!!


Chris 7 years ago

I hope you will accept my constructive criticism. First of all, you had a lot of good information in your article that I could use for my assignment. But check your spelling and grammar before posting your articles. I found some errors while reading it.


saneika mckenzie 6 years ago

i think you high lighted some good points and information, and it helped me olot, but as chris pointed out that you need to check your spelling and grammer. but this is just my point of view. i really enjoy reading it though and please don't think that i mean it in a bad way.


Pete W 6 years ago

Saneika - Please check your punctuation, capitalization and grammar. You should not criticize others for mistakes that you also frequently make. Just my 2 cents.


Pete W 6 years ago

By the way Nick, excellent article. It was a very interesting read. Do not worry about Andrea's comments, she is, like a dumb arse ! Thank you.


tes 6 years ago

Globalization has played significant role in demoralizing American sprit of self-confidence and reliance. We are now the biggest consumer of foreign products than any country in the world. Law makers are watching on the sideline when American asset is on a free fall to unrecoverable crash. The irony of all this is they make the law that not only created this disaster but appeared, systematically profiting from it.

I wish they have given enough thought before they consider the integration phase because the thin line that has separated US with the rest of the world, particularly the underdeveloped countries, not any different now than anytime on the past. We don't have any litmus to compare as far changes in socio-political indicators. It was a risk not worth taking at such speed before common rules set forth that will address mutual interest. It was a political move to gain wall street support because at the end of the day no one benefited from this wild except of world integration except CEO's and executives.


tes 6 years ago

Globalization has played significant role in demoralizing American sprit of self-confidence and reliance. We are now the biggest consumer of foreign products than any country in the world. Law makers are watching on the sideline when American asset is on a free fall to unrecoverable crash. The irony of all this is they make the law that not only created this disaster but appeared, systematically profiting from it.

I wish they have given enough thought before they consider the integration phase because the thin line that has separated US with the rest of the world, particularly the underdeveloped countries, not any different now than anytime on the past. We don't have any litmus to compare as far changes in socio-political indicators. It was a risk not worth taking at such speed before common rules set forth that will address mutual interest. It was a political move to gain wall street support because at the end of the day no one benefited from this wild concept of world integration except CEO's and executives.


jlo 4 years ago

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4 years ago

There are to many errors for this to me to consider using for an interpretation make sure you learn to spell before you post an article.


Rachel 4 years ago

I found this article really helpful for my research paper. You hit on very important points and highlighted things that should be called to the general public's attention. As for the others, I did not come here to criticize your grammar but to research a paper.


Gemma 4 years ago

I agree with Rachel, especially the latter! This helped me a lot too and has raised good points that echo great scholars.

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