Globalization as it is understood today started in the nineteenth century, even though it had earlier foundations in European colonial expansion. The managerial and technological changes that followed the industrial revolution caused significant increases in returns on investments, the demand for resources, and openings for markets, with Britain being a major state actor ( Gilpin, 2016 ). The entrance of new state actors including the United States, Italy, Germany, and Japan, to the global scene, interfered with the domination of Britain in globalization and geopolitics. Today, there are many more state actors influencing international relations, with the United States being arguably the most significant.
Non-state actors are referred to as non-sovereign bodies that exert critical social, political, and economic power and have an impact on a national as well as international scale. There is no consensus regarding the membership of this category, and many studies rely on context in stating its members. Eurasia Group and the National Intelligence Council co-hosted a run of seminars in 2006 and 2007, aimed at establishing the role of non-state actors in international relations. The seminars analyzed a broad range of such actors, particularly the non-criminal ones including non-governmental organizations (NGOs), multinationals, and philanthropic super-empowered individuals. These entities were included in this discussion because they have global significance but are often overlooked in favor of state actors. This paper discusses the influence of a state actor – the United States and a non-state actor – multinational corporations – on geopolitics and globalization.
Delegate your assignment to our experts and they will do the rest.
The Role of the United States in Geopolitics and Globalization
Soon after the end of World War II, the US took on the international role of sponsoring a return to a somewhat similar open world economy abandoned by Britain, which was declining during that period. The motivation behind this strategy was brought about by the perceived threat to global expansion by the Soviet Union as well as its autocratic approach to economic development and the desire by United States industry to gain from globalization ( Nye and Welch, 2016 ). Thus, the roots of globalization, as it is seen today, can be considered to lie in part in the inhibition of the Soviet Union, which was at the core of the United States Cold War policy. As a result, by the inception of the 21st Century, the United States had become, by far, the world’s most important state on an economic and military basis ( Gilpin, 2016 ). Today the United States’ military capacity, considering the share of national economy set aside for military expenditures, is second to none. In fact, the resources allocated to military spending in the United States is equivalent to the next twelve largest spenders combined. Whether such a heavy investment in the military ensures equal success in particular conflicts is open to much doubt. Some of the most recognized instances that have tainted the United States military are its involvement in Vietnam in the mid-twentieth Century, the invasion of Iraq in 2003, and its failure to strong-arm the Russians in Ukraine in 2014 (Booth and Erskine, 2016; Gilpin, 2016 ). Regardless, the United States has become an increasingly significant cultural and economic influence throughout the world, with the only significant challenge being the Soviet Union’s political-economic approach during the Cold War. During this period, the Soviet Union model was founded on central government economic planning while the United States model was based on the private ownership of industry and land.
Overall, the United States economic and cultural influence around the world can be considered to be successful. This paper focuses on two ways in which globalization and geopolitics have been dependent on the United States’ geopolitical capacity.
First, eliminating barriers to trade including quotas and tariffs became a significant objective of the United States foreign policy in the mid-twentieth century. US-based banks and industrial companies promoted the opening of a world economy more than other corporate interests ( Dittmer, 2014 ). Since the 1940s to date, the United States has laid the foundation for the dramatic growth of global trade, the development of manufacturing supply-chains for components and parts in various world regions and the previously-unimaginable opening of closed economies like China.
Second, the United States provides the world’s main currency for the purpose of global trade. This has made the Federal Reserve, which is the United States central bank, the world’s most significant financial institution. Arguably the most important contribution of the United States to the global finance system was when, in 1971, the United States shifted from a governmentally controlled monetary system to free-floating exchange rate whereby the United States dollar value fluctuates in relation to other currencies as a consequence of competitive bidding in open markets ( Dittmer, 2014 ). Since that period, the global monetary system has been operating mostly on floating exchange rates as the comparative values of more currencies are set in forex markets instead of government central banks. It is important to note that while this strategy facilitated the growth and development of the world financial system, it also set the scene for the global diffusion of financial risks as evidenced by the 2008 worldwide financial crisis. This crisis was mostly caused by the widespread purchase of United States sub-prime mortgage securities. As such economies as Brazil and China continue rising, it is expected, however, that the United States influence in global trade would reduce.
The Role of Multinational Corporates in Geopolitics and Globalization
Multinational corporations are organizations that manage production or distribute services in more than one country. Traditionally, multinational corporations have their headquarters in a particular country and have subsidiaries in others, all of which operate in harmony with a coordinated global strategy to obtain cost efficiencies and gain market share ( Goodman, 2017 ). It is also important to consider the relatively modern “multi-nationalization” of such state-owned businesses as Chinese oil corporation CNPC and Rosonboronexport, which is a Russian arms-export monopoly. Such enterprises are considered to be state entities and may or may not share similar incentives and objectives as private multinationals. Regardless, they promote globalization and cause developments in geopolitics, just like the United States albeit in a different manner.
Today, for many multinational corporations, the most significant impact on geopolitics and globalization is the collapse of the relatively older model of such organizations having headquarters in developed countries, with many of their subsidiaries in developing countries. In the older models, these subsidiaries got most of their instructions for operation from the headquarters. However, a growing number of multinational corporations today, many of which are state-owned, are situated in emerging market nations. Some of these nations include Turkey, Mexico, Brazil, Russia, India, and China ( Goodman, 2017 ). These multinationals are now considered to be powers in their own rights and have been critical in shifting corporate power away from the Organization for Economic Co-operation and Development (OECD) countries. For instance, multinational corporations from China, Russia, and India are giving “pariah states” that the US would rather isolate a substitute source of investment that, as a result, weakens the economic and political leverage of Western countries. India energy companies, for example, have invested considerably in Cuba and Burma, and have built important ties with Venezuela. Additionally, emerging market-oriented multinational corporations are increasingly involved in mergers with companies in developed countries. In some cases, these organizations also acquire companies in developed countries. As a result, they can gain access to sensitive technologies. Many of the world’s oil and gas reserves are now operated by emerging market-oriented multinational companies in close placement with or owned by their parent states.
References
Booth, K., & Erskine, T. (Eds.). (2016). International relations theory today. John Wiley & Sons.
Dittmer, J. (2014). Geopolitical assemblages and complexity. Progress in Human Geography, 38(3), 385-401.
Gilpin, R. (2016). The political economy of international relations. Princeton University Press.
Goodman, J. (2017). Non-state actors: Multinational corporations and international non-governmental organizations. An Introduction to International Relations, 343.
Nye Jr, J. S., & Welch, D. A. (2016). Understanding global conflict and cooperation: an introduction to theory and history. Pearson.
