Globalization and Time

Luchien Karsten

• Publisher: Routledge
• Year: 2013
• Print ISBN: 9780415683128
• eBook ISBN: 9781136300349
• Topic: Business
• Subtopic: Business General
• Index: Business

The process of globalization has brought about countless changes in societies, communities, regions and economies across the globe. It has been analyzed from many perspectives as a result and much has been written to muddy the waters of our understanding of this important concept. In going back to the real origins of the global economy, this book demonstrates that understanding this phenomenon as a, 'battle against time' will bring a new clarity to the subject.

The process of globalization was accompanied by the mastering of 'social time', thereby producing a progressive increase in the speed of business transactions, both in manufacturing and in services. The context is the development of international trade in western societies and the creation of business institutions to drive forward growth. The account takes a 'long view', beginning with early European exploration in the B.C. period, and ending with the establishment of multinational enterprises in the 20th century.

Using an impressive range of sources this unique book will be valuable reading for students and academics involved with the study of international business, economic history, business history and politics, among other disciplines.

1
The Coordination of Time

In 1990, two consultants from the Boston Consulting Group, Stalk and Hout, presented a compelling case for time as the key topic for international business. In their study Competing Against Time, they stressed the importance of the link between time and international business:

Time is a fundamental business performance variable. Listen to the ways in which managers talk about what is important to the success of their companies: response time, lead time, up time, on time. Time may sometimes be a more important performance parameter than money. In fact, as a strategic weapon, time is the equivalent of money, productivity, quality, and even innovation.

(Stalk and Hout 1990: 39)

Their point was that, in international business, a timely response to the desires of customers leads to a competitive advantage. They were convinced that the best way for Western businesses to improve their practice of managing time should be to imitate Japanese multinationals, which pioneered the use of timing as a competitive weapon in the globalizing economy.

Timing has become a recent translation of clock time replacing speed as the dominant marker of the second Industrial Revolution (1870–1960). Since multinational corporations began to apply timing to survive in international competitive markets, this latest version of clock time has obtained a global character. This book has the intention to demonstrate how clock time is historically embedded and, even though we perceive it as abstract time, it is still socially constituted. It has, therefore, a history that implies that its development and application changes continuously. Ever since the invention of the mechanical clock, abstract time may have become uniform, continuous, homogeneous, and empty, but it is also historically unique. Its application became socially accepted somewhere during the period between the fourteenth to the seventeenth centuries before industrial capitalism began to dominate Western Europe.

We will explore the processes which have led to the perception that clock time as a universal phenomenon has become hegemonic, has become integrated in infrastructural provisions like railroads and telecommunications, and has been a driving force behind several different forms and stages of globalization. Many of the products we use in our daily lives are derived from a complex geography of production, distribution, and consumption on an ever increasing scale.

Why does this book focus on time in relation to international business and globalization? During the eighteenth century, America’s oldest Founding Father, Benjamin Franklin, coined the phrase Time is Money. This dictum implements itself today on a global level. Presently, talk about globalization seems to implicitly imply the validity everywhere of the statement that Time is Money. Indeed, the current stage of internationalization, primarily of economic activities, is commonly equated with the process of electronic globalization where the movement of capital and the sharing of information within and between businesses move faster than ever before. “Advances in information and communications technology now allow vast currents of capital to circuit the globe at the blink of an eye and firms to produce different components of a single commodity in distant corners of the globe” (Scheuerman 2004: xiii).

By the end of the 1980s, the traditional distinction between domestic and multinational companies became blurred. International cooperation and competition no longer seemed the prerogative of industrial giants alone. At the turn of the 1990s, globalization surfaced as the new buzzword. The steady dismantling of trade barriers in Western Europe and in the Americas, the increasing availability of global capital, the unexpected collapse of communism in Eastern Europe, and the adoption of social market policies in some parts of China stimulated this process. The disappearance of economic barriers such as national borders, the drive for deregulation and privatization of state-owned companies, as well as the progressive convergence of consumer tastes has opened new opportunities for multinational enterprises operating internationally on a large scale as well as opportunities for small and medium-sized businesses, otherwise known as born globals. Indeed, globalization presently describes the actual reality of an economic world which is neither fully contained nor constrained by national boundaries (Spicer 2006).

Within that context, globalization is currently seen as the worldwide movement towards commercial, economic, financial, and communications integration. It implies opening up beyond local perspectives to a broader outlook of an interconnected and interdependent world with free transfer of capital, goods, and services, as well as people, across national frontiers.¹ Globalization today reflects increasing competition in larger markets, creating a pressure which is not only felt by multinational players who invest overseas to gain competitive advantage but also by those who operate in domestic markets who may feel threatened by the new players from abroad. The faster and more efficient this movement rolls along, the more gains the international players are supposed to realize. However, this vision of globalization does not contain any historical connotation. It simply implies that this movement of globalization is dawning. Yet where did this movement come from, what direction has it taken, and what are the driving forces behind it? To answer these questions, the book will put globalization in its historical spatio-temporal context.

The geographer Dicken (2007: 7) has stressed that the “newness” of globalization has been “grossly exaggerated.” The world economy was already extensively integrated in the period before the First World War. However, it was mainly a shallow integration which manifested itself through an arm’s length trade in goods between independent firms and international movement of capital for simple, direct investments with low interconnection.

In The Human Web: a Bird’s-Eye View of World History, father and son McNeill have indicated, however, that initial globalization is much older and that the “Old World Web” may have even had its origins 2,000 years ago when a handful of successful imperial societies increased their power and imposed their cultures on new lands (McNeill and McNeill 2003). Some civilizations within Eurasia and Africa homogenized the “Old World Web” and advanced quickly, leaving many others behind. The advancement towards a modern form of globalization began after 1450. “In the three and a half centuries after 1450, the peoples of the earth increasingly formed a single community” (ibid.: 155). After 1450, oceanic navigation united several different metropolitan webs together “into a single cosmopolitan web [...] based on a unitary maelstrom of cooperation and competition” (ibid.: 5). This single cosmopolitan web became the first actual stage of globalization beginning with the factual discoveries of new territories and the economic rebound of the late fifteenth and early sixteenth centuries.

The global economy of today is, therefore, the outcome of a long historical process whereby technological infrastructural development and military, as well as economic relationships, helped shape the interconnected changes and relationships of subsequent periods. Cartographers were able to design the globe by depicting the new world on artificial globes which reflected the process of shaping the Old World Web into a new form of terrestrial globalization. This book takes its starting point here while terrestrial globalization coincides with the rise of international business in Europe. As will be shown, terrestrial globalization opened up specific applications of abstract time, attempting to diminish the influence of various local, cultural, and national societal systems with their own temporal complexity based on all sorts of concrete event times. Yet the continuous tension between manifestations of abstract time and concrete time cannot be understood simply “in terms of the supersession by abstract time of all forms of concrete time” (Postone 1993: 216). The tension is a rather significant cause of the different forms of globalization that developed over the course of Western history.

Over the last few decades, however, globalization has also become a heavily contested issue. Some, like the Japanese management author K. Ohmae (1990), have developed a very favorable view on globalization. It is perceived as the outcome of a fast growth of world trade and commerce with the liberalization of national markets through global competition with an outcome of daunting technological advances and increasing interdependence. He presupposes that there is increasing geographical spreading and increasing concentration as well as a growing functional integration between different economic activities. Defenders of this view believe that we will soon all live in a borderless world where “national” limits are disappearing.

Others, however, see the hyper-globalists as spreading a myth. They emphasize that although globalization is currently being presented as a universally profitable stage of modernity, it is, in fact, mainly a project defended by elitist Western neoliberal interests in an attempt to subjugate even the remotest corners of the world and primarily safeguard Western economic benefits and prosperity. The mass protests of anti-globalists during the World Trade Organization (WTO) meeting in Seattle in 1999 which derailed the launch of another round of trade liberalization and the G-7 meeting in Genoa in 2001 have been a clear indication of a growing resistance against a one-sided globalization process. The protesters during the G-20 summit in London in 2009 demonstrated peacefully against global capitalism which was struggling with the shadow of its latest financial crisis (James 2009). They did not ask for a restoration of national hegemonies but stressed the establishment of global citizenship as a way to further embed advances of a better form of globalization based on a new politics of solidarity. The pro-globalizers look at the increasing political-economic expansion as a succession of stages which calls for a legal and institutional framework based on universal values and norms to embed and regulate globalization which more individuals and social groups might enjoy within their own range of temporalities. Globalization in that sense offers opportunities in terms of improving world economics and the general quality of life without undermining human security, social equity, freedom for the individual, and democracy. The pro-globalists look for approaches which actually reinforce positive developments of this kind of globalization. One of them is a more humane approach of social time.

Spatio-temporal approaches

The sociologist A. Giddens (1979) has placed the concept of time and space at the heart of social theorizing about societies and economic organizations to understand the processes that led to modern society. He stresses that Marx primarily focused on capitalist production relations and the commoditization of time and that Weber has mainly analyzed the processes of rationalization and bureaucratization to understand modern society and the coordination of time. However, both authors studied this modernization process primarily from the time perspective. Giddens, however, stresses that this process has been the outcome of the dissolution of social systems, i.e., social communities like city-states, from local contexts of interaction and have become re-embedded in social systems across large distances in time and space. He points out that the extension of social life in time and space is an overall characteristic of the capitalist development which advances into what he calls an extensive system integration.

Capitalism is constituted temporally and spatially, and both concepts are core components of modernization in which administrative power became exerted as much in capitalistic production processes as in public administrative procedures of nation-states. Giddens called this power the practice of surveillance, i.e., “the control of information and the superintendence of the activities of some groups by others” (Giddens 1987: 175). The effectiveness of administrative power became nested within a particular temporal and spatial context. He, therefore, criticizes authors who still define time and space in general terms as having no history themselves but simply see them as setting the stage for actions, i.e., the “environment of actions.” They implicitly apply them without recognizing that abstract time itself has a history which in a particular way became characteristic for modern Western culture and society.

The development of economic organizations like international businesses, which played and still play such an important role as drivers to speed-up economic and social changes, can only be clearly understood if they are studied in the context of modernization and are analyzed from an historically determined and integrated spatio-temporal perspective.

The geographer D. Harvey (1989) has similarly contributed to a better understanding of capitalism’s trajectory by stressing its geographical context. Like time, space is materially produced by different societies in a variety of ways. Space comprises qualitatively different physical forms which are the outcome and creator of particular political, economic, as well as cultural processes. Capitalism has had a tremendous influence on the way these geographical forms and outcomes have been shaped. Harvey introduced the notion of time–space compression to indicate that the increased pace of change due to new technologies and the advancement of globalization has enhanced the awareness of far distant places having an impact on our own lives instantaneously.

Both authors have stressed the importance of studying the contextualities of institutionalized patterns of interactions across time and space that are viewed as inherent in the investigation of social reproduction of capitalism. During the era of industrial capitalism, general economic processes began to characteristically affect the disembedding of individuals and institutions from their traditional contexts which are primarily determined by concrete time, trying to re-embed them in a setting which is dominated by abstract time.² Concrete time is always registered differentially in different settings depending on local customs, practices, and traditions (Postone 1993). Within capitalism, abstract clock time was eventually used to subsume all manner of space—time differences like differences in work cultures, production processes, as well as the styling of products and services into its own regime and turning them into profitable outcomes. Yet, as long as concrete time is embedded in local socio-cultural patterns, it can still operate alongside abstract time. In that sense, the space—time domain of globalizing capitalism shapes “territorially expressed, sometimes juxtaposed, sometimes distantiated relations that are dynamic and differentiated” (Castree 2009: 33–34).

The sociologist M. Castells (1996) has integrated this space—time approach in his analysis about the emerging informational capitalist network society. He stresses that, due to the revolutionary development of Information and Communication Technology (ICT), the network society has dissociated itself from the place-centered formation of industrial society and is primarily focusing on the space of flows of information which is driven by speed, flexibility, and timing. In the context of the global economy and due to the impact of ICT, time and space have obtained a new meaning. The latest industrial space that is organized around flows of information and capital has created a global economy which is different from a world economy:

It is an economy with the capacity to work as a unit in real time on a planetary scale. A space of flows in the form of networks transmitting information has created a setting in which distance becomes meaningless. The space of flows ultimately is a space-less space. This not only has serious consequences for the way the global economy is spatially operating but also impacts on the concept of time within societies in the world. At the level of time, we have entered the era of time-less time, a modular time where the traditional rhythms of night and day have disappeared. Time zones, holidays, bank holidays, etc. have disappeared as markers. […] Financial markets operate 24/7 throughout the year. The biological rhythms of human beings have become obsolete […]. Time-less time belongs to the space of flows while time discipline, biological time, and socially determined sequencing characterize places around the world, materially structuring and destructuring our segmented societies.

(Ibid.: 465)

Real time describes the full potential of what these technologies might achieve. Castells defines real time as space-less time; “What I call time-less time is only the emerging, dominant form of social time in the network society” (ibid.: 434). The space of flows induces time-less time as the latest form of abstract time which even becomes detached from the traditional clock time concept and only exists in the form of sequence.

Hope (2006), however, has questioned the validity of this concept. “Castells appears to be saying that time-less time contains no temporal contradictions. But the history of globalization illustrates the opposite tendency (…). Under global capitalism, the ruling myth of progress is synonymous with the ideology of real time” (ibid.: 289–291). Time-less time seems to imply that “this temporal realm is beyond human influence” and that time-less time is now “born to rule forever.” Yet this time-less time concept owes its existence to information technologies and networks, which are related to particular historical proc...

Table of contents

• Cover Page
• Half Title page
• Title Page
• Copyright Page
• Contents
• List of illustrations
• Acknowledgments
• List of abbreviations
• Introduction
• 1 The Coordination of Time
• Part I Terrestrial globalization
• Part II Industrial globalization
• Part III Electronic globalization
• Notes
• Bibliography
• Index