Harlambos (2013) describes Kenichi Ohmae as ‘one of the most uncompromising and wholeheartedly enthusiastic advocates of globalisation from a right-wing neoliberal perspective who sees economic change as the driving force of globalisation’
The interlinked economy
According to Ohmae (1994) political boarders are becoming less and less important, as countries increasingly form a giant, interlinked economy – this is especially true of the most developing countries, such as America, Europe and Japan, and these being joined by rapidly developing countries such as Taiwan, Singapore and Hong Kong. Ohmae argues that in the Interlinked Economy, corporations and consumers are more closely connected across boarders than ever, and politicians, bureaucrats and the military are declining in importance.
All of this has happened because of the opening up of the world economy and increasing trade between nations, which in turn has been driven by rapid developments in communication technologies – the rise of the internet has made it easier for people to see what people in other countries consume, and has made it much easier to buy products from other countries too.
Governments are no longer able to control information coming into their country, and thus they cannot control demand for foreign goods. If people see better standards of products being produced and consumed abroad they want them, and governments are increasingly powerless to prevent international trade in goods. According to Ohmae, this is not only good for the consumer, but good for the economy as well.
Global Citizens and Regional Links
Individuals have become global citizens through their consumption habits – they want to buy the best and cheapest products where ever they are made, and any government who tried to prevent this happening would risk upsetting millions of potential voters.
On the supply side, regional economic links have become more important than national ties – many Californian companies, for example, have more ties with Asian companies than ones in other parts of the USA.
Ohmae also believes that Transnational Corporations do not see themselves as being rooted in one country – if they did, this would be to their disadvantage – in order to maximize their profits, they have to think about global markets and adapt products to fit different local demands.
Because of all of the above factors, governments have largely lost their ability to control their economies.
Governments and Consumers
Ohame argues that the global economy also makes the use of military force less likely – if you attack your neighbour, the chances are you will be destroying some of the assets of your citizens, and their destruction will only result in a downturn in economic growth for you, since we are all economically interdependent.
Ohame believes that role and function of the nation state today is limited to that of producing the conditions in which consumers, worker and corporations can thrive in a global economy. They are still necessary to provide an infrastructure such as roads and legal system, for example.
Above all, though, they need to provide a good standard of education for their citizens, as Ohmae believes economic success results from having a highly educated, entrepeneurial and well informed population.
- Ohame ignores the role of nation states in controlling trade across their boarders – the three biggest trading blocks of Japan, North America and the EU, for example continue to restrict trade with nations outside.
- He understates the role of military power in geo-politics. States not only have a monopoly of violence in their own territories, the USA and Russia have recently used military force abroad.
- According to global pessimists, he overstates the power of consumers – global Corporations and bankers have more power.
Haralambos and Holborn (2013) Sociology Themes and Perspectives