Economic Integration, Cultural Standardization, and the Politics of Social Insurance

Abstract

We explore cultural aspects of globalization and provide a model to illuminate some possible effects of globalization on the politics of redistribution within nations. The argument of the paper is as follows. Globalization is an extension of nationalism (not its antithesis) with regard to some aspects of culture and economic structure: it promotes cultural standardization and economic integration across national boundaries. But unlike nationalism, globalization does this without providing either the international cultural solidarity or governmental institutions capable of supporting egalitarian redistribution and insurance on a global scale, while weakening the nation-based institutions for the same. In this respect a globalized world may recreate the social structure of the archetypal agrarian empire: a dominant English-speaking class of cosmopolitans presiding over a heterogeneous and provincial underclass with little solidarity across the language groups and weak nationally-based instruments of social insurance and egalitarian redistribution.

The politics of social insurance may thus increasingly pit the cosmopolitans against the provincials (not capital against labor, or even the high earners against the low earners, as many of the cosmopolitans are far from rich.) The result need not be institutional convergence to a world of uniformly minimalist welfare states, however, for the process of specialization induced by greater integration may support distinct institutional arrangements appropriate to each economy's divergent product mixes. Countries specializing in goods characterized by volatile demand or requiring high levels of specific skills may be induced by globalization to strengthen their systems of social protection.