Global Business in Local Culture by Philipp Aerni

Author:Philipp Aerni
Language: eng
Format: epub
ISBN: 9783030037987
Publisher: Springer International Publishing

© The Author(s), under exclusive license to Springer Nature Switzerland AG 2018

Philipp AerniGlobal Business in Local CultureSpringerBriefs in Economicshttps://doi.org/10.1007/978-3-030-03798-7_6

6. Economic Globalization as a “Disembedding” Force?

Philipp Aerni1

(1)Center for Corporate Responsibility and Sustainability (CCRS) at the University of Zurich, Zürich, Switzerland

Philipp Aerni

Email: [email protected]

As the main drivers of economic globalization, MNEs are crucial in addressing coordination problems in GVCs by tapping the knowledge and know-how of their embedded internal and external networks to generate economic outcomes that ensure a continuous stream of revenue through scalable innovation, but also benefit the societies in the regions in which the MNE invests (Andersson et al. 2002). Yet, in public, they have not been associated with embedded economic structures but rather with the disruption and displacement of locally embedded traditional economies (Robinson 2014; Baker 2016; Shiva 2016).

MNEs may indeed be a major force of economic globalization that has induced many locally embedded traditional industries to either transform or disappear. But, as discussed before, this pressure on local economies started already in the 19th century in Europe, and abuse was always part of it. For example, the landlords of the rural feudalist system in Eastern Europe wanted to compete in the new trade-oriented market economy, not by introducing new forms of division of labor and technological innovation, but by merely squeezing out more work obligations from their dependents. Fernand Braudel called the new arrangement a ‘second serfdom’ (Braudel 1982) that led to an economic as well as a humanitarian crisis. Indentured peasants finally had an opportunity to exit the exploitative system by escaping overseas. The average migrant arriving at the end of the 19th century in the United States may not have belonged to the poorest of the poorest, because they simply lacked the means to move overseas. Yet, the fact that only 10% of the arrivals from Poland were literate and skilled is an indication that the majority may have escaped serfdom (Zeitz 2017). The ‘New World’ enabled them to take their destiny into their own hands.

Eventually, feudal entrepreneurs benefiting from the old exploitative manorial system proved unable to compete with the rising bourgeois entrepreneurs who became more productive and innovative, not by exploiting their employees but by investing in them (Holenstein et al. 2018).

The plan to exit the old manorial system was a risky and uncertain venture for the former servants that migrated elsewhere. But it eventually allowed them to unshackle the old fetters associated with traditional feudal economic repression and to flourish in arrival cities in Europe and overseas. Therefore, none of the former subjects may have deplored the disembedding and eventual disappearance of the old manorial system during the first wave of globalization. It may undoubtedly have caused new uncertainties and new ways of legal and illegal exploitation, but for the first time, it also created unprecedented economic opportunities for outsiders in society, those who had no economic rights under the previous rulers (Aerni 2016).

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