| Summary: | Over the past decade, the topic of globalization has infiltrated both public and academic debates.
The aim of this dissertation is to investigate whether the growth in the discussion of globalization
is justified by an equivalent increase in the interaction of economies. The focus of this dissertation
is on economic globalization and specifically how it affects Canada. Evidence of cross-border
'flows' is presented in three parts. One, the trade of goods is traced from Confederation (1867)
to the present, showing that contemporary levels of trade are not unprecedented. Furthermore,
the data reveal that the bulk of the increase in Canada's trade since the Second World War has
been with the United States. There are also strong indications that as the economy is becoming
more service oriented, it will also become less trade dependent. Two, statistics on foreign direct
investment (FDI) reveal that foreign ownership in Canada is at an all-time historical low. Three,
the stock of portfolio investments (stocks and bonds) owned across borders is also not,
historically speaking, at particularly high levels. Overall, when foreign direct and portfolio
investment are combined, the data show that only a small percentage of Canada's wealth is owned
by foreign investors and, likewise, only a small portion of Canada's wealth is located outside of its
borders.
Another claim found in the globalization literature is that the nation state is weakening or
disappearing altogether. However, once subjected to scrutiny, this claim, too, is difficult to
sustain. Government expenditures have increased dramatically since the Second World War and
show few signs of abating. For the fiscal year 1996/97, government expenditures amounted to
approximately half of the Gross Domestic Product (GDP), indicating a general levelling of
expenditures since the mid-1970s. More importantly, the globalization literature has unfailingly
ignored the welfare-state side of government spending, arguably the most significant development
in the political economy of the nation state in the 20th century. To bridge this gap, three sectors
of the welfare state — education, health, and social services — are examined in detail. Lastly, an
alternate explanation for globalization is put forward. Capital, it is argued, has made a concerted
attack on the welfare state, utilizing high interest rates and high unemployment to discipline
labour. Although having suffered a few scratches and dents as a consequence, the welfare-state
has resolutely endured.
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