The globalization of capitalism may be the most significant economic change in the past 100 years. According to Louis Gallambos this new global business system will change the way everyone lives and works.
From the functionalist perspective, work is a basis of social solidarity. According to Emile Durkheim as the farmers do the same type of work; they share a similar view of the world. He used the term mechanical solidarity to refer to the sense of unity that comes from doing similar activities.
When an agricultural society industrializes, people work at many different types of jobs. As the division of labor grows, people come to feel less solidarity with one another. As they are like the separate organs that make up the same body, Durkheim called this type of unity organic solidarity.
This process has continued to the point that we now are developing a global division of labor as each of us now depends on workers around the globe. Corporations, with their separation of ownership and management, underlie the success of capitalism.
We may not feel a sense of unity with one another, but the same global economic web links all of us. The globalization of capitalism has forged a new world structure. Three primary trading blocs have emerged: North and South America, dominated by the United States; Europe, dominated by Germany; and Asia, dominated by Japan and China. Functionalists stress that this new global division benefits not only the multinational giants but also the citizens of the world.
That capitalism could become the world's dominant economic force can be traced to a social invention called the corporation. A corporation is a business that is treated legally as a person. A corporation can make contracts, incur debts, sue and be sued. Its liabilities and obligations, however, are separate from those of its owners. One of the aspects of corporations is their separation of ownership and management. It is not the owners those who own the company's stock who run the day-to-day affairs of the company instead, managers run the corporation. The result is the "ownership of wealth without appreciable control, and control of wealth without appreciable ownership"
Conflict theorists stress how power is concentrated in the capitalist class. They note that global capitalism is a means by which capitalists exploit workers. From the major owners of the multinational corporations comes an inner circle. While workers lose jobs to automation, the inner circle maintains its political power and profits from the new technology. The term corporate capitalism indicates that giant corporations dominate capitalism today. Power and wealth have become so concentrated that a global superclass has arisen.
A tool that unites and magnifies their power is interlocking directorates. Individuals serve on the board of directors of several major companies, and so do their fellow board members. Like a spider's web that starts at the center and fans out in all directions, these overlapping memberships join the top companies into a single network. The overlapping memberships of the globe's top multinational companies enfold their leaders into a small circle that are called the global superclass. The superclass is not only extremely wealthy but it is also extremely powerful. These people have access to the top circles of political power around the globe.