This chapter examines contemporary debates about the nature of ‘globalization’ in a fairly wide-ranging manner. Of key importance here is the contemporary position of the nation-state and particularly the current challenges facing national governments as they attempt to formulate domestic economic and social policies in what is – arguably – an increasingly global environment. GEPs – particularly those arising from changes in international trade and finance – are perceived by globalization enthusiasts as challenging the capacity of national governments to control their economic and social policies, and undermining their ability to opt for ‘generous’ welfare solutions. Before examining the specific impact that these pressures might have on welfare, it is important to understand the economic aspects of the globalization debate in some detail. Thereafter, the focus will shift to an assessment of arguments for and against the view that national governments now have little control over domestic economic management. Again, without a clear understanding of this issue, which goes some way beyond social policy, narrowly conceived, it is not possible to judge how ‘economics’ and ‘politics’ interact in the welfare arena.