The word globalization means

Globalization, or globalisation (Commonwealth English; see spelling differences), is the process of interaction and integration among people, companies, and governments worldwide. The term globalization first appeared in the early 20th century (supplanting an earlier French term mondialization), developed its current meaning some time in the second half of the 20th century, and came into popular use in the 1990s to describe the unprecedented international connectivity of the post-Cold War world.[1] Its origins can be traced back to 18th and 19th centuries due to advances in transportation and communications technology. This increase in global interactions has caused a growth in international trade and the exchange of ideas, beliefs, and culture. Globalization is primarily an economic process of interaction and integration that is associated with social and cultural aspects. However, disputes and international diplomacy are also large parts of the history of globalization, and of modern globalization.

Economically, globalization involves goods, services, data, technology, and the economic resources of capital.[2] The expansion of global markets liberalizes the economic activities of the exchange of goods and funds. Removal of cross-border trade barriers has made the formation of global markets more feasible.[3] Advances in transportation, like the steam locomotive, steamship, jet engine, and container ships, and developments in telecommunication infrastructure, like the telegraph, Internet, mobile phones, and smartphones, have been major factors in globalization and have generated further interdependence of economic and cultural activities around the globe.[4][5][6]

Though many scholars place the origins of globalization in modern times, others trace its history to long before the European Age of Discovery and voyages to the New World, and some even to the third millennium BCE.[7] Large-scale globalization began in the 1820s, and in the late 19th century and early 20th century drove a rapid expansion in the connectivity of the world’s economies and cultures.[8] The term global city was subsequently popularized by sociologist Saskia Sassen in her work The Global City: New York, London, Tokyo (1991).[9]

In 2000, the International Monetary Fund (IMF) identified four basic aspects of globalization: trade and transactions, capital and investment movements, migration and movement of people, and the dissemination of knowledge.[10] Globalizing processes affect and are affected by business and work organization, economics, sociocultural resources, and the natural environment. Academic literature commonly divides globalization into three major areas: economic globalization, cultural globalization, and political globalization.[11]

Etymology and usage

The word globalization was used in the English language as early as the 1930s, but only in the context of education, and the term failed to gain traction. Over the next few decades, the term was occasionally used by other scholars and media, but it was not clearly defined.[1] One of the first usages of the term in the meaning resembling the later, common usage was by French economist François Perroux in his essays from the early 1960s (in his French works he used the term mondialization (literary worldization), also translated as mundialization).[1] Theodore Levitt is often credited with popularizing the term and bringing it into the mainstream business audience in the later in the middle of 1980s.[1]

Since its inception, the concept of globalization has inspired competing definitions and interpretations. Its antecedents date back to the great movements of trade and empire across Asia and the Indian Ocean from the 15th century onward.[12][13]
Due to the complexity of the concept, various research projects, articles, and discussions often stay focused on a single aspect of globalization.[14]

In 1848, Karl Marx noticed the increasing level of national inter-dependence brought on by capitalism, and predicted the universal character of the modern world society. He states:

“The bourgeoisie has through its exploitation of the world market given a cosmopolitan character to production and consumption in every country. To the great chagrin of Reactionists, it has drawn from under the feet of industry the national ground on which it stood. All old-established national industries have been destroyed or are daily being destroyed. . . . In place of the old local and national seclusion and self-sufficiency, we have intercourse in every direction, universal inter-dependence of nations.”[15]

Sociologists Martin Albrow and Elizabeth King define globalization as «all those processes by which the people of the world are incorporated into a single world society.»[2] In The Consequences of Modernity, Anthony Giddens writes: «Globalization can thus be defined as the intensification of worldwide social relations which link distant localities in such a way that local happenings are shaped by events occurring many miles away and vice versa.»[16] In 1992, Roland Robertson, professor of sociology at the University of Aberdeen and an early writer in the field, described globalization as «the compression of the world and the intensification of the consciousness of the world as a whole.»[17]

In Global Transformations, David Held and his co-writers state:

Although in its simplistic sense globalization refers to the widening, deepening and speeding up of global interconnection, such a definition begs further elaboration. … Globalization can be on a continuum with the local, national and regional. At one end of the continuum lie social and economic relations and networks which are organized on a local and/or national basis; at the other end lie social and economic relations and networks which crystallize on the wider scale of regional and global interactions. Globalization can refer to those spatial-temporal processes of change which underpin a transformation in the organization of human affairs by linking together and expanding human activity across regions and continents. Without reference to such expansive spatial connections, there can be no clear or coherent formulation of this term. … A satisfactory definition of globalization must capture each of these elements: extensity (stretching), intensity, velocity and impact.[18]

Held and his co-writers’ definition of globalization in that same book as «transformation in the spatial organization of social relations and transactions—assessed in terms of their extensity, intensity, velocity and impact—generating transcontinental or inter-regional flows» was called «probably the most widely-cited definition» in the 2014 DHL Global Connectiveness Index.[19]

Swedish journalist Thomas Larsson, in his book The Race to the Top: The Real Story of Globalization, states that globalization:

is the process of world shrinkage, of distances getting shorter, things moving closer. It pertains to the increasing ease with which somebody on one side of the world can interact, to mutual benefit, with somebody on the other side of the world.[20]

Paul James defines globalization with a more direct and historically contextualized emphasis:

Globalization is the extension of social relations across world-space, defining that world-space in terms of the historically variable ways that it has been practiced and socially understood through changing world-time.[21]

Manfred Steger, professor of global studies and research leader in the Global Cities Institute at RMIT University, identifies four main empirical dimensions of globalization: economic, political, cultural, and ecological. A fifth dimension—the ideological—cutting across the other four. The ideological dimension, according to Steger, is filled with a range of norms, claims, beliefs, and narratives about the phenomenon itself.[22]

James and Steger stated that the concept of globalization «emerged from the intersection of four interrelated sets of ‘communities of practice’ (Wenger, 1998): academics, journalists, publishers/editors, and librarians.»[1]: 424  They note the term was used «in education to describe the global life of the mind»; in international relations to describe the extension of the European Common Market, and in journalism to describe how the «American Negro and his problem are taking on a global significance».[1] They have also argued that four forms of globalization can be distinguished that complement and cut across the solely empirical dimensions.[21][23] According to James, the oldest dominant form of globalization is embodied globalization, the movement of people. A second form is agency-extended globalization, the circulation of agents of different institutions, organizations, and polities, including imperial agents. Object-extended globalization, a third form, is the movement of commodities and other objects of exchange. He calls the transmission of ideas, images, knowledge, and information across world-space disembodied globalization, maintaining that it is currently the dominant form of globalization. James holds that this series of distinctions allows for an understanding of how, today, the most embodied forms of globalization such as the movement of refugees and migrants are increasingly restricted, while the most disembodied forms such as the circulation of financial instruments and codes are the most deregulated.[24]

The journalist Thomas L. Friedman popularized the term «flat world», arguing that globalized trade, outsourcing, supply-chaining, and political forces had permanently changed the world, for better and worse. He asserted that the pace of globalization was quickening and that its impact on business organization and practice would continue to grow.[25]

Economist Takis Fotopoulos defined «economic globalization» as the opening and deregulation of commodity, capital, and labor markets that led toward present neoliberal globalization. He used «political globalization» to refer to the emergence of a transnational élite and a phasing out of the nation-state. Meanwhile, he used «cultural globalization» to reference the worldwide homogenization of culture. Other of his usages included «ideological globalization», «technological globalization», and «social globalization».[26]

Lechner and Boli (2012) define globalization as more people across large distances becoming connected in more and different ways.[27]

«Globophobia» is used to refer to the fear of globalization, though it can also mean the fear of balloons.[28][29][30]

History

There are both distal and proximate causes which can be traced in the historical factors affecting globalization. Large-scale globalization began in the 19th century.[31]

Archaic

Archaic globalization conventionally refers to a phase in the history of globalization including globalizing events and developments from the time of the earliest civilizations until roughly the 1600s. This term is used to describe the relationships between communities and states and how they were created by the geographical spread of ideas and social norms at both local and regional levels.[32]

In this schema, three main prerequisites are posited for globalization to occur. The first is the idea of Eastern Origins, which shows how Western states have adapted and implemented learned principles from the East.[32] Without the spread of traditional ideas from the East, Western globalization would not have emerged the way it did. The interactions of states were not on a global scale and most often were confined to Asia, North Africa, the Middle East, and certain parts of Europe.[32] With early globalization, it was difficult for states to interact with others that were not close. Eventually, technological advances allowed states to learn of others’ existence and thus another phase of globalization can occur. The third has to do with inter-dependency, stability, and regularity. If a state is not dependent on another, then there is no way for either state to be mutually affected by the other. This is one of the driving forces behind global connections and trade; without either, globalization would not have emerged the way it did and states would still be dependent on their own production and resources to work. This is one of the arguments surrounding the idea of early globalization. It is argued that archaic globalization did not function in a similar manner to modern globalization because states were not as interdependent on others as they are today.[32]

Also posited is a «multi-polar» nature to archaic globalization, which involved the active participation of non-Europeans. Because it predated the Great Divergence in the nineteenth century, where Western Europe pulled ahead of the rest of the world in terms of industrial production and economic output, archaic globalization was a phenomenon that was driven not only by Europe but also by other economically developed Old World centers such as Gujarat, Bengal, coastal China, and Japan.[33]

The German historical economist and sociologist Andre Gunder Frank argues that a form of globalization began with the rise of trade links between Sumer and the Indus Valley civilization in the third millennium BCE. This archaic globalization existed during the Hellenistic Age, when commercialized urban centers enveloped the axis of Greek culture that reached from India to Spain, including Alexandria and the other Alexandrine cities. Early on, the geographic position of Greece and the necessity of importing wheat forced the Greeks to engage in maritime trade. Trade in ancient Greece was largely unrestricted: the state controlled only the supply of grain.[7]

Trade on the Silk Road was a significant factor in the development of civilizations from China, Indian subcontinent, Persia, Europe, and Arabia, opening long-distance political and economic interactions between them.[34] Though silk was certainly the major trade item from China, common goods such as salt and sugar were traded as well; and religions, syncretic philosophies, and various technologies, as well as diseases, also traveled along the Silk Routes. In addition to economic trade, the Silk Road served as a means of carrying out cultural trade among the civilisations along its network.[35] The movement of people, such as refugees, artists, craftsmen, missionaries, robbers, and envoys, resulted in the exchange of religions, art, languages, and new technologies.[36]

Early modern

«Early modern» or «proto-globalization» covers a period of the history of globalization roughly spanning the years between 1600 and 1800. The concept of «proto-globalization» was first introduced by historians A. G. Hopkins and Christopher Bayly. The term describes the phase of increasing trade links and cultural exchange that characterized the period immediately preceding the advent of high «modern globalization» in the late 19th century.[37] This phase of globalization was characterized by the rise of maritime European empires, in the 15th and 17th centuries, first the Portuguese Empire (1415) followed by the Spanish Empire (1492), and later the Dutch and British Empires. In the 17th century, world trade developed further when chartered companies like the British East India Company (founded in 1600) and the Dutch East India Company (founded in 1602, often described as the first multinational corporation in which stock was offered) were established.[38]

Lisbon in the 1570s had many Africans.

An alternative view from historians Dennis Flynn and Arturo Giraldez, postulated that: globalization began with the first circumnavigation of the globe under the Magellan-Elcano expedition which preluded the rise of Global Silver Trade.[39]

Early modern globalization is distinguished from modern globalization on the basis of expansionism, the method of managing global trade, and the level of information exchange. The period is marked by such trade arrangements as the East India Company, the shift of hegemony to Western Europe, the rise of larger-scale conflicts between powerful nations such as the Thirty Years’ War, and the rise of newfound commodities—most particularly slave trade. The Triangular Trade made it possible for Europe to take advantage of resources within the Western Hemisphere. The transfer of animal stocks, plant crops, and epidemic diseases associated with Alfred W. Crosby’s concept of the Columbian Exchange also played a central role in this process. European, Muslims, Indian, Southeast Asian, and Chinese merchants were all involved in early modern trade and communications, particularly in the Indian Ocean region.

Modern

According to economic historians Kevin H. O’Rourke, Leandro Prados de la Escosura, and Guillaume Daudin, several factors promoted globalization in the period 1815–1870:[40]

  • The conclusion of the Napoleonic Wars brought in an era of relative peace in Europe.
  • Innovations in transportation technology reduced trade costs substantially.
  • New industrial military technologies increased the power of European states and the United States, and allowed these powers to forcibly open up markets across the world and extend their empires.
  • A gradual move towards greater liberalization in European countries.

During the 19th century, globalization approached its form as a direct result of the Industrial Revolution. Industrialization allowed standardized production of household items using economies of scale while rapid population growth created sustained demand for commodities. In the 19th century, steamships reduced the cost of international transportation significantly and railroads made inland transportation cheaper. The transportation revolution occurred some time between 1820 and 1850.[31] More nations embraced international trade.[31] Globalization in this period was decisively shaped by nineteenth-century imperialism such as in Africa and Asia. The invention of shipping containers in 1956 helped advance the globalization of commerce.[41][42]

After World War II, work by politicians led to the agreements of the Bretton Woods Conference, in which major governments laid down the framework for international monetary policy, commerce, and finance, and the founding of several international institutions intended to facilitate economic growth by lowering trade barriers. Initially, the General Agreement on Tariffs and Trade (GATT) led to a series of agreements to remove trade restrictions. GATT’s successor was the World Trade Organization (WTO), which provided a framework for negotiating and formalizing trade agreements and a dispute resolution process. Exports nearly doubled from 8.5% of total gross world product in 1970 to 16.2% in 2001.[43] The approach of using global agreements to advance trade stumbled with the failure of the Doha Development Round of trade negotiation. Many countries then shifted to bilateral or smaller multilateral agreements, such as the 2011 South Korea–United States Free Trade Agreement.

Since the 1970s, aviation has become increasingly affordable to middle classes in developed countries. Open skies policies and low-cost carriers have helped to bring competition to the market. In the 1990s, the growth of low-cost communication networks cut the cost of communicating between countries. More work can be performed using a computer without regard to location. This included accounting, software development, and engineering design.

Student exchange programs became popular after World War II, and are intended to increase the participants’ understanding and tolerance of other cultures, as well as improving their language skills and broadening their social horizons. Between 1963 and 2006 the number of students studying in a foreign country increased 9 times.[44]

Since the 1980s, modern globalization has spread rapidly through the expansion of capitalism and neoliberal ideologies.[45] The implementation of neoliberal policies has allowed for the privatization of public industry, deregulation of laws or policies that interfered with the free flow of the market, as well as cut-backs to governmental social services.[46] These neoliberal policies were introduced to many developing countries in the form of structural adjustment programs (SAPs) that were implemented by the World Bank and the International Monetary Fund (IMF).[45] These programs required that the country receiving monetary aid would open its markets to capitalism, privatize public industry, allow free trade, cut social services like healthcare and education and allow the free movement of giant multinational corporations.[47] These programs allowed the World Bank and the IMF to become global financial market regulators that would promote neoliberalism and the creation of free markets for multinational corporations on a global scale.[48]

With a population of 1.4 billion, China is the world’s second-largest economy.

In the late 19th and early 20th century, the connectedness of the world’s economies and cultures grew very quickly. This slowed down from the 1910s onward due to the World Wars and the Cold War,[49] but picked up again in the 1980s and 1990s.[50] The revolutions of 1989 and subsequent liberalization in many parts of the world resulted in a significant expansion of global interconnectedness. The migration and movement of people can also be highlighted as a prominent feature of the globalization process. In the period between 1965 and 1990, the proportion of the labor force migrating approximately doubled. Most migration occurred between the developing countries and least developed countries (LDCs).[51] As economic integration intensified workers moved to areas with higher wages and most of the developing world oriented toward the international market economy. The collapse of the Soviet Union not only ended the Cold War’s division of the world – it also left the United States its sole policeman and an unfettered advocate of free market.[according to whom?] It also resulted in the growing prominence of attention focused on the movement of diseases, the proliferation of popular culture and consumer values, the growing prominence of international institutions like the UN, and concerted international action on such issues as the environment and human rights.[52] Other developments as dramatic were the Internet’s becoming influential in connecting people across the world; As of June 2012, more than 2.4 billion people—over a third of the world’s human population—have used the services of the Internet.[53][54] Growth of globalization has never been smooth. One influential event was the late 2000s recession, which was associated with lower growth (in areas such as cross-border phone calls and Skype usage) or even temporarily negative growth (in areas such as trade) of global interconnectedness.[55][56]

The China–United States trade war, starting in 2018, negatively affected trade between the two largest national economies. The economic impact of the COVID-19 pandemic included a massive decline in tourism and international business travel as many countries temporarily closed borders. The 2021–2022 global supply chain crisis resulted from temporary shutdowns of manufacturing and transportation facilities, and labor shortages. Supply problems incentivized some switches to domestic production.[57] The economic impact of the 2022 Russian invasion of Ukraine included a blockade of Ukrainian ports and international sanctions on Russia, resulting in some de-coupling of the Russian economy with global trade, especially with the European Union and other Western countries.

Economic globalization

U.S. Trade Balance and Trade Policy (1895–2015)

Economic globalization is the increasing economic interdependence of national economies across the world through a rapid increase in cross-border movement of goods, services, technology, and capital.[59] Whereas the globalization of business is centered around the diminution of international trade regulations as well as tariffs, taxes, and other impediments that suppresses global trade, economic globalization is the process of increasing economic integration between countries, leading to the emergence of a global marketplace or a single world market.[60] Depending on the paradigm, economic globalization can be viewed as either a positive or a negative phenomenon. Economic globalization comprises: globalization of production; which refers to the obtainment of goods and services from a particular source from locations around the globe to benefit from difference in cost and quality. Likewise, it also comprises globalization of markets; which is defined as the union of different and separate markets into a massive global marketplace. Economic globalization also includes[61] competition, technology, and corporations and industries.[59]

Current globalization trends can be largely accounted for by developed economies integrating with less developed economies by means of foreign direct investment, the reduction of trade barriers as well as other economic reforms, and, in many cases, immigration.[62]

International standards have made trade in goods and services more efficient. An example of such standard is the intermodal container. Containerization dramatically reduced the costs of transportation, supported the post-war boom in international trade, and was a major element in globalization.[41] International standards are set by the International Organization for Standardization, which is composed of representatives from various national standards organizations.

A multinational corporation, or worldwide enterprise,[63] is an organization that owns or controls the production of goods or services in one or more countries other than their home country.[64] It can also be referred to as an international corporation, a transnational corporation, or a stateless corporation.[65]

A free-trade area is the region encompassing a trade bloc whose member countries have signed a free-trade agreement (FTA). Such agreements involve cooperation between at least two countries to reduce trade barriers – import quotas and tariffs – and to increase trade of goods and services with each other.[66]
If people are also free to move between the countries, in addition to a free-trade agreement, it would also be considered an open border.
Arguably the most significant free-trade area in the world is the European Union, a politico-economic union of 27 member states that are primarily located in Europe. The EU has developed European Single Market through a standardized system of laws that apply in all member states. EU policies aim to ensure the free movement of people, goods, services, and capital within the internal market,[67]

Trade facilitation looks at how procedures and controls governing the movement of goods across national borders can be improved to reduce associated cost burdens and maximize efficiency while safeguarding legitimate regulatory objectives.

Global trade in services is also significant. For example, in India, business process outsourcing has been described as the «primary engine of the country’s development over the next few decades, contributing broadly to GDP growth, employment growth, and poverty alleviation».[68][69]

William I. Robinson’s theoretical approach to globalization is a critique of Wallerstein’s World Systems Theory. He believes that the global capital experienced today is due to a new and distinct form of globalization which began in the 1980s. Robinson argues not only are economic activities expanded across national boundaries but also there is a transnational fragmentation of these activities.[70] One important aspect of Robinson’s globalization theory is that production of goods are increasingly global. This means that one pair of shoes can be produced by six countries, each contributing to a part of the production process.

Cultural globalization

Shakira, a Colombian multilingual singer-songwriter, playing outside her home country

Cultural globalization refers to the transmission of ideas, meanings, and values around the world in such a way as to extend and intensify social relations.[71] This process is marked by the common consumption of cultures that have been diffused by the Internet, popular culture media, and international travel. This has added to processes of commodity exchange and colonization which have a longer history of carrying cultural meaning around the globe. The circulation of cultures enables individuals to partake in extended social relations that cross national and regional borders. The creation and expansion of such social relations is not merely observed on a material level. Cultural globalization involves the formation of shared norms and knowledge with which people associate their individual and collective cultural identities. It brings increasing interconnectedness among different populations and cultures.[72]

Cross-cultural communication is a field of study that looks at how people from differing cultural backgrounds communicate, in similar and different ways among themselves, and how they endeavour to communicate across cultures. Intercultural communication is a related field of study.

Cultural diffusion is the spread of cultural items—such as ideas, styles, religions, technologies, languages etc.
Cultural globalization has increased cross-cultural contacts, but may be accompanied by a decrease in the uniqueness of once-isolated communities. For example, sushi is available in Germany as well as Japan, but Euro-Disney outdraws the city of Paris, potentially reducing demand for «authentic» French pastry.[73][74][75] Globalization’s contribution to the alienation of individuals from their traditions may be modest compared to the impact of modernity itself, as alleged by existentialists such as Jean-Paul Sartre and Albert Camus. Globalization has expanded recreational opportunities by spreading pop culture, particularly via the Internet and satellite television. The cultural diffusion can create a homogenizing force, where globalisation is seen as synonymous with homogenizing force via connectedness of markets, cultures, politics and the desire for modernizations through imperial countries sphere of influence.[76]

Religions were among the earliest cultural elements to globalize, being spread by force, migration, evangelists, imperialists, and traders. Christianity, Islam, Buddhism, and more recently sects such as Mormonism are among those religions which have taken root and influenced endemic cultures in places far from their origins.[77]

McDonald’s is commonly seen as a symbol of globalization, often called McDonaldization of global society.

Globalization has strongly influenced sports.[78] For example, the modern Olympic Games has athletes from more than 200 nations participating in a variety of competitions.[79] The FIFA World Cup is the most widely viewed and followed sporting event in the world, exceeding even the Olympic Games; a ninth of the entire population of the planet watched the 2006 FIFA World Cup Final.[80][81][82][83]

The term globalization implies transformation. Cultural practices including traditional music can be lost or turned into a fusion of traditions. Globalization can trigger a state of emergency for the preservation of musical heritage. Archivists may attempt to collect, record, or transcribe repertoires before melodies are assimilated or modified, while local musicians may struggle for authenticity and to preserve local musical traditions. Globalization can lead performers to discard traditional instruments. Fusion genres can become interesting fields of analysis.[84]

Music has an important role in economic and cultural development during globalization. Music genres such as jazz and reggae began locally and later became international phenomena. Globalization gave support to the world music phenomenon by allowing music from developing countries to reach broader audiences.[85] Though the term «World Music» was originally intended for ethnic-specific music, globalization is now expanding its scope such that the term often includes hybrid subgenres such as «world fusion», «global fusion», «ethnic fusion»,[86] and worldbeat.[87][88]

Bourdieu claimed that the perception of consumption can be seen as self-identification and the formation of identity. Musically, this translates into each individual having their own musical identity based on likes and tastes. These likes and tastes are greatly influenced by culture, as this is the most basic cause for a person’s wants and behavior. The concept of one’s own culture is now in a period of change due to globalization. Also, globalization has increased the interdependency of political, personal, cultural, and economic factors.[90]

A 2005 UNESCO report[91] showed that cultural exchange is becoming more frequent from Eastern Asia, but that Western countries are still the main exporters of cultural goods. In 2002, China was the third largest exporter of cultural goods, after the UK and US. Between 1994 and 2002, both North America’s and the European Union’s shares of cultural exports declined while Asia’s cultural exports grew to surpass North America. Related factors are the fact that Asia’s population and area are several times that of North America. Americanization is related to a period of high political American clout and of significant growth of America’s shops, markets and objects being brought into other countries.

Some critics of globalization argue that it harms the diversity of cultures. As a dominating country’s culture is introduced into a receiving country through globalization, it can become a threat to the diversity of local culture. Some argue that globalization may ultimately lead to Westernization or Americanization of culture, where the dominating cultural concepts of economically and politically powerful Western countries spread and cause harm to local cultures.[92]

Globalization is a diverse phenomenon that relates to a multilateral political world and to the increase of cultural objects and markets between countries. The Indian experience particularly reveals the plurality of the impact of cultural globalization.[93]

Transculturalism is defined as «seeing oneself in the other».[94] Transcultural[95] is in turn described as «extending through all human cultures»[95] or «involving, encompassing, or combining elements of more than one culture».[96]

Political globalization

Political globalization refers to the growth of the worldwide political system, both in size and complexity. That system includes national governments, their governmental and intergovernmental organizations as well as government-independent elements of global civil society such as international non-governmental organizations and social movement organizations. One of the key aspects of the political globalization is the declining importance of the nation-state and the rise of other actors on the political scene.
William R. Thompson has defined it as «the expansion of a global political system, and its institutions, in which inter-regional transactions (including, but certainly not limited to trade) are managed».[97]
Political globalization is one of the three main dimensions of globalization commonly found in academic literature, with the two other being economic globalization and cultural globalization.[11]

Intergovernmentalism is a term in political science with two meanings. The first refers to a theory of regional integration originally proposed by Stanley Hoffmann; the second treats states and the national government as the primary factors for integration.[98]Multi-level governance is an approach in political science and public administration theory that originated from studies on European integration. Multi-level governance gives expression to the idea that there are many interacting authority structures at work in the emergent global political economy. It illuminates the intimate entanglement between the domestic and international levels of authority.

Some people are citizens of multiple nation-states. Multiple citizenship, also called dual citizenship or multiple nationality or dual nationality, is a person’s citizenship status, in which a person is concurrently regarded as a citizen of more than one state under the laws of those states.

Increasingly, non-governmental organizations influence public policy across national boundaries, including humanitarian aid and developmental efforts.[100] Philanthropic organizations with global missions are also coming to the forefront of humanitarian efforts; charities such as the Bill and Melinda Gates Foundation, Accion International, the Acumen Fund (now Acumen) and the Echoing Green have combined the business model with philanthropy, giving rise to business organizations such as the Global Philanthropy Group and new associations of philanthropists such as the Global Philanthropy Forum. The Bill and Melinda Gates Foundation projects include a current multibillion-dollar commitment to funding immunizations in some of the world’s more impoverished but rapidly growing countries.[101] The Hudson Institute estimates total private philanthropic flows to developing countries at US$59 billion in 2010.[102]

As a response to globalization, some countries have embraced isolationist policies. For example, the North Korean government makes it very difficult for foreigners to enter the country and strictly monitors their activities when they do. Aid workers are subject to considerable scrutiny and excluded from places and regions the government does not wish them to enter. Citizens cannot freely leave the country.[103][104]

Globalization and gender

Globalization has been a gendered process where giant multinational corporations have outsourced jobs to low-wage, low skilled, quota free economies like the ready made garment industry in Bangladesh where poor women make up the majority of labor force.[105] Despite a large proportion of women workers in the garment industry, women are still heavily underemployed compared to men.[105] Most women that are employed in the garment industry come from the countryside of Bangladesh triggering migration of women in search of garment work.[105] It is still unclear as to whether or not access to paid work for women where it didn’t exist before has empowered them.[105] The answers varied depending on whether it is the employers perspective or the workers and how they view their choices.[105] Women workers did not see the garment industry as economically sustainable for them in the long run due to long hours standing and poor working conditions.[105] Although women workers did show significant autonomy over their personal lives including their ability to negotiate with family, more choice in marriage, and being valued as a wage earner in the family. This did not translate into workers being able to collectively organize themselves in order to negotiate a better deal for themselves at work.[105]

Another example of outsourcing in manufacturing includes the maquiladora industry in Ciudad Juarez, Mexico where poor women make up the majority of the labor force.[106] Women in the maquiladora industry have produced high levels of turnover not staying long enough to be trained compared to men.[106] A gendered two tiered system within the maquiladora industry has been created that focuses on training and worker loyalty.[106] Women are seen as being untrainable, placed in un-skilled, low wage jobs, while men are seen as more trainable with less turnover rates, and placed in more high skilled technical jobs.[106] The idea of training has become a tool used against women to blame them for their high turnover rates which also benefit the industry keeping women as temporary workers.[106]

Other dimensions

Scholars also occasionally discuss other, less common dimensions of globalization, such as environmental globalization (the internationally coordinated practices and regulations, often in the form of international treaties, regarding environmental protection)[107] or military globalization (growth in global extent and scope of security relationships).[108] Those dimensions, however, receive much less attention the three described above, as academic literature commonly subdivides globalization into three major areas: economic globalization, cultural globalization and political globalization.[11]

Movement of people

An essential aspect of globalization is movement of people, and state-boundary limits on that movement have changed across history.[109] The movement of tourists and business people opened up over the last century. As transportation technology improved, travel time and costs decreased dramatically between the 18th and early 20th century. For example, travel across the Atlantic ocean used to take up to 5 weeks in the 18th century, but around the time of the 20th century it took a mere 8 days.[110] Today, modern aviation has made long-distance transportation quick and affordable.

Tourism is travel for pleasure. The developments in technology and transportation infrastructure, such as jumbo jets, low-cost airlines, and more accessible airports have made many types of tourism more affordable. At any given moment half a million people are in the air.[111] International tourist arrivals surpassed the milestone of 1 billion tourists globally for the first time in 2012.[112]
A visa is a conditional authorization granted by a country to a foreigner, allowing them to enter and temporarily remain within, or to leave that country. Some countries – such as those in the Schengen Area – have agreements with other countries allowing each other’s citizens to travel between them without visas (for example, Switzerland is part of a Schengen Agreement allowing easy travel for people from countries within the European Union). The World Tourism Organization announced that the number of tourists who require a visa before traveling was at its lowest level ever in 2015.[113]

Immigration is the international movement of people into a destination country of which they are not natives or where they do not possess citizenship in order to settle or reside there, especially as permanent residents or naturalized citizens, or to take-up employment as a migrant worker or temporarily as a foreign worker.[114][115][116]
According to the International Labour Organization, as of 2014 there were an estimated 232 million international migrants in the world (defined as persons outside their country of origin for 12 months or more) and approximately half of them were estimated to be economically active (i.e. being employed or seeking employment).[117] International movement of labor is often seen as important to economic development. For example, freedom of movement for workers in the European Union means that people can move freely between member states to live, work, study or retire in another country.

2010 London Youth Games opening ceremony. About 69% of children born in London in 2015 had at least one parent who was born abroad.[118]

Globalization is associated with a dramatic rise in international education. The development of global cross-cultural competence in the workforce through ad-hoc training has deserved increasing attention in recent times.[119][120] More and more students are seeking higher education in foreign countries and many international students now consider overseas study a stepping-stone to permanent residency within a country.[121] The contributions that foreign students make to host nation economies, both culturally and financially has encouraged major players to implement further initiatives to facilitate the arrival and integration of overseas students, including substantial amendments to immigration and visa policies and procedures.[44]

A transnational marriage is a marriage between two people from different countries. A variety of special issues arise in marriages between people from different countries, including those related to citizenship and culture, which add complexity and challenges to these kinds of relationships.
In an age of increasing globalization, where a growing number of people have ties to networks of people and places across the globe, rather than to a current geographic location, people are increasingly marrying across national boundaries. Transnational marriage is a by-product of the movement and migration of people.

Movement of information

Internet users by region[122]

Region 2005 2010 2017 2019 2021
Africa 2% 10% 21.8% 27.7% 39.7%
Americas 36% 49% 65.9% 75.9% 83.2%
Arab States 8% 26% 43.7% 55.2% 70.3%
Asia and Pacific 9% 23% 43.9% 48.9% 64.3%
Commonwealth of
Independent States
10% 34% 67.7% 76.3% 83.7%
Europe 46% 67% 79.6% 81.7% 89.5%

Before electronic communications, long-distance communications relied on mail. Speed of global communications was limited by the maximum speed of courier services (especially horses and ships) until the mid-19th century. The electric telegraph was the first method of instant long-distance communication. For example, before the first transatlantic cable, communications between Europe and the Americas took weeks because ships had to carry mail across the ocean. The first transatlantic cable reduced communication time considerably, allowing a message and a response in the same day. Lasting transatlantic telegraph connections were achieved in the 1865–1866. The first wireless telegraphy transmitters were developed in 1895.

The Internet has been instrumental in connecting people across geographical boundaries. For example, Facebook is a social networking service which has more than 1.65 billion monthly active users as of 31 March 2016.[123]

Globalization can be spread by Global journalism which provides massive information and relies on the internet to interact, «makes it into an everyday routine to investigate how people and their actions, practices, problems, life conditions, etc. in different parts of the world are interrelated. possible to assume that global threats such as climate change precipitate the further establishment of global journalism.»[124]

Globalization and disease

In the current era of globalization, the world is more interdependent than at any other time. Efficient and inexpensive transportation has left few places inaccessible, and increased global trade has brought more and more people into contact with animal diseases that have subsequently jumped species barriers (see zoonosis).[125]

Coronavirus disease 2019, abbreviated COVID-19, first appeared in Wuhan, China in November 2019. More than 180 countries have reported cases since then.[126] As of April 6, 2020, the U.S. has the most confirmed active cases in the world.[127] More than 3.4 million people from the worst-affected countries entered the U.S. in the first three months since the inception of the COVID-19 pandemic.[128] This has caused a detrimental impact on the global economy, particularly for SME’s and Microbusinesses with unlimited liability/self-employed, leaving them vulnerable to financial difficulties, increasing the market share for oligopolistic markets as well as increasing the barriers of entry.

Measurement

One index of globalization is the KOF Index of Globalization, which measures three important dimensions of globalization: economic, social, and political.[129] Another is the A.T. Kearney / Foreign Policy Magazine Globalization Index.[130]

2014 KOF Index of Globalization

Rank Country
1 Ireland
2 Belgium
3 Netherlands
4 Austria
5 Singapore
6 Denmark
7 Sweden
8 Portugal
9 Hungary
10 Finland
  2006 A.T. Kearney / Foreign Policy Magazine
Globalization Index

Rank Country
1 Singapore
2 Switzerland
3 United States
4 Ireland
5 Denmark
6 Canada
7 Netherlands
8 Australia
9 Austria
10 Sweden

Measurements of economic globalization typically focus on variables such as trade, Foreign Direct Investment (FDI), Gross Domestic Product (GDP), portfolio investment, and income. However, newer indices attempt to measure globalization in more general terms, including variables related to political, social, cultural, and even environmental aspects of globalization.[131][132]

The DHL Global Connectedness Index studies four main types of cross-border flow: trade (in both goods and services), information, people (including tourists, students, and migrants), and capital. It shows that the depth of global integration fell by about one-tenth after 2008, but by 2013 had recovered well above its pre-crash peak.[19][55] The report also found a shift of economic activity to emerging economies.[19]

Support and criticism

Reactions to processes contributing to globalization have varied widely with a history as long as extraterritorial contact and trade. Philosophical differences regarding the costs and benefits of such processes give rise to a broad-range of ideologies and social movements. Proponents of economic growth, expansion and development, in general, view globalizing processes as desirable or necessary to the well-being of human society.[133]

Antagonists view one or more globalizing processes as detrimental to social well-being on a global or local scale;[133] this includes those who focus on social or natural sustainability of long-term and continuous economic expansion, the social structural inequality caused by these processes, and the colonial, imperialistic, or hegemonic ethnocentrism, cultural assimilation and cultural appropriation that underlie such processes.

Globalization tends to bring people into contact with foreign people and cultures. Xenophobia is the fear of that which is perceived to be foreign or strange.[134][135] Xenophobia can manifest itself in many ways involving the relations and perceptions of an ingroup towards an outgroup, including a fear of losing identity, suspicion of its activities, aggression, and desire to eliminate its presence to secure a presumed purity.[136]

Critiques of globalization generally stem from discussions surrounding the impact of such processes on the planet as well as the human costs. They challenge directly traditional metrics, such as GDP, and look to other measures, such as the Gini coefficient[137] or the Happy Planet Index,[138] and point to a «multitude of interconnected fatal consequences–social disintegration, a breakdown of democracy, more rapid and extensive deterioration of the environment, the spread of new diseases, increasing poverty and alienation»[139] which they claim are the unintended consequences of globalization. Others point out that, while the forces of globalization have led to the spread of western-style democracy, this has been accompanied by an increase in inter-ethnic tension and violence as free market economic policies combine with democratic processes of universal suffrage as well as an escalation in militarization to impose democratic principles and as a means to conflict resolution.[140]

On 9 August 2019, Pope Francis denounced isolationism and hinted that the Catholic Church will embrace globalization at the October 2019 Amazonia Synod, stating «the whole is greater than the parts. Globalization and unity should not be conceived as a sphere, but as a polyhedron: each people retains its identity in unity with others»[141]

Public opinion

This article needs to be updated. Please help update this section to reflect recent events or newly available information. (December 2019)

As a complex and multifaceted phenomenon, globalization is considered by some as a form of capitalist expansion which entails the integration of local and national economies into a global, unregulated market economy.[142] A 2005 study by Peer Fis and Paul Hirsch found a large increase in articles negative towards globalization in the years prior. In 1998, negative articles outpaced positive articles by two to one.[143] The number of newspaper articles showing negative framing rose from about 10% of the total in 1991 to 55% of the total in 1999. This increase occurred during a period when the total number of articles concerning globalization nearly doubled.[143]

A number of international polls have shown that residents of Africa and Asia tend to view globalization more favorably than residents of Europe or North America. In Africa, a Gallup poll found that 70% of the population views globalization favorably.[144] The BBC found that 50% of people believed that economic globalization was proceeding too rapidly, while 35% believed it was proceeding too slowly.[145]

In 2004, Philip Gordon stated that «a clear majority of Europeans believe that globalization can enrich their lives, while believing the European Union can help them take advantage of globalization’s benefits while shielding them from its negative effects.» The main opposition consisted of socialists, environmental groups, and nationalists. Residents of the EU did not appear to feel threatened by globalization in 2004. The EU job market was more stable and workers were less likely to accept wage/benefit cuts. Social spending was much higher than in the US.[146] In a Danish poll in 2007, 76% responded that globalization is a good thing.[147]

Fiss, et al., surveyed US opinion in 1993. Their survey showed that, in 1993, more than 40% of respondents were unfamiliar with the concept of globalization. When the survey was repeated in 1998, 89% of the respondents had a polarized view of globalization as being either good or bad. At the same time, discourse on globalization, which began in the financial community before shifting to a heated debate between proponents and disenchanted students and workers. Polarization increased dramatically after the establishment of the WTO in 1995; this event and subsequent protests led to a large-scale anti-globalization movement.[143]
Initially, college educated workers were likely to support globalization. Less educated workers, who were more likely to compete with immigrants and workers in developing countries, tended to be opponents. The situation changed after the financial crisis of 2007. According to a 1997 poll 58% of college graduates said globalization had been good for the US. By 2008 only 33% thought it was good. Respondents with high school education also became more opposed.[148]

According to Takenaka Heizo and Chida Ryokichi, as of 1998 there was a perception in Japan that the economy was «Small and Frail». However, Japan was resource-poor and used exports to pay for its raw materials. Anxiety over their position caused terms such as internationalization and globalization to enter everyday language. However, Japanese tradition was to be as self-sufficient as possible, particularly in agriculture.[149]

Many in developing countries see globalization as a positive force that lifts them out of poverty.[150] Those opposing globalization typically combine environmental concerns with nationalism. Opponents consider governments as agents of neo-colonialism that are subservient to multinational corporations.[151] Much of this criticism comes from the middle class; the Brookings Institution suggested this was because the middle class perceived upwardly mobile low-income groups as threatening to their economic security.[152]

Economics

The literature analyzing the economics of free trade is extremely rich with extensive work having been done on the theoretical and empirical effects. Though it creates winners and losers, the broad consensus among economists is that free trade is a large and unambiguous net gain for society.[153][154] In a 2006 survey of 83 American economists, «87.5% agree that the U.S. should eliminate remaining tariffs and other barriers to trade» and «90.1% disagree with the suggestion that the U.S. should restrict employers from outsourcing work to foreign countries.»[155]

Quoting Harvard economics professor N. Gregory Mankiw, «Few propositions command as much consensus among professional economists as that open world trade increases economic growth and raises living standards.»[156] In a survey of leading economists, none disagreed with the notion that «freer trade improves productive efficiency and offers consumers better choices, and in the long run these gains are much larger than any effects on employment.»[157] Most economists would agree that although increasing returns to scale might mean that certain industry could settle in a geographical area without any strong economic reason derived from comparative advantage, this is not a reason to argue against free trade because the absolute level of output enjoyed by both «winner» and «loser» will increase with the «winner» gaining more than the «loser» but both gaining more than before in an absolute level.

In the book The End of Poverty, Jeffrey Sachs discusses how many factors can affect a country’s ability to enter the world market, including government corruption; legal and social disparities based on gender, ethnicity, or caste; diseases such as AIDS and malaria; lack of infrastructure (including transportation, communications, health, and trade); unstable political landscapes; protectionism; and geographic barriers.[158] Jagdish Bhagwati, a former adviser to the U.N. on globalization, holds that, although there are obvious problems with overly rapid development, globalization is a very positive force that lifts countries out of poverty by causing a virtuous economic cycle associated with faster economic growth.[150] However, economic growth does not necessarily mean a reduction in poverty; in fact, the two can coexist. Economic growth is conventionally measured using indicators such as GDP and GNI that do not accurately reflect the growing disparities in wealth.[159] Additionally, Oxfam International argues that poor people are often excluded from globalization-induced opportunities «by a lack of productive assets, weak infrastructure, poor education and ill-health;»[160] effectively leaving these marginalized groups in a poverty trap. Economist Paul Krugman is another staunch supporter of globalization and free trade with a record of disagreeing with many critics of globalization. He argues that many of them lack a basic understanding of comparative advantage and its importance in today’s world.[161]

As of 2017, there were 2,754 U.S. dollar billionaires worldwide, with a combined wealth of over US$9.2 trillion.[162]

The flow of migrants to advanced economies has been claimed to provide a means through which global wages converge. An IMF study noted a potential for skills to be transferred back to developing countries as wages in those a countries rise.[10] Lastly, the dissemination of knowledge has been an integral aspect of globalization. Technological innovations (or technological transfer) are conjectured to benefit most developing and least developing countries (LDCs), as for example in the adoption of mobile phones.[51]

There has been a rapid economic growth in Asia after embracing market orientation-based economic policies that encourage private property rights, free enterprise and competition. In particular, in East Asian developing countries, GDP per head rose at 5.9% a year from 1975 to 2001 (according to 2003 Human Development Report[163] of UNDP). Like this, the British economic journalist Martin Wolf says that incomes of poor developing countries, with more than half the world’s population, grew substantially faster than those of the world’s richest countries that remained relatively stable in its growth, leading to reduced international inequality and the incidence of poverty.

Of the factors influencing the duration of economic growth in both developed and developing countries, income equality has a more beneficial impact than trade openness, sound political institutions, and foreign investment.[164]

Certain demographic changes in the developing world after active economic liberalization and international integration resulted in rising general welfare and, hence, reduced inequality. According to Wolf, in the developing world as a whole, life expectancy rose by four months each year after 1970 and infant mortality rate declined from 107 per thousand in 1970 to 58 in 2000 due to improvements in standards of living and health conditions. Also, adult literacy in developing countries rose from 53% in 1970 to 74% in 1998 and much lower illiteracy rate among the young guarantees that rates will continue to fall as time passes. Furthermore, the reduction in fertility rate in the developing world as a whole from 4.1 births per woman in 1980 to 2.8 in 2000 indicates improved education level of women on fertility, and control of fewer children with more parental attention and investment.[165] Consequently, more prosperous and educated parents with fewer children have chosen to withdraw their children from the labor force to give them opportunities to be educated at school improving the issue of child labor. Thus, despite seemingly unequal distribution of income within these developing countries, their economic growth and development have brought about improved standards of living and welfare for the population as a whole.

Per capita gross domestic product (GDP) growth among post-1980 globalizing countries accelerated from 1.4 percent a year in the 1960s and 2.9 percent a year in the 1970s to 3.5 percent in the 1980s and 5.0 percent in the 1990s. This acceleration in growth seems even more remarkable given that the rich countries saw steady declines in growth from a high of 4.7 percent in the 1960s to 2.2 percent in the 1990s. Also, the non-globalizing developing countries seem to fare worse than the globalizers, with the former’s annual growth rates falling from highs of 3.3 percent during the 1970s to only 1.4 percent during the 1990s. This rapid growth among the globalizers is not simply due to the strong performances of China and India in the 1980s and 1990s—18 out of the 24 globalizers experienced increases in growth, many of them quite substantial.[166]

Worlds regions by total wealth (in trillions USD), 2018

The globalization of the late 20th and early 21st centuries has led to the resurfacing of the idea that the growth of economic interdependence promotes peace.[167] This idea had been very powerful during the globalization of the late 19th and early 20th centuries, and was a central doctrine of classical liberals of that era, such as the young John Maynard Keynes (1883–1946).[168]

Some opponents of globalization see the phenomenon as a promotion of corporate interests.[169] They also claim that the increasing autonomy and strength of corporate entities shapes the political policy of countries.[170][171] They advocate global institutions and policies that they believe better address the moral claims of poor and working classes as well as environmental concerns.[172] Economic arguments by fair trade theorists claim that unrestricted free trade benefits those with more financial leverage (i.e. the rich) at the expense of the poor.[173]

Globalization allows corporations to outsource manufacturing and service jobs from high cost locations, creating economic opportunities with the most competitive wages and worker benefits.[68] Critics of globalization say that it disadvantages poorer countries. While it is true that free trade encourages globalization among countries, some countries try to protect their domestic suppliers. The main export of poorer countries is usually agricultural productions. Larger countries often subsidize their farmers (e.g., the EU’s Common Agricultural Policy), which lowers the market price for foreign crops.[174]

Global democracy

Democratic globalization is a movement towards an institutional system of global democracy that would give world citizens a say in political organizations. This would, in their view, bypass nation-states, corporate oligopolies, ideological non-governmental organizations (NGO), political cults and mafias. One of its most prolific proponents is the British political thinker David Held. Advocates of democratic globalization argue that economic expansion and development should be the first phase of democratic globalization, which is to be followed by a phase of building global political institutions. Francesco Stipo, Director of the United States Association of the Club of Rome, advocates unifying nations under a world government, suggesting that it «should reflect the political and economic balances of world nations. A world confederation would not supersede the authority of the State governments but rather complement it, as both the States and the world authority would have power within their sphere of competence».[175] Former Canadian Senator Douglas Roche, O.C., viewed globalization as inevitable and advocated creating institutions such as a directly elected United Nations Parliamentary Assembly to exercise oversight over unelected international bodies.[176]

Global civics

Global civics suggests that civics can be understood, in a global sense, as a social contract between global citizens in the age of interdependence and interaction. The disseminators of the concept define it as the notion that we have certain rights and responsibilities towards each other by the mere fact of being human on Earth.[177] World citizen has a variety of similar meanings, often referring to a person who disapproves of traditional geopolitical divisions derived from national citizenship. An early incarnation of this sentiment can be found in Socrates, whom Plutarch quoted as saying: «I am not an Athenian, or a Greek, but a citizen of the world.»[178] In an increasingly interdependent world, world citizens need a compass to frame their mindsets and create a shared consciousness and sense of global responsibility in world issues such as environmental problems and nuclear proliferation.[179]

Baha’i-inspired author Meyjes, while favoring the single world community and emergent global consciousness, warns of globalization[180] as a cloak for an expeditious economic, social, and cultural Anglo-dominance that is insufficiently inclusive to inform the emergence of an optimal world civilization. He proposes a process of «universalization» as an alternative.

Cosmopolitanism is the proposal that all human ethnic groups belong to a single community based on a shared morality. A person who adheres to the idea of cosmopolitanism in any of its forms is called a cosmopolitan or cosmopolite.[181] A cosmopolitan community might be based on an inclusive morality, a shared economic relationship, or a political structure that encompasses different nations. The cosmopolitan community is one in which individuals from different places (e.g. nation-states) form relationships based on mutual respect. For instance, Kwame Anthony Appiah suggests the possibility of a cosmopolitan community in which individuals from varying locations (physical, economic, etc.) enter relationships of mutual respect despite their differing beliefs (religious, political, etc.).[182]

Canadian philosopher Marshall McLuhan popularized the term Global Village beginning in 1962.[183] His view suggested that globalization would lead to a world where people from all countries will become more integrated and aware of common interests and shared humanity.[184]

International cooperation

Military cooperation – Past examples of international cooperation exist. One example is the security cooperation between the United States and the former Soviet Union after the end of the Cold War, which astonished international society. Arms control and disarmament agreements, including the Strategic Arms Reduction Treaty (see START I, START II, START III, and New START) and the establishment of NATO’s Partnership for Peace, the Russia NATO Council, and the G8 Global Partnership against the Spread of Weapons and Materials of Mass Destruction, constitute concrete initiatives of arms control and de-nuclearization. The US–Russian cooperation was further strengthened by anti-terrorism agreements enacted in the wake of 9/11.[185]

Environmental cooperation – One of the biggest successes of environmental cooperation has been the agreement to reduce chlorofluorocarbon (CFC) emissions, as specified in the Montreal Protocol, in order to stop ozone depletion. The most recent debate around nuclear energy and the non-alternative coal-burning power plants constitutes one more consensus on what not to do. Thirdly, significant achievements in IC can be observed through development studies.[185]

Economic cooperation – One of the biggest challenges in 2019 with globalization is that many believe the progress made in the past decades are now back tracking. The back tracking of globalization has coined the term «Slobalization.» Slobalization is a new, slower pattern of globalization.[186]

Anti-globalization movement

Anti-globalization, or counter-globalization,[187] consists of a number of criticisms of globalization but, in general, is critical of the globalization of corporate capitalism.[188] The movement is also commonly referred to as the alter-globalization movement, anti-globalist movement, anti-corporate globalization movement,[189] or movement against neoliberal globalization. Opponents of globalization argue that power and respect in terms of international trade between the developed and underdeveloped countries of the world are unequally distributed.[190] The diverse subgroups that make up this movement include some of the following: trade unionists, environmentalists, anarchists, land rights and indigenous rights activists, organizations promoting human rights and sustainable development, opponents of privatization, and anti-sweatshop campaigners.[191]

In The Revolt of the Elites and the Betrayal of Democracy, Christopher Lasch analyzes[192] the widening gap between the top and bottom of the social composition in the United States. For him, our epoch is determined by a social phenomenon: the revolt of the elites, in reference to The Revolt of the Masses (1929) by the Spanish philosopher José Ortega y Gasset. According to Lasch, the new elites, i.e. those who are in the top 20% in terms of income, through globalization which allows total mobility of capital, no longer live in the same world as their fellow-citizens. In this, they oppose the old bourgeoisie of the nineteenth and twentieth centuries, which was constrained by its spatial stability to a minimum of rooting and civic obligations. Globalization, according to the sociologist, has turned elites into tourists in their own countries. The denationalization of business enterprise tends to produce a class who see themselves as «world citizens, but without accepting … any of the obligations that citizenship in a polity normally implies». Their ties to an international culture of work, leisure, information – make many of them deeply indifferent to the prospect of national decline. Instead of financing public services and the public treasury, new elites are investing their money in improving their voluntary ghettos: private schools in their residential neighborhoods, private police, garbage collection systems. They have «withdrawn from common life».
Composed of those who control the international flows of capital and information, who preside over philanthropic foundations and institutions of higher education, manage the instruments of cultural production and thus fix the terms of public debate. So, the political debate is limited mainly to the dominant classes and political ideologies lose all contact with the concerns of the ordinary citizen. The result of this is that no one has a likely solution to these problems and that there are furious ideological battles on related issues.
However, they remain protected from the problems affecting the working classes: the decline of industrial activity, the resulting loss of employment, the decline of the middle class, increasing the number of the poor, the rising crime rate, growing drug trafficking, the urban crisis.

D.A. Snow et al. contend that the anti-globalization movement is an example of a new social movement, which uses tactics that are unique and use different resources than previously used before in other social movements.[193]

One of the most infamous tactics of the movement is the Battle of Seattle in 1999, where there were protests against the World Trade Organization’s Third Ministerial Meeting. All over the world, the movement has held protests outside meetings of institutions such as the WTO, the International Monetary Fund (IMF), the World Bank, the World Economic Forum, and the Group of Eight (G8).[191] Within the Seattle demonstrations the protesters that participated used both creative and violent tactics to gain the attention towards the issue of globalization.

Opposition to capital market integration

World Bank Protester, Jakarta, Indonesia

Capital markets have to do with raising and investing money in various human enterprises. Increasing integration of these financial markets between countries leads to the emergence of a global capital marketplace or a single world market. In the long run, increased movement of capital between countries tends to favor owners of capital more than any other group; in the short run, owners and workers in specific sectors in capital-exporting countries bear much of the burden of adjusting to increased movement of capital.[194]

Those opposed to capital market integration on the basis of human rights issues are especially disturbed[according to whom?] by the various abuses which they think are perpetuated by global and international institutions that, they say, promote neoliberalism without regard to ethical standards. Common targets include the World Bank (WB), International Monetary Fund (IMF), the Organisation for Economic Co-operation and Development (OECD) and the World Trade Organization (WTO) and free trade treaties like the North American Free Trade Agreement (NAFTA), Free Trade Area of the Americas (FTAA), the Multilateral Agreement on Investment (MAI) and the General Agreement on Trade in Services (GATS). In light of the economic gap between rich and poor countries, movement adherents claim free trade without measures in place to protect the under-capitalized will contribute only to the strengthening the power of industrialized nations (often termed the «North» in opposition to the developing world’s «South»).[195][better source needed]

Anti-corporatism and anti-consumerism

Corporatist ideology, which privileges the rights of corporations (artificial or juridical persons) over those of natural persons, is an underlying factor in the recent rapid expansion of global commerce.[196] In recent years, there have been an increasing number of books (Naomi Klein’s 2000 No Logo, for example) and films (e.g. The Corporation & Surplus) popularizing an anti-corporate ideology to the public.

A related contemporary ideology, consumerism, which encourages the personal acquisition of goods and services, also drives globalization.[197] Anti-consumerism is a social movement against equating personal happiness with consumption and the purchase of material possessions. Concern over the treatment of consumers by large corporations has spawned substantial activism, and the incorporation of consumer education into school curricula. Social activists hold materialism is connected to global retail merchandizing and supplier convergence, war, greed, anomie, crime, environmental degradation, and general social malaise and discontent. One variation on this topic is activism by postconsumers, with the strategic emphasis on moving beyond addictive consumerism.[198]

Global justice and inequality

Global justice

Differences in national income equality around the world as measured by the national Gini coefficient, as of 2018[199]

The global justice movement is the loose collection of individuals and groups—often referred to as a «movement of movements»—who advocate fair trade rules and perceive current institutions of global economic integration as problems.[200] The movement is often labeled an anti-globalization movement by the mainstream media. Those involved, however, frequently deny that they are anti-globalization, insisting that they support the globalization of communication and people and oppose only the global expansion of corporate power.[201] The movement is based in the idea of social justice, desiring the creation of a society or institution based on the principles of equality and solidarity, the values of human rights, and the dignity of every human being.[202][203][204] Social inequality within and between nations, including a growing global digital divide, is a focal point of the movement. Many nongovernmental organizations have now arisen to fight these inequalities that many in Latin America, Africa and Asia face. A few very popular and well known non-governmental organizations (NGOs) include: War Child, Red Cross, Free The Children and CARE International. They often create partnerships where they work towards improving the lives of those who live in developing countries by building schools, fixing infrastructure, cleaning water supplies, purchasing equipment and supplies for hospitals, and other aid efforts.

Global share of wealth by wealth group, Credit Suisse, 2017

The economies of the world have developed unevenly, historically, such that entire geographical regions were left mired in poverty and disease while others began to reduce poverty and disease on a wholesale basis. From around 1980 through at least 2011, the GDP gap, while still wide, appeared to be closing and, in some more rapidly developing countries, life expectancies began to rise.[205] If we look at the Gini coefficient for world income, since the late 1980s, the gap between some regions has markedly narrowed—between Asia and the advanced economies of the West, for example—but huge gaps remain globally. Overall equality across humanity, considered as individuals, has improved very little. Within the decade between 2003 and 2013, income inequality grew even in traditionally egalitarian countries like Germany, Sweden and Denmark. With a few exceptions—France, Japan, Spain—the top 10 percent of earners in most advanced economies raced ahead, while the bottom 10 percent fell further behind.[206] By 2013, 85 multibillionaires had amassed wealth equivalent to all the wealth owned by the poorest half (3.5 billion) of the world’s total population of 7 billion.[207]

Critics of globalization argue that globalization results in weak labor unions: the surplus in cheap labor coupled with an ever-growing number of companies in transition weakened labor unions in high-cost areas. Unions become less effective and workers their enthusiasm for unions when membership begins to decline.[174] They also cite an increase in the exploitation of child labor: countries with weak protections for children are vulnerable to infestation by rogue companies and criminal gangs who exploit them. Examples include quarrying, salvage, and farm work as well as trafficking, bondage, forced labor, prostitution and pornography.[208]

Women often participate in the workforce in precarious work, including export-oriented employment. Evidence suggests that while globalization has expanded women’s access to employment, the long-term goal of transforming gender inequalities remains unmet and appears unattainable without regulation of capital and a reorientation and expansion of the state’s role in funding public goods and providing a social safety net.[209] Furthermore, the intersectionality of gender, race, class, and more remain overlooked when assessing the impact of globalization.[210]

In 2016, a study published by the IMF posited that neoliberalism, the ideological backbone of contemporary globalized capitalism, has been «oversold», with the benefits of neoliberal policies being «fairly difficult to establish when looking at a broad group of countries» and the costs, most significantly higher income inequality within nations, «hurt the level and sustainability of growth.»[211]

Anti-global governance

Beginning in the 1930s, opposition arose to the idea of a world government, as advocated by organizations such as the World Federalist Movement (WFM). Those who oppose global governance typically do so on objections that the idea is unfeasible, inevitably oppressive, or simply unnecessary.[212] In general, these opponents are wary of the concentration of power or wealth that such governance might represent. Such reasoning dates back to the founding of the League of Nations and, later, the United Nations.

Environmentalist opposition

a shows carbon footprint (CF) hotspots of foreign final consumption in China. bd show carbon footprint hotspots of the consumption of the United States, Hong Kong, and Japan, respectively. Among all foreign regions, the United States, Hong Kong, and Japan have the largest CFs in China, contributing ~23.0%, 10.8%, and 9.0%, respectively, to the total foreign CF in China in 2012.

Environmentalism is a broad philosophy, ideology[213][214][215] and social movement regarding concerns for environmental conservation and improvement of the health of the environment. Environmentalist concerns with globalization include issues such as global warming, global water supply and water crises, inequity in energy consumption and energy conservation, transnational air pollution and pollution of the world ocean, overpopulation, world habitat sustainability, deforestation, biodiversity loss and species extinction.

One critique of globalization is that natural resources of the poor have been systematically taken over by the rich and the pollution promulgated by the rich is systematically dumped on the poor.[216] Some argue that Northern corporations are increasingly exploiting resources of less wealthy countries for their global activities while it is the South that is disproportionately bearing the environmental burden of the globalized economy. Globalization is thus leading to a type of» environmental apartheid».[217]

Helena Norberg-Hodge, the director and founder of Local Futures/International Society for Ecology and Culture, criticizes globalization in many ways. In her book Ancient Futures, Norberg-Hodge claims that «centuries of ecological balance and social harmony are under threat from the pressures of development and globalization.» She also criticizes the standardization and rationalization of globalization, as it does not always yield the expected growth outcomes. Although globalization takes similar steps in most countries, scholars such as Hodge claim that it might not be effective to certain countries and that globalization has actually moved some countries backward instead of developing them.[218]

A related area of concern is the pollution haven hypothesis, which posits that, when large industrialized nations seek to set up factories or offices abroad, they will often look for the cheapest option in terms of resources and labor that offers the land and material access they require (see Race to the bottom).[219] This often comes at the cost of environmentally sound practices. Developing countries with cheap resources and labor tend to have less stringent environmental regulations, and conversely, nations with stricter environmental regulations become more expensive for companies as a result of the costs associated with meeting these standards. Thus, companies that choose to physically invest in foreign countries tend to (re)locate to the countries with the lowest environmental standards or weakest enforcement.

The European Union–Mercosur Free Trade Agreement, which would form one of the world’s largest free trade areas,[220] has been denounced by environmental activists and indigenous rights campaigners.[221] The fear is that the deal could lead to more deforestation of the Amazon rainforest as it expands market access to Brazilian beef.[222]

Food security

Globalization is associated with a more efficient system of food production. This is because crops are grown in countries with optimum growing conditions. This improvement causes an increase in the world’s food supply which encourages improved food security.[223] The political movement ‘BREXIT’ was considered a step back in globalisation; it has greatly disrupted food chains within the UK, as they import 26% of food produce from the EU.

Norway

Norway’s limited crop range advocates globalization of food production and availability. The northernmost country in Europe requires trade with other countries to ensure population food demands are met. The degree of self-sufficiency in food production is around 50% in Norway.[224]

See also

  • Civilizing mission
  • Cosmopolitanism
  • Deglobalization
  • Environmental racism
  • Eurasianism
  • Franchising
  • Free trade
  • Global civics
  • Global commons
  • Global mobility
  • Globalism
  • Global public goods
  • List of bilateral free-trade agreements
  • List of globalization-related indices
  • List of multilateral free-trade agreements
  • Middle East and globalization
  • Neorealism (international relations)
  • North–South divide
  • Outline of globalization
  • Postdevelopment theory
  • Technocapitalism
  • The No-Nonsense Guide to Globalization
  • Transnational cinema
  • Transnational citizenship
  • Triadization
  • United Nations Millennium Declaration
  • Vermeer’s Hat
  • World Englishes
  • Global regionalization

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Further reading

  • Ampuja, Marko. Theorizing Globalization: A Critique of the Mediatization of Social Theory (Brill, 2012)
  • Conner, Tom, and Ikuko Torimoto, eds. Globalization Redux: New Name, Same Game (University Press of America, 2004).
  • Eriksen, Thomas Hylland. «Globalization.» in Handbook of Political Anthropology (Edward Elgar Publishing, 2018).
  • Frey, James W. «The Global Moment: The Emergence of Globality, 1866–1867, and the Origins of Nineteenth-Century Globalization.» The Historian 81.1 (2019): 9. online, focus on trade and Suez Canal
  • Gunder Frank, Andre, and Robert A. Denemark. ReOrienting the 19th Century: Global Economy in the Continuing Asian Age (Paradigm Publishers, 2013);
  • Hopkins, A.G., ed. Globalization in World History (Norton, 2003).
  • Lechner, Frank J., and John Boli, eds. The Globalization Reader (4th ed. Wiley-Blackwell, 2012).
  • Leibler, Anat. «The Emergence of a Global Economic Order: From Scientific Internationalism to Infrastructural Globalism.» in Science, Numbers and Politics (Palgrave Macmillan, Cham, 2019) pp. 121–145 online[dead link].
  • Mir, Salam. «Colonialism, Postcolonialism, Globalization, and Arab Culture.» Arab Studies Quarterly 41.1 (2019): 33–58. online
  • Olstein, Diego (2015) “Proto-globalization and Proto-glocalizations in the Middle Millennium.” In Kedar, Benjamin and Wiesner-Hanks, Merry (Eds.), Cambridge World History. Volume 5: Expanding Webs of Exchange and Conquest, 500-1500 CE. Cambridge University Press, pp. 665-684
  • Pfister, Ulrich (2012), Globalization, EGO — European History Online, Mainz: Institute of European History, retrieved: 25 March 2021 (pdf).
  • Pieterse, Jan Nederveen. Globalization and culture: Global mélange (Rowman & Littlefield, 2019).
  • Rosenberg, Justin. «Globalization Theory: A Post Mortem,» International Politics 42:1 (2005), 2–74.
  • Steger, Manfred B. Globalization: A Very Short Introduction (4th ed. Oxford University Press, 2017)
  • Van Der Bly, Martha C.E. «Globalization: A Triumph of Ambiguity,» Current Sociology 53:6 (November 2005), 875–893
  • Wallerstein, Immanuel. «Globalization or the Age of Transition? A Long-Term View of the Trajectory of the World System,» International Sociology 15:2 (June 2000), 251–267.

External links

  • Comprehensive discussion of the term at the Site Global Transformations Archived 12 October 2009 at the Portuguese Web Archive
  • Globalization Website (Emory University) Links, Debates, Glossary etc.
  • BBC News Special Report – «Globalisation»
  • Globalization collected news and commentary at The Guardian  
  • «Globalization» Stanford Encyclopedia of Philosophy Analysis of the idea and its history.
  • OECD Globalization statistics
  • Mapping Globalization, Princeton University
  • List of Global Development Indexes and Rankings

What is globalization?

Globalization is the process by which ideas, knowledge, information,  goods and services spread around the world. In business, the term is used in an economic context to describe integrated economies marked by free trade, the free flow of capital among countries and easy access to foreign resources, including labor markets, to maximize returns and benefit for the common good.

Globalization, or globalisation as it is known in some parts of the world, is driven by the convergence of cultural and economic systems. This convergence promotes — and in some cases necessitates — increased interaction, integration and interdependence among nations. The more countries and regions of the world become intertwined politically, culturally and economically, the more globalized the world becomes. 

How globalization works

In a globalized economy, countries specialize in the products and services they have a competitive advantage in. This generally means what they can produce and provide most efficiently, with the least amount of resources, at a lower cost than competing nations. If all countries are specializing in what they do best, production should be more efficient worldwide, prices should be lower, economic growth widespread and all countries should benefit — in theory.

Policies that promote free trade, open borders and international cooperation all drive economic globalization. They enable businesses to access lower priced raw materials and parts, take advantage of lower cost labor markets and access larger and growing markets around the world in which to sell their goods and services.

Money, products, materials, information and people flow more swiftly across national boundaries today than ever. Advances in technology have enabled and accelerated this flow and the resulting international interactions and dependencies. These technological advances have been especially pronounced in transportation and telecommunications.

Among the recent technological changes that have played a role in globalization are the following:

Internet and internet communication. The internet has increased the sharing and flow of information and knowledge, access to ideas and exchange of culture among people of different countries. It has contributed to closing the digital divide between more and less advanced countries.

Communication technology. The introduction of 4G and 5G technologies has dramatically increased the speed and responsiveness of mobile and wireless networks.

list of benefits of 5G network technology

Increased speed and bandwidth are among the benefits of 5G technology.

IoT and AI. These technologies are enabling the tracking of assets in transit and as they move across borders, making cross-border product management more efficient.

Blockchain. This technology is enabling the development of decentralized databases and storage that support the tracking of materials in the supply chain. Blockchain facilitates the secure access to data required in industries such as healthcare and banking. For example, blockchain provides a transparent ledger that centrally records and vets transactions in a way that prevents corruption and breaches.

list of 10 benefits of blockchain technology

10 benefits of blockchain technology

Transportation. Advances in air and fast rail technology have facilitated the movement of people and products. And changes in shipping logistics technology moves raw materials, parts and finished products around the globe more efficiently.

Manufacturing. Advances such as automation and 3D printing have reduced geographic constraints in the manufacturing industry. 3D printing enables digital designs to be sent anywhere and physically printed, making distributed, smaller-scale production near the point of consumption easier. Automation speeds up processes and supply chains, giving workforces more flexibility and improving output.

Why is globalization important?

Globalization changes the way nations, businesses and people interact. Specifically, it changes the nature of economic activity among nations, expanding trade, opening global supply chains and providing access to natural resources and labor markets.

Changing the way trade and financial exchange and interaction occurs among nations also promotes the cultural exchange of ideas. It removes the barriers set by geographic constraints, political boundaries and political economies.

For example, globalization enables businesses in one nation to access another nation’s resources. More open access changes the way products are developed, supply chains are managed and organizations communicate. Businesses find cheaper raw materials and parts, less expensive or more skilled labor and more efficient ways to develop products.

With fewer restrictions on trade, globalization creates opportunities to expand. Increased trade promotes international competition. This, in turn, spurs innovation and, in some cases, the exchange of ideas and knowhow. In addition, people coming from other nations to do business and work bring with them their own cultures, which influence and mix with other cultures.

The many types of exchange that globalization facilitates can have positive and negative effects. For instance, the exchange of people and goods across borders can bring fresh ideas and help business. However, this movement can also heighten the spread of disease and promote ideas that might destabilize political economies.

History of globalization

Although many people consider globalization a twentieth century phenomenon, the process has been happening for millennia. Examples include the following:

  • The Roman Empire. Going back to 600 B.C., the Roman Empire spread its economic and governing systems through significant portions of the ancient world for centuries.
  • Silk Road trade. These trade routes, which date from 130 B.C. to 1453 A.D., represented another wave of globalization. They brought merchants, goods and travelers from China through Central Asia and the Middle East to Europe.
  • Pre-World War I. European countries made significant investments overseas in the decades before World War I. The period from 1870 to 1914 is called the golden age of globalization.
  • Post-World War II. The United States led the effort to create a global economic system with a set of broadly accepted international rules. Multinational institutions were established such as the United Nations (UN), International Monetary Fund, World Bank and World Trade Organization to promote international cooperation and free trade.

The term globalization as it’s used today came to prominence in the 1980s, reflecting several technological advancements that increased international interactions. IBM’s introduction of the personal computer in 1981 and the subsequent evolution of the modern internet are two examples of technology that helped drive international communication, commerce and globalization.

Globalization has ebbed and flowed throughout history, with periods of expansion and retrenchment. The 21st century has witnessed both. Global stock markets plummeted after the Sept. 11, 2001, terrorist attacks in the United States, but rebounded in subsequent years.

More recently, nationalist political movements have slowed immigration, closed borders and increased trade protectionism. The pandemic has had similar effects on borders and immigration and also disrupted supply chains. However, overall, the early 21st century has seen a dramatic increase in the pace of global integration. Rapid advances in technology and telecommunications are responsible for much of this change.

What is the G20?

The G20, or Group of Twenty, is an international forum that aims to foster international cooperation by addressing global economic issues, such as  financial stability and climate change. The G20 is made up of 19 countries and the European Union, including most of the world’s largest economies.

The nations involved account for 60% of the planet’s population, 75% of global trade and 80% of world GDP. It was founded in 1999, following the 1997 financial crisis, and has met every year since then.

Since 2008, the G20 has held an annual summit that brings together heads of state to discuss important economic issues. The G20’s president is selected annually on a rotating basis, and that person’s home country hosts the summit.

In 2019, the summit was held in Osaka, Japan, and it addressed issues such as women’s empowerment, climate change and artificial intelligence. The 2020 summit was to be in Riyadh, Saudi Arabia, but was held virtually because of the pandemic. Three of the main themes addressed were empowering people, especially women and youth; safeguarding the planet; and long-term strategies to share the benefits of innovation and technological advancement. The 2021 summit will be held in Rome, Italy, and will focus on recovery from the pandemic and climate change.

The members of G20 are Argentina, Australia, Brazil, Canada, China, France, Germany, Japan, India, Indonesia, Italy, Mexico, Russia, South Africa, Saudi Arabia, South Korea, Turkey, the United Kingdom, the United States and the European Union. Spain is a permanent guest of the organization.

Types of globalization: Economic, political, cultural

There are three types of globalization.

  1. Economic globalization. Here, the focus is on the integration of international financial markets and the coordination of financial exchange. Free trade agreements, such the North American Free Trade Agreement and the Trans-Pacific Partnership are examples of economic globalization. Multinational corporations, which operate in two or more countries, play a large role in economic globalization.
  2. Political globalization. This type covers the national policies that bring countries together politically, economically and culturally. Organizations such as NATO and the UN are part of the political globalization effort.
  3. Cultural globalization. This aspect of globalization focuses in a large part on the technological and societal factors that are causing cultures to converge. These include increased ease of communication, the pervasiveness of social media and access to faster and better transportation.

These three types influence one another. For example, liberalized national trade policies drive economic globalization. Political policies also affect cultural globalization, enabling people to communicate and move around the globe more freely. Economic globalization also affects cultural globalization through the import of goods and services that expose people to other cultures.

Effects of globalization

The effects of globalization can be felt locally and globally, touching the lives of individuals as well as the broader society in the following ways:

  • Individuals. Here, a variety of international influences affect ordinary people. Globalization affects their access to goods, the prices they pay and their ability to travel to or even move to other countries.
  • Communities. This level encompasses the impact of globalization on local or regional organizations, businesses and economies. It affects who lives in communities, where they work, who they work for, their ability to move out of their community and into one in another country, among other things. Globalization also changes the way local cultures develop within communities.
  • Institutions. Multinational corporations, national governments and other organizations such as colleges and universities  are all affected by their country’s approach to and acceptance of globalization. Globalization affects the ability of companies to grow and expand, a university’s ability to diversify and grow its student body and a government’s ability to pursue specific economic policies.

While the effects of globalization can be observed, analyzing the net impact is more complex. Proponents often see specific results as positive and critics of globalization view the same results as negative. A relationship that benefits one entity may damage another, and whether globalization benefits the world at large remains a point of contention.

Comparison of internationalization and localization product strategies

Internationalization and localization are both product strategies used in globalizing industries.

Examples of globalization

Multinational corporations are a tangible example of globalization. Some examples include the following:

  • McDonald’s had 39,198 fast-food restaurants in 119 countries and territories, according to its Securities and Exchange Commission filing at the end of 2020. It employed more than 2.2 million people at that time, the filing said.
  • Ford Motor Company reported in 2021 that it works with about 1,200 tier 1 suppliers around the globe.
  • Amazon’s recent expansion has it using tens of thousands of suppliers and employing more than nearly 1.3 million full- and part-time employees.

Through their influence on social and economic development in the countries that host them, multinational corporations embody the contradictions of globalization. They bring jobs, skills and wealth to the region they are investing or doing business in. But they also can destroy local businesses, exploit cheap labor and threaten indigenous cultures. The benefits they offer are often unsustainable because the loyalty of multinationals is to their investors and bottom lines and not to the local people, economies and cultures where they are doing business.

Another example of globalization is the response to the COVID-19 pandemic. Because the world was able to communicate across boundaries, nations were able to work together to quickly produce vaccines for the virus. In addition, doctors traveled where they were needed. For example, Cuba sent doctors to Italy at the beginning of the pandemic to assist with the crisis as it developed there.

However, countries also enacted strict travel restrictions and many closed their borders to cut down on the free movement of people and spread of the virus.

Benefits of globalization

Globalization enables countries to access less expensive natural resources and lower cost labor. As a result, they can produce lower cost goods that can be sold globally. Proponents of globalization argue that it improves the state of the world in many ways, such as the following:

  • Solves economic problems. Globalization moves jobs and capital to places that need these resources. It gives rich countries access to lower cost resources and labor and poorer countries access to jobs and the investment funds they need for development.
  • Promotes free trade. Globalization puts pressure on nations to reduce tariffs, subsidies and other barriers to free trade. This consequently promotes economic growth, creates jobs, makes companies more competitive and lowers prices for consumers.
  • Spurs economic development. Theoretically, globalization gives poorer countries access to foreign capital and technology they would not otherwise have. Foreign investment can result in an improved standard of living for the citizens of those nations.
  • Encourages positive trends in human rights and the environment. Advocates of globalization point to improved attention to human rights on a global scale and a shared understanding of the impact of people and production on the environment.
  • Promotes shared cultural understanding. Advocates view the increased ability to travel and experience new cultures as a positive part of globalization that can contribute to international cooperation and peace.

Negative consequences of globalization

Many proponents view globalization as way to solve systemic economic problems. But critics see it as increasing global inequality. Among the critiques of globalization are the following issues:

  • Destabilizes markets. Critics of globalization blame the elimination of trade barriers and the freer movement of people for undermining national policies and local cultures. Labor markets in particular are affected when people move across borders in search of higher paying jobs or companies outsource work and jobs to lower cost labor markets.
  • Damages the environment. The transport of goods and people among nations generates greenhouse gas and all the negative effects it has on the environment. Global travel and trade also can introduce, sometimes inadvertently, invasive species to foreign ecosystems. Industries such as fishing and logging tend to go where business is most lucrative or regulations are less strict, which has resulted in overfishing and deforestation in some parts of the world.
  • Lowers living standards. When companies move operations overseas to minimize costs, such moves can eliminate jobs and increase unemployment in sectors of the home country.
  • Facilitates global recessions. Tightly integrated global markets carry a greater risk of global recessions. The 2007-2009 financial crisis and Great Recession is a good example of how intertwined global markets are and how financial problems in one country or region can quickly affect other parts of the world. Globalization reduces the ability of individual nations to effectively use monetary and fiscal policy to control the national economy.
  • Damages cultural identities. Critics of globalization decry the decimation of unique cultural identities and languages that comes with the international movement of businesses and people. At the same time, the internet and social media are driving this trend even without the movement of people and commerce.
  • Increases the likelihood of pandemics. Increased travel, critics say, has the potential to increase the risk of pandemics. The H1N1 (swine flu) outbreak of 2009 and coronavirus in 2020 and 2021 are two examples of serious diseases that spread to multiple nations quickly.

Future of globalization

Technological advances, particularly blockchain, mobile communication and banking, are fueling economic globalization.

Nonetheless, rising levels of protectionism and anti-globalization sentiment in several countries could slow or even reverse the rapid pace of globalization. Nationalism and increasing trends toward conservative economic policies are driving these anti-globalization efforts.

Global trade is also made more difficult and facing rising threats from other factors, such as these:

  • climate change
  • decaying infrastructure
  • cyber attacks
  • human rights abuses

The takeaway

Globalization is a longstanding trend that is in the process of changing and possibly slowing. There are advantages to the more open border and free trade that globalization promotes, as well as negative consequences.

In a modern, post-pandemic world, individuals, businesses and countries must consider both sides of the globalization issue. Learn how companies are rethinking global supply chains to avoid disruption and reap the benefits of globalization.

Globalization has promoted multiculturalism in many countries of the world.

Globalization has promoted multiculturalism in many countries of the world.

What Globalization Means?

Globalization refers to the international interaction among people, companies, and governments of different countries through the exchanging of ideas, products, and cultural practices. Globalization is enhanced by the trading partnerships between different countries, as well as the use of the internet and mobile phones. Improvement in transportation systems like electric trains, container ships, and airplanes have made it possible for countries or people to access information about commodities offered in different places around the world.

Gloobalization In The Modern World

Globalization in the 19th century was attained as a result of industrial transformation during the civil war in the US. Industrialization promoted manufacturing of commodities in bulk and hence created the need to exchange with other people either for money or other products that were not produced locally. With the improved and reduced transport costs more can be exported and imported. Besides, people can move from one place to another and learn new skills that are not present in their area of origin.

Movement Of People

People are an important aspect of globalization, and hence their movement from one area to another plays a vital role in making the exchange of products a success. People move due to different reasons some of which includes tourism, immigration, and international education. Tourists travel to different countries for pleasure and interaction with others, therefore increasing interaction. When people visit different places, they end up buying products that they find different countries and in the process learn different cultures. Immigrants move from one country to another where they can settle and can gain employment. Their migration is facilitated by the readily available and affordable means of transport. International students seek education all over the world, buy products and mostly learn new culture.

Movement of Information, Goods, And Services

With globalization, information can be conveyed to any person regardless of the distance. The social media and telephones have made communication possible unlike in the past when people had to send letters through the courier or horsemen to deliver the mail and it occasionally could fail to deliver. Economic globalization has made it possible to move goods, services, and capital across the border. The improved means transport have made this possible.

Cultural Globalization

People exchange ideas, meanings, and values in the course of interaction through cultural globalization, where is has become possible for one to access whatever one wants to see at the click of the bottom.

Political Globalization

Globalization has impacted how different governments in the world function, as well as how they implement policies. For instance, the World Health Organization (WHO) formulates policies regarding health aspects that affect all member countries and therefore influencing them to work together. Non-government organizations influence public policies in different countries they operate in regard to the development projects they establish.

Importance Of Globalization

Globalization is a significant step towards the development of each nation. Every country can access the products, services, and even technology whenever they want. Hence, development in each country can be attained with the utilization of the available resources. Governments are promoting this aspect to ensure that social interaction, exchange of products and service is possible and thus none of the countries will suffer at the expense of others.

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And How Has the Global Economy Shaped the United States?

After centuries of technological progress and advances in international cooperation, the world is more connected than ever. But how much has the rise of trade and the modern global economy helped or hurt American businesses, workers, and consumers? Here is a basic guide to the economic side of this broad and much debated topic, drawn from current research.

Globalization is the word used to describe the growing interdependence of the world’s economies, cultures, and populations, brought about by cross-border trade in goods and services, technology, and flows of investment, people, and information. Countries have built economic partnerships to facilitate these movements over many centuries. But the term gained popularity after the Cold War in the early 1990s, as these cooperative arrangements shaped modern everyday life. This guide uses the term more narrowly to refer to international trade and some of the investment flows among advanced economies, mostly focusing on the United States.

The wide-ranging effects of globalization are complex and politically charged. As with major technological advances, globalization benefits society as a whole, while harming certain groups. Understanding the relative costs and benefits can pave the way for alleviating problems while sustaining the wider payoffs.

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Today, Americans rely on the global economy for many of the things they buy and sell, and to expand their businesses and make investments. Many products and services have become affordable to the average American through the coordination of production across countries.

Today, Americans rely on the global economy for many of the things they buy and sell, and to expand their businesses and make investments. Many products and services have become affordable to the average American through the coordination of production across countries.

The global economy moves fast. We help you navigate it.

The Peterson Institute for International Economics (PIIE) is an independent nonprofit, nonpartisan research organization dedicated to strengthening prosperity and human welfare in the global economy through expert analysis and practical policy solutions.

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THE HISTORY OF GLOBALIZATION IS DRIVEN BY TECHNOLOGY, TRANSPORTATION, AND INTERNATIONAL COOPERATION

Since ancient times, humans have sought distant places to settle, produce, and exchange goods enabled by improvements in technology and transportation. But not until the 19th century did global integration take off. Following centuries of European colonization and trade activity, that first “wave” of globalization was propelled by steamships, railroads, the telegraph, and other breakthroughs, and also by increasing economic cooperation among countries. The globalization trend eventually waned and crashed in the catastrophe of World War I, followed by postwar protectionism, the Great Depression, and World War II. After World War II in the mid-1940s, the United States led efforts to revive international trade and investment under negotiated ground rules, starting a second wave of globalization, which remains ongoing, though buffeted by periodic downturns and mounting political scrutiny.

GLOBALIZATION IN CHARTS

Foreign direct investment (FDI) involves establishing ownership or controlling interest of a business in another country.

Foreign direct investment (FDI) involves establishing ownership or controlling interest of a business in another country.

China, India, and Brazil dropped their rates to enter the World Trade Organization (WTO).

China, India, and Brazil dropped their rates to enter the World Trade Organization (WTO).

Global supply chains are production networks that assemble products using parts from around the world (known as intermediate goods). Today, 80 percent of world trade is driven by supply chains run by multinational corporations. Trade in intermediate goods is now nearly twice as large as trade in final goods and is especially important in advanced manufacturing, like autos.

Global supply chains are production networks that assemble products using parts from around the world (known as intermediate goods). Today, 80 percent of world trade is driven by supply chains run by multinational corporations. Trade in intermediate goods is now nearly twice as large as trade in final goods and is especially important in advanced manufacturing, like autos.

The surplus in services suggests the competitive strength of US services in the global market. The United States had an overall trade deficit of $447 billion in 2017, according to the US International Trade Commission, as a result of Americans spending more than they earn and financing the difference with foreign credit. For more, watch the video, “Is the US Trade Deficit a Problem?”

The surplus in services suggests the competitive strength of US services in the global market. The United States had an overall trade deficit of $447 billion in 2017, according to the US International Trade Commission, as a result of Americans spending more than they earn and financing the difference with foreign credit. For more, watch the video, “Is the US Trade Deficit a Problem?”

FAQ: What has been the role of international financial flows?

Separate from trade in goods and services, global financial integration is a much-debated but important topic. Here is a quick summary.

Globalization also encompasses the purchase and sale of financial investments

Many countries have large international financial flows or investments, consisting of assets and liabilities.
These include FDI, securities (which are bought and sold), and debts.
They are generally held by or owed to firms, banks and other financial institutions, or governments.
This chart shows how yearly US transactions grew over time as the global economy and financial system became increasingly
integrated but dropped dramatically during the global financial crisis of 2008–09. (Total US foreign assets in
2016 were $26 trillion, equal to 140 percent of US GDP. Total US liabilities to foreigners were $34 trillion in
2016, or 185 percent of GDP.)

Some types of investment are relatively stable. Others are more volatile.

This chart shows how FDI has grown steadily while the growth of portfolio holdings (foreign equity or foreign debt) and “other” assets (which are
largely composed of bank loans) has been more volatile. Reserves are international assets held by the US
government.

As a result of financial globalization, countries can be susceptible to crises from sudden stops in capital inflows

This chart shows the collapse of financial inflows to South Korea during two periods, the 1997–98 Asian
financial crisis and the global financial crisis of 2008–09, especially in “other liabilities” like bank loans.
Korea was hit in 2008–09 even though the epicenter of the crisis was in the United States and Europe.

“I saw that you could not separate the idea of commerce from the idea of war and peace. … [and] that wars were often largely caused by economic rivalry conducted unfairly. …I embraced the philosophy that…unhampered trade dovetailed with peace; high tariffs, trade barriers, and unfair economic competition, with war. …[I]f we could get a freer flow of trade—freer in the sense of fewer discriminations and obstructions—so that one country would not be deadly jealous of another and the living standards of all countries might rise, thereby eliminating the economic dissatisfaction that breeds war, we might have a reasonable chance for lasting peace.”

Cordell Hull, Secretary of State under
President Franklin D. Roosevelt, written in his memoirs in 1948

GLOBALIZATION AS A TOOL FOR PROSPERITY AND PEACE

After World War II, the United States helped build a global economic order governed by mutually accepted rules and overseen by multilateral institutions. The idea was to create a better world with countries seeking to cooperate with one another to promote prosperity and peace. Free trade and the rule of law were mainstays of the system, helping to prevent most economic disputes from escalating into larger conflicts. The institutions established include:

EFFECTS OF GLOBALIZATION

MORE GOODS AT LOWER PRICES

Globalization encourages each country to specialize in what it produces best using the least amount of resources, known as comparative advantage. This concept makes production more efficient, promotes economic growth, and lowers prices of goods and services, making them more affordable especially for lower-income households.

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SCALED UP BUSINESSES

Larger markets enable companies to reach more customers and get a higher return on the fixed costs of doing business, like building factories or conducting research. Technology firms have taken special advantage of their innovations this way.

BETTER QUALITY AND VARIETY

Competition from abroad drives US firms to improve their products. Consumers have better products and more choices as a result.

INNOVATION

Expanded trade spurs the spread of technology, innovation, and the communication of ideas. The best ideas from market leaders spread more easily.

JOB CHURN

Globalization supports new job opportunities but also contributes to job displacement. It does not significantly change the total number of positions in the economy, as job numbers are primarily driven by business cycles and Federal Reserve and fiscal policies. Nevertheless, a Peterson Institute study finds 156,250 US manufacturing jobs were lost on net each year between 2001 and 2016 from expanded trade in manufactured goods, which represents less than 1 percent of the workers laid off in a typical year.1 Low-wage workers in certain regions are most affected. Many of them also face lower earnings or have dropped out of the workforce. Bigger factors than trade that drive job displacements are labor-saving technologies, like automated machines and artificial intelligence. Better-paying positions have opened up in manufactured exports—especially in high-tech areas, such as computers, chemicals, and transportation equipment—and other high-skill work, notably in business services, such as finance and real estate (see Jobs section).

DECLINE IN INEQUALITY GLOBALLY, BUT WIDER WITHIN UNITED STATES

Globalization has helped narrow inequality between the poorest and richest people in the world, with the number living in extreme poverty cut by half since 1990. But within many countries, including the United States, inequality is rising. A consensus of scholarly work holds that globalization has contributed marginally to rising US wage inequality, putting this factor at 10 to 20 percent. A leading explanation for rising US inequality [pdf] is that technology is reducing demand for certain low- and middle-wage workers and increasing demand for high-skilled, higher-paid workers. Wages have also stagnated, though economists are still debating the exact causes. Countries exposed to globalization have alleviated inequality to different degrees through tax and welfare systems. The United States has done the least among advanced economies to mobilize government policies to reduce inequality.


1In 2016, 19.9 million workers [pdf] were laid off or discharged (i.e., involuntary separations).

GLOBALIZATION HAS DISPLACED SOME WORKERS, WHILE SUPPORTING HIGH-SKILL JOBS

Globalization changes the types of jobs available but has little effect on the overall number of jobs in the ever-changing US labor market. That being said, some workers have directly benefited from expanding global commerce, while others have not. Certain manufacturing and industry workers in specific geographic regions lost out, such as those in furniture, apparel, steel, auto parts, and electrical equipment industries in Tennessee, Michigan, and the mid-Atlantic states. A widely cited study [pdf] shows that between 1991 and 2007, lower-wage manufacturing workers within industries that faced import competition experienced large and lasting earnings losses, while higher-wage workers in these industries did not. The lower-wage workers may have lacked the skills and mobility to transition to other lines of work, whereas higher-wage workers relocated to companies outside manufacturing. Studies show that globalization has also diminished US worker bargaining leverage to demand higher wages.

FAQ: What has happened to American manufacturing employment?

Since World War 2, American jobs have increasingly been in service-providing industries instead of manufacturing.

US manufacturing production keeps growing but with fewer employees needed.

The percent of US jobs in manufacturing has steadily declined since the 1940s, before the rise of China, NAFTA,
or the WTO, mainly because technology has made it easier to produce goods. American industrial production is at
historically high levels, but fewer people are needed to achieve this success. Manufacturing employment share has also declined
because consumers are spending a smaller percent of their incomes on manufactured goods and more on services, which include housing, health care, dining out, travel, and legal services.
Employment in service industries has grown from about half to 84 percent of all
nonfarm, nongovernment employment.

Because US firms often beat international competitors at supplying high-skill services—like engineering, legal, consulting, research, management, and information technology—workers in these fields have benefited the most from globalization.

Business-service employment expanded more than 20 percent between 2006 and 2016. These jobs pay more than 20 percent higher wages than the average manufacturing job.

Foreign-owned companies that do business in the United States have hired Americans at a faster rate than US private employers between 2007 and 2015. They also pay better, do more research and development, export more, and invest more than the average US firm. The same is true, by comparison with local averages, of US firms that invest abroad. One in five American manufacturing workers is now employed by a foreign-owned company operating in the United States.

Demand will likely increase for more highly-skilled manufacturing workers, in areas such as engineering, management, finance, computer and mathematical occupations, and sales. The greatest areas of job growth now in the United States are in professional and business services, health care and social assistance, and educational services. More job training and education is needed to prepare workers for these jobs.

WHY SUPPORT GLOBALIZATION IF IT DISPLACES JOBS?

Economists look at the effects of globalization across the entire economy to weigh the pros vs. cons. Since the overall payoff is so much greater than the costs to individual workers or groups who have lost out, nearly all economists support having an open global market versus closing it off (see example).

Note: Trade expansion refers to the effects caused by additional manufactured imports and exports. Source: Gary Clyde Hufbauer and Zhiyao (Lucy) Lu, The Payoff to America from Globalization: A Fresh Look with a Focus on Costs to Workers. For chart sources, see Figure 3 in Policy Brief. Total manufacturing job separations from Job Openings and Labor Turnover Survey, Bureau of Labor Statistics.

Note: Trade expansion refers to the effects caused by additional manufactured imports and exports. Source: Gary Clyde Hufbauer and Zhiyao (Lucy) Lu, The Payoff to America from Globalization: A Fresh Look with a Focus on Costs to Workers. For chart sources, see Figure 3 in Policy Brief. Total manufacturing job separations from Job Openings and Labor Turnover Survey, Bureau of Labor Statistics.

Other common arguments:

  • Globalization is like technological progress. Both disrupt some livelihoods while enlarging the economic pie and opening up new and better-paying job opportunities. The internet, for instance, made many jobs obsolete but also created new higher-paying jobs and industries unheard of only a few decades ago.
  • Protectionism helps select groups but at a higher cost for everyone else. Imposing tariffs on steel, for instance, helps certain domestic steel producers, but many more jobs depend on businesses that need some imported steel to make goods that are affordable. US consumers end up paying more for foreign goods because of the tariff and more for domestic goods because domestic producers often raise prices in the absence of foreign competition. Damage worsens when trading partners retaliate with their own tariffs on US exports. US agriculture is particularly vulnerable to retaliation.

One study shows that US tariffs on Chinese tires under President Barack Obama saved 1,200 tire manufacturing jobs. But US consumers paid $900,000 per job saved, and 3,700 retail jobs were lost as tires became more expensive.

  • The United States must keep open markets to stay competitive globally. Other countries are continuing to open their markets to each other, forming regional supply chains that make production more efficient and products more affordable within their trading blocs. By not joining these deals, US exports have a difficult time competing. US businesses may also opt to move operations abroad to gain access to foreign markets.

US real income in 2030 is estimated to be $133 billion less than it would have been if President Trump had remained in the Trans-Pacific Partnership (TPP) trade deal. Other countries signed a deal in 2018 without the United States, giving them preferential access to each other’s markets.

  • Operating within a rules-based system allows for peaceful conflict resolution. There are cases when unfair trade practices and abuses harm US producers. Maintaining international systems to address those problems is key to preventing mutually destructive trade wars—even real wars. Economic integration strengthens US security alliances, while trade wars weaken the ability of the United States to collaborate with allies.

FAQ: How can the United States help workers find new jobs without sacrificing trade gains?

In an ideal world, displaced workers from trade competition could find new jobs, sometimes by moving or gaining new
skills. In reality, it has been very difficult for many of these workers to transition, with lasting effects on
individuals and their communities. Trade expert Gary Clyde Hufbauer points out that the national income gains
from expanded trade are at least 10 times greater than what is needed to meaningfully assist workers who lose
their jobs to import competition.

Instead of sacrificing trade gains, many economists recommend domestic policies like wage insurance, expanded
tax credits, better unemployment benefits, and subsidies for health insurance for all displaced workers regardless
of the cause. Such policies could reduce worker anxiety about job turnover across the board, whether it be from
trade or other bigger factors. Currently, there is government support through a program called Trade Adjustment
Assistance (TAA), though it only helps workers directly impacted by trade and the amounts paid are limited. The
United States spends only a fifth of what other advanced economies spend on average to help people find new jobs
through education, training, job search assistance, and other active labor market programs.

Broader domestic policies can also help workers adapt to the continuously changing job market, such as access
to higher education and health care, but Americans remain conflicted about the government’s role in these social
safety net programs. Other advanced economies have generally increased the size of government programs as they
opened up to trade.

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CHINA’S RISE IN THE GLOBAL ECONOMY CREATES COMPLICATED PROBLEMS

As a major world trading partner and manufacturing hub, China has become one of the most dominant forces in the global economy. It entered the World Trade Organization in 2001 and undertook many reforms, cutting tariffs and other trade barriers. But it still has not completely transformed into a market-oriented economy as its trading partners expected. Many big Chinese companies have close ties with the government, and certain practices have skewed the playing field in trade. For instance, China’s government unfairly demands that US intellectual property be handed over in certain cases as the price of doing business there. And Beijing routinely subsidizes its industries. These practices discriminate against not only Americans but also US allies.

US administrations have taken different approaches to deal with these concerns. Negotiated under President Obama, the Trans-Pacific Partnership (TPP) agreement was intended to entice China to improve its practices by allowing the country in on the lucrative deal only if it agreed to new rules, but President Trump withdrew from the deal. There are ongoing efforts started in December 2017 by the European Union, United States, and Japan to negotiate new rules that would potentially be embedded within the WTO.

In 2018, the Trump administration started imposing tariffs on China citing a variety of reasons, including helping American manufacturing, countering forced technology transfers, and reducing China’s large bilateral trade surplus in goods. Beijing retaliated with its own tariffs on US goods, escalating into a trade war. By late 2019, tariffs had increased to around 20 percent and new duties covered over half of exports from each country. To prevent further escalation, China committed to a “phase one deal” to expand purchases from the United States in 2020 and 2021, but it is unlikely China will meet its targets, and the deal does not address many concerns, including China’s industrial subsidies. Evidence to date is that the cost of tariffs has been borne by importing companies, sometimes resulting in higher prices for consumers. Tariffs remain elevated under President Joseph R. Biden Jr., as of mid-2021.

The trade war with China illustrates how globalization has become so widely entrenched in the US and world economies that undoing its complicated web of activities risks other damaging consequences. Below is a list of various protectionist actions and their economic, diplomatic, and national security risks.

Trade actions

Risks

Engaging in a trade war, with escalating tit-for-tat tariffs

  • Both countries lose economically when trade volumes decline
  • Costs rise, harming US competitiveness and making it harder for families to afford products
  • Retaliation hurts US exports

Withdrawing from free trade agreements

  • Disrupts global supply chains that domestic businesses, workers, and consumers rely on to hold costs and
    inflation down
  • Can put the United States at a disadvantage since other countries continue to strike their own deals with each other that
    improve their competitiveness
  • Leads to higher tariffs on US exports, which would dampen sales and hurt US businesses and workers
  • Jeopardizes role of the United States as a world leader in international cooperation, making it more difficult to
    achieve solutions on national security, immigration, and the environment

Violating WTO rules or circumventing established processes

  • Weakens rules-based trading system that the United States and much of the world relies on to keep foreign
    markets open and settle disputes

Promoting “Buy America” policies

  • Causes more lost jobs than they create as other countries retaliate
  • Makes government purchases more expensive

Imposing tariffs to save US manufacturing jobs at specific companies

  • Saves few jobs at very high cost to taxpayers and consumers
  • With global supply chains dominating world trade, it is difficult to hit another country
    and avoid hitting your own or your allies

Restricting imports from specific countries to try to reduce bilateral trade deficits

  • Does not improve the overall US trade deficit
  • Bilateral trade deficits are not an appropriate measure for economic improvement
  • Not a successful negotiating strategy for trade deals
  • Countries can and will retaliate

THE PUBLIC HAS MIXED VIEWS ON GLOBALIZATION

How do Americans feel about globalization? Listening to the debates can be confusing. Not surprisingly, polls vary widely depending on how and when the question is posed.

Globalization can be a hard sell to the public because the benefits are widely distributed and not as easily understood, compared with the personal costs to very specific companies or workers.

The problem is compounded because policymakers have done little to help workers and communities adjust at a time when the wealthiest Americans have gained the most in recent years. In general, younger people are more supportive of free trade, as most have never known a world without the current system.

Before 2016, Republicans generally favored US trade deals and Democrats generally voted against them. President Trump canceled TPP and threatened withdrawing from NAFTA, the Korea-US Free Trade Agreement (KORUS) (later revised and signed), and the WTO. His administration negotiated the US-Mexico-Canada Agreement (USMCA) to replace NAFTA; the agreement entered into force in 2020. Some GOP congressional members spoke out against Trump on certain trade issues (see example) or drafted bills to limit his authority on tariffs. The Trump administration pushed for more power to impose tariffs.

Survey Question: In general do you think that free trade agreements between the United States and other countries have been a good thing or a bad thing for the United States?

This Pew Research poll finds more support than not for free trade agreements. But a 2016 Bloomberg poll asked, “Do you think US trade policy should have more restrictions on imported foreign goods to protect American jobs, or have fewer restrictions to enable American consumers to have the most choices and the lowest prices?» This resulted in 65 percent of respondents wanting more restrictions, the opposite of the sentiment expressed in the Pew poll.

This Pew Research poll finds more support than not for free trade agreements. But a 2016 Bloomberg poll asked, “Do you think US trade policy should have more restrictions on imported foreign goods to protect American jobs, or have fewer restrictions to enable American consumers to have the most choices and the lowest prices?» This resulted in 65 percent of respondents wanting more restrictions, the opposite of the sentiment expressed in the Pew poll.

SUSTAINING GLOBALIZATION THROUGH POLICY ACTION

The global economy has yielded enormous economic gains for the United States, but problems undoubtedly remain. There are abuses within the system and rules need to be updated. Trade agreements should account for the modern digital age. Disputes continue on the trade of certain goods—whether items are flooding other markets too much, how industries are being subsidized, lingering protections on specific goods or economic sectors, etc. Solving these types of issues, which will inevitably arise and change over time, is best done through negotiation and coordination with trading partners—applying due process—in order to prevent costly trade wars, where more and more barriers end up hurting all sides.

But trade negotiations can only go so far. Not enough has been done to help those who have lost out from trade competition. And the reality is that the problems people face today go far beyond the effects of globalization. Manual work is increasingly being automated, lowering demand for workers. Wages are stagnant, as health care and higher education costs rise. Inequality is widening.

Domestic policies that support not just those left behind because of trade competition but all Americans will maximize gains while ensuring inclusive growth critical for national well-being and preventing erosion of multilateral systems that the United States helped build and that have served the country—and the world—well for most of the last century.

The global market still has great potential for the US economy. With anyone in the world now a text, click, call, or plane flight away, 95 percent of potential customers for goods and services are outside the United States, ready to buy goods and services from other countries if US producers are barred from their markets. If American producers want to reach those consumers, the United States must let producers from overseas reach American consumers, as they have over the years for cars, appliances, smartphones, and other products Americans want. More open trade could add another $540 billion to the US economy by 2025, equivalent to $1,600 a year in income per person.

Here are some of the crucial areas that economists have proposed the United States should focus on, as outlined in many studies at the Peterson Institute and other policy organizations. While these goals are simply stated and obviously will pose challenges to resolve, the stakes are high to rebuild trust in a global system that has helped secure prosperity and peace.

Invest in better and more inclusive education to prepare people for tomorrow’s economy.

Give all displaced workers sufficient financial and administrative support to find new jobs and some compensation for lost income.

Address growing income inequality through the tax system and spending programs.

Make sure the healthcare system does not impede workers from finding new jobs or cause significant financial hardship.

Use free trade agreements to improve the competitiveness of US businesses, increase total trade, and boost overall economic growth.

Work within the WTO and various free trade agreements to settle disputes, ensure fairness, protect intellectual property and investment rights, and promote reciprocity and growth. Improve the rules of the system rather than abandon them.

Coordinate with allies to confront trade abuses.

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GLOSSARY

Goods are physical, produced items traded between countries, like corn, machinery parts, or chemicals.

Services are business activities conducted between countries, such as tourism, finance, insurance, real estate, science exchanges, professional services, business management, education, health care, arts, entertainment, accommodation, and food services.

Exports are goods and services that are sold to individuals or companies outside of their country of origin.

Imports are goods or services purchased from outside the country.

A trade deficit occurs when spending on imports exceeds what is earned from selling exports. A trade surplus is the opposite, when earnings from exports top spending on imports. A country’s trade balance, either a surplus or deficit, is not affected by tariffs or trade agreements but by larger economic factors, like government spending and monetary policy.

Protectionism is the term for government restrictions on international trade aimed at blocking foreign products and driving companies and consumers to purchase domestically produced goods and services. The government may enact taxes on imports (called tariffs), limits on the quantity of imports (called quotas), subsidies to domestic industries, or other regulations. Tariffs are paid by domestic importers, not foreign governments or exporters.

Trade liberalization is the opposite of protectionism—when countries allow people and businesses to buy and sell across borders with fewer restrictions. In this context, liberal refers to more free or open trade.

CREDITS

Written by Melina Kolb

Edited by Madona Devasahayam, Helen Hillebrand, and Steven R. Weisman

Graphics by William Melancon

Videos by Daniel Housch

Chart data collected by Christopher G. Collins and Soyoung Han

Additional research by Anjali Bhatt, Cathleen Cimino-Isaacs, and Zhiyao (Lucy) Lu

Special thanks to C. Fred Bergsten, Chad P. Bown, Cullen S. Hendrix, Gonzalo Huertas, Gary Clyde Hufbauer, Douglas A. Irwin, Fredrick Toohey, Jeffrey J. Schott, and Eitan Urkowitz for their contributions.

This feature was first published on October 29, 2018 and last updated on August 24, 2021.

© 2021 Peterson Institute for International Economics. All rights reserved.

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Globalization is actually the idea that there will be no national boundary in the world of business and commerce and all the trade will operate on an international scale. Recognizing the cultural diversity of the world to build a harmonious world is another agenda of Globalization.

Concept of globalization

People have derived benefits from the geographical locations of one another since ages. This has been done by way of migration, trade and business relations. Likewise, even today the same phenomenon continues on a large scale by introduction of free trade agreements and novel developments in the international relations which enable the states to benefit from each other’s interests. This process of inter-state integration and interaction is called globalization.

Definition

Globalization, the word means to make “global”, meaning making global ties or making something or usage of something accessible and not restricted to a single territory. The process is leaving a significant impact on the international community and on its environment, politics, society and economic development. Besides, globalization has made gradual changes in the health sector and individual well-being of societies.

The need for globalization

Not all things are in abundance everywhere, but they can be in abundance at a particular place. For example if somebody is growing vegetables in their lawn and they have more than their consumption requirement then they would want to sell them to make the most of the yield and others will buy from them to escape the costly market rates. This is exactly how globalization works. Countries even go a step ahead by availing themselves of the cheap labor opportunities abroad. For example, a Japanese automobile company manufactures its automobile parts in say Pakistan, assembles them in Bangladesh and sells the finished cars in the other countries. Japan would only see which States can offer the most economic friendly results without compromising the quality.

Historical background

After the WWII, there has been a significant rise in the world trade. There has been a 20% increase in the volume of free trade particularly since 1950s, whereas the foreign investments have doubled.

Thomas Friedman, an American journalist and author precisely opines on globalization that it is getting “farther, faster, cheaper and deeper”.

Advantages of globalization

Globalization by removing the barriers also frees the States from their technological deficits. This improves not only the industrial sector but greatly impacts the healthcare segment as well when the States have begun to import advanced machinery and other assets that couldn’t be manufactured within their territories. This also boosts the development in the developing and underdeveloped countries by the flow of information and technology across borders.

Impact of globalization on law

Globalization has evidently impacted the legislation of the States. The laws of developed States have been incorporated by other states by way of Ordinances. Mostly the laws adopted relate to the areas which haven’t been touched by the domestic legislators. Intellectual property laws can be an instance where TRIPS Agreement of WTO has been made the basis for the Copyright, Trademark and Patent laws in various developing countries protecting the individuals and businesses.

The progress of China

China has reached the zenith of the world prosperity by globalizing only. It has impacted foreign markets to the extent that there’s not a single State where Chinese goods and services are not found. Yes, globalization extends to services as well. Developed countries invite foreigners by offering them with the unbeatable working opportunities. That’s the reason most Asians are seen working in the USA as doctors, engineers, lawyers etc. As a result, there has been an exchange of ideas, languages and over all culture. Inter-culture marriages are also an outcome of globalization.

Drawbacks

Nevertheless, excessive interdependence between the States at times gets problematic. For example in 2010 when Greece met debt crisis the impact was seen on the entire Europe. Plus due to increased demand for goods and amplified industrialization driven by globalization, the world is facing global warming, which is currently the biggest disaster for the world to face.

 Facts about Globalization:

  • As a result of globalization, world per capita GDP rose from $680 to $6,500 in between 1900 and 2000 where the rise was so inconsequential before that.
  • The dramatic rise of the GDP didn’t help the countries with low assets that much but surveys and statistics show that the quality of life and growth have become better with globalization.
  • The most striking facilitator of the globalization is the Internet.
  • Japan, Korea, China, and Taiwan are the countries have used the positive factors of globalization the most to develop their economy and the quality of life.
  • The WTO, the World Bank, and the IMF (International Monetary Fund) are the explicit result of globalization.

Each of us has some friends we share with. Each of your friends has different brands of mobile phones. Some of them are Made in Japan, some of them Made in the Us, and some of them in Made in South Korea.

Each of you lives in a same country and buys a phone from your local electronics’ shops. So how did the products made from different countries come to you?

Suppose you go to big multiplexes and buy foreign brand clothes that come from almost all overseas. How is it possible?

 All this is possible as a result of globalization. The answer to these questions is hidden in one word, that is, globalization.

So let’s find out the answer to the question- What is Globalization? What about the history of globalization.

The Information and Communication Technology (ICT) revolution, the free flow of information-based and knowledge-based economies, the growing integration with the global economy of the national economy, and the market economy, is the key to globalization.

So globalization is the process by which the free market economy is ensured all over the world. In this process, foreign companies are doing trade throughout the world. That’s why you can get all the foreign products at a minimal price from your doorstep. 

It is also a mechanism of mutual interaction and interconnection that initiates coordination and interaction between governments, institutions and peoples of different nations. The driving force of this approach is international trade and investment, and its main supporting force is information technology.

Environment, culture, political system, economic development and progress, and human and social progress; It has a clear effect on everything. Although research on globalization has literally begun, this matter must be quite ancient.

Although globalization is broadly used since 1970 but globalization as a concept we can find from ancient times, people have been shown to participate in international trade. Although there was no general policy then. The history of globalization begins from thousands of years ago, in the middle Ages, the Silk Road was used to trade China with Europe through Central Asia.

Must-Read– 5 Important Types of Globalization

Features of Globalization

From the above discussion, we also find some features of globalization. These are-

  1. Integration of Economies
  2. Liberalization
  3. Privatization
  4. Free Trade
  5. Interconnectedness

1. Integration of Economies

The integration of economies throughout the world is necessary for interaction and integration among people, companies, and governments worldwide.

 It is a process in which agreements are done among the countries within a particular geographic region for reducing tariff barriers to ensure a free flow of goods and services.

2. Liberalization

To ensure integration of economies among the countries it is necessary to implement the process of liberalization in their own countries.

Like integration of economies, liberalization also is a process by which a country reform their economic policies for open their market to all. It ensures freedom of the entrepreneurs for the establishment of any kind of legal trades or industries in their own countries or abroad.

3. Privatization

After liberalization, it’s time for privatization. Without liberalization there is no existence of privatization. Privatization refers to the transfer of ownership of any property, corporation or business or services from government to the privately owned sectors.

Globalization would not be possible without LPG. Here L refers to Liberalization, P for Privatization and lastly G for Globalization. It can be said that liberalization and Privatization are the precondition of globalization. 

4. Free Trade

It refers to free flow trade among the countries without tariff barriers. Free trade can be possible when some countries within a same geographic region sign an agreement for the free trade among their countries. 

5. Interconnectedness

It provides us a framework to explore the world through interaction with different people, animals, nature by using several technological tools without any kind of barriers.

Must-Read- Advantages and Disadvantages of Globalization

History of Globalization

Globalization is not a new phenomenon. Today’s globalization has developed through the different phases which are started from ancient time.

Human being always moved from one place to other place with the purpose of trade. They exchanged goods, skill and ideas with other people from the history.

Silk Road

history of globalization

I have already mentioned that China used the Silk Road for their trade to Europe through Central Asia. Around 1st Century BC, Silk Road was first introduced to the Roman Empire.

 Throughout history Eurasia is one of the important paths for communication and trade which links from china. This route or path is called today as Silk Road. Through this road, people share their knowledge, ideas, culture, and beliefs. 

Trader along with this road not only attached to trade but also intellectual and cultural exchange. Silk was a more expensive and luxurious product that was traded between east and west through this road. Besides silk, there were many products that were traded such as textiles, spices, grain, vegetables, and fruits, etc.

Spice Trade 

Trade of spice was happened from the 7th to 15th centuries by the Islamic merchants in the Middle East. Islamic merchants traded spice from the Middle East to East Asia. The main purpose of that trade was to spread the Islamic religion. As a result of this initiative you can see a country like Indonesia where the most population is a Muslim majority.

The dominating product of Islamic trade was spice. Spice was traded mainly through sea and they were very much focusing on international trade in medieval age.

Age of Exploration

From the 15th to the 18th Century was the era of exploration. During this time the exploration of the Europeans connected the East and the West. Columbus’s discovery of America is believed to have begun the journey of modern globalization.

At this time, three things were mainly focused on. These are called as 3C 

1. Christianity

Christianity represents western civilization. Based on this notion, Western society sought to spread their religion throughout the world and had many successes.

2. Civilization

Christianity was one of the means of reaching Western civilization all over the world. As we look at the countries of Africa and Asia, we can see that there are many areas where Christianity is particularly prevalent. Although their Ethnic Identity is different.

If you want to know about Ethnicity then this article is a must read.

Western civilization is perfect and the rest of religion or culture is barbaric. In order to establish this idea, they imposed their culture on these backward countries.

3. Commerce

Now the question is why did they impose their religion or culture on others?

The answer is trade. If you consider Western civilization to be superior, their practical products will attract you. Almost every civilized society is now accustomed to wearing western clothing and others. Their real purpose was to ensure that western trade was forever.

Must-Read– Globalization is a Myth or Reality

What are the Four Phases in the History of Globalization?

To understand globalization better, you need to be aware of every phase of it. Then you will understand exactly how globalization has become today’s globalization.

There are mainly four phases of globalization. These are:

First Phase in the History of Globalization

The first phase of globalization began primarily from the 19th century onwards and continued until the beginning of the First World War, which means 1914.

As a result of the industrial revolution, Great Britain influenced the world through their trade. Inventions such as steam engines, industrial weaving machines, and more accelerated trade worldwide. The global trade began in the true sense from this period.

Prior to this phase, the growth rate of world trade on average 3% per year. However, since the Industrial Revolution, global trade increased by 6% and subsequently increased by 14%.

 During this time, trade in these countries, besides England, France, Portugal, USA, had increased greatly. But England was all around. That is to say, England took huge advantage in this phase of globalization.

Then came the First World War (1914) and all the countries close their borders again. Global trade was fall down again.

Great Depression

Since the First World War, there has been a gradual shift in each country, and world trade has become limited. The result was a recession which was also called as Great Depression.

The recession began in the 1929 and ended at the end of the decade of 1930. It is a long-lasting and widespread recession of the twentieth century.

In the 20th century, the Great Depression was used as an example of the collapse of the global economy.

The recession began in the United States after the stock market collapsed on September 4, 1929.

Later on October 29, 1929, the news spread to the global stock market, known as Black Tuesday.

Global GDP declined by about 15% between 1929 and 1932. In some economies was recovered in the middle of the 1930s, the effects of the Great Depression on the economy of many countries continued until the beginning of World War II. Then after World War II, world trade almost stopped. However, this is not the end of globalization.

Second and Third Phase in the History of Globalization

After World War II, another new chapter in globalization was launched under the leadership of USA and World trade has increased again. This time, Iron Curtain divided the whole world into two parts – the USA led on one end and USSR led on the other. But in 1989, the iron curtain was broken and globalization gaining a rapid boost.

The EU’s Free Trade and USA’s rapid increasing of trade at the beginning of the 1950 helped strengthen the global economy. On the other hand USSR increase their global trade in similar to USA but using centralized planning rather than free trade. This time, the world economy returns to its old rhythm. Export once again increase to 14% of global GDP which was achieved in the 1914.

Ever since the collapse of the Soviet Union, free trade has been rampant throughout the world. The World Trade Organization is created to promote free trade around the world.

Fourth Phase In the History of Globalization

The world we are living in now is actually the fourth phase of globalization. The two powers that govern the current world now are the USA and the other is China.

Now the Internet is the main driving force of globalization. Now we talk more about digital economy such as E-commerce, digital-services, 3D printing and so on.

However, negative globalization is also expanding, such as the adverse effects of climate change on earth, cross-border cyber attacks, terrorism, etc.

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Increasingly the world is thought of as a whole

Globalization, as a concept, refers both to the «shrinking» of the world and the increased consciousness of the world as a whole. It is a term used to describe the changes in societies and the world economy that are the result of dramatically increased cross-border trade, investment, and cultural exchange. The processes and actions to which the concept of globalization now refers have been proceeding, with some interruptions, for many centuries, but only in relatively recent times has globalization become a main focus of discussion. The current or recently-past epoch of globalization has been dominated by the nation-state, national economies, and national cultural identities. The new form of globalization is an interconnected world and global mass culture, often referred to as a «global village.»

In specifically economic contexts, globalization is often used in characterizing processes underway in the areas of financial markets, production, and investment. Even more narrowly, the term is used to refer almost exclusively to the effects of trade, particularly trade liberalization or «free trade.»

Between 1910 and 1950, a series of political and economic upheavals dramatically reduced the volume and importance of international trade flows. Globalization trends reversed beginning with World War I and continuing until the end of World War II, when the Bretton Woods institutions were created (that is, the International Monetary Fund, or IMF, World Bank, and the General Agreement on Tariffs and Trade, later re-organized into the World Trade Organization, or WTO). In the post-World War II environment, fostered by international economic institutions and rebuilding programs, international trade and investment dramatically expanded. By the 1970s, the effects of the flow of trade and investment became increasingly visible, both in terms of the benefits and the disruptive effects.

As with all human endeavors, globalization processes are strongly affected by the values and motivation of the people involved in the process. In theory, globalization should benefit all people because it can produce greater overall economic value. Achieving an equitable distribution of the added value, however, would require the people who dominate the market to embody the virtue of sacrificing themselves to serve the higher purpose of the good of all. However, the legacy of colonialism, which causes a lingering arrogance among the powers in the Group of Eight and creates suspicion in the developing world, means that for many people, globalization is feared and resisted as a negative. Corporatist culture is seen as trampling upon local values and local economies. The Western, secular value system of the major economic actors is seen as a neo-colonial affront to people with non-Western religious and cultural values.

Thus, resistance to globalization is growing in many places, manifesting in the early twenty-first century with rise of Islamic terrorism. That al-Qaeda’s target on September 11, 2001, was New York City’s World Trade Center was no coincidence.

To be successful, the leaders of the globalization process need to practice the virtues of respect for religious and cultural values, and sacrifice their economic self-interest for the benefit of people suffering poverty and want. It is a challenge whose resolution requires world leaders to pay heed to the religious and cultural dimensions of life and to develop a global world view that lifts up the shared values of all cultures.

History of globalization

The term globalization was apparently first published in a 1962 article in Spectator magazine, but it began to enter everyday English usage after the 1962 publication of Marshall McLuhan’s Gutenberg Galaxy. «Globalism» is an even more recent term and appeared for the first time in the 1986 second edition of the Oxford English Dictionary.

Globalization has both technical and political meanings. As such, different groups will have different histories of «globalization.» In general use within the field of economics and political economy, globalization is a history of increasing trade between nations based on stable institutions that allow individuals and organizations in different nations to exchange goods with minimal friction.

The term «liberalization» came to mean the combination of laissez-faire economic theory with the removal of barriers to the movement of goods. This led to the increasing specialization of nations in exports, and the pressure to end protective tariffs and other barriers to trade.

There were several eras of intense cross-cultural encounters in pre-modern times (pre-1500 C.E.). The first important era to mention here is the time of the Roman and Han empires. This is the era of the ancient silk-road, roughly 200 B.C.E. to 400 C.E. The consolidation of large imperial states pacified enough of Eurasia that trading networks could safely link the extreme ends of the landmass. Nomadic peoples played an especially prominent role in the economy of the silk roads, since they both consumed the finished products of settled lands and transported them to other customers. So long as the silk roads remained active, they facilitated not only the exchange of trade goods but also the communication of cultural and religious traditions throughout much of the Eastern Hemisphere. This era came to an end with the collapse of the Roman and Han empires, which had anchored and sustained much of the interregional commerce in goods and ideas, and with the outbreak of devastating epidemic diseases that disrupted societies and economies throughout Eurasia.

Beginning about the sixth century, however, a revival of long-distance trade underwrote a second round of intense cross-cultural encounters. The revival of cross-cultural dealings depended again on the foundation of large imperial states, such as the Tang, Abbasid, and Carolingian empires, which pacified vast stretches of Eurasia and gained the cooperation of nomadic peoples who provided transportation links between settled regions. But, long-distance trade in the sixth century benefited also from much more frequent use of sea lanes across the Indian Ocean. Merchants once again linked the Eurasian landmass, while impressive numbers of missionaries and pilgrims traveled in their company. In an era often labeled a dark age—quite inappropriately—literacy and religions of salvation (particularly Buddhism, Islam, and early forms of Christianity) extended their influence to most parts of Eurasia.

The development of a consciousness of the world as a whole first came with the conquest of most of Eurasia, the biggest and long the most populous and culturally and technologically advanced continent, by the Mongols in the thirteenth century. Economist Ronald Findlay (2002) argues that:

For the first and only time in history, a single regime presided over the entire length of the overland trade routes linking China and the Near East. This made it possible for merchants and goods to move safely over these vast distances, facilitating the transmissions of ideas and techniques. Since China was substantially ahead of both Islam and the West in the general level of its technology, this flow chiefly benefited the lands at the western ends of the trade routes and beyond.

The first era of globalization, according to Findlay, began with “the unification of the central Eurasian land mass by the Mongol conquests and the reactions this aroused in the sedentary civilizations that they were launched against.” Among other things, it brought awareness to the Europeans of the civilizations of East Asia and a stronger desire to reach them by going around the Islamic world that had for so long stood in between. That, in turn, brought forth the effort to improve naval technology which enabled the European voyages of discovery of the fifteenth and sixteenth centuries. So, instead of being the first, this can rightfully be called the second (and decisive) state on the way to globalization—first Eurasia, then the world.

The unraveling of the Mongol state in China coincided with a phenomenon of much larger impact: the spread of bubonic plague, known in the West as the Black Death, throughout Eurasia. The pacified vast regions that facilitated overland travel throughout the empire made it possible for humans and their animal stock to transport microorganisms across long distances much more efficiently than ever before (Bently 1993). Long-distance trade probably did not disappear completely, but its volume certainly declined precipitously during the late fourteenth century.

The period of the gold standard and liberalization of the nineteenth century is often called «The Second Era of Globalization.» Based on the Pax Britannica and the exchange of goods in currencies pegged to specie, this era grew along with industrialization. The theoretical basis was Ricardo’s work on comparative advantage and Say’s Law of General Equilibrium. In essence, it was argued that nations would trade effectively, and that any temporary disruptions in supply or demand would correct themselves automatically. The institution of the gold standard came in steps in major industrialized nations between approximately 1850 and 1880, though exactly when various nations were truly on the gold standard is a matter of a great deal of contentious debate.

This «Second Era of Globalization» is said to have broken down in stages beginning with the first World War, and then collapsing with the crisis of the gold standard in the late 1920s and early 1930s.

Globalization in the era since World War II has been driven by multilateral Trade Negotiation Rounds, originally under the auspices of GATT and the WTO, which led to a series of agreements to remove restrictions on «free trade.» The Uruguay round led to a treaty that created the World Trade Organization, to mediate trade disputes. Other bilateral trade agreements, including sections of Europe’s Maastricht Treaty and the North American Free Trade Agreement, have also been signed in pursuit of the goal of reducing tariffs and barriers to trade and investment.

Aspects of Globalization

«Globalization» carries multiple meanings, nuances, and applications. These include:

  • The formation of a global village through closer contact between different parts of the world, with increasing possibilities of personal exchange, mutual understanding, and friendship between «world citizens,» and creation of a global civilization. The World Bank defines globalization as the “Freedom and ability of individuals and firms to initiate voluntary economic transactions with residents of other countries.” Marshall McLuhan’s idea of «the global village,» was introduced in his book Explorations in Communication (1960). The United Nations has coined the term “Our Global Neighborhood” to describe an emerging world-political context.
  • Globalization Theory aims to understand complex connectivity proliferating at the global level considering both its sources and its implications across the various spheres of social existence.
  • In political science and international relations, the current unit of analysis as the nation state. Globalization has brought forth supranational organizations and international regimes, that is, commonly accepted laws and commonly accepted practices. The loss of sovereignty by the nation state to transnational and supranational organizations is of greatest concern. A world system perspective is a world with a common political system (with a common social and cultural system), linked by a common language, cultural practices, and institutions.
  • In sociology and communications, globalization is understood as global mass culture dominated by the modern means of cultural production (movies, television, the Internet, mass advertising, and so on). Mass communication produces images that cross and re-cross linguistic frontiers more rapidly and easily than goods and services, and speaks across languages in an immediate way. Global mass culture is dominated by the ways in which the visual and graphic arts have entered directly into the reconstitution of popular life, of entertainment, and of leisure with the image, imagery, and styles of mass advertising. This is dominated by Western cultural values and techniques. This process is homogenizing but also enormously absorptive of techniques and practices.
  • Economic globalization refers to free trade and increasing relations among members of an industry in different parts of the world (globalization of an industry), with a corresponding erosion of national sovereignty in the economic sphere. The IMF defines globalization as “the growing economic interdependence of countries worldwide through increasing volume and variety of cross-border transactions in goods and services, freer international capital flows, and more rapid and widespread diffusion of technology” (IMF, World Economic Outlook, May 1997).
  • The negative effects of for-profit multinational corporations are exerted through such actions as the use of substantial and sophisticated legal and financial means to circumvent the bounds of local laws and standards, in order to leverage the labor and services of unequally-developed regions against each other.
  • The spread of capitalism from developed to developing nations.
  • «The concept of Globalization refers both to the compression of the world and the intensification of consciousness of the world as a whole» (Roland Robertson, 1992).
  • «The process by which the world becomes a single place» (Anthony King, 1997).

Globalization shares a number of characteristics with internationalization and is used interchangeably, although some prefer to use globalization to emphasize the erosion of the nation-state or national boundaries.

Globalism, if the concept is reduced to its economic aspects, can be said to contrast with economic nationalism and protectionism. It is related to laissez-faire capitalism and neoliberalism.

Signs of globalization

Although globalization has touched almost every person and locale in today’s world, the trend has spread unevenly. It is most concentrated among propertied and professional classes, in the North (industrialized nations), in towns (urban areas), and among younger generations.

Globalization has not displaced deeper social structures in relation to production (capitalism), governance (the state and bureaucratism more generally), community (the notion and communitarianism more generally), and knowledge (rationalism). But, globalization has prompted important changes to certain attributes of capital, the state, the nation, and modern rationality.

Contemporary globalization has had some important positive consequences with respect to cultural regeneration, communications, decentralization of power, economic efficiency, and the range of available products.

But state government policies (pro-market) toward globalization have had many negative consequences in regard to increased ecological degradation, persistent poverty, worsened working conditions, various cultural violence, widened arbitrary inequalities, and deepened democratic deficits.

As such, globalization has become identified with a number of trends, most of which may have developed since World War II. These include greater international movement of commodities, money, information, and people; and the development of technology, organizations, legal systems, and infrastructures to allow this movement. The actual existence of some of these trends is debated.

Trends associated with globalization

  • Increase in international trade at a faster rate than the growth in the world economy
  • Increase in international flow of capital including foreign direct investment
  • Increase in world production and output and consumption
  • Greater trans-border data flow, using such technologies as the Internet, communication satellites, and telephones
  • The push by many advocates for an international criminal court and international justice movements (see the ICC and ICJ respectively)
  • Greater international cultural exchange, for example through the export of Hollywood and Bollywood movies
  • Some argue that terrorism has undergone globalization through its use of global financial markets and global communication infrastructure
  • Spreading of multiculturalism and increased individual access to cultural diversity, with on the other hand, reduction in diversity through assimilation, hybridization, Westernization, Americanization, or Sinosization of cultures.
  • Erosion of national sovereignty and national borders through international agreements leading to organizations like the WTO, OPEC, and EU
  • Greater international travel and tourism
  • Greater immigration, including illegal immigration
  • Development of global telecommunications infrastructure
  • Development of global financial systems
  • Increase in the share of the world economy controlled by multinational corporations
  • Increased role of international organizations such as WTO, UN, IMF that deal with international transactions
  • Increase in the number of standards applied globally, for example, copyright laws

Regional economic integration (regionalism)

Economic integration is concerned with the removal of trade barriers or impediments between at least two participating nations and the establishment of cooperation and coordination between them. Economic integration helps steer the world toward globalization. Globalization refers to the growing economic interdependencies of countries worldwide through the increasing volume and variety of cross-border transactions in goods and services and of international capital flows, as well as through the rapid and widespread diffusion of technology and information.

The following forms of economic integration are often implemented:

  1. Free Trade Area: Involves country combination, where the member nations remove all trade impediments among themselves but retain their freedom concerning their policy making vis-à-vis non-member countries. The Latin American Free Trade Area, or LAFTA, and the North American Free Trade Agreement, or NAFTA are examples of this form.
  2. Customs Union: Similar to a free trade area except that member nations must conduct and pursue common external commercial relations such as common tariff policies on imports from non-member nations. The Central American Common Market (CACM) and the Caribbean Community and Common Market (CARICOM) are examples of this form.
  3. Common Market: A particular customs union that allows not only free trade of products and services but also free mobility of production factors (capital, labor, technology) across national member borders. The Southern Common Market Treaty (MERCOSUR) is an example of this form.
  4. Economic Union: A particular common market involving the unification of monetary and fiscal policies. Participants introduce a central authority to exercise control over these matters so that member nations virtually become an enlarged single “country” in an economic sense.
  5. Political Union: Requires the participating nations to become literally one nation in both an economic and political sense. This union involves the establishment of a common parliament and other political institutions.

Along with the above sequence from 1 to 5, the degree of economic integration increases. One form may shift to another over time if all the participating nations agree. For example, the European Union (EU) started as a common market and shifted over the years to an economic union and now to a partially political union.

The above forms reflect economic integration between or among nations within a region. Global economic integration also occurs through “multilateral cooperation” in which participating nations are bound by rules, principles, or responsibilities stipulated in commonly agreed upon agreements. Unlike the preceding five forms that all lead to regional economic integration, multilateral agreements are largely used to promote worldwide economic exchanges. They may be designed to govern general trade, service, and investments (for example, the World Trade Organization), capital flow and financial stability (for example, the World Bank and the International Monetary Fund), or specific areas of trade, such as dealing with particular commodities (for example, the International Coffee Agreement).

International economic integration is propelled by three levels of cooperation: Global, regional, and commodity. Global-level cooperation occurs mainly through international economic agreements or organizations (for example, WTO); regional-level cooperation proceeds through common markets or unions (for example, NAFTA); and commodity-level cooperation proceeds through multilateral commodity cartels or agreements (for example, OPEC).

Barriers to international trade and investment have been considerably lowered since World War II at the multilateral level through international agreements such as the General Agreement on Tariffs and Trade (GATT). Particular initiatives, carried out as a result of GATT and the WTO, for which GATT is the foundation, have included:

  • Promotion of free trade
    • Of goods: Reduction or elimination of tariffs; construction of free trade zones with small or no tariffs
    • Of capital: Reduction or elimination of capital controls
    • Reduction, elimination, or harmonization of subsidies for local businesses
  • Intellectual Property Restrictions
    • Harmonization of intellectual property laws across nations (generally speaking, with more restrictions)
    • Supranational recognition of intellectual property restrictions (for example, patents granted by China would be recognized in the U.S.)

Anti-globalization

Various aspects of globalization are seen as harmful by public-interest activists as well as strong state nationalists. This movement has no unified name. «Anti-globalization» is the media’s preferred term. Activists themselves, for example Noam Chomsky, have said that this name is as meaningless as saying the aim of the movement is to globalize justice. Indeed, «the global justice movement» is a common name. Many activists also unite under the slogan «another world is possible,» which has given rise to names such as altermondisme in French.

There is a wide variety of different kinds of «anti-globalization.» In general, critics claim that the results of globalization have not been what was predicted when the attempt to increase free trade began, and that many institutions involved in the system of globalization have not taken the interests of poorer nations and the working class into account.

Economic arguments by fair trade theorists claim that unrestricted free trade benefits those with more financial leverage (that is, the rich) at the expense of the poor.

Many «anti-globalization» activists see globalization as the promotion of a corporatist agenda, which is intent on constricting the freedoms of individuals in the name of profit. They also claim that increasing autonomy and strength of corporate entities increasingly shapes the political policy of nation-states.

Some «anti-globalization» groups argue that globalization is necessarily imperialistic, that it is one of the driving reasons behind the Iraq War (2003), and that it has forced investment to flow into the United States rather than to developing nations.

Some argue that globalization imposes credit-based economics, resulting in unsustainable growth of debt and debt crises.

Another more conservative camp in opposition to globalization are state-centric nationalists that fear globalization is displacing the role of nations in global politics and point to NGOs as impeding the power of individual nations. Some advocates of this warrant for anti-globalization are Pat Buchanan in the U.S. and Jean-Marie Le Pen in France.

The main opposition is to unfettered globalization (neoliberal; laissez-faire capitalism), guided by governments and what are claimed to be quasi-governments (such as the International Monetary Fund and the World Bank) that are supposedly not held responsible to the populations that they govern and instead respond mostly to the interests of corporations. Many conferences between trade and finance ministers of the core globalizing nations have been met with large, and occasionally violent, protests from opponents of «corporate globalism.»

The anti-global movement is very broad, including church groups, national liberation factions, left-wing parties, environmentalists, peasant unionists, anti-racism groups, libertarian socialists, and others. Most are reformist (arguing for a more humane form of capitalism) and a strong minority is revolutionary (arguing for a more humane system than capitalism). Many have decried the lack of unity and direction in the movement, but some, such as Noam Chomsky, have claimed that this lack of centralization may in fact be a strength.

Protests by the global justice movement have now forced high-level international meetings away from the major cities where they used to be held, and off into remote locations where protest is impractical.

Some «anti-globalization» activists object to the fact that the current «globalization» globalizes money and corporations and at the same time refuses to globalize people and unions. This can be seen in the strict immigration controls that exist in nearly all countries and the lack of labor rights in many countries in the developing world.

Pro-globalization (globalism)

Supporters of democratic globalization can be labeled pro-globalists. They consider that the second phase of globalization, which was market-oriented, should be completed by a phase of building global political institutions representing the will of world citizens. The difference with other globalists is that they do not define in advance any ideology to orientate this will, which should be left to the free choice of those citizens via a democratic process.

Supporters of free trade point out that economic theories of comparative advantage suggest that free trade leads to a more efficient allocation of resources, with all countries involved in the trade benefiting. In general, they claim that this leads to lower prices, more employment, higher output, and greater consumption opportunities.

Libertarians and other proponents of laissez-faire capitalism say higher degrees of political and economic freedom in the form of democracy and market economies in the developed world produce higher levels of material wealth. They see globalization as the beneficial spread of democracy and market mechanisms.

Critics of the anti-globalization movement argue that it is not elected and as such does not necessarily represent or is not held accountable to a broad spectrum of people. Also, anti-globalization movement uses anecdotal evidence to support its view while worldwide statistics strongly support globalization instead. Statistics show that: The percentage of people in developing countries living below $1 (adjusted for inflation and purchasing power) per day has halved in only 20 years; life expectancy has almost doubled in the developing world since WWII and is starting to close the gap with the developed world, where the improvement has been smaller; child mortality has decreased in every developing region of the world; and income inequality for the world as a whole is diminishing.

Many pro-market (pro-capitalists) are also critical of the World Bank and the IMF, arguing that they are corrupt bureaucracies controlled and financed by states, not corporations. These critics point out that many loans have been given to dictators who never carried out promised reforms, but instead left the common people to pay the debts later. Such corrupted loan partners cause «moral hazard» or hidden detrimental action by the lenders. The pro-capitalists see here an example of too little use of markets, not too much. They also note that some of the resistance to globalization comes from special interest groups with conflicting interests like Western world unions.

Globalization in question

The principle policy concern of globalization is usually put in terms of issues of economic efficiency. Economists tend to judge globalization largely in terms of the gains or losses that it brings to the productive development of scarce world resources. However, many would argue that economic growth should always be secondary to, and in service of, security, justice, and democracy.

On these issues the evaluations have been both positive and negative. In some respects, globalization has promoted increased human security, for example, with disincentives to war, improved means of humanitarian relief, new job creation opportunities, and greater cultural pluralism. However, in other ways globalization has perpetuated or even deepened warfare, environmental degradation, poverty, unemployment, exploitation of workers, and social disintegration. Thus, globalization does not automatically increase or decrease human security. The outcomes are positive or negative depending on the policies that are adopted toward the new geography.

Social justice can be looked at in terms of the distribution of life chances between classes, countries, sexes, races, urban/rural populations, and age groups. The bright side of globalization has in certain cases improved possibilities for young people, poor countries, women, and other subordinate social circles, allowing them to realize their potentials. More negatively, however, globalization has thus far sustained or increased various arbitrary hierarchies in contemporary society. For example, gaps in opportunities have tended to widen during the period of accelerated globalization on class lines as well as between the North (industrialized) and the South (underdeveloped) and the East (current and former communist state socialist countries).

The resultant increases in social injustice can be attributed at least partly to the spread of relations beyond territorial boundaries. The inequities have flowed largely from the policies that have been applied to globalization rather than from globalization per se.

In terms of the impact of globalization on democracy, the positives are through new information and communications technologies and an expansion of civil society. The downside is that there is a lack of mechanisms to ensure that post-sovereign governance is adequately participatory, consultative, transparent, and publicly accountable. Bold intellectual and institutional innovations are needed to refashion democracy for a globalized world.

There is much academic discussion about whether globalization is a real phenomenon or only a myth. Although the term is widespread, many authors argue that the characteristics of the phenomenon have already been seen at other moments in history. Also, many note that those features that make people believe we are in the process of globalization, including the increase in international trade and the greater role of multinational corporations, are not as deeply established as they may appear. The United States’ global interventionist policy is also a stumbling point for those that claim globalization has entered a stage of inevitability. Thus, many authors prefer the use of the term internationalization rather than globalization. To put it simply, the role of the state and the importance of nations are greater in internationalization, while globalization in its complete form eliminates nation states. So these authors see that the frontiers of countries, in a broad sense, are far from being dissolved, and therefore this radical globalization process has not yet happened, and probably will not happen, considering that in world history, internationalization never turned into globalization—the European Union and NAFTA have yet to prove their case.

The world increasingly shares problems and challenges that do not obey nation-state borders, most notably pollution of the natural environment, poverty, and disease. As such, the movement previously known as the anti-globalization movement has transmogrified into a movement of movements for globalization from below; seeking, through experimentation, forms of social organization that transcend the nation state and representative democracy. So, whereas the original arguments of anti-global critique can be refuted with stories of internationalization, as above, the emergence of a global movement is indisputable and therefore one can speak of a real process towards a global human society of societies.

References

ISBN links support NWE through referral fees

  • Bentley, Jerry H. 1993. Old World Encounters: Cross-Cultural Contacts and Exchanges in Pre-Modern Times. Oxford University Press. ISBN 0195076400.
  • Bhagwati, Jagdish. 2004. In Defence of Globalization. Oxford University Press. ISBN 0195170253.
  • Findlay, Ronald. 2002. “Globalization and the European Economy: Medieval Origins to the Industrial Revolution.” In Henry Kierzkowski (ed.). Europe and Globalization. Palgrave Macmillan. ISBN 978-0333998397.
  • Friedman, Thomas. 2000. The Lexus and the Olive Tree. ISBN 0374185522.
  • Gilpin, Robert. 2001. Global Political Economy: Understanding the International Economic Order. Princeton University Press. ISBN 0691086761.
  • Hardt, Michael, and Antonio Negri. 2000. Empire. ISBN 0674006712.
  • Held, David, et. al. 1999. Global Transformations: Politics, Economics, and Culture. Stanford University Press. ISBN 0804736278.
  • Hirst, Paul Q., and Grahame Thompson. 1996. Globalization in Question. Polity Press. ISBN 0745621643.
  • King, Anthony. 1997. Culture: Globalization and the World-System. University of Minnesota Press. ISBN 0816629536.
  • Klein, Naomi. 2001.No Logo. ISBN 0006530400.
  • Legrain, Philippe. 2002. Open World: The Truth About Globalization. ISBN 034911644X.
  • Martin, Hans-Peter. 1996. The Global Trap: Globalization and the Assault on Prosperity and Democracy (Die Globalisierungsfalle). ISBN 1856495302.
  • McLuhan, Marshall. 1960. Explorations in Communication. Edited by E.S. Carpenter. Beacon Press. ASIN B000HY3XSA
  • McLuhan, Marshall. 2011. The Gutenberg Galaxy: The Making of Typographic Man. University of Toronto Press. ISBN 978-1442612693.
  • Ransom, David. 1975. The Trojan Horse: A Radical Look at Foreign Aid.
  • Robertson, Roland. 1992. Globalization: Social Theory and Global Culture. Sage Publications. ISBN 0803981822.
  • Roy, Arundhati. 2004. An Ordinary Person’s Guide To Empire. South End Press. ISBN 0896087271.
  • Rupert, Mark. 2000. Ideologies of Globalization: Contending Visions of a New World Order. Routledge Publishers. ISBN 041518925.
  • Steger, Manfred. 2003. Globalization: A Very Short Introduction. Oxford University Press. ISBN 019280359X.
  • Stiglitz, Joseph. 2002. Globalization and Its Discontents. ISBN 014101038X.
  • Tomlinson, John. 1999. Globalization and Culture. University of Chicago Press. ISBN 0226807681.
  • Weatherford, Jack. 2004. Genghis Khan and the Making of the Modern World. Three Rivers Press. ISBN 0609809644.
  • Wolf, Martin. 2005. Why Globalization Works. ISBN 978-0300107777.

External links

All links retrieved June 23, 2017.

  • Yale Global Online
  • Free Trade and Globalization — discusses the negative aspects of globalization, WTO and many others related to globalization
  • Stanford Encyclopedia of Philosophy entry on Globalization
  • Globalization: The Socialist Perspective
  • The Globalist

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Globalization
is а term used to describe changes in societies and the world
economy that are the result of dramatically increased trade
and cultural exchange
.
Some view it as а process that is beneficial,
а key to future world economic development. Others regard it with
hostility,
believing that it increases inequality
between nations, threatens employment and living standards.
Globalization offers extensive opportunities for worldwide
development but it is not progressing evenly. Some countries
integrate into global economy more quickly than others. They are
seeing faster
growth

and reduced
poverty
.

By
contrast, in the 1970s and 1980s when many countries in Latin America
and Africa pursued inward-oriented policies, their economies
stagnated
or declined and poverty increased. It is evident that the
opportunities of globalization do not come without risks, but this is
not а reason to
reverse direction
.
For all concerned — both in developing countries and in the
advanced countries — it is necessary to еmbarасе policy changes
in order to build strong economies and financial systems that will
produce more rapid growth and ensure that poverty is reduced.

What
is globalization?

There is nothing mysterious about globalization. The term has come
into common usage since 1980s. It reflects technological
advances

that have made it easier and quicker to complete international
transactions — both trade and financial flows. It means that the same
market forces that have operated for centuries at all levels of human
economic activity extended beyond national borders. Major
characteristic features of globalization are capitalism expansions,
global labor division, migration of financial, human and production
resources within the planet, standardization of legislation,
economic and technological processes, as well as removing the borders
between cultures of various countries.

Markets
promote efficiency through competition and the division of labor and
allow people and economies to focus on what they do best. Global
markets offer greater opportunity for people to tap into larger
markets around the world. It means that they can have access to more
capital flows, technology, cheaper imports, and larger export
markets.

At
its most basic, scientists speak about several meanings of
globalization. It can mean:

1.
The formation of global
village

closer contacts between different parts of the world; increasing
possibilities of personal exchange, mutual understanding and
friendship between world
citizens
,
and creation of а global
civilization
.

2.
The spread of capitalism
from developed of developing nations.

3.
Economic globalization – the tendency for the world economy to work
as one unit, led by large international companies doing business all
over the world.

New
World Encyclopedia

Exercise
2.
Choose
the correct word.

  1. Globalization
    means changes in societies and the world economies that are the
    result of dramatically increased …………… exchange.

  1. financial

  2. human

  3. trade
    and cultural

  4. intellectual

  1. Some
    people think that globalization is а process that is …………….

  1. beneficial

  2. fantastic

  3. good

  4. efficient

  1. Others
    believe that globalization increases …………… between
    nations, threatens employment and living standards.

  1. misunderstanding

  2. poverty

  3. prosperity

  4. inequality

  1. Some
    countries integrate into global economy and hope for …………….

  1. happy
    future

  2. faster
    growth

  3. having
    a good time

  4. problems
    in economy

  1. In
    1990s economies of some countries …………….

  1. stagnated

  2. increased

  3. developed

  4. went
    bad

  1. It
    is evident that the opportunities of globalization do not come
    without risks, but this is not а reason to …………….

  1. go
    ahead

  2. stop

  3. jump

  4. reverse
    direction

  1. Globalization
    reflects ……………. that have made it easier and quicker to
    complete international transactions.

  1. great
    economic results

  2. technological
    advances

  3. financial
    investments

  4. computer
    technologies

  1. Economic
    globalization is the tendency for the ……………. to work as
    one unit.

  1. world
    economy

  2. nations

  3. international
    companies

  4. scientists

Exercise
3.
Give
Russian equivalents the following economic terms:

  1. living
    standards

  2. international
    transactions

  3. trade
    and financial flows

  4. division
    of labor

  5. global
    community

  6. developing
    country

  7. advanced
    country

  8. market
    forces

Exercise
4.
Find
English equivalents to the following Russian phrases in the text.

  1. проводить
    политику, ориентированную на внутренние
    нужды

  2. всем,
    кого это касается

  3. понимать
    изменения в политике

  4. войти
    в повседневный обиход

  5. выйти
    на более крупный (масштабный) рынок

  6. торговый
    и культурный обмен

  7. враждебность

  8. сниженный
    уровень бедности

  9. быть
    в состоянии застоя

  10. менять
    направление

Exercise
5.
Read
the passage about transportation and globalization. Translate it into
Russian.

Transportation
technologies also improved with the start of the 20th
Century when transatlantic ships became safer and faster and
airplanes were produced. First propeller driven passenger plane began
service in 1919 between London and Paris. Jet
plane
and television
of 1950’s were also important steps toward greater globalizations.
The first reliable transatlantic telephone cable TAT-1 was laid in
1956. 1957 marked the most important step in the history of
globalization when USSR launched its Sputnik
as the first man-made satellite.
Satellites made it possible to build a fully reliable global network,
compensating the radio networks’ ionosphere fading problem. However
global networks still required stronger global networks with solid
connections. The first transatlantic
fiber cable
TAT-8 was laid in 1988 for faster and reliable networks.

Exercise
6.
Read
the following passage. Render

it
in
English.

Термином
«глобализация»
характеризуется новейший процесс в
развитии современной экономики, в основе
которого лежит растущая интернационализация
производства и укрупнения транснациональных
корпораций. Глобализация 
 транспорта 
охватывает сферу услуг и является
составной частью преобразований,
происходящих в ходе непрекращающегося
научно-технического прогресса, начавшегося
после окончания второй мировой войны.
Интенсивность этого процесса возросла
после распада социалистической системы
в 1990-е гг. Глобализация 
на  транспорте 
содержит в себе общие международные
факторы развития, но большее значение
имеет фактор технический, поскольку он
обеспечивает движение товаров и
интернационализацию экономической
деятельности.  Глобализация 
приобретает общественное значение,
поскольку расширяет географическую
мобильность и сферу международного
общения человеческой массы.

Writing

Exercise
1. Read about mind mapping. Work in small groups and create a mind
map to generate ideas about impacts of globalization
.

A
mind
map

is a graph and nodes are in hierarchical order and direct relation to
each other (see Figure 1).

Figure
1. A mind map

Mind
mapping are nowadays used by millions of people for brainstorming,
note taking, document drafting, etc. Words in a mind map should
specify the author’s expertise and fields of interest. In contrast
to text documents, a mind map probably contains less stop and other
irrelevant words.

The
following advises may help you to create a good mind map.

1.
Take a blank piece of paper, A4 or larger.

Blank
paper allows 360º of freedom to express the full range of your
cortical skills, whereas pre-drawn lines restrict the natural flow
of your thoughts.

2.
Use the paper in landscape orientation.

Words
and images have more space in the direction we write, so they
don’t bump into margins as quickly.

3.
Start in the centre.

Thoughts
start in the centre of our mental world.

4.
Make a central image that represents the topic about which you are
writing/thinking:

  • Use
    at least three colours.

  • Keep
    the height and width of the central image to approx. 2’’ or 5
    cm (proportionately larger for bigger paper).

  • Allow
    the image to create its own shape (do not use a frame).

A
picture is worth a thousand words. It opens up associations,
focuses the thoughts, is

fun and results in better recall:

  • Colours
    stimulate the right cortical activity of imagination as well as
    capturing and holding attention.

  • This
    size gives plenty of space for the rest of your Mind Map, while
    making it large enough to be the clear focus of the topic.

  • The
    unique shape makes it more memorable and enjoyable. A frame makes
    the centre a monotony of shape and disconnects the branches.

5.
The main themes around the central image are like the chapter
headings of a book:

  • Print
    this word in CAPITALS or draw an image.

  • Place
    on a line of the same length

  • The
    central lines are thick, curved and organic i.e. like your arm
    joining your body, or the branch of a tree to the trunk.

  • Connect
    directly to the central image.

The
main themes, connected to the central image on the main branches,
allow their relative importance to be seen. These are the Basic
Ordering Ideas (BOIs) and aggregate and focus the rest of the Mind
Map:

  • Printing
    (versus cursive) allows the brain to photograph the image thus
    giving easier reading and more immediate recall.

  • Word
    length equals line length. An extra line disconnects thoughts,
    length accentuates the connection.

  • Curved
    lines give visual rhythm and variety and so are easier to
    remember, more pleasant to draw and less boring to look at.
    Thicker central lines show relative importance.

  • Connected
    to the image because the brain works by association not
    separated, disconnected lines.

6.
Start to add a second level of thought. These words or images are
linked to the main branch that triggered them. Remember:

  • Connecting
    lines are thinner.

  • Words
    are still printed but may be lower case.

Your
initial words and images stimulate associations. Attach whatever
word or image is triggered. Allow the random movement of your
thought; you do not have to ‘finish’ one branch before moving
on:

  • Connected
    lines create relationships and a structure. They also demonstrate
    the level of importance, as from a branch to a twig.

  • The
    size and style of the letters provide additional data about the
    importance and meaning of the word/image.

7.
Add a third or fourth level of data as thoughts come to you:

  • Use
    images as much as you can, instead of, or in addition to the
    words.

  • Allow
    your thoughts to come freely, meaning you ‘jump about’ the
    Mind Map as the links and associations occur to you.

Your
brain is like a multi-handed thought-ball catcher. The Mind Map
allows
you to catch and keep whatever ‘thought ball’ is thrown by
your brain.

8.
Add a new dimension to your Mind Map. Boxes add depth around the
word or image.

To
make some important points stand out.

9.
Sometimes enclose branches of a Mind Map with outlines in colour:

  • Enclose
    the shape of the branch and hug the shape tightly.

  • Use
    different colours and styles.

The
outlines will create unique shapes as you find in clouds and will
aid your memory:

  • These
    provide immediate visual linking. They can also encourage
    follow-up and remind you of action you need to take.

  • They
    can also show connection between branches by using the same
    colour outline.

10.
Make each Mind Map a little more:

  • BEAUTIFUL

  • ARTISTIC

  • COLOURFUL

  • IMAGINATIVE

    and

  • DIMENSIONAL

Your
eyes and brain will be attracted to your Mind Map:

  • It
    will be easier to remember.

  • It
    will be more attractive to you

    (and to others as well).

11.
Have fun!

Add a little humour, exaggeration or
absurdity wherever you can.

Your
brain will delight in getting the maximum use and enjoyment from
this process and will therefore learn faster, recall more
effectively and think more clearly.

http://www.mind-mapping.co.uk

Exercise
2. Choose one of three topics given below and create your own mind
map.

  1. Different
    modes of transport: travel globally.

  2. Globalization
    in developed and advanced countries: challenges of sustainable
    future.

  3. Differentiation
    or globalization: pros and contras?

Listening
and speaking

Exercise
1. Before you listen to the speech about
globalization by Barak Obama on CNN try to predict what
important issues he will mention. Choose from the list below.

1)
technology

2)
global workforce competition

3)
immigration

4)
how to tie the globalization

5)
American workers

6)
American market

7)
educational system

8)
leadership

Exercise
2.
Watch
the CNN video. Clap your hands when listen to the following words.

globalization,
competition, business, trade

Exercise
3. Listen to the speech again.
What
language clichés that are typical for public speeches have you
heard? Write them in your copybook. Find more clichés in
Appendix
3
.

Exercise
4.
Make
a plan of the Obama’s speech (listen again if necessary). In small
groups decide about the principles of
preparing
a

good public speech.

Exercise
6.
Choose
one of the topics given below and deliver your own speech (about 3
minutes).

1)
Global engineering workforce.

2)
Russia in a global society: prospects of the development.

3)
Developing countries: out of poverty.

Language
spot.

Impersonal
and
Indefinite
personal

sentences.

Exercise
1.
Read
the impersonal replies and match them with the following sentences
(one reply for one sentence):

  1. It’s
    impossible!

  2. It’s
    a pity…

  3. It’s
    amazing!

  4. It’s
    very strange.

  5. It’s
    real.

  6. It’s
    interesting.

  7. It’s
    not true.

  8. It’s
    no importance.

  1. Transportation
    is one of the critical components of the global economy by
    supporting a wide array of movements of passengers and freight
    between nations.

  2. A
    DVD player manufactured in China embarks in a complex journey,
    involving a multitude of stages with transport modes such as trucks,
    containerships and trains, and with transport facilities such as
    ports, railyards and distribution centers, to insure that it reaches
    global markets.

  3. In
    spite of its importance in the contemporary global economy,
    international transportation predates globalization.

  4. One
    of the first major “international” trade route was the Silk
    Road.

  5. Two
    transportation modes are specifically supporting globalization and
    international trade; maritime and air transportation. Road
    and railways
    are not very important.

  6. China
    is importing growing quantities of raw materials and energy but it
    is not exporting manufactured goods.

  7. Upper
    and lower case letters are named ‘upper’ and ‘lower’ because in the
    time when all original print had to be set in individual letters,
    the ‘upper case’ letters were stored in the case on top of the case
    that stored the smaller, ‘lower case’ letters.

  8. Where
    locomotive wheels make contact with the rail the total area is not
    much larger than a silver dollar.

Exercise
2.
Finish
the impersonal sentences as shown.

Example:
It is useless to: — It is useless to visit England without speaking
English.

  1. It’s
    difficult for engineers to…

  2. It’s
    not interesting to…

  3. It’s
    important to…

  4. It’s
    not serious to…

  5. It’s
    impossible to…

  6. It’s
    exciting to…

  7. It’s
    not easy for me to…

  8. It
    was necessary that…

  9. It
    will be simple to define…

  10. It
    is said that …

  11. It
    was known that …

  12. It
    will be shown that …

  13. It
    seems that …

  14. It
    was decided…

  15. It
    has been found…

  16. It
    is to be noted…

Exercise
3.
Make
the following sentences a) past, b) future, c) negative.

  1. It
    is necessary to send it urgently.

  2. It
    is a convenient train.

  3. It
    is interesting to read this article.

  4. It
    is an important experiment.

  5. It
    is not difficult to sign the contract.

  6. It
    is impossible to carry on trade in the modern world without using
    money.

  7. It
    is impossible to dissolve the substance in water.

  8. It
    is formerly believed that all heavy objects fell faster than light
    objects.

  9. It
    is now well established in economics that innovations are absolutely
    central to development, growth, and well-being.

  10. It
    is important to know these facts.

Exercise
4.
Read
the text. Find impersonal and indefinite personal sentences.
Translate them into Russian.

One
can say that globalization has been supported and expended by the
development of modern transport systems. It is known that from large
containerships to small delivery trucks, the whole distribution
system has become closely integrated linking manufacturing activities
with global markets. However, it is interesting to remember that the
beginning of the 21st century brings many challenges to the role of
transportation in the global economy. The capacity of many segments
of transport system has been stretched by additional demands tying up
long distance transportation modes.

One
may remind us about congestion in many international transport
terminals such as ports often causes delays and unreliable deliveries
and there is an acute need for improving inland transportation
systems, notably those linked to the major gateways of the global
economy. Last, but not least, the long trend of growing energy costs
is likely to impose significant adjustments to international
transport systems.

WebProject

Be
ready to speak about a famous public speaker in history. Give an
example of his/her public speech. The following sites may help.

http://www.bbc.co.uk/history/historic_figures/

http://www.spartacus.schoolnet.co.uk/USApolitical.htm

http://top7.com/top/1050/Public-Speakers-in-History

Supplementary reading

Exercise
1.
Read
the passage about globalisation to answer the following questions.

  1. What
    are key factors which have influenced the process of globalisation?

  2. How
    many abbreviations can you find in the text? Explain them.

  3. What
    examples of transnational corporations can you find in the passage?
    Do you know any TNC’s operating in Russia?

  4. What
    are the positive impacts of globalisation?

  5. What
    are the negative impacts of globalisation?

Pros
and cons of globalization

Reasons
for globalisation

There
are several key factors which have influenced the process of
globalisation:

  1. Improvements
    in transportation

    — larger cargo ships mean that the cost of transporting goods
    between countries has decreased. Economies of scale mean the cost
    per item can reduce when operating on a larger scale. Transport
    improvements also mean that goods and people can travel more
    quickly.

  2. Freedoms
    of trade —
    organisations
    like the World Trade Organisation (WTO) promote

    free
    trade between countries, which help to remove barriers between
    countries.

  3. Improvements
    of communications

    — the internet and mobile technology has allowed greater
    communication between people in different countries.

  4. Labour
    availability and skills

    — countries such as India have lower labour costs and also high
    skill levels.

Transnational
corporations

Globalisation
has resulted in many businesses setting up or buying operations in
other countries. When a foreign company invests in a country, perhaps
by building a factory or a shop, this is called inward
investment
.
Companies that operate in several countries are called multinational
corporations (MNCs) or transnational corporations (TNCs). The US
fast-food chain McDonald’s
is a large MNC — it has nearly 30,000 restaurants in 119 countries.

The
majority of TNCs come from the US and UK. The US car company Ford,
for example, makes large numbers of cars in the UK. However, TNCs
also invest in China — for example, the British DIY store B&Q now
has stores in this country.

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Globalization Meaning

Globalization is defined as the extension of trade, commerce and culture of an economy across different nations. It allows economies to exchange domestic products, services, technologies, ideas and other resources globally.

It facilitates developed nations to make foreign direct investmentsA foreign direct investment (FDI) is made by an individual or an organization, into a business located in a foreign country. The host nation receives job creation prospects, advanced technology, a higher standard of living, infrastructural development, and overall economic growth.read more (FDIs) for utilizing cheaper resources of developing countries. The process increases employment opportunities, productivity, living standards and earnings of emerging economies.

Table of contents
  • Globalization Meaning
    • Globalization Explained
    • Globalization Characteristics
    • Examples
    • Globalization Pros
    • Globalization Cons
    • FAQs
    • Recommended Articles
  • Globalization is the process of cross-border exchange and free flow of resources between different countries of the world.
  • It involves the worldwide integration of technology, ideas, knowledge, capital, human resource and culture.
  • Many companies go global or outsource their business operations to reduce their operational cost. Doing this helps in acquiring economical labor and wider resources available in foreign countries.
  • Globalization is a crucial concept in economics as it has many pros and cons. It has been criticized for the uneven distribution of wealth and power amongst a few companies, dominating the international market.

Globalization Explained

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Globalization establishes domestic organizations in foreign countries through the free movement of capital, trade, information, culture, people, etc. Moreover, it is a business expansion phenomenon allowing mobilization of resources amongst nations to ensure their optimum utilization for global growth.

Often domestic markets have limitations like high cost of productionProduction Cost is the total capital amount that a Company spends in producing finished goods or offering specific services. You can calculate it by adding Direct Material cost, Direct Labor Cost, & Manufacturing Overhead Cost. read more, expensive labor, inadequate raw materials, and strict laws. Shifting the business unit to a more economical and resourceful country is often considered more feasible by businesses leading to globalization. When companies step outside of their geographical boundaries, they experience a different culture. International laws usually govern global business units.

The history and origin of globalization can be traced back to the 1st century BC when Chinese luxury products made it to Rome using the Silk Road. Later Asia and Europe started importing and exporting silk and spices. However, it was post World War I that global trade was refrained to safeguard the interest of the local traders. Later, the US, after World War II, promoted international trade for boosting the falling global GDP.

After the Industrial Revolution in the 19th century, the formal infrastructure for cross border trade activities was developed, facilitating the free flow of trade. As a result, in 1989, the global GDP rose to 14%. Since then, many nations have entered into trade agreements and treaties to promote international tradeInternational Trade refers to the trading or exchange of goods and or services across international borders. read more activities.

Globalization Characteristics

  • Globalization initiates growth and interconnectivity of various sectors across nations. Its essential features include the cross-border connectivity or integration, free trade environment and interdependency of nations.
  • In addition, it facilitates global business expansion, cross-culture diversification, lower tariffs and taxes on international business operationsBusiness operations refer to all those activities that the employees undertake within an organizational setup daily to produce goods and services for accomplishing the company’s goals like profit generation.read more.
  • Migration of workforce and international investmentsInternational investments are made outside of domestic markets and offer portfolio diversification as well as risk management opportunities. As a result, an investor can diversify his portfolio and extend his return horizon by making international investments.read more create job opportunities, enhanced goods and services as well economic development.
  • The vast concept of globalization is often explained by classifying into sections by educational instituties and government bodies such as the IMF. The four more major sections include –
    1. trade
    2. capital movement,
    3. movement of people,
    4. dissemination of knowledge.

Examples

Let us look at some real-world examples of globalization in different sectors to understand why it is such an important concept in economics.

Globalization in business

With the World Trade Organization (WTO) and United Nations (UN) allowing international trade reforms and agreements on tariffs, it has become easier for the domestic entities to go global. Additionally, due to the FDIs, many companies can now find a firm footing in the international markets.

For instance, this report indicates that by 2028, the global handbag market is expected to reach $78.46 billion. The industry is dominated by renowned global manufacturers like Calvin Klein Inc. and Louis Vuitton Malletier. In addition, the creation of eco-friendly handbags owing to the environmentally conscious consumers has added to the demand spike.

Globalization in Food

When nations connect, they exchange a lot more than the products and services. Food is perhaps one of the strongest segments to have changed due to the interaction of different cultures. People experienced the flavors, cuisines and traditions of other nations, especially through global food chains like McDonald’s and Krispy Kreme. It also led to the fusion of cuisines.

Moreover, the sharing of farming techniques, fertilizers, biotechnology, and agricultural practices among the nations facilitated them to grow non-indigenous crops. Grocery chains such as Walmart have been offering a variety of international food in different nations.

For example, Andean superfood quinoa’s popularity became so intense in American and European countries that their prices went through the roof. As a result, the local people of Bolivia and Peru, where quinoa was a staple food, could no longer afford it.

Globalization in Culture

International cultural fusion has facilitated nations to share their art, music, values, ideas, beliefs, traditions, customs, food, festivals, and languages. Employees and companies operating outside their home country often get exposed to a new culture. The entertainment industry also plays a crucial role in introducing viewers to foreign cultures.

For instance, yoga is considered an Indian tradition, which was anciently confined within the geographical boundaries of India. Today, it is widely practised worldwide for physical and mental well-being. June 21 is observed as the International Yoga Day across the globe, as declared by the United Nations in 2015. Hundreds of countries plan special events for celebrating the day.

Globalization in Technology

Technology is the carrier of development, and it travels from one country to another to upgrade different sectors of the nations. With the emergence of the internet, globalization has reached a new horizon in the field of technology. Since some countries are ahead in technical know-how, it has helped economies solve some of their woes cheaper. For instance: the emergence of 5G technology has been the talk of the town in many countries due to its innovative applications.

Globalization Pros

  • The process opens up new ways for the domestic businesses to transform into multinational companiesA multinational company (MNC) is defined as a business entity that operates in its country of origin and also has a branch abroad. The headquarter usually remains in one country, controlling and coordinating all the international branches.
    read more
    . Domestic firms gain exposure to new international markets, hire talented and cheaper human resources, access newer raw material at lower costs.
  • Moreover, cross-border business operations often result in cultural integration of two nations, along with their language, art, music, food, values, etc. For developing countries, globalization brings in multiple opportunities for employment and monetary gains, improving living standards.
  • With higher investments in developing countries, it leads to infrastructural growth, better products and services that initiates economic growth and greater per capita incomeThe per capita income formula depicts the average income of a region computed by dividing the total income of that area by the total population of the region. It is used to figure out the average income of a city, provision, state, country, etc.read more.
  • It also promotes global economic balance, international tradeInternational Trade refers to the trading or exchange of goods and or services across international borders. read more, social justice and diversification globally, bringing nations closer to each other.

Globalization Cons

While companies go global, they face numerous hurdles such as language barriers, opposition and competition from the local sellers. In addition, global business expansion requires enormous capital investment coupled with risks like legal compliance or political unrest. On the other hand, it is a pitfall for the local entities that lose their customers to foreign products and services.

Other challenges include the immigration of talented personnel from the domestic region to foreign countries. Also, many successful business organizations migrate to other nations. Sometimes, most of these companies belong to a single industry.

When world economies are interconnected, the economic downfall in one nation may affect the functioning of the other countries. Besides, a handful of leading companies rule the world, resulting in uneven distribution of power and wealthWealth refers to the overall value of assets, including tangible, intangible, and financial, accumulated by an individual, business, organization, or nation.read more. Moreover, it has often increased labor exploitation in developing nations through poor working conditions, low wages and unethical practices.

FAQs

What is globalization?

Globalization is defined as the practice of free trade across the international market. It paves the way to exchange products, services, resources, ideas and technology from one nation to another.

Is globalization good or bad?

Globalization has many advantages and disadvantages. It opens up the international markets for local enterprises, providing them with expansion opportunities. However, it is a two-way sword since a higher demand for imported products adversely affects the local businesses. At times, the nation encounter displacement of a whole industry to a different country, creating a scarcity of products and jobs in the home country.

Why is globalization important?

From the corporate perspective, globalization is essential for international business expansion. It fulfills the need for acquiring newer resources available in other countries including the labor at cheaper costs. Moreover, it promotes global economic activities, nurtures developing countries, improves social justice to benefit the world economy.

Recommended Articles

This has been a guide to what is Globalization in Economics. Here we discuss the top 4 real-life examples of globalization with a detailed explanation. You can learn more about finance from the following articles –

  • Top 7 Functions of Financial Markets
  • Trade Deficit Definition
  • Formula for Balance of Payments
  • Contingent Shares Interpretation

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