Globalization

Globalization (or globalisation) describes a process by which regional economies, societies, and cultures have become integrated through a global network of communication, transportation, and trade. The term is sometimes used to refer specifically to economic globalization: the integration of national economies into the international economy through trade, foreign direct investment, capital flows, migration, and the spread of technology.^[1] However, globalization is usually recognized as being driven by a combination of economic, technological, sociocultural, political, and biological factors.^[2] The term can also refer to the transnational circulation of ideas, languages, or popular culture through acculturation.

Definitions

According to the Oxford English Dictionary, the word 'globalization' was first employed in 1930, to denote a holistic view of human experience in education.^[3] An early description of globalization was penned by the American entrepreneur-turned-minister Charles Taze Russell who coined the term 'corporate giants' in 1897,^[4] although it was not until the 1960s that the term began to be widely used by economists and other social scientists. The term has since then achieved widespread use in the mainstream press by the later half of the 1980s. Since its inception, the concept of globalization has inspired numerous competing definitions and interpretations, with antecedents dating back to the great movements of trade and empire across Asia and the Indian Ocean from the 15th century onwards.^[5]

The United Nations ESCWA has written that globalization "is a widely-used term that can be defined in a number of different ways. When used in an economic context, it refers to the reduction and removal of barriers between national borders in order to facilitate the flow of goods, capital, services and labor... although considerable barriers remain to the flow of labor... Globalization is not a new phenomenon. It began in the late nineteenth century, but it slowed down during the period from the start of the First World War until the third quarter of the twentieth century. This slowdown can be attributed to the inward-looking policies pursued by a number of countries in order to protect their respective industries... however, the pace of globalization picked up rapidly during the fourth quarter of the twentieth century..."^[6]

Saskia Sassen writes that "a good part of globalization consists of an enormous variety of micro-processes that begin to denationalize what had been constructed as national — whether policies, capital, political subjectivity, urban spaces, temporal frames, or any other of a variety of dynamics and domains."^[7]

HSBC, the world's largest bank, operates across the globe.^[8][9] Shown here is the HSBC Global Technology Centre in Pune, India which develops software for the entire HSBC group.^[10]

Tom J. Palmer of the Cato Institute defines globalization as "the diminution or elimination of state-enforced restrictions on exchanges across borders and the increasingly integrated and complex global system of production and exchange that has emerged as a result."^[11]

Thomas L. Friedman has examined the impact of the "flattening" of the world, and argues that globalized trade, outsourcing, supply-chaining, and political forces have changed the world permanently, for both better and worse. He also argues that the pace of globalization is quickening and will continue to have a growing impact on business organization and practice.^[12]

Noam Chomsky argues that the word globalization is also used, in a doctrinal sense, to describe the neoliberal form of economic globalization.^[13]

Herman E. Daly argues that sometimes the terms internationalization and globalization are used interchangeably but there is a significant formal difference. The term "internationalization" (or internationalisation) refers to the importance of international trade, relations, treaties etc. owing to the (hypothetical) immobility of labor and capital between or among nations.

Finally, Takis Fotopoulos argues that globalization is the result of systemic trends manifesting the market economy's grow-or-die dynamic, following the rapid expansion of transnational corporations. Because these trends have not been offset effectively by counter-tendencies that could have emanated from trade-union action and other forms of political activity, the outcome has been globalisation. This is a multi-faceted and irreversible phenomenon within the system of the market economy and it is expressed as: economic globalisation, namely, the opening and deregulation of commodity, capital and labour markets which led to the present form of neoliberal globalisation; political globalisation, i.e., the emergence of a transnational elite and the phasing out of the all powerful-nation state of the statist period; cultural globalisation, i.e., the worldwide homogenisation of culture; ideological globalisation; technological globalisation; social globalisation.^[14]

Effects

Globalization has various aspects which affect the world in several different ways such as:

• Industrial - emergence of worldwide production markets and broader access to a range of foreign products for consumers and companies. Particularly movement of material and goods between and within national boundaries. International trade in manufactured goods increased more than 100 times (from $95 billion to $12 trillion) in the 50 years since 1955.^[15] China's trade with Africa rose sevenfold during 2000-07 alone.^[16][17]
• Financial - emergence of worldwide financial markets and better access to external financing for borrowers. By the early part of the 21st century more than $1.5 trillion in national currencies were traded daily to support the expanded levels of trade and investment.^[18] As these worldwide structures grew more quickly than any transnational regulatory regime, the instability of the global financial infrastructure dramatically increased, as evidenced by the Financial crisis of 2007–2010.^[19]

As of 2005–2007, the Port of Shanghai holds the title as the World's busiest port.^[20][21][22]

• Economic - realization of a global common market, based on the freedom of exchange of goods and capital.^[23] The interconnectedness of these markets, however, meant that an economic collapse in one area could impact other areas. With globalization, companies can produce goods and services in the lowest cost location. This may cause jobs to be moved to locations that have the lowest wages, least worker protection and lowest health benefits. For Industrial activities this may cause production to move to areas with the least pollution regulations or worker safety regulations.

Almost all notable worldwide IT companies have a presence in India. Four Indians were among the world's top 10 richest in 2008, worth a combined $160 billion.^[24] In 2007, China had 415,000 millionaires and India 123,000.^[25]

• Health Policy - On the global scale, health becomes a commodity. In developing nations under the demands of Structural Adjustment Programs, health systems are fragmented and privatized. Global health policy makers have shifted during the 1990s from United Nations players to financial institutions. The result of this power transition is an increase in privatization in the health sector. This privatization fragments health policy by crowding it with many players with many private interests. These fragmented policy players emphasize partnerships and specific interventions to combat specific problems (as opposed to comprehensive health strategies). Influenced by global trade and global economy, health policy is directed by technological advances and innovative medical trade. Global priorities, in this situation, are sometimes at odds with national priorities where increased health infrastructure and basic primary care are of more value to the public than privatized care for the wealthy.^[26]
• Political - some use "globalization" to mean the creation of a world government which regulates the relationships among governments and guarantees the rights arising from social and economic globalization.^[27] Politically, the United States has enjoyed a position of power among the world powers, in part because of its strong and wealthy economy. With the influence of globalization and with the help of The United States’ own economy, the People's Republic of China has experienced some tremendous growth within the past decade. If China continues to grow at the rate projected by the trends, then it is very likely that in the next twenty years, there will be a major reallocation of power among the world leaders. China will have enough wealth, industry, and technology to rival the United States for the position of leading world power.^[28]
• Informational - increase in information flows between geographically remote locations. Arguably this is a technological change with the advent of fibre optic communications, satellites, and increased availability of telephone and Internet.
• Language - the most popular first language is Mandarin (845 million speakers) followed by Spanish (329 million speakers) and English (328 million speakers).^[29] However the most popular second language is undoubtedly English, the "lingua franca" of globalization:
  • About 35% of the world's mail, telexes, and cables are in English.
  • Approximately 40% of the world's radio programs are in English.
  • About 50% of all Internet traffic uses English.^[30]
• Competition - Survival in the new global business market calls for improved productivity and increased competition. Due to the market becoming worldwide, companies in various industries have to upgrade their products and use technology skillfully in order to face increased competition.^[31]
• Ecological - the advent of global environmental challenges that might be solved with international cooperation, such as climate change, cross-boundary water and air pollution, over-fishing of the ocean, and the spread of invasive species. Since many factories are built in developing countries with less environmental regulation, globalism and free trade may increase pollution and impact on precious fresh water resources (Hoekstra and Chapagain 2008)^[32]. On the other hand, economic development historically required a "dirty" industrial stage, and it is argued that developing countries should not, via regulation, be prohibited from increasing their standard of living.

London is a city of considerable diversity. As of 2008, estimates were published that stated that approximately 30% of London's total population was from an ethnic minority group. The latest official figures show that in 2008, 590,000 people arrived to live in the UK whilst 427,000 left, meaning that net inward migration was 163,000.^[33]

• Cultural - growth of cross-cultural contacts; advent of new categories of consciousness and identities which embodies cultural diffusion, the desire to increase one's standard of living and enjoy foreign products and ideas, adopt new technology and practices, and participate in a "world culture".^[34] Some bemoan the resulting consumerism and loss of languages. Also see Transformation of culture.
  • Spreading of multiculturalism, and better individual access to cultural diversity (e.g. through the export of Hollywood). Some consider such "imported" culture a danger, since it may supplant the local culture, causing reduction in diversity or even assimilation. Others consider multiculturalism to promote peace and understanding between people. A third position that gained popularity is the notion that multiculturalism to a new form of monoculture in which no distinctions exist and everyone just shift between various lifestyles in terms of music, cloth and other aspects once more firmly attached to a single culture. Thus not mere cultural assimilation as mentioned above but the obliteration of culture as we know it today.^[35][36] In reality, as it happens in countries like the United Kingdom, Canada, Australia or New Zealand, people who always lived in their native countries maintain their cultures without feeling forced by any reason to accept another and are proud of it even when they're acceptive of immigrants, while people who are newly arrived simply keep their own culture or part of it despite some minimum amount of assimilation, although aspects of their culture often become a curiosity and a daily aspect of the lives of the people of the welcoming countries.
  • Greater international travel and tourism. WHO estimates that up to 500,000 people are on planes at any one time.^[37] In 2008, there were over 922 million international tourist arrivals, with a growth of 1.9% as compared to 2007.^[38]
  • Greater immigration,^[39] including illegal immigration.^[40] The IOM estimates there are more than 200 million migrants around the world today.^[41] Newly available data show that remittance flows to developing countries reached $328 billion in 2008.^[42]
  • Spread of local consumer products (e.g., food) to other countries (often adapted to their culture).
  • Worldwide fads and pop culture such as Pokémon, Sudoku, Numa Numa, Origami, Idol series, YouTube, Orkut, Facebook, and MySpace. Accessible to those who have Internet or Television, leaving out a substantial segment of the Earth's population.

The construction of continental hotels is a major consequence of globalization process in affiliation with tourism and travel industry, Dariush Grand Hotel, Kish, Iran

• • Worldwide sporting events such as FIFA World Cup and the Olympic Games.
  • Incorporation of multinational corporations into new media. As the sponsors of the All-Blacks rugby team, Adidas had created a parallel website with a downloadable interactive rugby game for its fans to play and compete.^[43]
• Social - development of the system of non-governmental organisations as main agents of global public policy, including humanitarian aid and developmental efforts.^[44]
• Technical
  • Development of a Global Information System, global telecommunications infrastructure and greater transborder data flow, using such technologies as the Internet, communication satellites, submarine fiber optic cable, and wireless telephones
  • Increase in the number of standards applied globally; e.g., copyright laws, patents and world trade agreements.
• Legal/Ethical
  • The creation of the international criminal court and international justice movements.
  • Crime importation and raising awareness of global crime-fighting efforts and cooperation.
  • The emergence of Global administrative law.
• Religious
  • The spread and increased interrelations of various religious groups, ideas, and practices and their ideas of the meanings and values of particular spaces.^[45]

Cultural effects

Globalization has influenced the use of language across the world. This street in Hong Kong, a former British colony, shows various signs, a few of which incorporate both Chinese and British English.

Japanese McDonald's fast food as evidence of corporate globalization and the integration of the same into different cultures.

"Culture" is defined as patterns of human activity and the symbols that give these activities significance. Culture is what people eat, how they dress, the beliefs they hold, and the activities they practice. Globalization has joined different cultures and made it into something different.^[46]

One classic culture aspect is food. Someone in America can be eating Japanese noodles for lunch while someone in Sydney, Australia is eating classic Italian meatballs. India is known for its curry and exotic spices. France is known for its cheeses. North America is known for its burgers and fries. McDonald's is a North American company which is now a global enterprise with 31,000 locations worldwide. This company is just one example of food causing cultural influence on the global scale.

Another common practice brought about by globalization is the usage of Chinese characters in tattoos. These tattoos are popular with today's youth despite the lack of social acceptance of tattoos in China.^[47] Also, there is a lack of comprehension in the meaning of Chinese characters that people get,^[48] making this an example of cultural appropriation.

The internet breaks down cultural boundaries across the world by enabling easy, near-instantaneous communication between people anywhere in a variety of digital forms and media. The Internet is associated with the process of cultural globalization because it allows interaction and communication between people with very different lifestyles and from very different cultures. Photo sharing websites allow interaction even where language would otherwise be a barrier.

Negative effects

Globalization has generated significant international opposition over concerns that it has increased inequality and environmental degradation.^[49] In the Midwestern United States, globalization has eaten away at its competitive edge in industry and agriculture, lowering the quality of life.^[50]

Some also view the effect of globalization on culture as a rising concern. Along with globalization of economies and trade, culture is being imported and exported as well. The concern is that the stronger, bigger countries such as the United States, may overrun the other, smaller countries' cultures, leading to those customs and values being faded away. This process is also sometimes referred to as Americanization or McDonaldization. ^[51]

Sweatshops

A maquila in Mexico

In many poorer nations globalization is the result of foreign businesses utilizing workers in a country to take advantage of the lower wage rates.

One example used by anti-globalization protestors is the use of sweatshops by manufacturers. According to Global Exchange these "Sweat Shops" are widely used by sports shoe manufacturers and mentions one company in particular – Nike.^[52] There are factories set up in the poor countries where employees agree to work for low wages. Then if labour laws alter in those countries and stricter rules govern the manufacturing process the factories are closed down and relocated to other nations with more business favorable policies.

There are several agencies that have been set up worldwide specifically designed to focus on anti-sweatshop campaigns and education of such. In the USA, the National Labor Committee has proposed a number of bills as part of The Decent Working Conditions and Fair Competition Act, which have thus far failed in Congress. The legislation would legally require companies to respect human and worker rights by prohibiting the import, sale, or export of sweatshop goods.^[53]

Specifically, these core standards include no child labor, no forced labor, freedom of association, right to organize and bargain collectively, as well as the right to decent working conditions.^[54]

There are also concerns about the emergence of "electronic sweatshops." Shehzad Nadeem writes that the outsourcing of service work, such as customer service and Information Technology work, to India has resulted in “longer work hours, an intense work pace, and temporal displacement manifested in health problems and alienation from family and friends.”^[55]

Negative effects of economic liberalization

The world today is so interconnected that the collapse of the subprime mortgage market in the U.S. has led to a global financial crisis and recession on a scale not seen since the Great Depression.^[56] Government deregulation and failed regulation of Wall Street's investment banks were important contributors to the subprime mortgage crisis.^[57][58]

A flood of consumer goods such as televisions, radios, bicycles, and textiles into the United States, Europe, and Japan has helped fuel the economic expansion of Asian tiger economies in recent decades.^[59] However, Chinese textile and clothing exports have recently encountered criticism from Europe, the United States and some African countries.^[60][61] In South Africa, some 300,000 textile workers have lost their jobs due to the influx of Chinese goods.^[62] The increasing U.S. trade deficit with China has cost 2.4 million American jobs between 2001 and 2008, according to a study by the Economic Policy Institute (EPI).^[63] A total of 3.2 million – one in six U.S. factory jobs – have disappeared between 2000 and 2007.^[64]

Brain drain

Opportunities in richer countries drives talent away from poorer countries, leading to brain drains. Brain drain has cost the African continent over $4.1 billion in the employment of 150,000 expatriate professionals annually.^[65] Indian students going abroad for their higher studies costs India a foreign exchange outflow of $10 billion annually.^[66]

Environmental degradation

Burning forest in Brazil. The removal of forest to make way for cattle ranching was the leading cause of deforestation in the Brazilian Amazon from the mid 1960s. Recently, soybeans have become one of the most important contributors to deforestation in the Brazilian Amazon.^[67]

The Worldwatch Institute said the booming economies of China and India are planetary powers that are shaping the global biosphere. In 2007, China overtook the United States as the world's biggest producer of CO₂.^[68] Only 1 percent of the country’s 560 million city inhabitants (2007) breathe air deemed safe by the European Union. At present rates, tropical rainforests in Indonesia would be logged out in 10 years, Papua New Guinea in 13 to 16 years.^[69] A major source of deforestation is the logging industry, driven spectacularly by China and Japan.^[70] China and India are quickly becoming large oil consumers.^[71][72] China has seen oil consumption grow by 8% yearly since 2002, doubling from 1996–2006.^[73] State of the World 2006 report said the two countries' high economic growth hid a reality of severe pollution. The report states:

The world's ecological capacity is simply insufficient to satisfy the ambitions of China, India, Japan, Europe and the United States as well as the aspirations of the rest of the world in a sustainable way^[74]

Without more recycling, zinc could be used up by 2037, both indium and hafnium could run out by 2017, and terbium could be gone before 2012.^[75] It is said that if China and India were to consume as much resources per capita as United States or Japan in 2030 together they would require a full planet Earth to meet their needs.^[76] In the longterm these effects can lead to increased conflict over dwindling resources^[77] and in the worst case a Malthusian catastrophe.

Food security

The head of the International Food Policy Research Institute, stated in 2008 that the gradual change in diet among newly prosperous populations is the most important factor underpinning the rise in global food prices.^[78] From 1950 to 1984, as the Green Revolution transformed agriculture around the world, grain production increased by over 250%.^[79] The world population has grown by about 4 billion since the beginning of the Green Revolution and most believe that, without the Revolution, there would be greater famine and malnutrition than the UN presently documents (approximately 850 million people suffering from chronic malnutrition in 2005).^[80][81]

It is becoming increasingly difficult to maintain food security in a world beset by a confluence of "peak" phenomena, namely peak oil, peak water, peak phosphorus, peak grain and peak fish. Growing populations, falling energy sources and food shortages will create the "perfect storm" by 2030, according to the UK government chief scientist. He said food reserves are at a 50-year low but the world requires 50% more energy, food and water by 2030.^[82][83] The world will have to produce 70% more food by 2050 to feed a projected extra 2.3 billion people and as incomes rise, the United Nations' Food and Agriculture Organisation (FAO) warned.^[84] Social scientists have warned of the possibility that global civilization is due for a period of contraction and economic re-localization, due to the decline in fossil fuels and resulting crisis in transportation and food production.^[85][86][87] One paper even suggested that the future might even bring about a restoration of sustainable local economic activities based on hunting and gathering, shifting horticulture, and pastoralism.^[88]

The journal Science published a four-year study in November 2006, which predicted that, at prevailing trends, the world would run out of wild-caught seafood in 2048.^[89]

Disease

Globalization has also helped to spread some of the deadliest infectious diseases known to humans.^[90] Starting in Asia, the Black Death killed at least one-third of Europe's population in the 14th century.^[91] Even worse devastation was inflicted on the American supercontinent by European arrivals. 90% of the populations of the civilizations of the "New World" such as the Aztec, Maya, and Inca were killed by small pox brought by European colonization. Modern modes of transportation allow more people and products to travel around the world at a faster pace, but they also open the airways to the transcontinental movement of infectious disease vectors.^[92] One example of this occurring is AIDS/HIV.^[93] Due to immigration, approximately 500,000 people in the United States are believed to be infected with Chagas disease.^[94] In 2006, the tuberculosis (TB) rate among foreign-born persons in the United States was 9.5 times that of U.S.-born persons.^[95]

Drug and illicit goods trade

The United Nations Office on Drugs and Crime (UNODC) issued a report that the global drug trade generates more than $320 billion a year in revenues.^[96] Worldwide, the UN estimates there are more than 50 million regular users of heroin, cocaine and synthetic drugs.^[97] The international trade of endangered species is second only to drug trafficking.^[98] Traditional Chinese medicine often incorporates ingredients from all parts of plants, the leaf, stem, flower, root, and also ingredients from animals and minerals. The use of parts of endangered species (such as seahorses, rhinoceros horns, saiga antelope horns, and tiger bones and claws) has created controversy and resulted in a black market of poachers who hunt restricted animals.^[99][100] In 2003, 29% of open sea fisheries were in a state of collapse.^[101]

Advocates

Supporters of free trade claim that it increases economic prosperity as well as opportunity, especially among developing nations, enhances civil liberties and leads to a more efficient allocation of resources. 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, this leads to lower prices, more employment, higher output and a higher standard of living for those in developing countries.^[102][103]

Dr. Francesco Stipo, Director of the USA Club of Rome suggests that "the world government 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".^[104]

Proponents of laissez-faire capitalism, and some libertarians, say that higher degrees of political and economic freedom in the form of democracy and capitalism in the developed world are ends in themselves and also produce higher levels of material wealth. They see globalization as the beneficial spread of liberty and capitalism.^[102]

Supporters of democratic globalization are sometimes called pro-globalists. They believe that the first phase of globalization, which was market-oriented, should be followed by a phase of building global political institutions representing the will of world citizens. The difference from other globalists is that they do not define in advance any ideology to orient this will, but would leave it to the free choice of those citizens via a democratic process.

Some, such as former Canadian Senator Douglas Roche, O.C., simply view globalization as inevitable and advocate creating institutions such as a directly elected United Nations Parliamentary Assembly to exercise oversight over unelected international bodies.

Critics

"Anti-globalization" can involve the process or actions taken by a state or its people in order to demonstrate its sovereignty and practice democratic decision-making. Anti-globalization may occur in order to maintain barriers to the international transfer of people, goods and beliefs, particularly free market deregulation, encouraged by business organizations and organizations such as the International Monetary Fund or the World Trade Organization. Moreover, as Naomi Klein argues in her book No Logo, anti-globalism can denote either a single social movement or an umbrella term that encompasses a number of separate social movements^[105] such as nationalists and socialists. In either case, participants stand in opposition to the unregulated political power of large, multi-national corporations, as the corporations exercise power through leveraging trade agreements which in some instances create unemployment, and damage the democratic rights of citizens, the environment particularly air quality index and rain forests, as well as national government's sovereignty to determine labor rights, including the right to form a union, and health and safety legislation, or laws as they may otherwise infringe on cultural practices and traditions of developing countries.

Some people who are labeled "anti-globalist" or "sceptics" (Hirst and Thompson)^[106] consider the term to be too vague and inaccurate.^[107][108] Podobnik states that "the vast majority of groups that participate in these protests draw on international networks of support, and they generally call for forms of globalization that enhance democratic representation, human rights, and egalitarianism."

Joseph Stiglitz and Andrew Charlton write:^[109]

Some members aligned with this viewpoint prefer instead to describe themselves as the "Global Justice Movement", the "Anti-Corporate-Globalization Movement", the "Movement of Movements" (a popular term in Italy), the "Alter-globalization" movement (popular in France), the "Counter-Globalization" movement, and a number of other terms.

Critiques of the current wave of economic globalization typically look at both the damage to the planet, in terms of the perceived unsustainable harm done to the biosphere, as well as the perceived human costs, such as poverty, inequality, miscegenation, injustice and the erosion of traditional culture which, the critics contend, all occur as a result of the economic transformations related to globalization. They challenge directly the metrics, such as GDP, used to measure progress promulgated by institutions such as the World Bank, and look to other measures, such as the Happy Planet Index,^[110] created by the New Economics Foundation.^[111] They 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"^[112] which they claim are the unintended but very real consequences of globalization.

The terms globalization and anti-globalization are used in various ways. Noam Chomsky believes that^[113][114]

Critics argue that globalization results in:

• Poorer countries suffering disadvantages: While it is true that globalization encourages free trade among countries, there are also negative consequences because some countries try to save their national markets. The main export of poorer countries is usually agricultural goods. Larger countries often subsidise their farmers (like the EU Common Agricultural Policy), which lowers the market price for the poor farmer's crops compared to what it would be under free trade.^[115]
• The exploitation of foreign impoverished workers: The deterioration of protections for weaker nations by stronger industrialized powers has resulted in the exploitation of the people in those nations to become cheap labor. Due to the lack of protections, companies from powerful industrialized nations are able to offer workers enough salary to entice them to endure extremely long hours and unsafe working conditions, though economists question if consenting workers in a competitive employers' market can be decried as "exploited". It is true that the workers are free to leave their jobs, but in many poorer countries, this would mean starvation for the worker, and possible even his/her family if their previous jobs were unavailable.^[116]
• The shift to outsourcing: Globalization has allowed corporations to move manufacturing and service jobs from high cost locations to locations with the lowest wages and worker benefits. This results in loss of jobs in the high cost locations. This has contributed to the deterioration of the middle class which is a major factor in the increasing economic inequality in the United States . Families that were once part of the middle class are forced into lower positions by massive layoffs and outsourcing to another country. This also means that people in the lower class have a much harder time climbing out of poverty because of the absence of the middle class as a stepping stone.^[117]
• Weak labor unions: The surplus in cheap labor coupled with an ever growing number of companies in transition has caused a weakening of labor unions in the United States. Unions lose their effectiveness when their membership begins to decline. As a result unions hold less power over corporations that are able to easily replace workers, often for lower wages, and have the option to not offer unionized jobs anymore.^[115]
• An increase in exploitation of child labor: for example, a country that experiencing increases in labor demand because of globalization and an increase the demand for goods produced by children, will experience greater a demand for child labor. This can be "hazardous" or "exploitive", e.g., quarrying, salvage, cash cropping but also includes the trafficking of children, children in bondage or forced labor, prostitution, pornography and other illicit activities.^[118]

In December 2007, World Bank economist Branko Milanovic has called much previous empirical research on global poverty and inequality into question because, according to him, improved estimates of purchasing power parity indicate that developing countries are worse off than previously believed. Milanovic remarks that "literally hundreds of scholarly papers on convergence or divergence of countries’ incomes have been published in the last decade based on what we know now were faulty numbers." With the new data, possibly economists will revise calculations, and he also believed that there are considerable implications estimates of global inequality and poverty levels. Global inequality was estimated at around 65 Gini points, whereas the new numbers indicate global inequality to be at 70 on the Gini scale.^[119]

The critics of globalization typically emphasize that globalization is a process that is mediated according to corporate interests, and typically raise the possibility of alternative global institutions and policies, which they believe address the moral claims of poor and working classes throughout the globe, as well as environmental concerns in a more equitable way.^[120]

The movement is very broad, including church groups, national liberation factions, peasant unionists, intellectuals, artists, protectionists, anarchists, those in support of relocalization and others. Some are reformist, (arguing for a more moderate form of capitalism) while others are more revolutionary (arguing for what they believe is a more humane system than capitalism) and others are reactionary, believing globalization destroys national industry and jobs.

One of the key points made by critics of recent economic globalization is that income inequality, both between and within nations, is increasing as a result of these processes. One article from 2001 found that significantly, in 7 out of 8 metrics, income inequality has increased in the twenty years ending 2001. Also, "incomes in the lower deciles of world income distribution have probably fallen absolutely since the 1980s". Furthermore, the World Bank's figures on absolute poverty were challenged. The article was skeptical of the World Bank's claim that the number of people living on less than $1 a day has held steady at 1.2 billion from 1987 to 1998, because of biased methodology.^[121]

A chart that gave the inequality a very visible and comprehensible form, the so-called 'champagne glass' effect,^[122] was contained in the 1992 United Nations Development Program Report, which showed the distribution of global income to be very uneven, with the richest 20% of the world's population controlling 82.7% of the world's income.^[123]

Source: United Nations Development Program. 1992 Human Development Report^[124]

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.^[125]

Americanization related to a period of high political American clout and of significant growth of America's shops, markets and object being brought into other countries. So globalization, a much more diversified phenomenon, relates to a multilateral political world and to the increase of objects, markets and so on into each others countries.

Critics of globalization talk of Westernization. A 2005 UNESCO report^[126] showed that cultural exchange is becoming more frequent from Eastern Asia but 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.

Some opponents of globalization see the phenomenon as the promotion of corporatist interests.^[127] They also claim that the increasing autonomy and strength of corporate entities shapes the political policy of countries.^[128][129]

History

Extent of the Silk Road and Spice trade routes blocked by the Ottoman Empire in 1453 spurring exploration

The historical origins of globalization are the subject of on-going debate. Though some scholars situate the origins of globalization in the modern era, others regard it as a phenomenon with a long history.

Perhaps the most extreme proponent of a deep historical origin for globalization was Andre Gunder Frank, an economist associated with dependency theory. Frank argued that a form of globalization has been in existence since the rise of trade links between Sumer and the Indus Valley Civilization in the third millennium B.C.^[130] Critics of this idea point out that it rests upon an over-broad definition of globalization.

An early form of globalized economics and culture existed during the Hellenistic Age, when commercialized urban centers were focused around the axis of Greek culture over a wide range that stretched from India to Spain, with such cities as Alexandria, Athens, and Antioch at its center. Trade was widespread during that period, and it is the first time the idea of a cosmopolitan culture (from Greek "Cosmopolis", meaning "world city") emerged. Others have perceived an early form of globalization in the trade links between the Roman Empire, the Parthian Empire, and the Han Dynasty. The increasing articulation of commercial links between these powers inspired the development of the Silk Road, which started in western China, reached the boundaries of the Parthian empire, and continued onwards towards Rome.^[131] With 300 Greek ships a year sailing between the Greco-Roman world and India, the annual trade may have reached 300,000 tons.^[132]

The Islamic Golden Age was also an important early stage of globalization, when Jewish and Muslim traders and explorers established a sustained economy across the Old World resulting in a globalization of crops, trade, knowledge and technology. Globally significant crops such as sugar and cotton became widely cultivated across the Muslim world in this period, while the necessity of learning Arabic and completing the Hajj created a cosmopolitan culture.^[133]

Portuguese carrack in Nagasaki, 17th century Japanese Nanban art

Native New World crops exchanged globally: Maize, Tomato, Potato, Vanilla, Rubber, Cacao, Tobacco

The advent of the Mongol Empire, though destabilizing to the commercial centers of the Middle East and China, greatly facilitated travel along the Silk Road. This permitted travelers and missionaries such as Marco Polo to journey successfully (and profitably) from one end of Eurasia to the other. The so-called Pax Mongolica of the thirteenth century had several other notable globalizing effects. It witnessed the creation of the first international postal service, as well as the rapid transmission of epidemic diseases such as bubonic plague across the newly unified regions of Central Asia.^[134] These pre-modern phases of global or hemispheric exchange are sometimes known as archaic globalization. Up to the sixteenth century, however, even the largest systems of international exchange were limited to the Old World.

The Age of Discovery brought a broad change in globalization, being the first period in which Eurasia and Africa engaged in substantial cultural, material and biologic exchange with the New World.^[135] It began in the late 15th century, when the two Kingdoms of the Iberian Peninsula - Portugal and Castile - sent the first exploratory voyages^[136] around the Horn of Africa and to the Americas, "discovered" in 1492 by Christopher Columbus. Shortly before the turn of the 16th century, Portuguese started establishing trading posts (factories) from Africa to Asia and Brazil, to deal with the trade of local products like gold, spices and timber, introducing an international business center under a royal monopoly, the House of India.^[137]

Global integration continued with the European colonization of the Americas initiating the Columbian Exchange,^[138] the enormous widespread exchange of plants, animals, foods, human populations (including slaves), communicable diseases, and culture between the Eastern and Western hemispheres. It was one of the most significant global events concerning ecology, agriculture, and culture in history. New crops that had come from the Americas via the European seafarers in the 16th century significantly contributed to the world's population growth.^[139]

This phase is sometimes known as proto-globalization. It was characterized by the rise of maritime European empires, in the 16th and 17th centuries, first the Portuguese and Spanish Empires, and later the Dutch and British Empires. In the 17th century, globalization became also a private business phenomenon when chartered companies like British East India Company (founded in 1600), often described as the first multinational corporation, as well as the Dutch East India Company (founded in 1602) were established. Because of the large investment and financing needs and high risks involved in international trade, the British East India Company became the first company in the world to share risk and enable joint ownership of companies through the issuance of shares of stock: an important driver for globalization.

Animated map showing Colonial empires evolution from 1492 to present

19th century Great Britain become the first global economic superpower, because of superior manufacturing technology and improved global communications such as steamships and railroads.

The 19th century witnessed the advent of globalization approaching its modern form. Industrialization allowed cheap production of household items using economies of scale, while rapid population growth created sustained demand for commodities. Globalization in this period was decisively shaped by nineteenth-century imperialism. After the Opium Wars and the completion of British conquest of India, vast populations of these regions became ready consumers of European exports. It was in this period that areas of sub-Saharan Africa and the Pacific islands were incorporated into the world system. Meanwhile, the conquest of new parts of the globe, notably sub-Saharan Africa, by Europeans yielded valuable natural resources such as rubber, diamonds and coal and helped fuel trade and investment between the European imperial powers, their colonies, and the United States. Said John Maynard Keynes,^[140]

The first phase of "modern globalization" began to break down at the beginning of the 20th century, with the first world war. The novelist VM Yeates criticised the financial forces of globalization as a factor in creating World War I.^[141] The final death knell for this phase came during the gold standard crisis and Great Depression in the late 1920s and early 1930s.

In the middle decades of the twentieth century globalization was largely driven by the global expansion of multinational corporations based in the United States and Europe, and worldwide exchange of new developments in science, technology and products, with most significant inventions of this time having their origins in the Western world according to Encyclopedia Britannica.^[142] Worldwide export of western culture went through the new mass media: film, radio and television and recorded music. Development and growth of international transport and telecommunication played a decisive role in modern globalization.

In late 2000s, much of the industrialized world entered into a deep recession.^[143] Some analysts say the world is going through a period of deglobalization after years of increasing economic integration.^[144][145] China has recently become the world's largest exporter surpassing Germany.^[146]

Post-World War II

Globalization, since World War II, is largely the result of planning by politicians to break down borders hampering trade. Their work led to the Bretton Woods conference, an agreement by the world's leading politicians to lay down the framework for international commerce and finance, and the founding of several international institutions intended to oversee the processes of globalization.

These institutions include the International Bank for Reconstruction and Development (the World Bank), and the International Monetary Fund. Globalization has been facilitated by advances in technology which have reduced the costs of trade, and trade negotiation rounds, originally under the auspices of the General Agreement on Tariffs and Trade (GATT), which led to a series of agreements to remove restrictions on free trade.

Since World War II, barriers to international trade have been considerably lowered through international agreements — GATT. Particular initiatives carried out as a result of GATT and the World Trade Organization (WTO), for which GATT is the foundation, have included:

• Promotion of free trade:
  • elimination of tariffs; creation of free trade zones with small or no tariffs
  • Reduced transportation costs, especially resulting from development of containerization for ocean shipping.
  • Reduction or elimination of capital controls
  • Reduction, elimination, or harmonization of subsidies for local businesses
  • Creation of subsidies for global corporations
  • Harmonization of intellectual property laws across the majority of states, with more restrictions
  • Supranational recognition of intellectual property restrictions (e.g. patents granted by China would be recognized in the United States)

Cultural globalization, driven by communication technology and the worldwide marketing of Western cultural industries, was understood at first as a process of homogenization, as the global domination of American culture at the expense of traditional diversity. However, a contrasting trend soon became evident in the emergence of movements protesting against globalization and giving new momentum to the defense of local uniqueness, individuality, and identity.^[147]

The Uruguay Round (1986 to 1994)^[148] led to a treaty to create the WTO to mediate trade disputes and set up a uniform platform of trading. Other bilateral and multilateral trade agreements, including sections of Europe's Maastricht Treaty and the North American Free Trade Agreement (NAFTA) have also been signed in pursuit of the goal of reducing tariffs and barriers to trade.

World exports rose from 8.5% in 1970, to 16.2% of total gross world product in 2001.^[149]

In the 1990s, the growth of low cost communication networks allowed work done using a computer to be moved to low wage locations for many job types. This included accounting, software development, and engineering design.

Measurement

Economic globalization can be measured in different ways. These center around the four main economic flows that characterize globalization:

• Goods and services, e.g., exports plus imports as a proportion of national income or per capita of population
• Labor/people, e.g., net migration rates; inward or outward migration flows, weighted by population
• Capital, e.g., inward or outward direct investment as a proportion of national income or per head of population
• Technology, e.g., international research & development flows; proportion of populations (and rates of change thereof) using particular inventions (especially 'factor-neutral' technological advances such as the telephone, motorcar, broadband)

As globalization is not only an economic phenomenon, a multivariate approach to measuring globalization is the recent index calculated by the Swiss think tank KOF. The index measures the three main dimensions of globalization: economic, social, and political. In addition to three indices measuring these dimensions, an overall index of globalization and sub-indices referring to actual economic flows, economic restrictions, data on personal contact, data on information flows, and data on cultural proximity is calculated. Data is available on a yearly basis for 122 countries, as detailed in Dreher, Gaston and Martens (2008).^[150] According to the index, the world's most globalized country is Belgium, followed by Austria, Sweden, the United Kingdom and the Netherlands. The least globalized countries according to the KOF-index are Haiti, Myanmar, the Central African Republic and Burundi.^[151]

A.T. Kearney and Foreign Policy Magazine jointly publish another Globalization Index. According to the 2006 index, Singapore, Ireland, Switzerland, the Netherlands, Canada and Denmark are the most globalized, while Indonesia, India and Iran are the least globalized among countries listed.

International social fora

The first World Social Forum in 2001 was an initiative of the administration of Porto Alegre, Brazil. The slogan of was "Another World Is Possible". It was here that the WSF's Charter of Principles was adopted to provide a framework for the fora.

The WSF became a periodic meeting: in 2002 and 2003 it was held again in Porto Alegre and became a rallying point for worldwide protest against the American invasion of Iraq. In 2004 it was moved to Mumbai, India, to make it more accessible to the populations of Asia and Africa. This last appointment saw the participation of 75,000 delegates.

Regional fora took place following the example of the WSF, adopting its Charter of Principles. The first European Social Forum was held in November 2002 in Florence. The slogan was "Against the war, against racism and against neo-liberalism". It saw the participation of 60,000 delegates and ended with a huge demonstration against the war of 1,000,000 people according to the organizers. The other two ESFs took place in Paris and London, in 2003 and 2004 respectively.

Recently there has been some discussion behind the movement about the role of the social forums. Some see them as a "popular university", an occasion to make many people aware of the problems of globalization. Others would prefer that delegates concentrate their efforts on the coordination and organization of the movement and on the planning of new campaigns. However it has often been argued that in the dominated countries (most of the world) the WSF is little more than an 'NGO fair' driven by Northern NGOs and donors most of which are hostile to popular movements of the poor.^[152]

Relation to Americanization

In the past, the argument that globalization could be equated in actuality to the spreading of American culture was made.^[153] The thorough spreading of American culture throughout the world was apparent. For example, there were cola products shipped and sold in nearly every country in the world. American fashion also seemed to be trending in most other countries. The United States was known as a hyperpower due to its economic and military dominance at the time; the relative power of the US waned as other developing nations such as the BRIC nations grew in strength, decreasing the forcefulness of the argument that current globalization is simply Americanization.

See also

References

Globalization: An Innovation Imperative (Keynote Presentation by Mr. Pari Natarajan, CEO, Zinnov)

Further reading

External links

• YaleGlobal Online Online Magazine focusing on Globalization
• Latin Business Chronicle, Dec.10, 2008 Latin America More Globalized
• Arno Tausch (2006), ‘From the “Washington” towards a “Vienna Consensus”? A quantitative analysis on globalization, development and global governance’. Paper, prepared for the discussion process leading up to the EU-Latin America and Caribbean Summit 2006, May 11, 2006 to May 12, 2006, Vienna, Austria. Centro Argentino de Estudios Internacionales, Buenos Aires
• ‘“Destructive Creation”? Some long-term Schumpeterian reflections on the Lisbon process’ PDF. Arno Tausch (2007), Entelequia e-Books, University of Cadiz/Malaga (Spain), Munich Personal Repec Archive, Global Development Network, University of Sussex and University of Connecticut, Ideas/Repec]
• Embracing the Challenge of Free Trade: Competing and Prospering in a Global Economy a speech by Federal Reserve chairman Ben Bernanke
• BBC News Special Report - Globalisation
• Guardian Special Report - Globalisation
• Inequality Project from University of Texas
• Institute for Research on World-Systems at UC Riverside
• Resilience, Panarchy, and World-Systems Analysis from the Ecology and Society Journal
• OECD Globalization statistics
• Globalization theories
• The Sociology of Globalization
• Mapping Globalization — globalization project with a collection of maps
• Globalization from the Canadian Encyclopedia
• Globalization and Me Blog and Viewpoints on Globalization

Multimedia

• CBC Archives CBC Television reports on the opening of Moscow McDonald's (1990) - sample of Western business expanding into former communist countries.
• Squeezed: The Cost of Free Trade in the Asia-Pacific 2007 film about the impacts of globalisation in Thailand and the Philippines.