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A KFC franchise in Kuwait.

Globalization (less commonly Globalisation), refers to increasing global connectivity, integration and interdependence in the economic, social, technological, cultural, political, and ecological spheres. Globalization is an umbrella term and is perhaps best understood as a unitary process inclusive of many sub-processes (such as enhanced economic interdependence, increased cultural influence, rapid advances of information technology, and novel governance and geopolitical challenges) that are increasingly binding people and the biosphere more tightly into one global system.

There are several definitions and all usually mention the increasing connectivity of economies and ways of life across the world. The Encyclopedia Britannica says that globalization is the "process by which the experience of everyday life ... is becoming standardized around the world." While some scholars and observers of globalization stress convergence of patterns of production and consumption and a resulting homogenization of culture, others stress that globalization has the potential to take many diverse forms.[1]

In economics, globalization is the convergence of prices, products, wages, rates of interest and profits towards developed country norms.[2] Globalization of the economy depends on the role of human migration, international trade, movement of capital, and integration of financial markets. The International Monetary Fund notes the growing economic interdependence of countries worldwide through increasing volume and variety of cross-border transactions, free international capital flows, and more rapid and widespread diffusion of technology. Theodore Levitt is usually credited with globalization's first use in an economic context. [3]

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

  • Industrial (alias trans nationalization) - emergence of worldwide production markets and broader access to a range of goods for consumers and companies
  • Financial - emergence of worldwide financial markets and better access to external financing for corporate, national and subnational borrowers
  • Economic - realization of a global common market, based on the freedom of exchange of goods and capital.
  • Political - Political globalization is the creation of a world government which regulates the relationships among nations and guarantees the rights arising from social and economic globalization. [4]
  • Informational - increase in information flows between geographically remote locations
  • Cultural - growth of cross-cultural contacts; advent of new categories of consciousness and identities such as Globalism - which embodies cultural diffusion, the desire to consume and enjoy foreign products and ideas, adopt new technology and practices, and participate in a "world culture".
  • Ecological- the advent of global environmental challenges that can not be solved without international cooperation, such as climate change, cross-boundary water and air pollution, over-fishing of the ocean, and the spread of invasive species.
  • Social - the achievement of free circulation by people of all nations.
  • Greater international cultural exchange
  • Technical/legal

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

  • Promotion of free trade
  • Intellectual property restrictions
    • Harmonization of intellectual property laws across the majority of nations, with more restrictions.
    • Supranational recognition of intellectual property restrictions (e.g. patents granted by China would be recognized in the United States)

Globalization can also be defined as the internationalization of everything related to different countries [Internationalization however, is a contrasted phenomenon to that of Globalization]

Historical precedents

The term "globalization' was coined in the latter half of the twentieth century, and the term and its concepts did not permeate popular consciousness until the latter half of the 1980s. Various social scientists have tried to demonstrate continuity between contemporary trends of globalization and earlier periods.[5].

Globalization is a centuries long process, tracking the expansion of human population and the growth of civilization, that has accelerated dramatically in the past 50 years. Earlier forms of globalization existed during the Mongol Empire, when there was greater integration along the Silk Road. Global integration continued through the expansion of European trade, as in the 16th and 17th centuries, when the Portuguese and Spanish Empires reached to all corners of the world. The effects on European industries were notable, e.g. the Silver Mining in Schwaz, Austria was partly gold and sheep, as silver was available from the Spanish colonies for lower prices.

Globalization became a business phenomena in the 17th century when the first Multinational was founded in The Netherlands. During the Dutch Golden Age the Dutch East India Company was established as a private owned company. Because of the high risks involved with the international trade, ownership was divided with Shares. The Dutch East India Company was the first company in the world to issue shares, an important driver for globalization.

Liberalization in the 19th century is often called "The First Era of Globalization", a period characterized by rapid growth in international trade and investment, between the European imperial powers, their colonies, and, later, the United States. The "First Era of Globalization" began to break down at the beginning with the first World War, and later collapsed during the gold standard crisis in the late 1920s and early 1930s. Lenin's Theory of Imperialism (1905) provided a seminal critique of this period as the being characterised by the exploitation of the third world by those in the first. This theme forms the basis of many recent critiques of globalisation.

Globalization in the era since World War II has been driven by advances in technology which have reduced the costs of trade, and trade negotiation rounds, originally under the auspices of GATT, which led to a series of agreements to remove restrictions on free trade. The Uruguay round (1984 to 1995) led to a treaty to create the World Trade Organization (WTO), to mediate trade disputes and set up a uniform platform of trading. Other bi- and trilateral 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 grand.

The world increasingly is confronted by problems that can not be solved by individual nation-states acting alone. Examples include cross-boundary air and water pollution, over-fishing of the oceans and other degradations of the natural environment, regulation of outer-space, global warming, international terrorist networks, global trade and finance, and so on. Solutions to these problems necessitate new forms of cooperation and the creation of new global institutions. Since the end of WWII, following the advent of the UN and the Bretton Woods institutions, there has been an explosion in the reach and power of Multinational corporations and the rapid growth of global civil society.[6]

The Global Scenario Group, an environmental research and forecasting organization, views globalization as part of the shift to a Planetary Phase of Civilization, characterized by global social organizations, economies, and communications. The GSG maintains that the future character of this global society is uncertain and contested.

Measuring globalization

Looking specifically at economic globalization, it can be measured in different ways. These centre 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)

To what extent a nation-state or culture is globalized in a particular year has until most recently been measured employing simple proxies like flows of trade, migration, or foreign direct investment, as described above. 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 are available on a yearly basis for 122 countries. 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.[7].

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

Measuring Attitudes to Globalization

Measurement of attitudes toward globalization were sought after in a 2003 worldwide globalization study. The study focused on teenagers' perceptions towards globalization and globalism, because soon they will be the adults living out the results of today's policy. The study examined the thesis of: Teenagers are natural globalists & Teenagers are afraid of globalization. The sample for this study included two hundred teenagers between the ages of 14 and 18, from New York, Lebanon, Azerbaijan, and the Philippines. The locations were urban. There was a survey administered with input from Gene Ellis, a professor (Wirtschaftswissenschaft Seminar) at the Eberhard Karls University of Tuebingen, and global consulting principal, economist, and former World Bank employee Andrew Mack.

Topics of globalization and globalism were grouped into sub-categories. Globalization categories included immigration, trade, and diplomatic relations. Globalism included consumption, personal freedoms, technology, and culture.

The results of the research suggested that both American teenagers and international teenagers are natural globalists and are largely in favor of globalization. Teenagers in New York had higher levels of support for globalization than globalism. International teens were more globalists. Importantly, all teens were very positive towards technology, cultural exchange, trade, consumption of international goods, and immigration.

The study suggested that the future of international technology, trade, and culture will depend on bringing the concepts of globalization and globalism together. More so, the Internet seems to be one of the most important tools in linking teenagers globally and this suggests that this sort of communication should be developed around the world at a faster rate. Finally, it was suggested that the future of culture and trade will depend on the rate of technological progress.

Pro-globalization (globalism)

File:Less than $2 a day.png
Globalization advocates such as Jeffrey Sachs point to the above average drop in poverty rates in countries, such as China, where globalization has taken a strong foothold, compared to areas unaffected by globalization, such as Sub-Saharan Africa, where poverty rates have remained stagnant.[8]
Globalization has brought foreign companies to Bangalore, India

Supporters of free trade point out 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.[8][9]

One of the ironies of the recent success of India and China is the fear that... success in these two coutnries comes at the expense of the United States. These fears are fundamentally wrong and, even worse, dangerous. They are wrong becuase the world is not a zero-sum struggle... but rather is a positive-sum opportunity in which improving technologies and skills can raise living standards around the world.

— Jeffrey D. Sachs, The End of Poverty, 2005

Libertarians and other proponents of laissez-faire capitalism 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. Liberals see it as a tool for releiving poverty and providing the poor with a foothold in the global economy.[8]

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 [citation needed].

Supporters of globalization argue that the anti-globalization movement uses anecdotal evidence to support their protectionist view, whereas worldwide statistics strongly support globalization:

  • The percentage of people in developing countries living below US $1 (adjusted for inflation and purchasing power) per day has halved in only twenty years,[10] with the greatest improvements occurring in economies rapidly reducing barriers to trade and investment; yet, some critics argue that more detailed variables measuring poverty should be studied instead.[11]
  • The percentage of people living on less than $2 a day has decreased greatly in areas effected by globalization, whereas poverty rates in other areas have remained largely stagnant. In East-Asia, including China, the percentage has decreased by 50.1% compared to a 2.2% increase in Sub-Saharan Africa.[9]
  • Life expectancy has almost doubled in the developing world since World War II and is starting to close the gap between itself and the developed world where the improvement has been smaller. Infant mortality has decreased in every developing region of the world.[12]
  • Democracy has increased dramatically from there being almost no nations with universal suffragein 1900 to 62.5% of all nations having it in 2000.[14]
  • Feminism has made great advances in areas such as Bangladesh through economically liberating and empowering women with jobs.[8]
  • The proportion of the world's population living in countries where per-capita food supplies are less than 2,200 calories (9,200 kilojoules) per day decreased from 56% in the mid-1960s to below 10% by the 1990s.[15]
  • Between 1950 and 1999, global literacy increased from 52% to 81% of the world. Women made up much of the gap: female literacy as a percentage of male literacy has increased from 59% in 1970 to 80% in 2000.[16]
  • The percentage of children in the labor force has fallen from 24% in 1960 to 10% in 2000.[17]
  • There are similar increasing trends toward electric power, cars, radios, and telephones per capita, as well as a growing proportion of the population with access to clean water.[18]
Area Demographic 1981 1984 1987 1990 1993 1996 1999 2002 Percentage Change 1981-2002
East Asia and Pacific Less than $1 a day 57.7% 38.9% 28.0% 29.6% 24.9% 16.6% 15.7% 11.1% -80.76%
Less than $2 a day 84.8% 76.6% 67.7% 69.9% 64.8% 53.3% 50.3% 40.7% -52.00%
Latin America Less than $1 a day 9.7% 11.8% 10.9% 11.3% 11.3% 10.7% 10.5% 8.9% -8.25%
Less than $2 a day 29.6% 30.4% 27.8% 28.4% 29.5% 24.1% 25.1% 23.4% -29.94%
Sub-Saharan Africa Less than $1 a day 41.6% 46.3% 46.8% 44.6% 44.0% 45.6% 45.7% 44.0% +5.77%
Less than $2 a day 73.3% 76.1% 76.1% 75.0% 74.6% 75.1% 76.1% 74.9% +2.18%

SOURCE: World Bank, Poverty Estimates, 2002[9]

Others, such as 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.

Supporters of globalization are highly critical of some current policies. In particular, the very high subsidies to and protective tariffs for agriculture in the developed world. For example, almost half of the budget of the European Union goes to agricultural subsidies, mainly to large farms and agricultural businesses, which form a powerful lobby.[19] Japan gave 47 billion dollars in 2005 in subsidies to its agricultural sector,[20] nearly four times the amount it gave in total foreign aid.[21] The US gives 3.9 billion dollars each year in subsidies to its cotton sector, including 25,000 growers, three times more in subsidies than the entire USAID budget for Africa’s 500 million people.[22] This drains the taxed money and increases the prices for the consumers in developed world; decreases competition and efficiency; prevents exports by more competitive agricultural and other sectors in the developed world due to retaliatory trade barriers; and undermines the very type of industry in which the developing countries do have comparative advantages. Tarrifs and trade barriers, thereby, hinder the economic development of developing economies, adversely affecting living standards in these countries.[23]

Anti-globalization

Main article: Anti-globalization

Critics of the economic aspects of globalization contend that it is not an inexorable process which flows naturally from the economic needs of everyone, as its proponents typically argue.[citation needed] The critics 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.[24] The movement is very broad, including church groups, national liberation factions, left-wing parties, environmentalists, peasant unionists, anti-racism groups, protectionists, anarchists, those in support of relocalization and others. Some are reformist, (arguing for a more humane 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.

In terms of the controversial global migration issue, disputes revolve around both its causes, whether and to what extent it is voluntary or involuntary, necessary or unnecessary; and its effects, whether beneficial, or socially and environmentally costly. Proponents tend to see migration simply as a process whereby white and blue collar workers may go from one country to another to provide their services, while critics tend to emphasize negative causes such as economic, political, and environmental insecurity, and cite as one notable effect, the link between migration and the enormous growth of urban slums in developing countries. According to "The Challenge of Slums," a 2003 UN-Habitat report, "the cyclical nature of capitalism, increased demand for skilled versus unskilled labour, and the negative effects of globalization — in particular, global economic booms and busts that ratchet up inequality and distribute new wealth unevenly — contribute to the enormous growth of slums."[25]

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; it can lead to some confusion, as activists typically oppose certain aspects or forms of globalization, not globalization per se. Activists themselves, for example Noam Chomsky, have said that this name is meaningless as the aim of the movement is to globalize justice.[26] 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 altermondialisme in French.

There are a wide variety of types 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, the working class, and the natural environment into account. Their solution is to raise the prices consumers must pay via protectionism.[citation needed]

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.[27]

Some opponents of globalization see the phenomenon as the promotion of corporatist interests.[28] They also claim that the increasing autonomy and strength of corporate entities shapes the political policy of countries.[citation needed]

Some anti-globalization groups argue that globalization is necessarily imperialistic, is one of the driving reasons behind the Iraq war and is forcing savings to flow into the United States rather than developing nations; it can therefore be said that "globalization" is another term for a form of Americanization, as it is believed by some observers that the United States could be one of the few countries (if not the only one) to truly profit from globalization.[citation needed]

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

The financial crises in Southeast Asia that began in 1997 in the relatively small, debt-ridden economy of Thailand but quickly spread to the economies of South Korea, Indonesia, Malaysia, Hong Kong, the Philippines and eventually were felt all around the world [29], demonstrated the new risks and volatility in rapidly changing globalized markets [citation needed]. The IMF's subsequent 'bailout' money came with conditions of political change (i.e. government spending limits) attached and came to be viewed by critics as undermining national sovereignty in neo-colonialist fashion [citation needed]. Anti-Globalization activists pointed to the meltdowns as proof of the high human cost of the indiscriminate global economy.[citation needed]

Many global institutions that have a strong international influence are not democratically ruled, nor are their leaders democratically elected. Therefore they are considered by some as supranational undemocratic powers.[30][31][32][33]

The main opposition is to unfettered globalization (neoliberalism; 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".

Some anti-globalization activists and supporters object to the fact that the current "globalization" encompasses money and corporations, but not people and unions. This can be seen in the strict immigration controls in nearly all countries, and the lack of labour rights in many countries in the developing world.

Another more conservative camp opposed to globalization is state-centric nationalists who fear globalization is displacing the role of nations in global politics and point to NGOs as encroaching upon the power of individual nations. Some advocates of this warrant for anti-globalization are Pat Buchanan and Jean-Marie Le Pen and Ned Pencil.

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.

References

  1. ^ Raskin, P., T. Banuri, G. Ga llopín, P. Gutman, A. Hammond, R. Kates, and R. Schwartz. 2002. The Great Transition: The Promise and the Lure of the Times Ahead. Boston, MA: Tellus Institute.
  2. ^ Shariff,Ismail. GLOBAL ECONOMIC INTEGRATION: PROSPECTS AND PROBLEMS. From An International Journal of Development Economics. Development Review, Vol1, No.2 (2003): p. 163-178
  3. ^ Levitt, Theodore. Globalization of markets, Harvard Business Review, 1983
  4. ^ Stipo, Francesco. World Federalist Manifesto. Guide to Political Globalization, ISBN 978-0-9794679-2-9, http://www.worldfederalistmanifesto.com
  5. ^ Raskin, P., T. Banuri, G. Gallopín, P. Gutman, A. Hammond, R. Kates, and R. Schwartz and Malkit Paji and Kaka dhaliwal Singh mook. 2002. The Great Transition: The Promise and the Lure of the Times Ahead. Boston, MA: Tellus Institute
  6. ^ see Florini, A. 2000. The Third Force. Tokyo: JCIE
  7. ^ KOF Index of Globalization
  8. ^ a b c d Sachs, Jeffrey (2005). The End of Poverty. New York, New York: The Penguin Press. 1-59420-045-9. {{cite book}}: Cite has empty unknown parameter: |coauthors= (help)
  9. ^ a b c "World Bank, Poverty Rates, 1981 - 2002" (PDF). Retrieved 2007-06-04.
  10. ^ PovcalNet, iResearch.worldbank.org
  11. ^ Michel Chossudovsky, "Global Falsehoods"
  12. ^ Guy Pfefferman, "The Eight Losers of Globalization"
  13. ^ David Brooks, "Good News about Poverty"
  14. ^ Freedom House
  15. ^ [http://reason.com/news/show/34961.html BAILEY, R.(2005).
  16. ^ BAILEY, R.(2005). The poor may not be getting richer but they are living longer.
  17. ^ Oxford Leadership Academy.
  18. ^ ScienceDirect
  19. ^ Oxfam:Stop the dumping!
  20. ^ OECD Producer Support Estimate By Country
  21. ^ OECD Development Aid At a Glance By Region
  22. ^ Cultivating Poverty The Impact of US Cotton Subsidies on Africa
  23. ^ Six Reasons to Kill Farm Subsidies and Trade Barriers
  24. ^ Fórum Social Mundial
  25. ^ [1]
  26. ^ [2]
  27. ^ NAFTA at 10, Jeff Faux, Economic Policy Institute, D.C.
  28. ^ Lee, Laurence (17 May, 2007). "WTO blamed for India grain suicides". Al Jazeera. Retrieved 17 May, 2007. {{cite news}}: Check date values in: |accessdate= and |date= (help)
  29. ^ Miracle to Meltdown in Asia; Flynn, N.; Oxford University Press 1999
  30. ^ Noam Chomsky, Rogue States: The Rule of Force in World Affairs (Cambridge, Mass.: South End P, 2000), p. 211.
  31. ^ Michael Hardt and Antonio Negri, Empire (Cambridge: Harvard UP, 2000), pp. 314-16 et passim.
  32. ^ David Harvey, A Brief History of Neoliberalism (Oxford: Oxford UP, 2005).
  33. ^ Joseph E. Stiglitz, Globalization and Its Discontents (New York: Norton, 2002), p. 22.

Further reading

See also

Postmodernism
Preceded by Modernism
Postmodernity
Fields
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