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Globalization (or globalisation) in its literal sense is a social change, an increased connectivity among societies and their elements due to transculturation; the explosive evolution of transport and communication technologies to facilitate international cultural and economic exchange. The term is applied in various social, cultural, commercial and economic contexts. "Globalization" can mean:

  • The formation of a global village - closer contact between different parts of the world, with increasing possibilities of personal exchange, mutual understanding and friendship between "world citizens",
  • Economic globalization - more freedom of 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 negative effects of for-profit multinational corporations - 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.

It 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.

History of globalization

Since the word has both technical and political meanings, different groups will have differing histories of "globalization". In general use within the field of economics and political economy, is, however, a history of increasing trade between nations based on stable institutions that allow individuals and firms 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. The period of the gold standard and liberalization of the 19th century is often called "The First 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.

The "First 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 1920's and early 1930's.

Globalization in the era since World War II has been driven by 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 led to a treaty to create the World Trade Organization or WTO, 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.

Proponents claim that this leads to lower prices, more employment and better allocation of resources. Sympathetic critics point out 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 labor into account. Unsympathetic critics link globalization with corporatization, and the increasing autonomy of corporate entities to force nation-states to bend political policy to the will of corporate entities. 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".

Signs of globalization

Globalization has become identified with a number of trends, most of which 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. More specifically, globalization refers to:

Many of these trends are seen as positive by supporters of various forms of globalization, and in many cases globalization has been actively promoted by governments and other institutions. For example, there are certain economic arguments supporting globalization, such as the theory of comparative advantage suggesting that free trade leads to a more efficient allocation of resources, with all those involved in the trade benefitting. Conversely, critics of globalization bring different economic arguments, such as those put forward by fair trade theorists, which seem to indicate that unrestricted free trade benefits those with more financial leverage (i.e. the rich) at the expense of the poor.

Global trade or still international / multilateral trade?

Barriers to international trade have been considerably lowered since World War II 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
  • Intellectual Property Restrictions
    • Harmonization of intellectual property laws across nations (generally speaking, with more restrictions)
    • Supranational recognition of intellectual property restrictions (e.g. patents granted by China would be recognized in the US)

Some consider that the first successful business model of globalization exploitation, although it might be just a residue of the old colonial system, was the Indonesian regime change of 1965 when the democratic government was overthrown and the military regime under General Suharto gave US business access to new clothing factories and mining opportunities in Borneo and New Guinea. The Indonesian factories employed Muslim women of Java on twelve to eighteen hour, six or seven day shifts which combined with much lower wages gave a distinct commercial advantage to US clothes manufacture. Though the Ford Foundation originally began indoctrination of the land owning elite during the 1950's, they soon found that the military Generals were both amenable and eager to give US companies access to their nations wealth in exchange for fiscal and political aid. In preparation for the regime change the US supported the Indonesian military invasions of West New Guinea in 1961 and East Timor in 1975; in exchange the US received in 1967 mining rights to West New Guinea isolated from legal limitations such as the Fourth Geneva Convention, non-binding UN resolution 1803 "Permanent sovereignty over natural resources", or environmental controls. The US Freeport-McMoRan mine is the world's largest open cut mine and is the world's cheapest source of copper; gold from the mine is sent to the US on monthly shipments.

Anti-globalization

Various aspects of globalization are seen as harmful by anti-globalization, public-interest activists. There is a wide variety of different kinds of "anti-globalization." Almost no activists favor getting rid of globalization completely. Rather, the main opposition is to unfettered globalization (neoliberal; laissez-faire capitalist), guided by governments and quasi-governments (such as the International Monetary Fund and the World Bank) that are not held responsible to the populations that they govern and instead respond mostly to the interests of corporations.

Globalization in question

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. 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 is not yet happening, and probably won't happen, considering that in world history, internationalization never turned into globalization - the European Union and NAFTA are yet to prove their case.)

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

See also

References and further reading

  • Jagdish Bhagwati: In Defence of Globalization (2004), Oxford University Press, ISBN 0195170253
  • Hirst & Thompson: Globalization in Question (1996), Polity Press, ISBN 0-7456-2164-3
  • Naomi Klein: No Logo (2001). A popular book which is very much against globalization. ISBN 0006530400
  • Philippe Legrain: Open World: The Truth About Globalization (2002) ISBN 034911644X - A largely pro-globalization book which responds to many of the complaints of the anti-globalization movement, written by a former Special Adviser to the World Trade Organisation Director-General.
  • Hans-Peter Martin: The Global Trap: Globalization and the Assault on Prosperity and Democracy (Die Globalisierungsfalle, 1996) ISBN 1856495302
  • David Ransom: The Trojan Horse: A Radical Look at Foreign Aid (1975), pp. 93-116
  • Arundhati Roy, Ordinary Person's Guide To Empire, Consortium Book Sales and Dist, September 15, 2004, hardcover, ISBN 089608728X; trade paperback, Consortium, September 15, 2004, ISBN 0896087271
  • Manfred Steger: Globalization: A Very Short Introduction (2003), Oxford University Press, ISBN 019280359X - A good short introduction.
  • Joseph Stiglitz: Globalization and its discontents (2002) - A book largely sympathetic to the theory of globalization from the 2001 Economics Nobel Prize winner. However, he is sharply critical of the global institutions, the International Monetary Fund, the WTO and the World Bank, regulating the process. ISBN 014101038X

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