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Globalization

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Globalization (or globalisationGlobalisation is a British variant spelling. Globalization is the main variant, preferred by both Webster's and the Oxford English Dictionary.), is an umbrella term for a complex series of economic, social, technological, and political changes seen as increasing interdependence and interaction between people and companies in disparate locations. The phenomenon has been noted since the 1980s in the context of sociological study on a worldwide scale.
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The term "globalization" is used to refer to these collective changes as a process, or else as the cause of (typically) negative and turbulent change. The distinct uses include:

Economic globalization

Economic globalization, (i.e. the aggregate change we observe in our factories, storefronts, indeed generally across our economies and lifestyles) is caused by four fundamental forms of capital movement throughout the global economy. The four important capital flows are:

Most of the stresses and complexities confronted in the general macro affairs of countries, communities, and the interactions between them, can be traced to these four flows. Connectivity available via cheaper telecommunications and modes of travel-- made more accessible to more people, facilitates these interactions at a rate unprecedented in history. Cultural and political frictions at all levels can thus be explained as arising from the difference in opinion between two or more parties about the origination, treatment, timing, ownership or value of one or more of the capital flows.

Globalization is the source of much debate and controversy about its nature and its merits. Debate over its nature question globalization's pervasiveness and extent, and whether it is a process that occurs from 'above' (through government and state actions) or 'below' (through civil society actions). Debate over its merits consider whether globalization helps improve quality of life, or destroy it; it also questions the role and existence of local culture in a 'globalizing world'. Such debates have been fierce, with its supporters seeing globalization as an economic saviour for the world's poor and as helping improve quality of life; while its opponents consider it to be oppressing the developing world, destroying local culture and contributing to global warming.

Definitions

Definitions of globalization are almost all highly subjective, depending on the positionality and experiences of the definer. Amoore, Louise; 2002; 'Globalisation contested : an international political economy of work'; Manchester;Manchester Ujjniversity Press; ISBN 0719060966 A typical definition can be taken from the International Monetary Fund, which defines globalization as the growing economic interdependence of countries worldwide through increasing volume and variety of cross-border transactions in goods and services, free international capital flows, and more rapid and widespread diffusion of technology. All definitions appear to agree that globalization has economic, political, cultural, and technological aspects that may be closely intertwined.

History

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, however, it is a history of increasing trade between nations based on stable institutions that allow firms in different nations to exchange goods and services with minimal friction.

The term "liberalization" came to mean the acceptance of the Neoclassical economic model which is based on the unimpeded flow of goods and services between economic jurisdictions. This led to 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 David 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 contentiously debated.

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 1920s and early 1930s. Countries that engaged in that era of globalization, including the European core, some of the European periphery and various European offshoots in the Americas and Oceania, prospered. Inequality between those states fell, as goods, capital and labour flowed remarkably freely between nations.

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 bi- and trilateral 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.

Nature and existence of globalization

There is much academic discussion about whether globalization is a real phenomenon or only an analytical artifact (a myth). Although the term is widespread, many authors argue that the characteristics attributed to globalization have already been seen at other moments in history. Also, many note that such features, including the increase in international trade and the greater role of multinational corporations, are not as deeply established as they may appear.

Some authors prefer the term internationalization rather than globalization. In internationalization, the role of the state and the importance of nations are greater, while globalization in its complete form eliminates nation states. So, they argue that the frontiers of countries, in a broad sense, are far from being dissolved, and therefore this globalization process is not happening, and probably will not happen (see Linda Weiss), 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 the movement previously known as anti-globalization has transformed into a movement of movements for globalization from below, seeking, through experimentation, forms of social organisation that transcend the nation-state and representative democracy. Whereas the original arguments that globalization is taking place 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. Other authors have argued that we are in transition to a planetary phase of civilization; the exact form and character of the global society is contested and will be determined by the choices we make in the critical decades ahead. For example, the Global Scenario Group [Global Scenario Group] has outlined alternative visions of the global future, with "market forces" or economic globalization being just one option, contrasted with "policy reform," "fortress world," "breakdown," "eco-communalism" and a "new sustainability paradigm."

Some maintain that globalization is an imagined geography; that is, a political tool of ruling neo-liberalists, who are attempting to use certain images and discourses of world politics to justify their political agendas. Writers of books such as No Logo claim that by presenting a picture of a globalized world, the Bretton Woods institutions can demand that countries open up their economies to liberalization under Structural Adjustment Programmes that encourage governments to fund privatization programmes, ahead of welfare and public services [Global Issues That Affect Everyone].

Characteristics

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

Anti-globalization (Global Justice)

Critics of the economic aspects of globalization contend that it is not, as its proponents tend to imply, an inexorable process that flows naturally from the economic needs of everyone. The critics typically emphasize that globalization is a process that is mediated according to elite imperatives, 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. [Fórum Social Mundial] 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." [United Nations Human Settlements Programme]

The "Stocks and Stripes flag", the united stockholders of America. A protest flag signifying the alleged corporate influence over the U.S.
Enlarge
The "Stocks and Stripes flag", the united stockholders of America. A protest flag signifying the alleged corporate influence over the U.S.

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

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.

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

Some "anti-globalization" groups argue that globalization is necessarily imperialistic, 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.

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

The financial crises in Southeast Asia that began in 1997 in the relatively small, debt-ridden economy of Thailand but quickly spread to Malaysia, Indonesia, South Korea and eventually were felt all around the world, demonstrated the new risks and volatility in rapidly changing globalized markets. 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. Anti-Globalization activists pointed to the meltdowns as proof of the high human cost of the indiscriminate global economy.

Increase in law and order with a decrease in state intervention at home in order to protect the wealth and businesses.

Many global institutions that have a strong international influence are not democraticly ruled, nor are their leaders democraticly elected. Therefore they are considered by some as supernational undemocratic powers.

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

Some "anti-globalization" activists object to the fact that the current "globalization" globalizes 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.

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

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

Pro-globalization (globalism)

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

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

Libertarians and other proponents of laissez-faire capitalism say higher degrees of political and economic freedom in the form of democracy and capitalism in the developed world are both ends in themselves and also produce higher levels of material wealth. They see globalization as the beneficial spread of liberty and capitalism.

Critics argue that the anti-globalization movement uses anecdotal evidence to support their view and that worldwide statistics instead strongly support globalization:

However, some of these improvements may not be due to globalization, or may be possible without the current form of globalization or its negative consequences, to which the global justice movement objects.

Some pro-capitalists are also critical of the World Bank and the IMF, arguing that they are corrupt bureaucracies controlled and financed by states, not corporations. Many loans have been given to dictators who never carried out promised reforms, instead leaving the common people to pay the debts later. They thus see too little capitalism, not too much. They also note that some of the resistance to globalization comes from special interest groups with conflicting interests, like Western world unions. However, there are also many anti-capitalist who are against the World Bank and the IMF because they believe they are too capitalist and only in interests for profit.

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.

Other uses

"Globalization" can mean:
Although Appadurai's taxonomy is highly contestable, it does serve to show that globalization is much more than economics on a global scale.
  • In its cultural form, globalization has been a label used to identify attempts to erode the national cultures of Europe, and subsume them into a global culture whose members will be much easier to manipulate through mass media and controlled governments. In this context, massive legal or illegal immigration has been allowed, mainly in European countries.
  • 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", and creation of a global civilization.
  • Economic globalization — there are four aspects to economic globalization, referring to four different flows across boundaries, namely flows of goods/services, i.e. 'free trade' (or at least freer trade), flows of people (migration), of capital, and of technology. A consequence of economic globalization is increasing relations among members of an industry in different parts of the world (globalization of an industry), with a corresponding erosion of national sovereignty in the economic sphere. The IMF defines globalization as “the growing economic interdependence of countries worldwide through increasing volume and variety of cross-border transactions in goods and services, freer international capital flows, and more rapid and widespread diffusion of technology” (IMF, World Economic Outlook, May, 1997). The World Bank defines globalization as the "Freedom and ability of individuals and firms to initiate voluntary economic transactions with residents of other countries".
  • In the field of management, globalization is a marketing or strategy term that refers to the emergence of international markets for consumer goods characterized by similar customer needs and tastes enabling, for example, selling the same cars or soaps or foods with similar ad campaigns to people in different cultures. This usage is contrasted with internationalization which describes the activities of multinational companies dealing across borders in either financial instruments, commodities, or products that are extensively tailored to local markets. Globalization also means cross-border management activities or development processes to adapt to the emergence of a globalized market or to seek and realize benefit from economies of scale or scope or from cross-border learning among different country-based organizations.
  • In the field of software, globalization is a technical term that combines the development processes of internationalization and localization.
  • Many, such as participants in the World Social Forum, use the term "corporate globalization" or "global corporatization" to highlight the impact of multinational corporations and the use of legal and financial means to circumvent local laws and standards, in order to leverage the labor and services of unequally-developed regions against each other.
  • The spread of capitalism from developed to developing nations.
  • "The concept of globalisation refers both to the compression of the world and the intensification of consciousness of the world as a whole" - Benedikt Kiesenhofer

    • Measurement of globalization

    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. A more sophisticated 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 the USA, followed by Sweden, Canada, the United Kingdom, and Luxembourg. The least globalized countries according to the KOF-index are Togo, Chad and the Central African Republic. [KOF Index of Globalization]

    References

    See also

    
Postmodernism series
    
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Postmodernity

    
Postmodern philosophy

    
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Globalization

    
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