GLOBALIZATION--CIVICS FORM FOUR.
INTRODUCTION.
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| Globalization |
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Though several scholars place the origins of globalization in modern times, others trace its history long before the European age of discovery and voyages to the New World. Some even trace the origins to the third millennium BCE.[4][5] In the late 19th century and early 20th century, the connectedness of the world's economies and cultures grew very quickly.
The term globalization has been increasing use since the mid-1980s and especially since the mid-1990s.[6] In 2000, the International Monetary Fund (IMF) identified four basic aspects of globalization: trade and transactions, capital and investment movements, migration and movement of people, and the dissemination of knowledge.[7] Further, environmental challenges such as climate change, cross-boundary water, air pollution, and over-fishing of the ocean are linked with globalization.[8] Globalizing processes affect and are affected by business and work organization, economics, socio-cultural resources, and the natural environment.
Contents
- 1 Overview
- 2 History
- 3 Aspects
- 4 Support and criticism
- 5 Key journals
- 6 See also
- 7 References
- 8 Further reading
- 9 External links
Overview
Etymology and usage
The term globalization is derived from the word globalize, which refers to the emergence of an international network of social and economic systems.[10] One of the earliest known usages of the term as a noun was in a 1930 publication entitled, Towards New Education, where it denoted a holistic view of human experience in education.[11] A related term, corporate giants, was coined by Charles Taze Russell in 1897[12] to refer to the largely national trusts and other large enterprises of the time. By the 1960s, both terms began to be used as synonyms by economists and other social scientists. It then reached the mainstream press in the later half of the 1980s. Since its inception, the concept of globalization has inspired 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.[13][14] Due to the complexity of the concept, research projects, articles, and discussions often remain focused on a single aspect of globalization.[1]Roland Robertson, professor of sociology at University of Aberdeen, an early writer in the field, defined globalization in 1992 as:
...the compression of the world and the intensification of the consciousness of the world as a whole.[15]Sociologists Martin Albrow and Elizabeth King define globalization as:
...all those processes by which the peoples of the world are incorporated into a single world society.[2]In The Consequences of Modernity, Anthony Giddens uses the following definition:
Globalization can thus be defined as the intensification of worldwide social relations which link distant localities in such a way that local happenings are shaped by events occurring many miles away and vice versa.[16]In Global Transformations David Held, et al., study the definition of globalization:
Although in its simplistic sense globalization refers to the widening, deepening and speeding up of global interconnection, such a definition begs further elaboration. ... Globalization can be located on a continuum with the local, national and regional. At one end of the continuum lie social and economic relations and networks which are organized on a local and/or national basis; at the other end lie social and economic relations and networks which crystallize on the wider scale of regional and global interactions. Globalization can refer to those spatial-temporal processes of change which underpin a transformation in the organization of human affairs by linking together and expanding human activity across regions and continents. Without reference to such expansive spatial connections, there can be no clear or coherent formulation of this term. ... A satisfactory definition of globalization must capture each of these elements: extensity (stretching), intensity, velocity and impact.[17]Swedish journalist Thomas Larsson, in his book The Race to the Top: The Real Story of Globalization, states that globalization:
is the process of world shrinkage, of distances getting shorter, things moving closer. It pertains to the increasing ease with which somebody on one side of the world can interact, to mutual benefit, with somebody on the other side of the world.[18]The journalist Thomas L. Friedman popularized the term "flat world", arguing that globalized trade, outsourcing, supply-chaining, and political forces had permanently changed the world, for better and worse. He asserted that the pace of globalization was quickening and that its impact on business organization and practice would continue to grow.[19]
Economist Takis Fotopoulos defined "economic globalization" as the opening and deregulation of commodity, capital and labor markets that led toward present neoliberal globalization. He used "political globalization" to refer to the emergence of a transnational elite and a phasing out of the nation-state. "Cultural globalization", he used to reference the worldwide homogenization of culture. Other of his usages included "ideological globalization", "technological globalization" and "social globalization".[20]
In 2000, the International Monetary Fund (IMF) identified four basic aspects of globalization: trade and transactions, capital and investment movements, migration and movement of people and the dissemination of knowledge.[7] With regards to trade and transactions, developing countries increased their share of world trade, from 19 percent in 1971 to 29 percent in 1999. However, there is great variation among the major regions. For instance, the newly industrialized economies (NIEs) of Asia prospered, while African countries as a whole performed poorly. The makeup of a country's exports is an important indicator for success. Manufactured goods exports soared, dominated by developed countries and NIEs. Commodity exports, such as food and raw materials were often produced by developing countries: commodities' share of total exports declined over the period.
Following from this, capital and investment movements can be highlighted as another basic aspect of globalization. Private capital flows to developing countries soared during the 1990s, replacing "aid" or "development assistance" which fell significantly after the early 1980s. Foreign Direct Investment (FDI) became the most important category. Both portfolio investment and bank credit rose but they have been more volatile, falling sharply in the wake of the financial crisis of the late 1990s. The migration and movement of people can also be highlighted as a prominent feature of the globalization process. In the period between 1965–90, the proportion of the labor forces migrating approximately doubled. Most migration occurred between developing countries and Least Developed Countries (LDCs).[21]
Manfred Steger, professor of Global Studies and research leader in the Global Cities Institute at RMIT University, identifies five dimensions of globalization: economic, political, cultural, ecological, and ideological. The ideological dimension, according to Steger, is filled with a range of norms, claims, beliefs, and narratives about the phenomenon itself.[22]
History
Main article: History of globalization
See also: Timeline of international trade
There are both distal and proximate causes which can be traced in the historical factors affecting globalization. Large-scale globalization began in the 19th century.[9]Archaic
Main article: Archaic globalization
Archaic globalization is seen as a phase in the history of globalization
conventionally referring to globalizing events and developments from
the time of the earliest civilizations until roughly the 1600s. This
term is used to describe the relationships between communities and
states and how they were created by the geographical spread of ideas and
social norms at both local and regional levels.[23]In this schema, three main prerequisites are posited for globalization to occur. The first is the idea of Eastern Origins, which shows how Western states have adapted and implemented learned principals from the East.[23] Without the traditional ideas from the East, Western globalization would not have emerged the way it did. The second is distance. The interactions amongst states were not on a global scale and most often were confined to Asia, North Africa, the Middle East and certain parts of Europe.[23] With early globalization it was difficult for states to interact with others that were not within close proximity. Eventually, technological advances allowed states to learn of others existence and another phase of globalization was able to occur. The third has to do with interdependency, stability and regularity. If a state is not depended on another then there is no way for them to be mutually affected by one another. This is one of the driving forces behind global connections and trade; without either globalization would not have emerged the way it did and states would still be dependent on their own production and resources to function. This is one of the arguments surrounding the idea of early globalization. It is argued that archaic globalization did not function in a similar manner to modern globalization because states were not as interdependent on others as they are today.[23]
Also posited is a 'multi-polar' nature to archaic globalization, which involved the active participation of non-Europeans. Because it predated the Great Divergence of the nineteenth century, in which Western Europe pulled ahead of the rest of the world in terms of industrial production and economic output, archaic globalization was a phenomenon that was driven not only by Europe but also by other economically developed Old World centers such as Gujurat, Bengal, coastal China and Japan.[24]
Early Modern
Main article: Proto-globalization
'Early modern-' or 'proto-globalization' covers a period of the history of globalization roughly spanning the years between 1600 and 1800. The concept of 'proto-globalization' was first introduced by historians A. G. Hopkins and Christopher Bayly.
The term describes the phase of increasing trade links and cultural
exchange that characterized the period immediately preceding the advent
of high 'modern globalization' in the late 19th century.[25]
This phase of globalization 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, world trade developed further when chartered companies like the British East India Company (founded in 1600) and the Dutch East India Company (founded in 1602, often described as the first multinational corporation in which stock was offered) were established.[26]Early modern globalization is distinguished from modern globalization on the basis of expansionism, the method of managing global trade, and the level of information exchange. The period is marked by such trade arrangements as the East India Company, the shift of hegemony to Western Europe, the rise of larger-scale conflicts between powerful nations such as the Thirty Year War, and a rise of new commodities – most particularly slave trade. The Triangular Trade made it possible for Europe to take advantage of resources within the western hemisphere. The transfer of plant and animal crops and epidemic diseases associated with Alfred Crosby's concept of The Columbian Exchange also played a central role in this process. Early modern trade and communications involved a vast group including European, Muslim, Indian, Southeast Asian and Chinese merchants, particularly in the Indian Ocean region.
Modern
Main article: History of globalization
During the 19th century, globalization approached its modern form as a result of the industrial revolution. Industrialization allowed standardized
production of household items using economies of scale while rapid
population growth created sustained demand for commodities.
Globalization in this period was decisively shaped by nineteenth-century
imperialism. In the 19th century, steamships reduced the cost of international transport significantly and railroads made inland transport cheaper. The transport revolution occurred some time between 1820 and 1850.[9] More nations embraced international trade.[9] Globalization in this period was decisively shaped by nineteenth-century imperialism such as in Africa and Asia. The invention of shipping containers in 1956 helped advance the globalization of commerce.[27][28]After the Second World War, work by politicians led to the Bretton Woods conference, an agreement by major governments to lay down the framework for international monetary policy, commerce and finance, and the founding of several international institutions intended to facilitate economic growth multiple rounds of trade opening simplified and lowered trade barriers. Initially, the General Agreement on Tariffs and Trade (GATT), led to a series of agreements to remove trade restrictions. GATT's successor was the World Trade Organization (WTO), which created an institution to manage the trading system. Exports nearly doubled from 8.5% of total gross world product in 1970 to 16.2% in 2001.[29] The approach of using global agreements to advance trade stumbled with the failure of the Doha round of trade-negotiation. Many countries then shifted to bilateral or smaller multilateral agreements, such as the 2011 South Korea–United States Free Trade Agreement.
Since the 1970s, aviation has become increasingly affordable to middle classes in developed countries. Open skies policies and low-cost carriers have helped to bring competition to the market. In the 1990s, the growth of low cost communication networks cut the cost of communicating between different countries. More work can be performed using a computer without regard to location. This included accounting, software development, and engineering design.
In the late 19th century and early 20th century, the connectedness of the world's economies and cultures grew very quickly. This slowed down from the 1910s onward due to the World Wars and the Cold War [30] but has picked up again since neoliberal policies began in the 1980s and perestroika and the Chinese economic reforms of Deng Xiaoping opened the old Eastern Bloc to western capitalism.[31] In the early 2000s, much of the industrialized world entered into the Great Recession,[32] which may have slowed the process, at least temporarily.[33][34][35]
Trade and globalization have evolved tremendously today. Globalized society offers a complex web of forces and factors that bring people, cultures, markets, beliefs and practices into increasingly greater proximity to one another.[36]
Aspects
Global business organization
Main article: International business
With improvements in transportation
and communication, international business grew rapidly after the
beginning of the 20th century. International business includes all
commercial transactions (private sales, investments, logistics, and transportation) that take place between two or more regions, countries and nations beyond their political boundaries. Such international diversification is tied with firm performance and innovation, positively in the case of the former and often negatively in the case of the latter.[37] Usually, private companies undertake such transactions for profit.[38] These business transactions involve economic resources such as capital, natural and human resources used for international production of physical goods and services such as finance, banking, insurance, construction and other productive activities.[39]International business arrangements have led to the formation of multinational enterprises (MNE), companies that have a worldwide approach to markets and production or one with operations in more than one country. A MNE may also be called a multinational corporation (MNC) or transnational company (TNC). Well known MNCs include fast food companies such as McDonald's and Yum Brands, vehicle manufacturers such as General Motors, Ford Motor Company and Toyota, consumer electronics companies like Samsung, LG and Sony, and energy companies such as ExxonMobil, Shell and BP. Most of the largest corporations operate in multiple national markets.
Businesses generally argue that survival in the new global marketplace requires companies to source goods, services, labor and materials overseas to continuously upgrade their products and technology in order to survive increased competition.[40]
International trade
Main article: International trade
An absolute trade advantage exists when countries can produce a commodity with less costs per unit produced than could its trading partner. By the same reasoning, it should import commodities in which it has an absolute disadvantage.[43] While there are possible gains from trade with absolute advantage, comparative advantage – that is, the ability to offer goods and services at a lower marginal and opportunity cost – extends the range of possible mutually beneficial exchanges. In a globalized business environment, companies argue that the comparative advantages offered by international trade have become essential to remaining competitive.
Trade agreements, economic blocks and special trade zones
Establishment of free trade areas has become an essential feature of modern governments to handle preferential trading arrangements with foreign and multinational entities.[44]A Special Economic Zone (SEZ) is a geographical region that has economic and other laws that are more free-market-oriented than a country's typical or national laws. "Nationwide" laws may be suspended inside these special zones. The category 'SEZ' covers many areas, including Free Trade Zones (FTZ), Export Processing Zones (EPZ), Free Zones (FZ), Industrial parks or Industrial Estates (IE), Free Ports, Urban Enterprise Zones and others. Usually the goal of a structure is to increase foreign direct investment by foreign investors, typically an international business or a multinational corporation (MNC). These are designated areas in which companies are taxed very lightly or not at all in order to encourage economic activity. Free ports have historically been endowed with favorable customs regulations, e.g., the free port of Trieste. Very often free ports constitute a part of free economic zones.
A FTZ is an area within which goods may be landed, handled, manufactured or reconfigured, and reexported without the intervention of the customs authorities. Only when the goods are moved to consumers within the country in which the zone is located do they become subject to the prevailing customs duties. Free trade zones are organized around major seaports, international airports, and national frontiers – areas with many geographic advantages for trade.[45] It is a region where a group of countries has agreed to reduce or eliminate trade barriers.[46]
Qualifying Industrial Zones (QIZ) are industrial parks that house manufacturing operations in Jordan and Egypt. They are a special free trade zones established in collaboration with neighboring Israel to take advantage of the free trade agreements between the United States and Israel. Under the trade agreements with Jordan as laid down by the United States, goods produced in QIZ-notified areas can directly access US markets without tariff or quota restrictions, subject to certain conditions. To qualify, goods produced in these zones must contain a small portion of Israeli input. In addition, a minimum 35% value to the goods must be added to the finished product. The brainchild of Jordanian businessman Omar Salah, the first QIZ was authorized by the United States Congress in 1997.
The Asia-Pacific has been described as "the most integrated trading region on the planet" because its intra-regional trade accounts probably for as much as 50-60% of the region's total imports and exports.[47] It has also extra-regional trade: consumer goods exports such as televisions, radios, bicycles, and textiles into the United States, Europe, and Japan fueled the economic expansion.[48]
The ASEAN Free Trade Area[49] is a trade bloc agreement by the Association of Southeast Asian Nations supporting local manufacturing in all ASEAN countries. The AFTA agreement was signed on 28 January 1992 in Singapore. When the AFTA agreement was originally signed, ASEAN had six members, namely, Brunei, Indonesia, Malaysia, Philippines, Singapore and Thailand. Vietnam joined in 1995, Laos and Myanmar in 1997 and Cambodia in 1999.
Tax havens
Main article: Tax haven
A tax haven is a state, country or territory where certain taxes are levied at a low rate or not at all, which are used by businesses for tax avoidance and tax evasion.[52] Individuals and/or corporate entities can find it attractive to establish shell subsidiaries or move themselves to areas with reduced or nil taxation levels. This creates a situation of tax competition among governments. Different jurisdictions tend to be havens for different types of taxes and for different categories of people and companies.[53] States that are sovereign or self-governing under international law
have theoretically unlimited powers to enact tax laws affecting their
territories, unless limited by previous international treaties. The
central feature of a tax haven is that its laws and other measures can
be used to evade or avoid the tax laws or regulations of other
jurisdictions.[54] In its December 2008 report on the use of tax havens by American corporations,[55] the US Government Accountability Office
was unable to find a satisfactory definition of a tax haven but
regarded the following characteristics as indicative of it: nil or
nominal taxes; lack of effective exchange of tax information with
foreign tax authorities; lack of transparency in the operation of
legislative, legal or administrative provisions; no requirement for a
substantive local presence; and self-promotion as an offshore financial center.A 2012 report from the Tax Justice Network estimated that between USD $21 trillion and $32 trillion is sheltered from taxes in unreported tax havens worldwide. If such wealth earns 3% annually and such capital gains were taxed at 30%, it would generate between $190 billion and $280 billion in tax revenues, more than any other tax shelter.[56] If such hidden offshore assets are considered, many countries with governments nominally in debt are shown to be net creditor nations.[57] However, the tax policy director of the Chartered Institute of Taxation expressed skepticism over the accuracy of the figures.[58] Daniel J. Mitchell of the US-based Cato Institute says that the report also assumes, when considering notional lost tax revenue, that 100% money deposited offshore is evading payment of tax.[59]
Tax havens have been criticized because they often result in the accumulation of idle cash[60] that is expensive and inefficient for companies to repatriate.[61] The tax shelter benefits result in a tax incidence disadvantaging the poor.[62] Many tax havens are thought to have connections to "fraud, money laundering and terrorism."[63] While investigations of illegal tax haven abuse have been ongoing, there have been few convictions.[64][65] Lobbying pertaining to tax havens and associated transfer pricing has also been criticized.[66] Accountants' opinions on the propriety of tax havens have been evolving,[67] as have the opinions of their corporate users,[68] governments,[69][70] and politicians,[71][72] although their use by Fortune 500 companies[73] and others remains widespread.[74] Reform proposals centering on the Big Four accountancy firms have been advanced.[75] Some governments appear to be using computer spyware to scrutinize some corporations' finances.[76]
International tourism
Main article: Tourism
Tourism is travel for recreational, leisure or business purposes. The World Tourism Organization
defines tourists as people "traveling to and staying in places outside
their usual environment for not more than one consecutive year for
leisure, business and other purposes".[77] There are many forms of tourism such as agritourism, birth tourism, culinary tourism, cultural tourism, eco-tourism, extreme tourism, geotourism, heritage tourism, LGBT tourism, medical tourism, nautical tourism, pop-culture tourism, religious tourism, slum tourism, war tourism, and wildlife tourism.Globalization has made tourism a popular global leisure activity. The World Health Organization (WHO) estimates that up to 500,000 people are in flight at any one time.[78]
In 2010, international tourism reached US$919B, growing 6.5% over 2009, corresponding to an increase in real terms of 4.7%.[82] In 2010, there were over 940 million international tourist arrivals worldwide.[83]
International sports
Main articles: Olympic Games and List of world championships
Modern international sports events can be big business for as well as
influencing the political, economical, and other cultural aspects of
countries around the world. Especially with politics and sports, sports can affect countries, their identities, and in consequence, the world.The ancient Olympic Games were a series of competitions held between representatives of several city-states and kingdoms from Ancient Greece, which featured mainly athletic but also combat and chariot racing events. During the Olympic games all struggles against the participating city-states were postponed until the games were finished.[84] The origin of these Olympics is shrouded in mystery and legend.[85] During the 19th century Olympic Games became a popular global event.
While some economists are skeptical about the economic benefits of hosting the Olympic Games, emphasizing that such "mega-events" often have large costs, hosting (or even bidding for) the Olympics appears to increase the host country's exports, as the host or candidate country sends a signal about trade openness when bidding to host the Games.[86] Moreover, research suggests that hosting the Summer Olympics has a strong positive effect on the philanthropic contributions of corporations headquartered in the host city, which seems to benefit the local nonprofit sector. This positive effect begins in the years leading up to the Games and might persist for several years afterwards, although not permanently. This finding suggests that hosting the Olympics might create opportunities for cities to influence local corporations in ways that benefit the local nonprofit sector and civil society.[87] The Games have also had significant negative effects on host communities; for example, the Centre on Housing Rights and Evictions reports that the Olympics displaced more than two million people over two decades, often disproportionately affecting disadvantaged groups.[88]
Globalization has continually increased international competition in sports. The FIFA World Cup, for example, is the world's most widely viewed sporting event; an estimated 700 million people watched the final match of the 2010 FIFA World Cup held in South Africa.[89]
According to a 2011 A.T. Kearney study of sports teams, leagues and federations, the global sports industry is worth between €350 billion and €450 billion (US$480-$620 billion).[90] This includes infrastructure construction, sporting goods, licensed products and live sports events.
Illicit international trade
Main articles: Black market and Transnational organized crime
Drug trade
In 2010 the United Nations Office on Drugs and Crime (UNODC) reported that the global drug trade generated more than US$320 billion a year in revenues.[93] Worldwide, the UN estimates there are more than 50 million regular users of heroin, cocaine and synthetic drugs.[94] The international trade of endangered species was second only to drug trafficking among smuggling "industries".[95] 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) resulted in a black market of poachers who hunt restricted animals.[96][97]Human smuggling and trafficking
Main article: Human trafficking
Human trafficking differs from people smuggling. In the latter, people voluntarily request or hire an individual, known as a smuggler, to covertly transport them from one location to another. This generally involves transportation from one country to another, where legal entry would be denied at the international border. There may be no deception involved in the (illegal) agreement. After entry into the country and arrival at their ultimate destination, the smuggled person is usually free to find their own way. According to the International Centre for Migration Policy Development (ICMPD), human smuggling is a crime against the State due to violation of immigration laws and does not require violations of the rights of the smuggled migrants to be considered a crime. Human trafficking, on the other hand, is a crime against a person because of violation of the victim's rights through coercion and exploitation.[106]
Economic globalization
Main article: Economic globalization
In 1944, 44 nations attended the Bretton Woods Conference with a purpose of stabilizing world currencies and establishing credit for international trade in the post World War II era. While the international economic order envisioned by the conference gave way to the neo-liberal economic order prevalent today, the conference established many of the organizations essential to advancement towards a close-knit global economy and global financial system, such as the World Bank, the International Monetary Fund, and the International Trade Organization.
As an example, Chinese economic reform began to open China to globalization in the 1980s. Scholars find that China has attained a degree of openness that is unprecedented among large and populous nations, with competition from foreign goods in almost every sector of the economy. Foreign investment helped to greatly increase product quality and knowledge and standards, especially in heavy industry. China's experience supports the assertion that globalization greatly increases wealth for poor countries.[110] As of 2005–2007, the Port of Shanghai holds the title as the World's busiest port.[111][112][113][114]
As another example, economic liberalization in India and ongoing economic reforms began in 1991. As of 2009, about 300 million people – equivalent to the entire population of the United States – have escaped extreme poverty.[115] In India, business process outsourcing has been described as the "primary engine of the country's development over the next few decades, contributing broadly to GDP growth, employment growth, and poverty alleviation".[116][117]
Global financial system
Main article: Global financial system
By the early 21st century, a worldwide framework of legal agreements, institutions, and both formal and informal economic actors came together to facilitate international flows of financial capital for purposes of investment and trade financing. This global financial system emerged during the first modern wave of economic globalization, marked by the establishment of central banks, multilateral treaties, and intergovernmental organizations aimed at improving the transparency, regulation, and effectiveness of international markets.[119] The world economy became increasingly financially integrated
throughout the 20th century as nations liberalized capital accounts and
deregulated financial sectors. With greater exposure to volatile
capital flows, a series of financial crises
in Europe, Asia, and Latin America had contagious effects on other
countries. By the early 21st century, financial institutions had become
increasingly large with a more sophisticated and interconnected range of
investment activities. Thus, when the United States experienced a
financial crisis early in that century, it quickly propagated among
other nations. It became known as the global financial crisis and is recognized as the catalyst for the worldwide Great Recession.Austerity
Main article: Austerity
Governments sometimes impose austerity policies to reduce budget deficits during adverse economic conditions. These can include spending cuts, tax increases, or a mixture of the two.[120][121][122] Austerity policies demonstrate governments' liquidity to their creditors and credit rating agencies by bringing fiscal income closer to expenditure.The economic effects of austerity are unclear due to its wide and non-specific definition, the limited historic sample of natural experiments and potential for conflation with the effects of other events that tend to precede austerity, such as recessions and financial crises. In macroeconomics, reducing government spending generally increases unemployment. This increases safety net spending and reduces tax revenues, to some extent. Government spending contributes to gross domestic product (GDP), so the debt-to-GDP ratio which signifies liquidity may not immediately improve. Short-term deficit spending, particularly, contributes to GDP growth when consumers and businesses are unwilling or unable to spend.[123] Under the theory of expansionary fiscal contraction (EFC), a major reduction in government spending can change future expectations about taxes and government spending, encouraging private consumption and resulting in overall economic expansion.[124] Since 2011, the International Monetary Fund has issued cautionary guidance against austerity measures imposed without regard to underlying economic fundamentals[125][126][127] and many commentators have suggested that austerity measures have indeed been misguided and harmful to the economies where they have been imposed.[128][129][130]
Capital flight
Main articles: Capital flight and Liquidity crisis
See also: Sudden stop (economics), Tax exporting, Capital strike, and Illicit financial flows
Capital flight occurs when assets or money rapidly flow out of a country because of that country's recent increase in taxes, tariffs, labor costs, or other unfavorable financial conditions such as government debt defaulting, which disturb investors. This leads to a sometimes very rapid disappearance of wealth and is usually accompanied by a sharp drop in the exchange rate of the affected country, leading in turn to depreciation in a variable currency exchange rate regime or a forced devaluation under fixed exchange rates.
This can be particularly damaging when the capital belongs to the
people of the affected country, because not only are the citizens now
burdened by the loss of faith in the economy and devaluation of their
currency, but probably also their assets have lost much of their nominal value. This leads to dramatic decreases in the purchasing power of the country's assets and makes it increasingly expensive to import goods.
Capital flight affects advanced economies, as well. A 2009 article in The Times reported that hundreds of wealthy financiers and entrepreneurs had recently fled the United Kingdom in response to recent tax increases, relocating in low tax destinations such as Jersey, Guernsey, the Isle of Man, and the British Virgin Islands.[132] In May 2012 the scale of Greek capital flight in the wake of the first "undecided" legislative election was estimated at €4 billion a week[133] and later that month the Spanish Central Bank revealed €97 billion in capital flight from the Spanish economy for the first quarter of 2012.[134]
Measuring globalization
Indices
Main article: Globalization Index
Measurement of economic globalization focuses on variables such as trade, Foreign Direct Investment (FDI), portfolio investment, and income.
However, newer indices attempt to measure globalization in more general
terms, including variables related to political, social, cultural, and
even environmental aspects of globalization.[135]One index of globalization is the KOF Index, which measures the three main dimensions of globalization: economic, social, and political.[136] Another is the A.T. Kearney / Foreign Policy Magazine Globalization Index.[137]
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Free trade policies
Main article: Global Enabling Trade Report
The Enabling Trade Index
measures the factors, policies and services that facilitate the trade
in goods across borders and to destinations. It is made up of four
sub-indexes: market access; border administration; transport and
communications infrastructure; and business environment. The top 20
countries (as of the 2010 report) are:[138]Singapore 6.06
Hong Kong 5.70
Denmark 5.41
Sweden 5.41
Switzerland 5.37
New Zealand 5.33
Norway 5.32
Canada 5.29
Luxembourg 5.28
Netherlands 5.26
Iceland 5.26
Finland 5.25
Germany 5.20
Austria 5.17
Australia 5.13
United Arab Emirates 5.12
United Kingdom 5.06
Chile 5.06
United States 5.03
France 5.02
Sociocultural globalization
Culture
Main article: Cultural globalization
Cultural globalization
has increased cross-cultural contacts but may be accompanied by a
decrease in the uniqueness of once-isolated communities. For example, sushi
is available in Germany as well as Japan but Euro-Disney outdraws the
city of Paris, potentially reducing demand for "authentic" French
pastry.[139][140][141]
Globalization's contribution to the alienation of individuals from
their traditions may be modest compared to the impact of modernity
itself, as alleged by existentialists such as Jean-Paul Sartre and Albert Camus.
Globalization has expanded recreational opportunities by spreading pop
culture, particularly via the Internet and satellite television.Religious movements were among the earliest cultural elements to globalize, being spread by force, migration, evangelists, imperialists and traders. Christianity, Islam, Buddhism and more recently sects such as Mormonism, which have taken root and influenced endemic cultures in places far from their origins.[142]
The term globalization implies transformation. Cultural practices including traditional music can be lost or turned into a fusion of traditions. Globalization can trigger a state of emergency for the preservation of musical heritage. Archivists must attempt to collect, record or transcribe repertoires before melodies are assimilated or modified. Local musicians struggle for authenticity and to preserve local musical traditions. Globalization can lead performers to discard traditional instruments. Fusion genres can become interesting fields of analysis.[147]
Globalization gave support to the World Music phenomenon by allowing locally-recorded music to reach Western audiences searching for new ideas and sounds. For example, Western musicians have adopted many innovations that originated in other cultures.[148]
The term "World Music" was originally intended for ethnic-specific music. Now, globalization is expanding its scope such that the term often includes hybrid sub-genres such as World fusion, Global fusion, Ethnic fusion[149] and Worldbeat[150][151]
Bourdieu claimed that the perception of consumption can be seen as self-identification and the formation of identity. Musically, this translates into each being having his own musical identity based on likes and tastes. These likes and tastes are greatly influenced by culture as this is the most basic cause for a person's wants and behavior. The concept of one's own culture is now in a period of change due to globalization. Also, globalization has increased the interdependency of political, personal, cultural and economic factors.[153]
A 2005 UNESCO report[154] 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. 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 diverse phenomenon, relates to a multilateral political world and to the increase of cultural objects and markets between countries. The Indian experience particularly reveals the plurality of the impact of cultural globalization.[155]
Multilingualism and the emergence of lingua francas
Main articles: Multilingualism, Lingua franca, and List of lingua francas
Multilingual speakers outnumber monolingual speakers in the world's population.[156] Today most people in the world are multilingual.[157] Language contact occurs when two or more languages or varieties interact. Language contact occurs in a variety of phenomena, including language convergence, borrowing, and relexification. The most common products are pidgins, creoles, code-switching, and mixed languages.Multilingualism is becoming a social phenomenon governed by the needs of globalization and cultural openness.[158] Thanks to the ease of access to information facilitated by the Internet, individuals' exposure to multiple languages is becoming more and more frequent, triggering, therefore, the need to acquire more and more languages.
A lingua franca is a language systematically used to make communication possible between people not sharing a mother tongue, in particular when it is a third language, distinct from both mother tongues.[159] Today, the most popular second language is English. Some 3.5 billion people have some acquaintance of the language.[160] English is the dominant language on the Internet.[161] About 35% of the world's mail, telexes, and cables are in English; approximately 40% of the world's radio programs are in English.[162]
While multilingualism is common among individuals, globally the number of spoken languages is decreasing. The top 20 languages spoken by more than 50 million speakers each are spoken by some 50% of the world's population, whereas many of the other languages are spoken in small communities, most with less than 10,000 speakers.[163] Historically, these less widespread languages were afforded protection through geographical isolation. Today, speakers of regional and minority languages are increasingly unable to compete with those who speak dominant languages such that these languages are now considered endangered languages. The total number of languages in the world is not precisely known and estimates vary depending on many factors. The current estimate is that there are between 6000 and 7000[164] languages spoken and between 50–90% of those will have become extinct by the year 2100.[163]
Politics
Main article: Global politics
In general, globalization may ultimately reduce the importance of nation states. Supranational institutions such as the European Union, the WTO, the G8 or the International Criminal Court replace or extend national functions to facilitate international agreement.[165]
Some observers attribute the relative decline in US power to
globalization, particularly due to the country's high trade deficit.
This led to a global power shift towards Asian states, particularly
China, which unleashed market forces and achieved tremendous growth
rates. As of 2011, the Chinese economy was on track to overtake the
United States by 2025.[166]
Increasingly, Non-Governmental Organizations influence public policy across national boundaries, including humanitarian aid and developmental efforts.[167] Philanthropic organizations with global missions are also coming to the forefront of humanitarian efforts; charities such as the Bill and Melinda Gates Foundation, Accion International, the Acumen Fund (now Acumen) and the Echoing Green have combined the business model with philanthropy, giving rise to business organizations such as the Global Philanthropy Group and new associations of philanthropists such as the Global Philanthropy Forum. The Bill and Melinda Gates Foundation projects include a current multi-billion dollar commitment to funding immunizations in some of the world's more impoverished but rapidly growing countries.[168] and hundreds of millions of dollars in the next few years to programs aimed at encouraging saving by the world's poor.[169] The Hudson Institute estimates total private philanthropic flows to developing countries at US$59 billion in 2010.[170]
As a response to globalization, some countries have embraced isolationist policies. For example, the North Korean government makes it very difficult for foreigners to enter the country and strictly monitors their activities when they do. Aid workers are subject to considerable scrutiny and excluded from places and regions the government does not wish them to enter. Citizens cannot freely leave the country.[171][172]
Media and public opinion
Main articles: Media (communication) and Public opinion
A 2005 study by Peer Fiss and Paul Hirsch found a large increase in
articles negative towards globalization in the years prior. In 1998,
negative articles outpaced positive articles by two to one.[173] In 2008 Greg Ip claimed this rise in opposition to globalization can be explained, at least in part, by economic self-interest.[174]
The number of newspaper articles showing negative framing rose from
about 10% of the total in 1991 to 55% of the total in 1999. This
increase occurred during a period when the total number of articles
concerning globalization nearly doubled.[173]A number of international polls have shown that residents of developing countries tend to view globalization more favorably.[175] The BBC found a growing feeling in developing countries that globalization was proceeding too rapidly. Only in a few countries, including Mexico, the countries of Central America, Indonesia, Brazil and Kenya, did a majority feel that globalization is increasing too slowly.[176]
Philip Gordon stated that "[as of 2004] a clear majority of Europeans believe that globalization can enrich their lives, while believing the European Union can help them take advantage of globalization's benefits while shielding them from its negative effects."[177] The main opposition consisted of socialists, environmental groups, and nationalists.
Residents of the EU did not appear to feel threatened by globalization in 2004. The EU job market was more stable and workers were less likely to accept wage/benefit cuts. Social spending was much higher than in the US.[178]
In a Danish poll in 2007, 76% responded that globalisation is a good thing.[179]
Fiss, et al., surveyed U.S. opinion in 1993. Their survey showed that, in 1993, more than 40% of respondents were unfamiliar with the concept of globalization. When the survey was repeated in 1998, 89% of the respondents had a polarized view of globalization as being either good or bad. At the same time, discourse on globalization, which began in the financial community before shifting to a heated debate between proponents and disenchanted students and workers. Polarization increased dramatically after the establishment of the WTO in 1995; this event and subsequent protests led to a large-scale anti-globalization movement.[173] Initially, college educated workers were likely to support globalization. Less educated workers, who were more likely to compete with immigrants and workers in developing countries, tended to be opponents. The situation changed after the financial crisis of 2007. According to a 1997 poll 58% of college graduates said globalization had been good for the U.S. By 2008 only 33% thought it was good. Respondents with high school education also became more opposed.[174]
According to Takenaka Heizo and Chida Ryokichi, as of 1998 there was a perception in Japan that the economy was "Small and Frail". However Japan was resource poor and used exports to pay for its raw materials. Anxiety over their position caused terms such as internationalization and globalization to enter everyday language. However, Japanese tradition was to be as self-sufficient as possible, particularly in agriculture.[180]
The situation may have changed after the 2007 financial crisis. A 2008 BBC World Public Poll as the crisis began suggested that opposition to globalization in developed countries was increasing. The BBC poll asked whether globalization was growing too rapidly. Agreement was strongest in France, Spain, Japan, South Korea, and Germany. The trend in these countries appears to be stronger than in the United States. The poll also correlated the tendency to view globalization as proceeding too rapidly with a perception of growing economic insecurity and social inequality.[176]
Many in developing countries see globalization as a positive force that lifts them out of poverty.[181] Those opposing globalization typically combine environmental concerns with nationalism. Opponents consider governments as agents of neo-colonialism that are subservient to multinational corporations.[182] Much of this criticism comes from the middle class; the Brookings Institute suggested this was because the middle class perceived upwardly mobile low-income groups as threatening to their economic security.[183]
Although many critics blame globalization for a decline of the middle class in industrialized countries, the middle class is growing rapidly in developing countries.[184] Coupled with growing urbanization, this leads to increasing disparities in wealth between urban and rural areas.[185] In 2002, in India, 70% of the population lived in rural areas and depended directly on natural resources for their livelihood.[182] As a result, mass movements in the countryside at times express objections to the process.[186]
The nonprofit Reporters Without Borders publishes a Press Freedom Index, an annual ranking of countries based upon the organization's assessment of the countries' press freedom records in the previous year. It reflects the degree of freedom that journalists, news organizations, and netizens enjoy in each country, and the efforts made by the authorities to respect and ensure respect for this freedom.
Internet
Main article: Global Internet usage
Both a product of globalization as well as a catalyst, the Internet
connects computer users around the world. From 2000 to 2009, the number
of Internet users globally rose from 394 million to 1.858 billion.[188] By 2010, 22 percent of the world's population had access to computers with 1 billion Google searches every day, 300 million Internet users reading blogs, and 2 billion videos viewed daily on YouTube.[189] According to research firm IDC,
the size of total worldwide e-commerce, when global
business-to-business and -consumer transactions are added together, will
equate to US$16 trillion in 2013. IDate, another research firm, estimates the global market for digital products and services at US$4.4 trillion in 2013. A report by Oxford Economics adds those two together to estimate the total size of the digital economy at $20.4 trillion, equivalent to roughly 13.8% of global sales.[190]While much has been written of the economic advantages of Internet-enabled commerce, there is also evidence that some aspects of the internet such as maps and location-aware services may serve to reinforce economic inequality and the digital divide.[191] Electronic commerce may be partly responsible for consolidation and the decline of mom-and-pop, brick and mortar businesses resulting in increases in income inequality.[192][193][194]
An online community is a virtual community that exists online and whose members enable its existence through taking part in membership ritual. Significant socio-technical change may have resulted from the proliferation of such Internet-based social networks.[195]
Population Growth
Main articles: World population and Human overpopulation
The world population has experienced continuous growth since the end of the Great Famine and the Black Death in 1350, when it stood at around 370 million.[196]
The highest rates of growth – global population increases above 1.8%
per year – were seen briefly during the 1950s, and for a longer period
during the 1960s and 1970s. The growth rate peaked at 2.2% in 1963, and
had declined to 1.1% by 2011. Total annual births were highest in the
late 1980s at about 138 million,[197]
and are now expected to remain essentially constant at their 2011 level
of 134 million, while deaths number 56 million per year, and are
expected to increase to 80 million per year by 2040.[198]
Current projections show a continued increase in population (but a
steady decline in the population growth rate), with the global
population expected to reach 7.5 and 10.5 billion by 2050.[199][200]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.[201] From 1950 to 1984, as the Green Revolution transformed agriculture around the world, grain production increased by over 250%.[202] World population has grown by about 4 billion since the beginning of the Green Revolution and without it, there would be greater famine and malnutrition than the UN presently documents (approximately 850 million people suffering from chronic malnutrition in 2005).[203][204] With human consumption of seafood having doubled in the last 30 years, seriously depleting multiple seafood fisheries and destroying the marine ecosystem as a result, awareness is prompting steps to be taken to create a more sustainable seafood supply.[205]
Urbanization
Main articles: Urbanization and Megacities
Growth in population during the period of rapid industrialization and
globalization in the 20th century was accompanied by increased
urbanization on a global basis. By 2011, the majority of the world's
population lived in industrialized urban areas featuring nearby factories and business offices rather than in traditional rural areas where agricultural activities predominate.[213] Certain cities began to emerge as global cities
generally considered to be important centers of global economic
activities. Megacities, cities having a population in excess of 10
million, grew in number from 3 in 1973 to 24 by 2013, with estimates of
up to 27 by 2025.[214]Health
Main articles: Global health and Globalization and disease
Global health is the health of populations in a global context that transcends the perspectives and concerns of individual nations.[215] Health problems that transcend national borders or have a global political and economic impact are emphasized.[216]
It has been defined as 'the area of study, research and practice that
places a priority on improving health and achieving equity in health for all people worldwide'.[217]
Thus, global health is about worldwide improvement of health, reduction
of disparities, and protection against global threats that disregard
national borders.[218] The application of these principles to the domain of mental health is called Global Mental Health.[219]
International travel has helped to spread some of the deadliest infectious diseases.[221] 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.[222] One example of this occurring is AIDS/HIV.[223] Due to immigration, approximately 500,000 people in the United States are believed to be infected with Chagas disease.[224] In 2006, the tuberculosis (TB) rate among foreign-born persons in the United States was 9.5 times that of U.S.-born persons.[225] Starting in Asia, the Black Death killed at least one-third of Europe's population in the 14th century.[226] 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.
Global natural environment
Main articles: Natural environment, Natural resource, and Natural capital
See also: Human ecology and Coupled human–environment system
The natural environment encompasses all living and non-living things occurring naturally on Earth or some region thereof. It is an environment that encompasses the interaction of all living species.[227] The natural environment is contrasted with the built environment, which comprises the areas and components that are strongly influenced by humans. It is difficult to find absolutely natural
environments; it is common that the naturalness varies in a continuum,
from ideally 100% natural in one extreme to 0% natural in the other.
More precisely, we can consider the different aspects or components of
an environment and see that their degree of naturalness is not uniform[228] but, instead, there exists a coupled human–environment system.
State of the World 2006 report said India's and China's high economic growth was not sustainable. 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.[230] In a 2006 news story, BBC reported, "...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.[230] In the longterm these effects can lead to increased conflict over dwindling resources[231] and in the worst case a Malthusian catastrophe. International foreign investment in developing countries could lead to a "race to the bottom" as countries lower their environmental and resource protection laws to attract foreign capital.[8][232] The reverse of this theory is true, however, when developed countries maintain positive environmental practices, imparting them to countries they are investing in and creating a "race to the top" phenomenon.[8]
Changes in natural capital are beginning to erode the economic logic of one major aspect of economic globalization: an international division of labor and production based on global supply chains.[237] Planetary boundaries for several key environmental resources have been reached and others are near their limits. Over time, peak oil and climate change may result in "peak globalization," measured in terms of decreasing ton-miles of freight transported, particularly across oceans and continents. The economic logic of the comparative advantage of global supply chains could be overcome by both increasing transportation costs and interruptions and delays in the transit of freight.[237]
China and India substantially increased their fossil fuel consumption as their economies switched from subsistence farming to industry and urbanization.[238][239] Chinese oil consumption grew by 8% yearly between 2002 and 2006, doubling from 1996–2006.[240] In 2007, China surpassed the United States as the top emitter of CO
2.[241] Only 1 percent of the country's 560 million city inhabitants (2007) breathe air deemed safe by the European Union. In effect, this means that developed countries may "outsource" some of the pollution associated with consumption in countries where pollution-intensive industries have been moved.
Societies utilize forest resources in order to reach a sustainable level of economic development. Historically, forests in earlier developing nations experience "forest transitions", a period of deforestation and reforestation as a surrounding society becomes more developed, industrialized and shift their primary resource extraction to other nations via imports. For nations at the periphery of the globalized system however, there are no others to shift their extraction onto, and forest degradation continues unabated. Forest transitions can have an effect on the hydrology, climate change, and biodiversity of an area by impacting water quality and the accumulation of greenhouse gases through the re-growth of new forest into second and third growth forests.[242][243] A major source of deforestation is the logging industry, driven by China and Japan.[244]
Without more recycling, zinc could be used up by 2037, both indium and hafnium could run out by 2017, and terbium could be gone by 2012.[245] Other "peak" phenomena, such as peak oil, peak coal, peak gas, peak water, and peak wheat, also affect the availability and sustainability of natural capital.
In 2003, 29% of open sea fisheries were in a state of collapse.[246] 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.[247] Conversely, globalization created a global market for farm-raised fish and seafood, which as of 2009 was providing 38% of global output, potentially reducing fishing pressure.[248]
The global trade in goods depends upon reliable, inexpensive transportation of freight along complex and long-distance supply chains.[237] Global warming and peak oil undermine globalization by their effects on both transportation costs and the reliable movement of freight. Countering the current geographic pattern of comparative advantage with higher transportation costs, climate change and peak oil would thus result in peak globalization, after which the volume of exports will decline as measured by ton-miles of freight.[249]
Global workforce
Main articles: Global workforce and New international division of labour
Global workforce refers to the international labor pool of workers, including those employed by multinational companies and connected through a global system of networking and production, immigrant workers, transient migrant workers, telecommuting workers, and those in contingent work and other precarious employment. As of 2012, the global labor pool consisted of approximately 3 billion workers, around 200 million unemployed.[250]The global workforce, or international labor, reflects a new international division of labor that has been emerging since the late 1970s in the wake of other forces of globalization. The global economic factors driving the rise of multinational corporations – namely, cross-border movement of goods, services, technology and capital – are changing ways of thinking about labor and the structure of today's workforce. With roots in the social processes surrounding the shift to standardization and industrialization, post-industrial society in the Western world has been accompanied by industrialization in other parts of the world, particularly in Asia. As industrialization takes hold worldwide and more cultures move away from traditional practices in respect to work and labor, the ways in which employers think about and utilize labor are changing.
The global workforce is competitive and has been described as "a war for talent."[251] This competitiveness is due, in part, to communications technologies that assist companies to attain multinational status. Communication technologies also allow companies to find workers without limiting their search locally, a process known as global labor arbitrage. An example of this war for talent is the phenomenon of foreign executives appointed into headquarter positions of local organisations.[252][253]
However, production workers and service workers in advanced economies have been unable to compete directly with much lower-cost workers in developing countries.[254] Low-wage countries gained the low-value-added element of work formerly done in rich countries, while higher-value work remained; for instance, the total number of people employed in manufacturing in the US declined, but value added per worker increased.[255]
There are many examples of this movement of labor into developing economies. Two examples can be found in China and South Africa. Chinese success cost jobs in other developing countries as well as in the West.[256] From 2000 to 2007, the U.S. lost a total of 3.2 million manufacturing jobs.[257] As of 26 April 2005 "In regional giant South Africa, some 300,000 textile workers have lost their jobs in the past two years due to the influx of Chinese goods".[258]
In Europe, in 2012, the unemployment rate hit a record high at 11.8% with 18.8 million people out of jobs with youth unemployment at a new high, according to Eurostat.[259] The rate of unemployed youth in Spain increased to over 56%, and in Greece to 62.5% in early 2013.[260] Research shows that young people in Europe, themselves, are also worried for their future.[261]
Noble Prize winning economist Michale Spence writes, “The massive changes in the global economy since World War II have had overwhelmingly positive effects. Hundreds of millions of people in the developing world have escaped poverty, and more will in the future. The global economy will continue to grow – probably at least threefold over the next 30 years. One person's gain is not necessarily another's loss; global growth is not even close to a zero-sum game. But globalization hurts some subgroups within some countries, including the advanced economies.”[262]
International migration
Main articles: Human migration, Foreign worker, and List of countries by net migration rate
Many countries have some form of guest worker program
with policies similar to those found in the U.S. that permit U.S.
employers to sponsor non-U.S. citizens as laborers for approximately
three years, to be deported afterwards if they have not yet obtained a green card. As of 2009, over 1,000,000 guest workers reside in the US; the largest program, the H-1B visa, has 650,000 workers in the U.S.[263] and the second-largest, the L-1 visa, has 350,000.[264] Many other United States visas exist for guest workers as well, including the H-2A visa,
which allows farmers to bring in an unlimited number of agricultural
guest workers. The United States ran a Mexican guest-worker program in
the period 1942–1964, known as the Bracero Program.
Migration of educated and skilled workers is called brain drain. For example, the U.S. welcomes many nurses to come work in the country.[267] The brain drain from Europe to the United States means that some 400,000 European science and technology graduates now live in the U.S. and most have no intention to return to Europe.[268] Nearly 14 million immigrants came to the United States from 2000 to 2010.[269]
Immigrants to the United States and their children founded more than 40 percent of the 2010 Fortune 500 companies. They founded seven of the ten most valuable brands in the world.[270]
Reverse brain drain is the movement of human capital from a more developed country to a less developed country. It is considered a logical outcome of a calculated strategy where migrants accumulate savings and develop skills overseas that can be used in their home country.[271]
Reverse brain drain can occur when scientists, engineers, or other intellectual elites migrate to a less developed country to learn in its universities, perform research, or gain working experience in areas where education and employment opportunities are limited in their home country. These professionals then return to their home country after several years of experience to start a related business, teach in a university, or work for a multi-national in their home country.[272]
A remittance is a transfer of money by a foreign worker to his or her home country. Remittances are playing an increasingly large role in the economies of many countries, contributing to economic growth and to the livelihoods of less prosperous people (though generally not the poorest of the poor). According to World Bank estimates, remittances totaled US$414 billion in 2009, of which US$316 billion went to developing countries that involved 192 million migrant workers.[273] For some individual recipient countries, remittances can be as high as a third of their GDP.[273] As remittance receivers often have a higher propensity to own a bank account, remittances promote access to financial services for the sender and recipient, an essential aspect of leveraging remittances to promote economic development. The top recipients in terms of the share of remittances in GDP included many smaller economies such as Tajikistan (45%), Moldova (38%), and Honduras (25%).[274]
The IOM found more than 200 million migrants around the world in 2008,[275] including illegal immigration.[276][277] Remittance flows to developing countries reached US$328 billion in 2008 and new projections on remittance flows to developing countries show they are expected to reach US$515 billion in 2015.[278]
A transnational marriage is a marriage between two people from different countries. A variety of special issues arise in marriages between people from different countries, including those related to citizenship and culture, which add complexity and challenges to these kinds of relationships. In an age of increasing globalization, where a growing number of people have ties to networks of people and places across the globe, rather than to a current geographic location, people are increasingly marrying across national boundaries. Transnational marriage is a by-product of the movement and migration of people.
Support and criticism
Reactions to processes contributing to globalization have varied widely with a history as long as extraterritorial contact and trade. Philosophical differences regarding the costs and benefits of such processes give rise to a broad-range of ideologies and social movements. Proponents of economic growth, expansion and development, in general, view globalizing processes as desirable or necessary to the well-being of human society.[279] Antagonists view one or more globalizing processes as detrimental to social well-being on a global or local scale;[279] this includes those who question either the social or natural sustainability of long-term and continuous economic expansion, the social structural inequality caused by these processes, and the colonial, Imperialistic, or hegemonic ethnocentrism, cultural assimilation and cultural appropriation that underlie such processes.As summarized by Noam Chomsky:
The dominant propaganda systems have appropriated the term "globalization" to refer to the specific version of international economic integration that they favor, which privileges the rights of investors and lenders, those of people being incidental. In accord with this usage, those who favor a different form of international integration, which privileges the rights of human beings, become "anti-globalist." This is simply vulgar propaganda, like the term "anti-Soviet" used by the most disgusting commissars to refer to dissidents. It is not only vulgar, but idiotic. Take the World Social Forum (WSF), called "anti-globalization" in the propaganda system – which happens to include the media, the educated classes, etc., with rare exceptions. The WSF is a paradigm example of globalization. It is a gathering of huge numbers of people from all over the world, from just about every corner of life one can think of, apart from the extremely narrow highly privileged elites who meet at the competing World Economic Forum, and are called "pro-globalization" by the propaganda system.[280]
Proponents
In general, corporate businesses, particularly in the area of finance, see globalization as a positive force in the world. Many economists cite statistics that seem to support such positive impact. For example, per capita Gross Domestic Product (GDP) growth among post-1980 globalizing countries accelerated from 1.4 percent a year in the 1960s and 2.9 percent a year in the 1970s to 3.5 percent in the 1980s and 5.0 percent in the 1990s. This acceleration in growth seems even more remarkable given that the rich countries saw steady declines in growth from a high of 4.7 percent in the 1960s to 2.2 percent in the 1990s. Also, the non-globalizing developing countries seem to fare worse than the globalizers, with the former's annual growth rates falling from highs of 3.3 percent during the 1970s to only 1.4 percent during the 1990s. This rapid growth among the globalizers is not simply due to the strong performances of China and India in the 1980s and 1990s – 18 out of the 24 globalizers experienced increases in growth, many of them quite substantial.[281]Economic liberalism and free trade
Main articles: Economic liberalism and Neoliberalism
The flow of migrants to advanced economic countries has been claimed to provide a means through which global wages converge. An IMF study noted a potential for skills to be transferred back to developing countries as wages in those a countries rise.[7] Lastly, the dissemination of knowledge has been an integral aspect of globalization. Technological innovations (or technological transfer) is conjectured to benefit most the developing and least developing countries (LDCs), as for example in the adoption of mobile phones.[21]
There has been a rapid economic growth in Asia after embracing market orientation-based economic policies that encourage private property rights, free enterprise and competition. In particular, in East Asian developing countries, GDP per head rose at 5.9% a year from 1975 to 2001 (according to 2003 Human Development Report[284] of UNDP). Like this, the British economic journalist Martin Wolf says that incomes of poor developing countries, with more than half the world’s population, grew substantially faster than those of the world’s richest countries that remained relatively stable in its growth, leading to reduced international inequality and the incidence of poverty.
Certain demographic changes in the developing world after active economic liberalization and international integration resulted in rising general welfare and, hence, reduced inequality. According to Wolf, in the developing world as a whole, life expectancy rose by four months each year after 1970 and infant mortality rate declined from 107 per thousand in 1970 to 58 in 2000 due to improvements in standards of living and health conditions. Also, adult literacy in developing countries rose from 53% in 1970 to 74% in 1998 and much lower illiteracy rate among the young guarantees that rates will continue to fall as time passes. Furthermore, the reduction in fertility rate in the developing world as a whole from 4.1 births per woman in 1980 to 2.8 in 2000 indicates improved education level of women on fertility, and control of fewer children with more parental attention and investment.[285] Consequentially, more prosperous and educated parents with fewer children have chosen to withdraw their children from the labor force to give them opportunities to be educated at school improving the issue of child labor. Thus, despite seemingly unequal distribution of income within these developing countries, their economic growth and development have brought about improved standards of living and welfare for the population as a whole.
Global democracy
Main article: Democratic globalization
Democratic globalization is a movement towards an institutional system of global democracy
that would give world citizens a say in political organizations. This
would, in their view, bypass nation-states, corporate oligopolies,
ideological Non-governmental organizations (NGO), political cults and mafias. One of its most prolific proponents is the British political thinker David Held. Advocates of democratic globalization
argue that economic expansion and development should be the first phase
of democratic globalization, which is to be followed by a phase of
building global political institutions. Dr. Francesco Stipo, Director of the United States Association of the Club of Rome, advocates unifying nations under a world government,
suggesting that it "should reflect the political and economic balances
of world nations. A world confederation would not supersede the
authority of the State governments but rather complement it, as both the
States and the world authority would have power within their sphere of
competence".[287] Former Canadian Senator Douglas Roche, O.C., viewed globalization as inevitable and advocated creating institutions such as a directly elected United Nations Parliamentary Assembly to exercise oversight over unelected international bodies.[288]International cooperation
Military cooperation – Past examples of international cooperation exist. One example is the security cooperation between the United States and the former Soviet Union after the end of the Cold War, which astonished international society. Arms control and disarmament agreements, including the Strategic Arms Reduction Treaty (see START I, START II, START III, and New START) and the establishment of NATO’s Partnership for Peace, the Russia NATO Council, and the G8 Global Partnership against the Spread of Weapons and Materials of Mass Destruction, constitute concrete initiatives of arms control and de-nuclearization. The U.S.–Russian cooperation was further strengthened by anti-terrorism agreements enacted in the wake of 9/11.[289]Environmental cooperation – One of the biggest successes of environmental cooperation has been the agreement to reduce chlorofluorocarbon (CFC) emissions, as specified in the Montreal Protocol, in order to stop ozone depletion. The most recent debate around nuclear energy and the non-alternative coal-burning power plants constitutes one more consensus on what not to do. Thirdly, significant achievements in IC can be observed through development studies.[289]
Global civics
Main articles: Global civics and Multiculturalism
See also: Global citizenship
Global civics suggests that civics can be understood, in a global sense, as a social contract between global citizens
in the age of interdependence and interaction. The disseminators of the
concept define it as the notion that we have certain rights and
responsibilities towards each other by the mere fact of being human on
Earth.[290] World citizen has a variety of similar meanings, often referring to a person who disapproves of traditional geopolitical divisions derived from national citizenship. An early incarnation of this sentiment can be found in Socrates, who Plutarch quoted as saying: "I am not an Athenian, or a Greek, but a citizen of the world."[291]
In an increasingly interdependent world, world citizens need a compass
to frame their mindsets and create a shared consciousness and sense of
global responsibility in world issues such as environmental problems and
nuclear proliferation.[292]Cosmopolitanism is the proposal that all human ethnic groups belong to a single community based on a shared morality. A person who adheres to the idea of cosmopolitanism in any of its forms is called a cosmopolitan or cosmopolite.[293] A cosmopolitan community might be based on an inclusive morality, a shared economic relationship, or a political structure that encompasses different nations. The cosmopolitan community is one in which individuals from different places (e.g. nation-states) form relationships based on mutual respect. For instance, Kwame Anthony Appiah suggests the possibility of a cosmopolitan community in which individuals from varying locations (physical, economic, etc.) enter relationships of mutual respect despite their differing beliefs (religious, political, etc.).[294]
Canadian philosopher Marshall McLuhan popularized the term Global Village beginning in 1962.[295] His view suggested that globalization would lead to a world where people from all countries will become more integrated and aware of common interests and shared humanity.[296]
Critiques
Main article: Criticisms of globalization
Critiques of globalization generally stem from discussions
surrounding the impact of such processes on the planet as well as the
human costs. They challenge directly traditional metrics, such as GDP,
and look to other measures, such as the Gini coefficient [297] or the Happy Planet Index,[298]
and point to a "multitude of interconnected fatal consequences–social
disintegration, a breakdown of democracy, more rapid and extensive
deterioration of the environment, the spread of new diseases, increasing
poverty and alienation"[299] which they claim are the unintended consequences of globalization.
Some critics of globalization argue that it harms the diversity of cultures. As a dominating country’s culture is introduced into a receiving country through globalization, it can become a threat to the diversity of local culture. Some argue that globalization may ultimately lead to Westernization or Americanization of culture, where the dominating cultural concepts of economically and politically powerful Western countries spread and cause harm on local cultures.
Some opponents of globalization see the phenomenon as a promotion of corporatist interests.[300] They also claim that the increasing autonomy and strength of corporate entities shapes the political policy of countries.[301][302] They advocate global institutions and policies that they believe better address the moral claims of poor and working classes as well as environmental concerns.[303] 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.[304]
Critics argue that globalization results in:
- Poorer countries suffering disadvantages: While it is true that free trade encourages globalization among countries, some countries try to protect their domestic suppliers. The main export of poorer countries is usually agricultural productions. Larger countries often subsidise their farmers (e.g., the EU's Common Agricultural Policy), which lowers the market price for foreign crops.[305]
- The shift to outsourcing: Globalization allowed corporations to move manufacturing and service jobs from high cost locations, creating economic opportunities with the most competitive wages and worker benefits.[116]
- Weak labor unions: The surplus in cheap labor coupled with an ever growing number of companies in transition weakened labor unions in high-cost areas. Unions lose their effectiveness and workers their enthusiasm for unions when membership begins to decline.[305]
- An increase in exploitation of child labour: Countries with weak protections for children are vulnerable to infestation by rogue companies and criminal gangs who exploit them. Examples include quarrying, salvage, and farm work as well as trafficking, bondage, forced labor, prostitution and pornography.[307]
Anti-globalization movement
Main article: Anti-globalization movement
Anti-globalization, or counter-globalisation,[309] consists of a number of criticisms of globalization but, in general, is critical of the globalization of corporate capitalism.[310] The movement is also commonly referred to as the alter-globalization movement, anti-globalist movement, anti-corporate globalization movement,[311] or movement against neoliberal
globalization. It can be explained as encompassing the ideologies
present in the following other “movements”, which will be discussed
below: opposition to capital market integration, social justice and
inequality, anti-consumerism, anti-global governance and
environmentalist opposition. Each of these ideologies can be framed
around a specific strand of the anti-globalization movement, but in
general the movement gears their efforts towards all of these primary
principles. It is considered a rather new and modern day social
movement, as the issues it is fighting against are relevant in today’s
time. However, the events that occurred which fuels the movement can be
traced back through the lineage of the movement of a 500-year old
history of resistance against European colonialism and U.S. imperialism.[312]
This refers to the continent of Africa being colonized and stripped of
their resources by the Europeans in the 19th century. It is also related
closely with the anti-Vietnam war mobilizations between 1960 and1970,
with worldwide protests against the adjustment of structure in Africa,
Asia, and Latin America. Although British sociologist Paul Q. Hirst and political economist Grahame F. Thompson note the term is vague;[313]
"anti-globalization movement" activities may include attempts to
demonstrate sovereignty, practice local democratic decision-making, or
restrict the international transfer of people, goods and capitalist
ideologies, particularly free market deregulation. Canadian author and social activist Naomi Klein argues that the term could denote either a single social movement or encompass multiple social movements such as nationalism and socialism.[314]
Bruce Podobnik, a sociologist at Lewis and Clark College, 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."[315] Economists Joseph Stiglitz and Andrew Charlton write:The anti-globalization movement developed in opposition to the perceived negative aspects of globalization. The term 'anti-globalization' is in many ways a misnomer, since the group represents a wide range of interests and issues and many of the people involved in the anti-globalization movement do support closer ties between the various peoples and cultures of the world through, for example, aid, assistance for refugees, and global environmental issues.[316]In general, opponents of globalization in developed countries are disproportionately middle-class and college-educated. This contrasts sharply with the situation in developing countries, where the anti-globalization movement has been more successful in enlisting a broader group, including millions of workers and farmers.[317]
These supporters of the movement are aware of the unequal power and respect in terms of international trade between the developed and underdeveloped countries of the world.[318] The activists that support the AGM, as mentioned previously before, can range in terms of the specific issue(s) that they oppose. Again, there are a few different dimensions of globalization: economic, political, cultural, ecological and ideological. The diverse subgroups that make up this movement include some of the following: trade unionists, environmentalists, anarchists, land rights and indigenous rights activists, organizations promoting human rights and sustainable development, opponents of privatization, and anti-sweatshop campaigners.[312]
Movement tactics
D.A. Snow et al. contend that the anti-globalization movement is an example of a new social movement, which uses tactics that are unique and use different resources than previously used before in other social movements.[319] Actors of the movement participate in things such as disruptive tactics. These include flash mobs for example, which work extremely well in catching the attention of others and spreading awareness about the issue of globalization. There is also the spreading of information about the social movement through social media and word of mouth about NGOs, organizations and movement groups working to help alleviate the effects of globalization. Websites such as Twitter and Facebook have become a useful outlet for people to become aware of what is going on around the globe, any protests or tactics taking place and the progress of non-governmental organizations aiding in these impoverished countries.One of the most infamous tactics of the movement is the Battle of Seattle in 1999, where there were protests against the World Trade Organization's Third Ministerial Meeting.[312] It can be described as being a massive group of passionate, grass roots people within the anti-globalization movement protesting against the WTO’s corporate rule. All over the world, the movement has held protests outside meetings of institutions such as the WTO, the International Monetary Fund (IMF), the World Bank, the World Economic Forum, and the Group of Eight (G8).[312] Within the Seattle demonstrations the protesters that participated used both creative and violent tactics to gain the attention towards the issue of globalization. It is still one of the most significant and memorable social movement protests in the past 20 years.
Opposition to capital market integration
Main article: Anti-capitalist movements
Capital markets have to do with raising and investing moneys in various human enterprises. Increasing integration of these financial markets
between countries leads to the emergence of a global capital
marketplace or a single world market. In the long run, increased
movement of capital between countries tends to favor owners of capital
more than any other group; in the short run, owners and workers in
specific sectors in capital-exporting countries bear much of the burden
of adjusting to increased movement of capital.[320]
It is not surprising that these conditions lead to political divisions
about whether or not to encourage or increase international capital
market integration.
Those opposed to capital market integration on the basis of human rights issues are especially disturbed by the various abuses which they think are perpetuated by global and international institutions that, they say, promote neoliberalism without regard to ethical standards. This can also be referred to as “corporate capitalism”, as previous mentioned, which are money driven organizations such as the World Bank and the International Monetary Fund, along with many of the popular and competitive multinational corporations, like Nike and other institutions. Common targets include the World Bank (WB), International Monetary Fund (IMF), the Organisation for Economic Co-operation and Development (OECD) and the World Trade Organization (WTO) and free trade treaties like the North American Free Trade Agreement (NAFTA), Free Trade Area of the Americas (FTAA), the Multilateral Agreement on Investment (MAI) and the General Agreement on Trade in Services (GATS). In light of the economic gap between rich and poor countries, movement adherents claim "free trade" without measures in place to protect the under-capitalized will contribute only to the strengthening the power of industrialized nations (often termed the "North" in opposition to the developing world's "South"). Some of the powerful Northern corporations have implemented policies like privatizing public industry and reducing tariffs. By doing this it has created a growth in sweatshops in the developing world, where wages are minimal and unfair, and conditions are unsafe to the workers’ health and psychological state. The global North can benefit from this by getting goods for a cheaper monetary amount. However, this is at the expense of these impoverished people and the community or country as a whole. Now, fair trade has been introduced in order to attempt to rebuild the economies of third world countries by paying employees, who work to produce goods to be exported, a fair price for their efforts.[321]
Global justice and inequality
Main article: Global justice movement
Inequality
Main articles: Economic inequality and International inequality
Increasing international commerce with high barriers to entry, corporate consolidation, tax havens and other methods of tax avoidance, and political corruption have all caused increases in income inequality and wealth concentration: the increasingly unequal distribution of economic assets (wealth) and income within or between global populations, countries,
and individuals. Economic inequality varies between societies,
historical periods, economic structures or systems (for example, capitalism or socialism), ongoing or past wars, between genders, and between differences in individuals' abilities to create wealth.[327] There are various numerical indices for measuring economic inequality. A prominent one is the Gini coefficient, but there are also many other methods.Economic inequality affects equity, equality of outcome, and equality of opportunity. Although earlier thought considered economic inequality as necessary and beneficial,[328] it has more recently come to be seen as a growing social problem.[329] Early studies suggesting that greater equality inhibits economic growth have been shown to be flawed because they did not account for the many years it can take inequality changes to manifest in growth changes.[330] In fact, one of the most robust and important determinants of sustained economic growth is the level of income inequality.[286]
International inequality is inequality between countries. Economic differences between rich and poor countries are very large. According to the United Nations Human Development Report for 2004, the GDP per capita in countries with high, medium and low human development (a classification based on the UN Human Development Index) was 24,806, 4,269 and 1,184 PPP$, respectively (PPP$ = purchasing power parity measured in United States dollars).[331]
Gender inequality in the global workforce
Main article: Gender inequality
Women often participate in the workforce as casual labor.
Evidence suggests that while globalization has expanded women’s access
to employment, the long-term goal of transforming gender inequalities
remains unmet and appears unattainable without regulation of capital and
a reorientation and expansion of the state’s role in funding public
goods and providing a social safety net.[332]Anti-consumerism
Main article: Anti-consumerism
Anti-consumerism is the socio-political movement against equating
personal happiness with consumption and the purchase of material
possessions. The term "consumerism" was first used in 1915 to refer to
"advocacy of the rights and interests of consumers" (Oxford English Dictionary), but here the term "consumerism" refers to the sense first used in 1960, "emphasis on or preoccupation with the acquisition of consumer goods" (Oxford English Dictionary). Concern over the treatment of consumers has spawned substantial activism, and the incorporation of consumer education into school curricula.Anti-consumerist activism draws parallels with environmental activism, anti-globalization, and animal-rights activism in its condemnation of modern corporations, or organizations that pursue a solely economic interest. One variation on this topic is activism by postconsumers, with the strategic emphasis on moving beyond addictive consumerism.[6]
In recent years, there have been an increasing number of books (Naomi Klein's 2000 No Logo, for example) and films (e.g. The Corporation & Surplus) popularizing an anti-corporate ideology to the public.
Opposition to economic materialism comes primarily from two sources: religion and social activism. Some religions assert materialism interferes with connection between the individual and the divine or that it is inherently an immoral lifestyle. Social activists believe materialism is connected to global retail merchandizing and supplier convergence, war, greed, anomie, crime, environmental degradation, and general social malaise and discontent.
Anti-global governance
Main article: Global governance
Beginning in the 1930s, opposition arose to the idea of a world
government, as advocated by organizations such as the World Federalist
Movement (WFM).[333]
Those who oppose global governance typically do so on objections that
the idea is in-feasible, inevitably oppressive, or simply unnecessary.[334]
In general, these opponents are wary of the concentration of power or
wealth that such governance might represent. Religious reasons are also
cited, in which global governance is seen as the Biblical Antichrist or a representation thereof (see New World Order (conspiracy theory)). Such reasoning dates back to the founding of the League of Nations and, later, the United Nations.Environmentalist opposition
Main article: Environmentalism
See also: Global warming, Climate change, and Deforestation
Environmentalism is a broad philosophy, ideology[335][336][337] and social movement regarding concerns for environmental conservation and improvement of the health of the environment,
particularly as the measure for this health seeks to incorporate the
concerns of non-human elements. Environmentalism advocates the
preservation, restoration and improvement of the natural environment in
an attempt to balance relations between humanity and their broader natural environment.
The exact nature of this balance is controversial and there are many
different ways for environmental concerns to be expressed in practice.
Environmentalism and environmental concerns are often represented by the
color green,[338] but this association has been appropriated by the marketing industries and is a key tactic in the art of Greenwashing. Environmentalist concerns with globalization include issues such as global warming, climate change, global water supply and water crises, inequity in energy consumption and energy conservation, transnational air pollution and pollution of the world ocean, overpopulation, world habitat sustainability, deforestation, biodiversity and species extinction.Another concern is labelled "environmental apartheid",[339] which claims that the resources and wealth of society are typically appropriated by a small minority group of a privileged race or class, under much protection. Thus, the excluded majority never gets a chance to access to resources necessary for well-being and survival. In the pre-Rio period, it was the North that contributed most to the destruction of the environment. Globalization is restructuring control over resources in such a way that the natural resources of the poor are systematically taken over by the rich and the pollution promulgated by the rich is systematically dumped on the poor.[340] For example, 90 percent of historic carbon dioxide emissions have been by the industrialized countries. The developed countries produce 90 percent of the hazardous wastes produced around the world every year. Global free trade has globalized this environmental destruction in an asymmetric pattern. Some argue the economy is controlled by Northern corporations and they are increasingly exploiting resources of less wealthy countries for their global activities while it is the South that is disproportionately bearing the environmental burden of the globalized economy. Globalization is thus leading to a type of environmental apartheid.[341]
A related area of concern is the pollution haven hypothesis, which posits that, when large industrialized nations seek to set up factories or offices abroad, they will often look for the cheapest option in terms of resources and labor that offers the land and material access they require (see Race to the bottom).[342] This often comes at the cost of environmentally sound practices. Developing countries with cheap resources and labor tend to have less stringent environmental regulations, and conversely, nations with stricter environmental regulations become more expensive for companies as a result of the costs associated with meeting these standards. Thus, companies that choose to physically invest in foreign countries tend to (re)locate to the countries with the lowest environmental standards or weakest enforcement.
Key journals
Main article: List of globalization-related journals
Key academic journals examining globalization include:- Antipode
- Development and Change
- Economic Geography
- Globalization and Health
- Glocalism: Journal of Culture, Politics and Innovation
- Journal of World-Systems Research
- World Development
See also
| Library resources about
Globalization
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