Globalization (Wikipedia)

Globalization
From Wikipedia, the free encyclopedia

The International Monetary Fund defines Globalization (or globalisation) as “the growing economic interdependence of countries worldwide through increasing volume and variety of cross-border transactions in goods and services, free international capital flows, and more rapid and widespread diffusion of technology”. Meanwhile, The International Forum on Globalization defines it as “the present worldwide drive toward a globalized economic system dominated by supranational corporate trade and banking institutions that are not accountable to democratic processes or national governments.” [1] While notable critical theorists, such as Immanuel Wallerstein, emphasize that globalization cannot be understood separately from the historical development of the capitalist world-system [2] the different definitions highlight the ensuing debate of the roles and relationships of government, corporations, and the individual in maximizing social welfare within the globalization paradigms. Nonetheless, it is clear that globalization has economic, political, cultural, and technological aspects that may be closely intertwined. Given that these aspects are key to an individual's quality of life, the social benefits and costs brought upon them by globalization generate strong debate.
The economic aspects stressed in globalization are trade, investment and migration. The globalization of trade entails that human beings have greater access to an array of goods and services never seen before in human history. From German cars, to Colombian coffee, from Chinese clothing, to Egyptian cotton, from American music, to Indian software, human beings may be able to purchase a wide range of goods and services. The globalization of investment takes place through Foreign Direct Investment, where multinational companies directly invest assets in a foreign country, or by indirect investment where individuals and institutions purchase and sell financial assets of other countries. Free migration allows individuals to find employment in jurisdictions where there are labor shortages.
Critics of free trade also contend that it may lead to the destruction of a country's native industry, environment and/or a loss of jobs. Critics of international investment contend that by accepting these financial schemes a country loses its economic sovereignty and may be forced to set policies that are contrary to its citizen's interests or desires. Moreover, multinational companies that invest in a country may also acquire too much political and economic power in relation to its citizens. Finally, migration may lead to the exploitation of workers from a migrant country and the displacement of workers from a host country. Critics of globalization also contend that different economic systems that either augment or supplant globalization may maximize social welfare more efficiently and equitably.
The political aspects of globalization are evidenced when governments create international rules and institutions to deal with issues such as trade, human rights, and the environment. Among the new institutions and rules that have come to fruition as a result of globalization are the World Trade Organization, the Euro currency, the North American Free Trade Agreement, to name a few. Whether a government is to consciously open itself to cross-border links, is the central question of this aspect.
Social activist and non-profit organizations such as Amnesty International and Greenpeace are also becoming more global in scope. Some of these organizations take issue with the economic and political aspects of globalization as they fear that economic interests either subvert the nation state in its ability to protect its citizens from economic exploitation, or support governments that violate the human rights of their citizens.
Cultural global ties also grow through globalization as news ideas and fashions through trade, travel and media move around the globe at lightning speed. Global brands such as Coca-Cola, Nike & Sony serve as common reference to consumers all over the World. An individual in China enjoys the same soft drink as an individual in Puerto Rico--at opposite ends of the globe. However, these ties may also cause strains: for example Western Ideas of freedom of expression may clash with Islamic views on Religious tolerance. And if not strains, critics contend this is really an imposition of cultural imperialism in order to preserve economic interests.
The other aspect of globalization is the revolutionary change in technology, particularly in transport and communication, which ostensibly creates a global village. In 1850 it took nearly a year to sail around the World. Now you can fly around the world in a day, send an email anywhere almost instantly, or be part of the 1.5 billion viewers watching the final match of the World Cup. Transportation costs have come down as result of technological advances that make foreign markets more accessible to trade. Tuna caught in the North Atlantic may be served the next day at a Sushi restaurant in Japan. Finally, billions of dollars in assets and currencies are exchanged daily around the globe by electronic means at virtually no cost. Globalization spreads everything.