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What Is Globalization
What Is Globalization
G20 leaders get together in an annual summit to discuss and coordinate pressing global
issues of mutual interest. Though economics and trade are usually the centerpieces of
each summit’s agenda, issues like climate change, migration policies, terrorism, the
future of work, or global wealth are recurring focuses too. Since the G20 leaders
represent the “political backbone of the global financial architecture that secures open
markets, orderly capital flows, and a safety net for countries in difficulty”, it is often
thanks to bilateral meetings during summits that major international agreements are
achieved and that globalization is able to move forward.
The joint action of G20 leaders has unquestionably been useful to save the global
financial system in the 2008/2009 crisis, thanks to trade barriers removal and the
implementation of huge financial reforms. Nonetheless, the G20 was been struggling to
be successful at coordinating monetary and fiscal policies and unable to root out tax
evasion and corruption, among other downsides of globalization. As a result of this and
other failures from the G20 in coordinating globalization, popular, nationalist movements
across the world have been defending countries should pursue their interests alone or
form fruitful coalitions.
Lagarde defends we should pursue globalization policies that extend the benefits of
openness and integration while alleviating their side effects. How to make globalization
more just is a very complex question that involves redesigning economic systems. But
how? That’s the question.
Globalization is deeply connected with economic systems and markets, which, on their
turn, impact and are impacted by social issues, cultural factors that are hard to
overcome, regional specificities, timings of action and collaborative networks. All of this
requires, on one hand, global consensus and cooperation, and on the other, country-
specific solutions, apart from a good definition of the adjective “just”.
When Did Globalization Begin? The History of
Globalization
For some people, this global phenomenon is inherent to human nature. Because of this,
some say globalization begun about 60,000 years ago, at the beginning of human
history. Throughout time, human societies’ exchanging trade has been growing. Since
the old times, different civilizations have developed commercial trade routes and
experienced cultural exchanges. And as well, the migratory phenomenon has also been
contributing to these populational exchanges. Especially nowadays, since traveling
became quicker, more comfortable, and more affordable.
This phenomenon has continued throughout history, notably through military conquests
and exploration expeditions. But it wasn’t until technological advances in transportation
and communication that globalization speeded up. It was particularly after the second
half of the 20th century that world trades accelerated in such a dimension and speed
that the term “globalization” started to be commonly used.
The most visible impacts of globalization are definitely the ones affecting the economic
world. Globalization has led to a sharp increase in trade and economic exchanges, but
also to a multiplication of financial exchanges.
In the 1970s world economies opened up and the development of free trade policies
accelerated the globalization phenomenon. Between 1950 and 2010, world exports
increased 33-fold. This significantly contributed to increasing the interactions between
different regions of the world.
This acceleration of economic exchanges has led to strong global economic growth. It
fostered as well a rapid global industrial development that allowed the rapid
development of many of the technologies and commodities we have available
nowadays.
Knowledge became easily shared and international cooperation among the brightest
minds speeded things up. According to some analysts, globalization has also
contributed to improving global economic conditions, creating much economic wealth
(thas was, nevertheless, unequally distributed – more information ahead).
At the same time, finance also became globalized. From the 1980s, driven by neo-
liberal policies, the world of finance gradually opened. Many states, particularly the US
under Ronald Reagan and the UK under Margaret Thatcher introduced the famous “3D
Policy”: Disintermediation, Decommissioning, Deregulation.
The idea was to simplify finance regulations, eliminate mediators and break down the
barriers between the world’s financial centers. And the goal was to make it easier to
exchange capital between the world’s financial players. This financial globalization has
contributed to the rise of a global financial market in which contracts and capital
exchanges have multiplied.
Together with economic and financial globalization, there has obviously also been
cultural globalization. Indeed, the multiplication of economic and financial exchanges
has been followed by an increase in human exchanges such as migration, expatriation
or traveling. These human exchanges have contributed to the development of cultural
exchanges. This means that different customs and habits shared among local
communities have been shared among communities that (used to) have different
procedures and even different beliefs.
Good examples of cultural globalization are, for instance, the trading of commodities
such as coffee or avocados. Coffee is said to be originally from Ethiopia and consumed
in the Arabid region. Nonetheless, due to commercial trades after the 11th century, it is
nowadays known as a globally consumed commodity. Avocados, for instance, grown
mostly under the tropical temperatures of Mexico, the Dominican Republic or Peru.
They started by being produced in small quantities to supply the local populations but
today guacamole or avocado toasts are common in meals all over the world.
At the same time, books, movies, and music are now instantaneously available all
around the world thanks to the development of the digital world and the power of the
internet. These are perhaps the greatest contributors to the speed at which cultural
exchanges and globalization are happening. There are also other examples of
globalization regarding traditions like Black Friday in the US, the Brazilian Carnival or
the Indian Holi Festival. They all were originally created following their countries’ local
traditions and beliefs but as the world got to know them, they are now common
traditions in other countries too.
Apart from all the benefits globalization has had on allowing cultural exchanges it also
homogenized the world’s cultures. That’s why specific cultural characteristics from some
countries are disappearing. From languages to traditions or even specific industries.
That’s why according to UNESCO, the mix between the benefits of globalization and the
protection of local culture’s uniqueness requires a careful approach.
Despite its benefits, the economic growth driven by globalization has not been done
without awakening criticism. The consequences of globalization are far from
homogeneous: income inequalities, disproportional wealth and trades that benefit
parties differently. In the end, one of the criticisms is that some actors (countries,
companies, individuals) benefit more from the phenomena of globalization, while others
are sometimes perceived as the “losers” of globalization. As a matter of fact, a recent
report from Oxfam says that 82% of the world’s generated wealth goes to 1% of the
population.
Many critics have also pointed out that globalization has negative effects on the
environment. Thus, the massive development of transport that has been the basis of
globalization is also responsible for serious environmental problems such as
greenhouse gas emissions, global warming or air pollution.
At the same time, global economic growth and industrial productivity are both the driving
force and the major consequences of globalization. They also have big environmental
consequences as they contribute to the depletion of natural
resources, deforestation and the destruction of ecosystems and loss of biodiversity.
The worldwide distribution of goods is also creating a big garbage problem, especially
on what concerns plastic pollution.
On the other hand, globalization is also needed for the transitioning to a more
sustainable world, since only a global synergy would really be able to allow a real
ecological transition. Issues such as global warming indeed require a coordinated
response from all global players: fight against CO2 emissions, reduction of waste, a
transition to renewable energies. The same goes for ocean or air pollution, or ocean
acidification, problems that can’t be solved without global action. The dissemination of
green ideas also depends on the ability of committed actors to make them heard
globally.
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