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Globalization
Globalization
The think tank Peterson Institute for International Economics (PIIE) states
globalization stalled after World War I, and nations moved
toward protectionism as they launched import taxes to more closely guard their
industries in the aftermath of the conflict. This trend continued through the
Great Depression and World War II until the U.S. took on an instrumental role in
reviving international trade.
One of the critical steps in the path to globalization came with the North
American Free Trade Agreement (NAFTA), signed in 1993. One of NAFTA's many
effects was to give American auto manufacturers the incentive to relocate a
portion of their manufacturing to Mexico where they could save on the costs of
labor. NAFTA was replaced in 2020 by the United States-Mexico-Canada
Agreement (USMC).
Governments worldwide have integrated a free market economic system
through fiscal policies and trade agreements in the 20th century. The core of
most trade agreements is the removal or reduction of tariffs.
Types of Globalization
There are 8 types of Globalization:
Social globalization
Technological globalization
Financial globalization
Economic globalization
Political globalization
Cultural globalization
Ecological globalization
Sociological globalization
Through these 8 aspects, we can see how our world is becoming more integrated
on many different levels. This article will define, explain and examine all 8 types of
globalization.
1. Political Globalization
2. Social Globalization
Also known as sociological globalization, social globalization refers to the
integration of our societies.
Not to be confused with cultural globalization, sociological globalization refers to
the idea that we now live in a shared society. (There are many
different cultures within a society. But a society is a group of people who all live
together).
And now more than ever, it feels as if we all live in one society instead of a group
of different societies. For example:
3. Economic Globalization
Economic globalization refers to the ways corporations do business as
multinational organizations nowadays.
Whereas once McDonald’s only existed in the USA and HSBC only existed in the
UK, now these companies are all over the world in a ‘globalized economy’. You
will also notice the movement of manufacturing industries to developing nations
to make the most of low wages and lowers the price of goods. This can help
developing nations increase overall employment but can be considered
exploitation of nations with poor working conditions. It also takes good paying
jobs away from developed nations.
4. Technological Globalization
Technological globalization refers to the spread of technology around the world.
Examples of this include the spread of the internet, solar panel technology and
medical technologies – which can all help improve the lives of people around the
world. The spread of technologies can be interpreted as the ‘rising tide lifts all
boats’ argument. Globalization means we can make the most of the best
technologies from all around the world to make everyone’s lives better and
improve everyone’s economies. Technological globalization is closely connected
to the anthropological “scapes of globalization” theory by Arjun Appadurai. He
came up with the term “technoscapes” to explain how technology spreads around
the world.
5. Financial Globalization
Financial globalization refers to the ease at which money can be spread around
the world.
The growth of stock exchanges like the NYSE and FTSE as well as
internationalization of financial markets has made it easier for people to transfer
money internationally. The benefit of this is that it’s easy and cheap to get
investments for new business ventures. You can find a Chinese, French or
Canadian investor to wire you some money to start your business instead of just
relying on local investors! But many nations also face backlash because of the
sense that overseas companies buy out too much of their businesses, real estate
and farming land – which could be a threat to a nation’s sovereignty.
6. Cultural Globalization
Cultural globalization refers to the spread and mixing of cultures around the
world.
Arjun Appadurai talks about the possible effect of homogenization of culture,
where dominant nations like the United States spread their cultures through
television and movies, which leads to the dilution and loss of local and indigenous
cultures and the rise of a global culture.
One example is the spread of punk music from the UK and USA around the world
in the 1970s. Other examples include the spread of Disney music, secularism and
consumer culture.
Concepts related to cultural globalization include cultural adaptation, cultural
diffusion, and hierarchical diffusion. We can also see that, as migrants move
around the world, people are increasingly developing transnational identities.
7. Ecological Globalization
Ecological globalization refers to the idea that the world needs to be considered
one interconnected ecosystem.
This means that the world needs to work together to address ecological issues
that cross the borders of nation-states
Examples include:
The hole in the Ozone layer, which required the world to ban CFCs.
Climate Change, which will affect the poorest nations (particularly low-lying
nations in the Pacific and South-East Asia) even though much of the
damage is caused by developed nations like the United States.
To address these issues, climate accords like the Kyoto Protocol and the Paris
Climate Agreement have been put into place, where each nation agrees to invest
in lowering its carbon emissions.
8. Geographical Globalization
Geographical globalization refers to the idea that the world is no longer seen as
groups of distinct nations as much as it once was.
We now work in multinational blocs to make decisions, and nations work together
to solve problems. It also refers to the fact that we’re now able to travel between
nations with increasing ease. You can go from the United States to Europe within
a day, for example. Furthermore, people can identify as belonging to multiple
geographic regions, especially if they hold multiple passports. Heritage and
familial ownership of territory is getting weaker and weaker.
Every Society has its own culture and way of life. It is established by the group of
people who live together and adhere to some principles in their society. Pakistan
has a rich and unique culture that has preserved established traditions
throughout history. Many cultural practices, food, monuments and shrines were
inherited from the rule of Muslim Mughal and Afghan Emperors.
Pakistan has its own deep rooted desi cuisine but as a result of globalization, fast
food culture is wide spread in Pakistan. International Food Chains such as KFC,
Mc Donald’s, Pizza Hut, Hardeesetc. can be easily located on the corners of
streets, Airports, Malls, Shopping Centers, schools and Gas stations. In Pakistan,
first fast food chain was opened in 1997, that was KFC and just after a year, Mc
Donald’s opened in 1998. There is no looking back since then. Pakistani people
love to eat inter-continental and Chinese cuisines. Pakistani cuisine is also being
recognized due to globalized world.
The variety of Pakistani Music ranges from diverse provincial folk music and
traditional styles such as Qawwali and Ghazal Gayaki to modern forms fusing
traditional and western music, such as synchronization of Qawwali and western
music by the world renowned Nusrat Fateh Ali Khan. Various American,
European, and Asian Television channels and films are available alongside state
owned PTV and other privately owned channels. People have wide variety to
choose, what they like to listen and watch. They have access to latest movie and
music releases, making it more competitive for the Pakistan’s Movie and Music
industry.
Economic logic
Demographics
The scale of both migration and displaced populations has become a major source
of international debate and domestic political tensions in a growing number of
countries. Yet, migration and labor mobility are an essential feature of a world
where populations are stagnant and aging in some countries but young and
growing elsewhere. They also reflect the human cost of conflict and climate
induced displacement, neither of which is likely to diminish in the near term.
Properly managed, migration can be a major, even critical, source of opportunity
with shared benefits for sending and receiving countries – as shown by CGD
research.
Unfortunately, the global system was mostly built around flows of goods and
services and, to a lesser extent, capital. The lack of international cooperation and
political and financial burden sharing on migration is becoming increasingly
untenable. Common standards and rules for treatment of asylum seekers,
multilateral resources for helping receiving countries bear the costs of conflict- or
climate-driven migration surges, standardized and efficient guest work programs,
multilateral support for economic policies that help migrants become growth-
drivers, all these are possible if governments perceive their common interest in
collectively managing migration to maximize gains and minimize costs.
While the two sides approach it from opposite ends and have very different
values, they attribute some common problems to globalization. For both,
globalization is associated with across-the-board liberalization, growing
inequality, financial crisis, and a sense of not being able to control one’s own
economic and social destiny. COVID-19 has in many ways reinforced the belief
that the pandemic wouldn’t have been as bad if we weren’t so open.
Globalization must mutate to suit the national interest more broadly defined.
Economic realities will be part of the national interest as will the need to
cooperate on global threats, but these will need to be balanced against the need
to reduce linkages with countries that are less reliable as they move away from
the market democracy model and to respond to domestic political pressures from
left and right. We need better, evidence-based, and trusted public decision-
making mechanisms for weighing short-term vs. long-term economic impacts and
security benefits vs. economic costs.
Rules and policies have traditionally focused on benefits for global consumers
based on comparative advantage. Going forward, countries will need trade rules
and rule adjustments that allow them to also pursue other national objectives –
labor and environmental standards, urgent health needs, and gains for job-
creating, green, and socially beneficial producers. This could mean allowing well-
targeted subsidies not subject to countervailing duties, border carbon adjustment
mechanisms that help low-carbon firms compete on a level playing field,
intellectual property protection waivers for vaccine production, or common
disciplines for protecting data privacy.
Individual IFI governance and G20 governance fragmented across finance, health,
education, migration, and anti-terrorism channels are no longer sufficient, as we
are seeing in the global COVID-19 vaccination failure. This doesn't mean
eliminating IFI boards or downgrading the G20 finance channel. Rather it means
building new workable governance structures that bring together all the actors
needed to effectively address the different GPG challenges. One such example is
the proposal to create a body bringing together health and finance ministers from
the G20 and some other countries to regularly review the status of pandemic
preparedness and to ensure that critical gaps are identified and filled. More
broadly, there is a need to augment the voice and representation in the G20 of
poor countries, among the most vulnerable to cross-border challenges.
The bottom line is that globalization will have to evolve with a more
comprehensive concept of national interest, defined in broader terms than
economic efficiency to include pressing social and environmental challenges
confronting both rich and poor countries. In parallel, the management of global
flows will require new and augmented multilateral structures that bring together
disparate ministries, poorer vulnerable countries, and key private actors. This will
certainly make globalization and its management more complex, but it is far
better than trying to erect barriers in a vain attempt to stop irresistible, and
potentially very beneficial, global forces.
3- Culture Effects
Globalization helps developing countries to deal with rest of the world increase
their economic growth, solving the poverty problems in their country. In the past,
developing countries were not able to tap on the world economy due to trade
barriers. They cannot share the same economic growth that developed countries
had. However, with globalization the World Bank and International Management
encourage developing countries to go through market reforms and radical
changes through large loans. Many developing nations began to take steps to
open their markets by removing tariffs and free up their economies. The
developed countries were able to invest in the developing nations, creating job
opportunities for the poor people. For example, rapid growth in India and China
has caused world poverty to decrease (blogspot.com.2009). It is clear to see that
globalization has made the relationships between developed countries and
developing nations stronger, it made each country depend on another country.
According to Thirlwall (2003:13) " Developing countries depend on developed
countries for resource flows and technology, but developed countries depend
heavily on developing countries for raw materials, food and oil, and as markets
for industrial goods". One the most important advantages of globalization are
goods and people are transported easier and faster as a result free trade between
countries has increased, and it decreased the possibility of war between
countries. Furthermore, the growth in the communication between the
individuals and companies in the world helped to raise free trade between
countries and this led to growth economy. However, globalization has many
economy and trade advantages in the developing countries, we must also note
the many disadvantages that globalization has created for the poor countries.
One reason globalization increases the inequality between the rich and poor, the
benefits globalization is not universal; the richer are getting rich and the poor are
becoming poorer. Many developing countries do benefit from globalization but
then again, many of such nations do lag behind." In the past two decades, China
and India have grown faster than the already rich nations. However, countries like
Africa still have the highest poverty rates, in fact, the rural areas of China which
do not tap on global markets also suffer greatly from such high poverty
(blogspot.com.2009). On the other hand, developed countries set up their
companies and industries to the developing nations to take advantages of low
wages and this causing pollution in countries with poor regulation of pollution.
Furthermore, setting up companies and factories in the developing nations by
developed countries affect badly to the economy of the developed countries and
increase unemployment.
3- Culture Effects
Globalization has many benefits and detriment to the culture in the developing
countries. Many developing countries cultures has been changed through
globalization, and became imitate others cultures such as, America and European
countries. Before globalization it would not have been possible to know about
other countries and their cultures. Due to important tools of globalization like
television, radio, satellite and internet, it is possible today to know what is
happening in any countries such as, America, Japan and Australia. Moreover,
people worldwide can know each other better through globalization. For example,
it is easy to see more and more Hollywood stars shows the cultures different from
America. In addition, today we can see clearly a heavily effect that caused by
globalization to the young people in the different poor nations, it is very common
to see teenagers wearing Nike T-Shirts and Adidas footwear, playing Hip-Hop
music, using Apple ipad and iPhone and eating at MacDonald, KFC and Domino's
Pizza. It is look like you can only distinguish them by their language. One the other
hand, many developing countries are concerned about the rise of globalization
because it might lead to destroy their own culture, traditional, identity, customs
and their language. Many Arab countries such as Iraq, Syria, Lebanon and Jordan,
as developing countries have affected negatively in some areas, their cultures,
Developing Country Studies www.iiste.org customs and traditional have been
changed. They wear and behave like developed nations, a few people are wearing
their traditional cloths that the used to. Furthermore, globalization leads to
disappearing of many words and expressions from local language because many
people use English and French words. In addition, great changes have taken place
in the family life, young people trying to leave their families and live alone when
they get 18 years old, and the extended family tends to become smaller than
before (Kurdish globe, 2010).
Conclusion
In conclusion, as we can see, the process of globalization has involved all the
countries around the world. Developing countries such as India, China, Iraq, Syria,
Lebanon, Jordan and some Africa's countries, have been affected by globalization,
and whether negatively or positively, the economies of these countries have
improved under the influence of globalization. The size of direct foreign
investment has increased and a lot of bad habits and traditions erased, but also
globalization has brought many drawbacks to these countries as well. Many
customs and cultures are disappeared such as traditions clothes and some
language and expressions have changed. In addition, the violence and drugs
abuse are increased and a lot of deadly diseases have spread under the influence
of globalization. However, although globalization has many disadvantages, we
believe that globalization has brought the developing countries many more
benefits than the detriments. For example, we can see there is more and a
biggest opportunity for people in both developed countries and developing
countries to sell as many goods to as many people as right now, so we can say this
is the golden age for business, commerce and trade.
Components of Globalization
Beneficial Effects
Some economists have a positive outlook regarding the net effects of
globalization on economic growth. These effects have been analyzed over the
years by several studies attempting to measure the impact of globalization on
various nations' economies using variables such as trade, capital flows, and their
openness, GDP per capita, foreign direct investment (FDI), and more. These
studies examined the effects of several components of globalization on growth
using time-series cross-sectional data on trade, FDI, and portfolio investment.
Although they provide an analysis of individual components of globalization on
economic growth, some of the results are inconclusive or even contradictory.
However, overall, the findings of those studies seem to be supportive of the
economists' positive position, instead of the one held by the public and non-
economist view.34
Trade among nations via the use of comparative advantage promotes growth,
which is attributed to a strong correlation between the openness to trade flows
and the effect on economic growth and economic performance.5
Additionally, there is a strong positive relation between capital flows and their
impact on economic growth.6
Foreign Direct Investment's impact on economic growth has had a positive
growth effect in wealthy countries and an increase in trade and FDI, resulting in
higher growth rates.7
Empirical research examining the effects of several components of globalization
on growth, using time series and cross-sectional data on trade, FDI and portfolio
investment, found that a country tends to have a lower degree of globalization if
it generates higher revenues from trade taxes. Further evidence indicates that
there is a positive growth-effect in countries that are sufficiently rich, as are most
of the developed nations.
The World Bank reports that integration with global capital markets can lead to
disastrous effects, without sound domestic financial systems in place.8
One of the potential benefits of globalization is to provide opportunities for
reducing macroeconomic volatility on output and consumption via diversification
of risk.
Harmful Effects
Non-economists and the wide public expect the costs associated with
globalization to outweigh the benefits, especially in the short-run. Less wealthy
countries from those among the industrialized nations may not have the same
highly-accentuated beneficial effect from globalization as more wealthy countries,
measured by GDP per capita, etc. Although free trade increases opportunities for
international trade, it also increases the risk of failure for smaller companies that
cannot compete globally. Additionally, free trade may drive up production and
labor costs, including higher wages for a more skilled workforce, which again can
lead to outsourcing jobs from countries with higher wages.
Domestic industries in some countries may be endangered due to comparative
or absolute advantage of other countries in specific industries. Another possible
danger, and harmful effect, is the overuse and abuse of natural resources to meet
new higher demands in the production of goods.
IMPACTS OF GLOBALIZATION
Globalization has benefits that cover many different areas. It reciprocally
developed economies all over the world and increased cultural exchanges. It also
allowed financial exchanges between companies, changing the paradigm of work.
Many people are nowadays citizens of the world. The origin of goods became
secondary and geographic distance is no longer a barrier for many services to
happen. Let’s dig deeper.
The Engine of Globalization – An Economic Example
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.
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.
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.
The Economic Negative Effects of Globalization
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.
Interdependence
Interdependence between nations can cause local or global instability. This occurs if
local economic fluctuations end up impacting a large number of countries relying on
them.5 For example, in 2020, Ukraine was the fifth larger exporter of wheat. When
Russia invaded the country, it threatened food supply chains for countries like
Pakistan, Lebanon, and Vietnam that import Ukrainian wheat.
national Sovereignty
Some see the rise of nation-states, global firms, and other international
organizations as a threat to sovereignty. Ultimately, this could cause some leaders to
become nationalistic Two prominent examples of the rise of nationalism as a
pushback to globalism include the 2016 election of Donald Trump in the U.S. and the
British vote to leave the European Union (known as "Brexit"). These events
contributed to the anti-globalization movement and stoked anti-immigration
sentiments.
Equity Distribution
Dani Rodrick, author of Straight Talk on Trade: Ideas for a Sane World Economy,
argues for a rebalancing of globalization.
Politically speaking, when left-wing parties are in power they tend to focus on
their country’s people, goods and services. Exchanges with the outside world
aren’t seen as very valuable and importations are often left aside.
CONCLUSION.
Globalization Quotes by World Influencers
Many world leaders, decision-makers and influential people have spoken about
globalization. Some stand out its positive benefits and others focus deeper on its
negative effects. Find below some of the most interesting quotes on this issue.
“We can’t speak day after day about globalization without at the same time
having in mind that…we need multilateral solutions.”
“We have to remember we’re in a global economy. The purpose of fiscal stimulus
is not simply to sustain activity in our national economies but to help the global
economy as well, and that’s why it’s so critical that measures in those packages
avoid anything that smacks of protectionism.”
“I find that because of modern technological evolution and our global economy,
and as a result of the great increase in population, our world has greatly changed:
it has become much smaller. However, our perceptions have not evolved at the
same pace; we continue to cling to old national demarcations and the old feelings
of ‘us’ and ‘them’.”
“Globalization is not only something that will concern and threaten us in the
future, but something that is taking place in the present and to which we must
first open our eyes.”
“The fact is that as living standards have risen around the world, world trade has
been the mechanism allowing poor countries to increasingly take care of really
basic needs, things like vaccination.”
Globalization quote by John Lennon, member of the music band The Beatles ??
Imagine there’s no countries. It isn’t hard to do. Nothing to kill or die for. And no
religion, too. Imagine all the people. Living life in peace. You, you may say I’m a
dreamer. But I’m not the only one. I hope someday you will join us. And the world
will be as one