GLOBALIZATION

The term “globalization” is used to describe how the world’s economies, cultures and populations are becoming more and more interconnected thanks to international trade in goods, services, tech, capital, people and information. Countries have been working together to make these moves happen for centuries, but the term really took off after the Cold War ended in the early ‘90s, when these cooperation agreements changed the way we live today.

Globalization’s far-reaching consequences are complex and politically charged. Globalization, like major technological advancements, benefits the whole of society, while at the same time hurting certain groups. Knowing the costs and benefits of globalization can help solve problems while preserving the larger benefits.

Globalization refers to the spread of financial products, goods, technology, information, and jobs across national borders and cultures. Globalization gives organizations a competitive edge on several fronts. In economic terms, it refers to the interdependence of nations worldwide encouraged by free commerce. They can cut operating costs by manufacturing abroad, buy raw materials more cheaply due to tariff reductions or elimination, and, most importantly, gain access to millions of new consumers.

Dimensions of Globalization

Globalization, according to Manfred Steger, professor of Global Studies at the University of Hawaii at Manoa, has four major dimensions: economic, political, cultural, and ecological, each with ideological implications. Steger likens contemporary globalization research to an ancient Buddhist parable about blind scholars and their first encounter with an elephant. Some globalization scholars, such as the blind scholars, are overly focused on condensing globalization into a single process, which leads to disagreements over “which aspect of social life constitutes its primary domain.”

Economic: Economic globalization refers to the intensification and extension of economic interdependence around the world. It includes the emergence of a new global economic order, the internationalization of trade and finance, the shifting power of transnational corporations, and the expanded role of international financial institutions.

Political: Political globalization is a term used to describe the growth and intensification of political relations globally. The modern-nation state system and its changing place in today’s world, the role of global governance, and the direction of our global political systems are all aspects of political globalization.

Military: Military globalization is defined as the intensification and extension of military power across the globe through various means of military power as a subdomain of political globalization (nuclear military weapons, radiation weapons simply weapons of mass destruction). This type of globalization occurs in offensive and defensive power uses, as well as international survival. Beyond states, global organizations such as the United Nations extend military capabilities globally through support from both the Global North and the Global South.

Cultural: The intensification and expansion of cultural flows across the globe is referred to as cultural globalization. Culture is a broad concept with many facets, but Steger uses it to refer to “the symbolic construction, articulation, and dissemination of meaning” in the context of globalization. Discussions under this heading include the development, or lack thereof, of global culture, the role of the media in shaping our identities and desires, and the globalization of languages.

Ecological: Population growth, food access, global biodiversity loss, the gap between rich and poor, as well as between the global North and global South, human-caused climate change, and global environmental degradation are all topics of ecological globalization.

Pros and Cons of Globalization

Pros

Globalization supporters believe it allows developing countries to catch up to industrialized nations through increased manufacturing, diversification, economic expansion, and higher living standards. Companies help underdeveloped nations expand their economies by outsourcing technology and jobs to them. Trade initiatives boost cross-border commerce by removing supply-side and trade-related barriers. Globalization has also advanced social justice on a global scale, with advocates reporting that it has brought to light human rights issues that would otherwise go unnoticed on a large scale.

Cons

One obvious result of globalization is that a country’s economic downturn can have a domino effect on its trading partners. The 2008 financial crisis, for example, had a severe impact on Portugal, Ireland, Greece, and Spain. All of these countries were members of the European Union, which had to step in to bail out debt-ridden nations, which became known as the PIIGS acronym. Detractors of globalization argue that it has resulted in a concentration of wealth and power in the hands of a small corporate elite capable of absorbing smaller competitors around the world. With the relocation of entire industries to new locations abroad, globalization has become a divisive issue in the United States. It is regarded as a major contributor to the economic squeeze on the middle class. Globalization, for better or worse, has increased homogenization. Starbucks, Nike, and Gap dominate the commercial landscape in many countries. Because of the United States’ sheer size and reach, cultural exchange among nations has largely been one-sided.

Effects of Globalization

More Goods at Lower Prices: As a result of globalization, each country is encouraged to specialize in what it does best with the fewest resources, a phenomenon known as comparative advantage. This concept improves production efficiency, stimulates economic growth, and lowers the prices of goods and services, making them more affordable, especially for lower-income households.

Scaled Up Businesses: Larger markets allow businesses to reach more customers while receiving a higher return on fixed costs of doing business, such as building factories or conducting research. This is how technology companies have taken advantage of their innovations.

Better Quality and Variety: Foreign competition forces US companies to improve their products. As a result, consumers have better products and more options.

Innovation: Trade growth promotes the spread of technology, innovation, and the exchange of ideas. The best ideas from industry leaders spread more quickly.

Job Churn: Globalization creates new job opportunities while also causing job displacement. It has no significant impact on the total number of jobs in the economy because job numbers are primarily influenced by business cycles and fiscal policies.

Importance of Globalization

Globalization, in essence, refers to the world becoming more interconnected. Nations are now more interconnected than ever because to air travel, containerized maritime transport, international trade agreements, international treaties, and the Internet. Outsourcing, free trade, and international supply chains are examples of business trends associated with globalization. Globalization is important because it expands the global market and allows more and different goods to be produced and sold at lower prices.

Globalization is also significant because it is one of the most powerful forces influencing the modern world, so much so that understanding the world without understanding globalization can be difficult. Many of the world’s largest and most successful corporations, for example, are truly multinational enterprises with offices and supply chains spread across the globe. These businesses would not exist without the complex network of trade routes, international legal agreements, and telecommunications infrastructure made possible by globalization. Globalization is also directly related to important political developments, such as the ongoing trade war between the United States and China.

Example of Globalization

A car made in the United States that uses parts from China, Japan, South Korea, Sri Lanka, and South Africa is a simple example of globalization. The car is then exported to Europe and sold to a driver who fills the car’s gas tank with Saudi oil-refined gasoline.