Globalization
"Globalization." Current Issues: Macmillan Social Science Library. Detroit: Gale,
2010.Opposing Viewpoints In Context. Web. 17 May 2013.
Globalization is the creation and expansion of economic and social connections among people
and organizations around the world. The process is fueled by the movement of people, goods,
ideas, technology, and money across national boundaries.
The populations of different cultures have interacted and established economic and cultural links
for centuries. In the Middle Ages, merchants and explorers exchanged goods and ideas
throughout Europe, across North Africa, and between the Middle East and Asia. However, in
recent decades, globalization has advanced at an increasingly rapid pace. Two major forces in
this development have been the Internet, which has sped up communications, and businesses,
which have expanded to reach markets on distant continents.
Although people still identify with their local communities and national governments, many
increasingly see themselves as part of a global society. However, globalization does not affect all
regions in the same way. Individuals and corporations in industrialized countries tend to benefit
more than those in developing countries.
History
A number of international organizations were created during and after World War II (1939–
1945) to establish or improve economic and political cooperation around the globe. In 1944
representatives from the United States, Britain, and their allies met in Bretton Woods, New
Hampshire, to set up the World Bank and the International Monetary Fund (IMF). The World
Bank provides loans for major development projects, such as dams and oil pipelines. The IMF
manages the exchange of national currencies and provides short-term loans to help nations
improve their economies.
The following year, the United Nations was founded with the goals of maintaining international
peace and security and solving economic, social, and humanitarian problems. In the years that
followed, regional organizations, such as the Organization of American States, the European
Community (later the European Union), and the Organization of African Unity, formed to
address regional issues and pursue common goals. All of these economic and political
organizations have contributed to global cooperation and the expansion of business and cultural
activity across national borders.
At the same time, many countries signed trade agreements that have greatly increased
international commerce and changed patterns of employment. The 1947 General Agreement on
Tariffs and Trade (GATT) established rules for international trade, focusing on the removal of
tariffs and other regulations. In 1995 GATT was replaced with the World Trade Organization
(WTO), which monitors countries bound by the GATT agreement. By 2008, 153 countries were
members of the WTO.
Several nations have agreed to set up regional free-trade zones by removing tariffs and other
barriers to commercial activity. The North American Free Trade Agreement (NAFTA) was
created by the United States, Mexico, and Canada in 1994. The agreement was bitterly debated
in all three countries before winning approval, and its effects have been disputed with equal
fervor.
Economic Globalization
The removal of trade barriers has contributed to the growth of transnational corporations
(TNCs)—companies that conduct business around the world, often by opening divisions in more
than one country. TNCs must operate under the trade rules of each country in which they do
business. In many cases, TNCs have a great deal of influence in a country because of the
dominant role they play in the nation’s economy, particularly in important industries such as oil
production or agriculture. About 90 percent of TNCs have their headquarters in a few wealthy
industrial nations—mainly in the United States, Japan, and Europe—that often work hard to
advance the TNCs’ interests.
Cultural Globalization
The network of economic ties connecting countries around the world has also encouraged the
exchange of culture and ideas. Various forms of media—including news publications, television,
movies, and the Internet—have spread ideas and information swiftly to distant places.
This sharing of information has positive aspects, such as opening avenues for cooperation among
scientists and other individuals working to solve global problems. Yet opponents of globalization
argue that the exchange of cultural ideas sometimes threatens to destroy local traditions and
identities.
Globalization and Development
Many people believe that globalization has caused—or worsened—various problems in
developing countries. Much of the opposition has been focused on the policies of international
organizations such as the World Bank and the IMF, which were set up to assist poor nations.
Critics charge that the five largest shareholders in the World Bank and IMF—the United States,
Japan, Germany, France, and the United Kingdom—sometimes use these programs to further
their own interests.
World Bank and IMF loans come with strict conditions that require countries applying for
assistance to agree to a plan known as a structural adjustment program (SAP). The conditions of
the typical SAP include removing restrictions on foreign investment and corporate activity,
selling off resources and utilities to private owners, eliminating or lowering tariffs, producing
raw materials for export, abandoning environmental regulations, and cutting spending on social
programs, such as education, health care, and welfare.
Despite the SAP conditions, developing nations have borrowed heavily to fund improvement
projects. By the 1980s many were unable to pay back their loans. Some countries borrowed
additional sums just to cover their loan payments, and they remain trapped in debt and unable to
rebuild their economies.
Issues and Protests
The trend toward globalization has become a subject of intense debate and massive public
protests. When NAFTA went into effect in January 1994, large numbers of people in southern
Mexico rose up in rebellion. Fierce demonstrations and nationwide strikes also rocked Argentina,
Bolivia, Ecuador, Kenya, Nigeria, South Africa, and other countries. In late 1999 protesters
blockaded and shut down a major meeting of the WTO in Seattle, Washington. Since then,
demonstrations have taken place at global economic summit meetings in the Czech Republic,
Italy, and Canada as well the United States. The protests involve broad coalitions of students,
union members, environmentalists, and other activists.
There is a wide range of opinion on what should be done about globalization. Some believe that
the terms of NAFTA, the WTO, the IMF, and the World Bank should be revised to include more
protections for labor, the environment, and human rights. Others insist that these agreements and
institutions cannot be reformed and must be abolished altogether.
Supporters of free-trade policies argue that lifting restrictions on commerce generates jobs for
millions of people and helps reduce poverty. In the case of NAFTA, they note that trade among
the United States, Canada, and Mexico has risen dramatically since the signing of the agreement.
Opponents charge that free trade hurts local businesses and only benefits a few powerful
interests. They point out, for example, that in Mexico many farmers and business owners have
been overwhelmed by the flood of cheap goods from the United States brought in under NAFTA.
Meanwhile, NAFTA has enabled corporations to open factories in Mexico, where labor is
cheaper and environmental regulations are less strict than in the United States. This has
contributed to the loss of many manufacturing jobs in the United States.
Some people worry about the increasing power of transnational corporations. They fear that, by
amassing enormous wealth, TNCs might become more influential in some places than the elected
governments that represent local communities. Others argue that the spread of capitalism and
free markets will strengthen democracy around the globe.
The debate over globalization is likely to continue, particularly in the United States where the
outsourcing of jobs to other countries is an increasing concern.