Paolo Dabandan
SSN187
Globalization is the increase of economic activity, flow of information, goods, money,
and people across national boundaries. Globalization has impacted the world economically and
politically. Many countries that were formally distant with each other now trade products,
services and ideas globally. Many cities have become larger and more powerful becoming
global cities that dominate the economy. Still, there are many drawbacks to globalization such
as the exploitation of third world countries for their labor and resources.
One of the most important influences on globalization would be that of the revolution
of information technology. “Technology tools such as the internet enable people to produce
and consume products, manage enterprise, invest money, conduct research, and exchange
information freely across national boundaries.” (Chapter 6. Page 142) This means that
technology has made processing and integrating economic activity better and faster allowing
the global economy to have “the capacity to work as a unit in real time on a planetary scale.”
(Castells 1996, 92). The availability of cheap and rapid communication has made globalization
possible. Free trade is another influence of globalization. The creation of the European Union
allowed for reduced trade tariffs and investment barriers. Certain countries such as, America,
Canada, and Mexico, have group together to form the North American Free Trade Agreement in
order to make trade easier by lowering trade tariffs between each other. The World Trade
Organization’s also promotes free trade with other countries; one example is the case between
Jamaica and the United States over banana trade with the European countries. The World
Trade Organization ruled the unfair trade practices between Jamaica and Europe; this allowed
the United States to stay competitive with Jamaica. On the other hand this cause massive layoff
and lower wages for Banana farms in Jamaica because they are unable to compete with banana
prices from the US and Chiquita.
With the start of globalization, multinational corporations started taking advantage of
free trade and labor in other countries. Companies started moving factories to underdeveloped
countries because they were able to produce things cheaper. One example of this is in the
documentary film Life and Debt where companies such as Hanes created factories in areas in
Jamaica known as free zones. This created many jobs for Jamaicans, but at a cost. Workers
would work in the free zones for little money and are charged taxes like educational tax and
health care, even thought there taxes aren’t going anywhere and are not being used to help the
workers. Other problems they faced were there wages would be given two or more weeks late
causing rights and without workers being able to form unions, workers were not able to do
anything. Next they started bringing in Chinese workers who they described to be better
treated and paid in U.S. currency while Jamaicans are paid in Jamaican dollars. Soon factories
started closing to open in poorer countries where companies can pay less and earn more profit,
this caused a huge amount of unemployment in Jamaica. Another example is in the
documentary film War on Democracy. In the documentary, the United States created the
National Endowment which implanted a new democracy in countries. One example in the
documentary was the country Chile. With the National Endowment, Chile became prosperous.
This opened the market in Chile and allowed overseas corporations to set up in Chile. On the
other hand, only the rich Chileans were getting richer while the poorer side of Chile continued
to live in poverty.
Another thing that promoted globalization was the International Monetary Funds, the
World Bank, and the World Trade Organization. The International Monetary Funds gave loans
to national governments to help them in their times of need. Developing countries who would
borrow loans from the IMF would have to have their loans become conditional towards “the
nation adopting certain steps such as not raising minimum wage, dropping interest rates,
cutting government services, and lowering trade tariffs.” (Chapter 6, Page 143) This caused
problems for developing countries because they were unable to stay competitive economically
with larger countries. This created more debt for the developing countries and put them in
deeper in debt with the IMF. One example is Jamaica where the IMF imposed conditions when
they lent Jamaica money such as lowering trade tariffs. This caused a dependence on cheap
imported goods for Jamaican and made it harder for Jamaican farmers to stay competitive
against other countries causing many farms to collapse. Other problems farmers faced were
high interest rates that were imposed on them by the IMF which sunk them deeper into debt.
First world countries have undergone a great amount of change due to globalization.
Countries like Tokyo, London, and New York have become more than just “first world
countries” and have become known as “global cities”. They have become central areas for large
corporations to form headquarters which allows them control in the coordination of production
of goods and services. They have also become the leading the locations of financial institutes
such as stock exchanges and investment banks. “These three cities have become leaders in
research and innovation of new products for corporations.” (Chapter 6, page 145) Global cities
tend to only provide highly skilled and highly paid jobs while they generally still face a decline in
the number of jobs. Because of the globalization of labor, many lower skilled residents find
themselves to be jobless and without steady work. The cities have also become two sided with
the rich on one and the poor on the other. With many of the low skilled jobs disappearing,
rising rents have eliminated affordable housing for many people causing them to live in the
streets or public housing. Still, global cities have become a big draw for immigrants. New York,
for example, has attracted many Caribbean and Asian immigrants but they are mostly
concentrated in low paying manufacturing jobs. While global cities dominate countries around
them, the United States finds states like New York compete with Los Angeles and Chicago.
“Third world” is a term given to countries that are considered to be underdeveloped
either economically or in the levels of industrialization, globalization, education and other
criteria for advancement. Some argue that globalization has helped the developing countries to
prosper while others say that it has only served in the benefit of modern cities at the expense
of the third world countries. In the documentary film War on Democracy they show many poor
Latin countries such as Guatemala, Venezuela, Chile, Cuba, and Bolivia face hardships against
first world countries like the United States. The United States would intervene with Latin
countries when they find that their economic security as being jeopardized. Countries like
Venezuela have a large oil deposit. This allowed the U.S. to make a deal where Venezuela would
provide them with cheap oil, and the ones providing the oil would, in return, expect a great
profit. But ever since Hugo Chavez has come into power, the deal no longer went on, thus
losing the U.S favorable interest in Venezuela. With this, Chavez has been targeted by the U.S.
wanting him removed from power going so far as to have helped in a revolt against the
government. Another documentary that features the issue of oil is The Oil Factor. In the film,
shows the current situation with the war in Iraq and questions the reason why we are even
there to begin with. The movie depicts Iraqi citizens at constant struggle with US armed forces
who occupy the land. It basically shows how the US has an interest in setting up bases in Iraq in
order to protect the oil fields.
In the end globalization has made it easier for us to move information and technology
faster, allowing us to improve our lifestyle every day. Businesses are now able to create a
greater profit by selling to other countries. Still, to what extent can we allow the exploitation of
the workers who don’t even make minimum wage to support his country because companies
like Hanes don’t think your work is good enough to earn a decent wage, or how about the guy
who lost his job because Nike decided to move its factories in a developing country because
they are able to pay less for labor. Are we also going to allow powerful nations to push around
smaller countries because they want to suck out every little ounce of profit and leave the
country in depression? How mighty are countries like the United States to be able to use
military force to get what they want from other countries and not care about the people they
are depriving and hurting. Do you believe in making a huge profit while hurting the little guy? I
don’t.