Lumen Learning
Learning Outcomes
- Define globalization and describe its manifestation in modern society
- Discuss the pros and cons of globalization
What Is Globalization?
Globalization refers to the process of integrating governments, cultures, and financial markets through international trade into a single world market. You’ve already learned about globalization as it applies to culture and technology, as well as stratification and inequality. In this context, you’ll examine its application as it connects to a global economy.
Often the process of globalization begins with a single motive, such as market expansion (on the part of a corporation) or increased access to healthcare (on the part of a nonprofit organization). But usually there is a snowball effect, and globalization becomes a mixed bag of economic, philanthropic, entrepreneurial, and cultural efforts. Sometimes the efforts have obvious benefits, even for those who worry about cultural colonialism, such as campaigns to bring clean-water technology to rural areas that do not have access to safe drinking water.
There are several forces driving globalization, including the global economy and multinational corporations that control assets, sales, production, and employment (United Nations 1973). Characteristics of multinational corporations include the following: A large share of their capital is collected from a variety of nations, their business is conducted without regard to national borders, they concentrate wealth in the hands of core nations and already wealthy individuals, and they play a key role in the global economy.
Another impact of globalization is the emergence of global assembly lines, where products are assembled over the course of several international transactions. For instance, Apple designs its next-generation Mac prototype in the United States, components are made in various peripheral nations, they are then shipped to another peripheral nation such as Malaysia for assembly, and tech support is outsourced to India.
Globalization has also led to the development of global commodity chains, where internationally integrated economic links connect workers and corporations for the purpose of manufacture and marketing (Plahe 2005). For example, in maquiladoras, mostly found in northern Mexico, workers may sew imported precut pieces of fabric into garments. Furthermore, globalization also brings an international division of labor, in which comparatively wealthy workers from core nations compete with the low-wage labor pool of peripheral and semi-peripheral nations.
Aspects of Globalization
Globalized trade is nothing new. Societies in ancient Greece and Rome traded with other societies in Africa, the Middle East, India, and China. Trade expanded further during the Islamic Golden Age and after the rise of the Mongol Empire. The establishment of colonial empires after the voyages of discovery by European countries meant that trade was going on all over the world. In the nineteenth century, the Industrial Revolution led to even more trade of ever-increasing amounts of goods. However, the advance of technology, especially communications, after World War II and the Cold War, triggered the explosive expansion of global markets that we see today.
One way to look at the similarities and differences that exist among the economies of different nations is to compare their standards of living. The statistic most commonly used to do this is the domestic product per capita. This is the gross domestic product, or GDP, of a country divided by its population. The table below compares the top 11 countries with the bottom 11 out of the 228 countries listed in the CIA World Factbook.
| Country | GDP Per Capita in U.S. dollars |
|---|---|
| Monaco | 185,829.00 |
| Liechtenstein | 181,402.80 |
| Bermuda | 117,089.30 |
| Luxembourg | 114,704.60 |
| Isle of Man | 89,108.40 |
| Cayman Islands | 85,975.00 |
| Macao SAR, China | 84,096.40 |
| Switzerland | 81,993.70 |
| Ireland | 78,661.00 |
| Norway | 75,419.60 |
| Burundi | 261.2 |
| Malawi | 411.6 |
| Sudan | 441.5 |
| Central African Republic | 467.9 |
| Mozambique | 503.6 |
| Afghanistan | 507.1 |
| Madagascar | 523.4 |
| Sierra Leone | 527.5 |
| Niger | 553.9 |
| Congo, Dem. Rep. | 580.7 |
There are benefits and drawbacks to globalization. Some of the benefits include the exponentially accelerated progress of development, the creation of international awareness and empowerment, and the potential for increased wealth (Abedian 2002). However, experience has shown that countries can also be weakened by globalization. Some critics of globalization worry about the growing influence of enormous international financial and industrial corporations that benefit the most from free trade and unrestricted markets. They fear these corporations can use their vast wealth and resources to control governments to act in their interest rather than that of the local population (Bakan 2004). Indeed, when looking at the countries at the bottom of the list above, we are looking at places where the primary benefactors of mineral exploitation are major corporations and a few key political figures.
Watch It
This video illustrates some of the sociological advantages and disadvantages of globalization.
Think It Over
- What impact has globalization had on the music you listen to, the books you read, or the movies or television you watch?
- What effect can immigration have on the economy of a developing country?
- Is globalization a danger to local cultures? Why, or why not?
Glossary
- global assembly lines:
- a practice where products are assembled over the course of several international transactions
- global commodity chains:
- internationally integrated economic links that connect workers and corporations for the purpose of manufacture and marketing
- xenophobia:
- an intense fear and even hatred of foreigners and foreign goods
