Globalization is a process of integration of the world in terms of economy, social relationships, and culture. Globalization implies something more than interdependence. While interdependence means that countries depend more and more on other countries, integration implies that countries are becoming part, albeit at different levels, of one economic system.
It is frequently thought that globalization was a very recent phenomenon which began at the end of the XX century with the development of the Internet. This belief, however, is incorrect. There is no doubt that the development of commercial and communication interdependence or integration have recently reached explosive levels, but the tendencies that we are witnessing now are the culmination of something that began a long time ago. Marx saw this process as a consequence of the typical development of capitalism, something with which his biggest critics would agree.
This process has impacted us in a number of ways: communication with remote places has been transformed into something easy and readily accessible through the Internet; goods and services originating in distant places have become accessible as if they were local products; and in some parts of the world, the mobility of workers and capital has been facilitated. Although it is a multifaceted process, the economic factor is the most important one because of its consequences and overall impact.
This growth is, on the other hand, controversial. Some see it as beneficial due to an increase in production and consumption of goods made in distant places. Others focus on the inequalities between rich and poor countries and between the rich and poor citizens within the same country.
Globalization is related to technological growth, and is, thus, stimulated by the economic development which new technologies allow. Technological development produces breakthroughs in production and communication. These breakthroughs in communications produce increases in investments and consumption. This results in a notable increase of the economic activity as a whole.
Globalization is also a product of a series of political changes. The decision of reducing the restrictions on international trade, allowing higher investment levels on the part of multinational corporations in many countries, opening borders so that workers from one country can work in another without restriction, allowing capital to move with equal freedom to facilitate investments, countries adopting the same currency, and creating financial institutions to manage the shared currency are all political decisions. These decisions have facilitated opening markets in more remote regions.
Many debates have arisen as a result of this phenomenon. The most important focus on two problems: the first, in relation to the real range of globalization and the second, in relation to the desirability of globalization.
The debate on the range of globalization has to do with the nature of the process: is it something fleeting or permanent? Is it a far-reaching process as many think or it is a more limited process?
Those who favor globalization and see it as a positive development argue that it is a process which cannot be stopped because it is energized by technological developments. It has been argued that these technological developments have been able to greatly reduce the dependency of commercial activity on geographical location, and that this process is irreversible. It has frequently been observed that the mobility of multinational corporations has given them an element of freedom and power which has, in turn, helped to increase their relative political power; which has facilitated the development of investments, production, and consumption.
Those who question the range of globalization insist that its true impact has been exaggerated. It is true -they argue- that multinational corporations move with ease across national borders, that there is a mobility of capital and workers, and that products made in remote places compete favorably with those produced locally.But economies are not only composed of multinational corporations, and that the level of freedom these enjoy is not as high as it is said to be because, in many cases, countries exercise effective controls on their activities at a local level. Indeed globalization depends greatly on politics and governments.
Governments affect the terms of commercial exchange inside their territories, and although small or economically fragile countries could be forced to consent to conditions that countries in other circumstances would not accept, many of them exercise significant controls. It is said that the idea that globalization is an uncontrollable phenomenon is being promoted by those who benefit from it, such as multinational corporations and the economies of industrialized countries. One can see, however, that the labor and marginalized sectors in all countries suffer displacement due to the disloyal economic competition which flourishes under globalization.
The debate over the desirability of globalization is seen in the following terms: those who favor globalization argue that the increase in commercial exchange at a worldwide level is beneficial to all. The Internet is a resource that benefits citizens of all countries, allowing easy informative, educational, and cultural exchanges between millions of people. Conversely, those who oppose globalization claim that the benefits of commercial exchanges are distributed in a very inequitable way and that poor countries do not benefit as much as rich countries
During the last few decades there have been public outcries against the effects of globalization. These popular movements against globalization and in favor of the protection of local markets have produced governments committed to increasing regulations on the economic variables which affect their markets. Those who favor globalization, in turn, believe that these movements are futile due to the irreversible nature of the globalization process. They also believe the movements to be counteractive because they seek to protect local markets by closing off competition which leads to isolation and inefficiencies which -in their opinion—lead to an increase in poverty.
Author: Proyectos FPH
Published: January 16, 2008.
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